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MARCH 2018 - INTELLIGENT EFFICIENCY - A CASE STUDY OF BARRIERS & SOLUTIONS - SMART HOMES 1
CaseStudy-BarrierstoIntelligentEfficiency–SmartHomes
FinalReportMarch,2018
MARCH 2018 - INTELLIGENT EFFICIENCY - A CASE STUDY OF BARRIERS & SOLUTIONS - SMART HOMES 2
4EistheEnergyEfficientEnd-UseEquipmentTechnologyCollaborationProgramme,establishedbytheInternationalEnergyAgency(IEA)in2008tosupportgovernmentsinco-ordinatingeffectiveenergyefficiencypolicies.Twelvecountrieshavejoinedtogetherunderthe4Eplatformtoexchangetechnicalandpolicyinformationfocusedonincreasingtheproductionandtradeinefficientend-useequipment.However4Eismorethanaforumforsharinginformation–itpoolsresourcesandexpertiseonawidearangeofprojectsdesignedtomeetthepolicyneedsofparticipatinggovernments.Participantsfindthatisnotonlyanefficientuseofavailablefunds,butresultsinoutcomesthatarefarmorecomprehensiveandauthoritativethancanbeachievedbyindividualjurisdictions.Currentmembersof4Eare:Australia,Austria,Canada,Denmark,France,Japan,Korea,Netherlands,Switzerland,Sweden,UKandUSA.Furtherinformationonthe4EImplementingAgreementisavailablefrom:www.iea-4e.org
Networkconnecteddevices,includingtheInternetofThings,aregrowingrapidlyandofferenormousopportunitiesforimprovedenergymanagement.Atthesametime,thereisaresponsibilitytoensurethatthesedevicesuseaminimalamountofenergytostayconnected.4E’sElectronicDevicesandNetworksAnnex(EDNA)workstoaligngovernmentpoliciesinthisareaandkeepparticipatingcountriesinformedasmarketsfornetworkconnecteddevicesdevelop.FurtherinformationonEDNAisavailableat:http://edna.iea-4e.org
ThiscasestudywasinitiatedbytheConnectedDevicesAlliance(CDA)whichisanetworkofmorethan350governmentandindustryparticipantsthathavecometogethertoworkontheenergyefficiencyopportunitiesprovidedbynetworkeddevices.FurtherinformationontheCDAisavailableat:https://cda.iea-4e.orgThisreportisauthoredbyconsultant,VidaRozite.Theviews,conclusionsandrecommendationsexpressedinthisreportdonotnecessarilyreflecttheviewsoftheIEA,4E,EDNA,theCDAortheirmembers.
MARCH 2018 - INTELLIGENT EFFICIENCY - A CASE STUDY OF BARRIERS & SOLUTIONS - SMART HOMES 3
Table of contents
Tableofcontents............................................................................................................................................3
Abbreviations..................................................................................................................................................5
Glossary.............................................................................................................................................................6
Executivesummary.......................................................................................................................................8
Background......................................................................................................................................................9
Introduction..................................................................................................................................................10
1 Whataresmarthomes?.....................................................................................................................13
2 Technologypathway...........................................................................................................................182.1 Currentsmarthometechnologyuptakeandforecasts...................................................212.2 Driversandmotivatorsforsmarthometechnologyuptake.........................................222.3 Statusandforecastofsmartgridcapabilities....................................................................22
3 Energysavingspotentialandotherenergysystembenefits................................................253.1 residentialenergyefficiencybenefits...................................................................................253.2 Benefitsintermsofcollectingandanalyzingdata...........................................................273.3 Energysystembenefits..............................................................................................................283.3.1 Quantificationofbenefitstoenergysystems.............................................................................28
4 Energycostsofsmarthomes...........................................................................................................30
5 Barrierstoimplementation.............................................................................................................325.1 Barrierstoimplementationpathway...................................................................................325.2 BarriersTotheuptakeofsmarthometechnologies.......................................................335.2.1 HighCostsandunclearbenefits.......................................................................................................335.2.2 Privacy,trustandCybersecurity....................................................................................................345.2.3 Complexityandtechnologyrisk......................................................................................................35
