By Siân Green

Enel is implementing a project to equip 27 million homes in Italy with ‘smart’ home networking technology. The project – thought to be the largest ever of its kind – involves the widespread use of power line communications on a commercial basis and will improve energy efficiency.

In early 2000, Italian utility Enel began a pilot project to investigate the concept and technology behind home networking. Now the utility is rolling out the technology across the whole of the Italy, giving consumers access to a whole new range of energy and non-energy services, and improving energy management.

The $1.6 billion project involves the installation of ‘smart’ digital meters in each home. The meters are equipped with technology from California, USA-based Echelon Corporation, which will help Enel to cut costs and enhance customer relations as it prepares for deregulation.

Enel’s CEO Franco Tato explains: “We believe that we can substantially improve the quality of our service to customers while lowering the cost of that service through remote demand side management, time of day pricing, outage detection and isolation and other services.”

“We partnered with Echelon to deploy an advanced energy distribution infrastructure that will enhance our ability to respond quickly and effectively to the energy needs of the country,” added Tato.

Figure 1. Home networking infrastructure with powerline communications technology
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Enel is currently installing a few thousand meters per week, a task it began in the summer of 2001. By January 2002, it will be installing around one million of the meters in homes every month, and hopes to complete the project by mid-2004.

A key objective of the project is to enhance Enel’s energy management capabilities and improve energy efficiency in the Italian domestic sector. “By working smarter, [Echelon technology] can dramatically reduce the energy consumption in homes and buildings – in their applications, our customers have reported energy savings of up to 70 per cent without any negative impact, and in fact with lots of positive benefits,” said Echelon chairman Ken Oshman.

Market drivers

The fact that the installation of home networking technology will bring benefits to the consumer is important for Enel. With deregulation of the electricity industry, utilities are having to dramatically change their business practices to arm themselves for competition. Not only must they become more efficient, they must also differentiate themselves from others in the market to attract and retain customers.

Figure 2. The Lonworks technology uses power line communications technology to allow different appliances to communicate without the need for additional wiring and networking
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It is these factors that are opening up opportunities in the home networking market for companies such as Echelon which produce devices that allow utilities to widen their service offerings while reducing costs.

The Echelon story

Twelve years ago, Echelon’s founders recognized the potential for improved automation and control in the buildings management industry.

Elements of buildings utilities – for example, heating, lighting, air conditioning and so on – are often completely isolated subsystems controlled by separate, proprietary control systems. Echelon realized that control could be improved, and cost savings made, if an open protocol was developed that could cross the boundaries between the subsystems.

“All the protocols at that time for controlling an environment were proprietary,” says Mark Ossel, vice president and general manager EMEA of Echelon Corporation. “So a protocol, LonTalk, was developed to cross the boundaries between those environments and became open in the sense that it is available to everyone to use as a means for communication. “Lonworks is a full OS1 7 layer model. The advantage of this is that you can change, for example, the physical media (twisted pair coper, power line, fibre etc) while the architecture remains the same.

This technology, known as the Lonworks architecture, has now been adopted by many organizations, including standards bodies such as ANSI. Some 4000 original equipment manufacturers (OEMs) across various industries now include Lonworks technology in their products.

The Lonworks technology works by using power line communication technology to allow different appliances and devices in a building to communicate with each other. The communication takes place over a building’s electricity wires which act as a network to which any appliance can become connected through a regular electricity socket. This also means that the home can be intelligently networked without the need for additional wiring.

Figure 3. European power line communication frequency allocation
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In Italy, the ‘smart’ electricity meters being installed are equipped with Echelon’s Lonworks technology that enables devices within a home to communicate directly with each other, and also allows either the utility or the homeowner to control these devices remotely.

An application processor, called the ‘neuron’, forms the heart of the architecture. It controls the application in any device, like the meter, as well as the communications protocols, and includes a power line transceiver, which enables communication between the home and the local substation via the power lines.

The power line transceiver also acts as a ‘gateway’ to the home, effectively allowing the utility, homeowner or even a third party to ‘reach’ into the home to supply services, retrieve data or control appliances and devices remotely. It carries out local device commissioning, giving each appliance an ‘address’ on the network as well as some basic logic so that devices can communicate with each other and the outside world.

Communications between devices and appliances on the network in the home takes place on a ‘node-to-node’ basis – i.e. communications between devices can take place directly and are not routed via a server or central control system.

Smart meters

With Lonworks architecture installed in a digital electricity meter, Enel will be able to improve the efficiency of its operations and reduce costs. Importantly, energy management and energy efficiency measures will be easy to implement.

One of the main areas of cost savings will be made in meter readings, as Enel will be able to take automated, remote meter readings. It will be able to take readings as frequently as it needs, and the meter readings will be highly accurate. It will also be able to disconnect and re-connect consumers remotely, and the meter will be able to detect power theft.