5.3 Establishmentofsmartgridelementsandmarkets........................................................386 Policyrationale.....................................................................................................................................406.1 Benefitsofaction.........................................................................................................................406.1.1 Possiblerisksofaction.........................................................................................................................40
6.2 Acasefordelayingaction?.......................................................................................................417 Possiblepolicyactions.......................................................................................................................437.1 Visionandengagement..............................................................................................................437.2 Highcostsandunclearbenefits..............................................................................................447.3 Privacy,trustandcybersecurity............................................................................................477.4 Complexityandtechnologyrisks...........................................................................................487.5 Lackofsmartgridcapabilitiesandenablingmarket......................................................49
8.Conclusionsandrecommendations.................................................................................................51
References.....................................................................................................................................................52
MARCH 2018 - INTELLIGENT EFFICIENCY - A CASE STUDY OF BARRIERS & SOLUTIONS - SMART HOMES 4
TablesTable1Typicalsmarthometechnologyfeatures.................................................................................13Table2Smarthometechnologypathway............................................................................................18Table3Energysavingsbenefitsofsmarthometechnologies..............................................................26Table4Barrierstotheimplementationpathwayofsmarthomes.......................................................32BoxesBox1Definitionofkeyterms................................................................................................................11Box2Arenetzeroenergyhomessmart?.............................................................................................16Box3End-usesmostsuitablefordemandresponse............................................................................23Box4Smarthomeautomation–openvsclosedloopsystems............................................................35Box5Mappingofexistingstandardsandongoingstandardisationinitiatives.....................................44FiguresFigure1Illustrationofasmarthome....................................................................................................14Figure2Simplifiedillustrationofcloudservicesforsmarthomes.......................................................15Figure3Illustrationofasmarthomeaspartofthewiderenergysystem...........................................16Figure4PotentialenergysavingsintheUKfromenergyefficientsmarthomedeployment..............27Figure5Illustrationofasmarthomewithmultiplesmartsystems.....................................................37Figure6GermanheatpumpindustryassociationSmartGridReadylabel..........................................46
MARCH 2018 - INTELLIGENT EFFICIENCY - A CASE STUDY OF BARRIERS & SOLUTIONS - SMART HOMES 5
Abbreviations
CDA ConnectedDevicesAlliance
DR DemandResponse
DSF DemandSideFlexibility
DSM DemandSideManagement
EC EuropeanCommission
ETSI EuropeanTelecommunicationStandardsInstitute
EU EuropeanUnion
EV Electricvehicle
EVSE ElectricVehicleSupplyEquipmenti.e.chargers
EDNA ElectronicDevicesandNetworksAnnex
HAN Homeareanetwork
HEMS HomeEnergyManagementSystems
HVAC Heating,VentilationandAir-Conditioning
ICT Informationandcommunicationstechnologies
IE IntelligentEnergyEfficiency
IEA InternationalEnergyAgency
IEC InternationalElectrotechnicalCommission
IoT InternetofThings
IPMVP InternationalPerformanceMeasurementandVerificationProtocol
ISO InternationalOrganisationforStandardization
MEPS mandatoryminimumenergyperformancestandards
S&L StandardsandLabels
MARCH 2018 - INTELLIGENT EFFICIENCY - A CASE STUDY OF BARRIERS & SOLUTIONS - SMART HOMES 6
Glossary
Automation Systemsthatintegratediverseelectricaldevicesandenergy-consumingequipment,allowingautomaticcontrolinaccordancewithselectedsettingsorinresponsetodatafromsensors.
DemandResponse Intentionalmodificationstoconsumptionpatternsofelectricityofend-usecustomersthatareintendedtoalterthetiming,levelofinstantaneousdemand,orthetotalelectricityconsumptioninresponsetochangesinthepriceofelectricityovertimeortoincentivepayments.
Cloudcomputing ThepracticeofusinganetworkofremoteservershostedontheInternettostore,manageandprocessdata,ratherthanalocalserverorapersonalcomputer.
Demandresponse Demandresponseordemand-sideresponsereferstothepossibilityforconsumerstoadjusttheirelectricityconsumptionduringperiodsofpeakdemand,whenpowersupplyisscarceorelectricitynetworksarecongested,inresponsetotime-basedfinancialincentives.Demandresponsecanconsistofinterruptingdemandforashortduration,oradjustingtheintensityofdemandforacertainamountoftimebyreducingorshiftingloads,orstoringenergy.Forconnecteddevices,demandresponsefunctionalitymightenableapowerutilityoraggregatortoremotelyturnoffair-conditioningunitsincustomerhomestoavoidpeakloadissues.