The result will be more timely and accurate billing compared to a system employing meter reading personnel. This will decrease the number of calls to the customer support centre.

In addition, Enel will be able to introduce new tariffs based on usage levels and time-of-use, helping it to better serve its customers while enhancing its energy management capabilities.

At the individual house level, this type of home networking technology can significantly enhance a utility’s and a homeowner’s ability to reduce energy consumption. According to Ossel, a sensor could be placed in a room to detect whether there is someone present in the room. The sensor can communicate directly with the heating or air conditioning system and the lighting so that these systems are turned down when the room is empty and are turned up to appropriate levels when the room is occupied.

Such a sensor could also detect levels of sunlight and adjust heating and lighting levels accordingly, and could also be integrated with a home’s security system to detect a break-in.

The home networking technology also allows devices and appliances in the home to communicate with the outside world via the power line transceiver and the power lines between the home and the local substation. Thus the homeowner can control these devices remotely, for example from the office via a web browser or even via a mobile telephone.

So as the homeowner leaves the office in the evening, says Ossel, he or she can set their heating system to start up just before they are due to arrive home. They could also check the status of their home ‘systems’ via the web, and could configure these systems to send them messages (email or SMS) if there are any changes in their status, e.g. if a fault occurs or if a breach in security is detected.

Managing the load

Alternatively, the utility can carry out this type of remote control as an additional service to the consumer. Not only will this help to generate additional revenue for the utility, but it will also enable it to carry out the important function of load management.

Figure 4. Consumers can control appliances and utilities remotely via a web browser or a mobile telephone
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The ability to remotely manage appliances, such as washing machines, in the home can help utilities to significantly reduce the amount of peak power consumed. As peaking power is expensive to purchase, the utility is therefore able to reduce costs.

Hence in Italy, consumers will be able to enter an agreement under which it gives Enel control over when their washing machine is switched on. While a washing machine does not consume a lot of power, if this peak shaving is multiplied across several thousand households, the impact can be considerable.

According to Ossel, Enel has started a scheme in conjunction with white goods manufacturers Whirlpool and Merloni which have developed appliances specifically for use in smart homes. Under the scheme, the manufacturers can supply consumers with washing machines free of charge, and the consumers then pay a small fee each time they use the machine.

This type of scheme is typical of the type of innovation that home networking technology is expected to encourage. A key element of this scheme for the utilities is that consumers can sign up to a service and maintenance agreement, under which the utility, or service provider, monitors the performance of the washing machine and can detect, and even predict, faults. The idea is that the consumer gets trouble-free washing while the utility benefits from a closer relationship with the consumer.

Given that the provision of these types of services provides utilities with benefits, Enel will offer incentives to encourage customers to sign up – for example offering increased savings with each service a customer signs up to. In fact, the whole scheme will raise awareness among households in Italy of energy usage and encourage them to be more energy efficient. This, says Ossel, will be helped by the fact that consumers can also have a display in their home showing how much energy they are consuming, the unit price, and a graphical display of energy consumption patterns.

Making a difference

The home network can also help consumers save energy – and money – by performing peak shaving on a ‘micro-level’ within the home. Because the networked devices and appliances can communicate directly with each other, one appliance can reduce its energy consumption when another needs to increase consumption. Again, replicated across several thousand homes, this can have a noticeable impact on a utility’s load.

Echelon believes that the level of innovation will increase with time, especially as more and more white goods manufacturers use Lonworks technology in their products. The company is keen to see more projects like Enel’s implemented and is talking to power utilities across Europe in markets where there is still a degree of vertical integration. Vertical integration is important, says Ossel, as it makes these projects relatively simple to implement compared to vertically fragmented markets such as the UK.

Echelon estimates that it has already captured around 65 per cent of the intelligent buildings market, and believes that it can capture more. The key to this, says Ossel, is the fact that its Lonworks technology is more cost-effective compared to other home networking technologies available on the market and makes for a better business case.

“With most home networking technologies, you’re talking about broadband, internet access and streaming video downloads – that’s where the talk is. But in all those cases, the business case fails, and the people doing it are either going out of business or are making huge losses. In [Echelon’s] case, the utility makes an investment of around €100 per home for the total infrastructure – changing the meter, the labour, the backbone network and so on – which it will get back in a few years. So this is a solid business case.”

And going in favour of Echelon is the fact that the project with Enel has enabled it to take a big step forward with its technology. “This project has lowered the price point of our components and meters to levels unknown before,” says Ossel.

“It has also changed the mindset towards this type of technology. Utilities can now see what they can do with this technology and what kind of a payback they can get. We hope they will rethink their position and make the change.”