Digitalisation Theapplicationofinformationcommunicationtechnologiesacrosstheeconomy,includingenergy,toachievedesiredoutcomessuchasimprovedsafety,efficiencyandproductivity.
Electricvehicle Avehiclewhosepowertrainincludesbothabattery(whichcanberechargedviaanexternalpowersource)andanelectricmotor.Chargingcanbeachievedbyplugsorby(stationaryordynamic)conductiveorinductivepowertransfer.
Flexibility(inelectricity
systems)
Thecapabilityofanelectricitysystemtorespondtoupwardordownwardchangesinthesupply/demandbalanceinacost-effectivemanneroveratimescalerangingfromafewminutestoseveralhours.
IntelligentEfficiency(IE) Thedeploymentofnetwork-connectedICTtechnologiestofacilitateefficientoperationofenergy-usingequipment,leadingtoenergysavings
IntelligentEfficiency(IE)
technologiesorsolutions
Asuiteofenergyefficiencymeasuresthatuseinformationandcommunicationstechnologies(ICT)suchassensors,networks,anddataanalyticstosaveenergy.
InternetofThings Systemofinterrelatedcomputingdevices,mechanicalanddigitalmachines,objects,animalsorpeoplethatareprovidedwithuniqueidentifiersandtheabilitytotransferdataoveranetworkwithoutrequiringhuman-to-humanorhuman-to-computerinteraction.
Learningalgorithm Aprocessormethodusedtoextractpatternsfromdatacollection(e.g.fromsensorsandcontrols)toidentifyandadaptappropriatesolutionsorapplicationsforadeviceorsystem.
Openinterface Anopeninterfaceisapublictechnicalstandardforconnectinghardwaretohardwareandsoftwaretosoftware.
Plug-and-play Softwareordevicesthatareintendedtoworkperfectlywhenfirstusedorconnected,withoutreconfigurationoradjustmentbytheuser.
MARCH 2018 - INTELLIGENT EFFICIENCY - A CASE STUDY OF BARRIERS & SOLUTIONS - SMART HOMES 7
Prosumers Small-scale,distributedelectricitygenerationwhichallowsconsumerstohavethechoicetobuyelectricityfromaretailerortoproduceatleastpartofitthemselves.
Realtime Informationavailablesimultaneouslywithanevent,orimmediatelyaftercollection.
Sensor Adevicewhichdetectsormeasuressometypeofinputfromthephysicalenvironment(e.g.daylight,temperature,motionorpressure).
Smartcharging Achargingstrategyforelectricvehiclesthatusesconnectivityandotherdigitaltechnologiestoautomaticallyshiftbatterychargingtotimeswhenelectricitypricesarelowand/orwhenoverallelectricitydemandislow.
Smartmeter Ameterthatrecordselectricityconsumptioninintervalsofanhourorless,andcommunicatesthatinformationatleastdailybacktotheutilityformonitoringandbillingpurposes.Thistypeofadvancedmeteringinfrastructurediffersfromtraditionalautomaticmeterreadinginthatitenablestwo-waycommunicationbetweenthemeterandthecentralsystem.Smartmeterfunctionalityincludesremotereading,two-waycommunication,supportforadvancedtariffandpaymentsystems,andremotedisablementandenablementofsupply.
Standardisation Theprocessofimplementinganddevelopingtechnicalstandardsbasedontheconsensusofdifferentpartiesthatincludeindustry,interestgroups,standardsorganisationsandgovernments.Standardisationhelpsmaximisecompatibility,interoperability,safetyandrepeatability.
Standby Theenergydemandofanapplianceordevicewhenitisnotactivelyinusebutisreadytoberapidlyputintouse.
MARCH 2018 - INTELLIGENT EFFICIENCY - A CASE STUDY OF BARRIERS & SOLUTIONS - SMART HOMES 8
Executive summary
Buildingsaccountfornearlyone-thirdofglobaltotalfinalenergyconsumption.Forecastsindicatethatbuildingenergyuse,especiallyelectricityuse,willgrowsignificantly.Smarthomesareanewopportunitytoreduceenergyuseinresidentialbuildings,andstudiesindicatethatsmarthometechnologiescouldreduceenergyuseinhomesbyalmost30%.IfathirdofallhouseholdsintheUKweretoinstallandusebestavailablesmarthometechnologies,achievedsavingscouldbemorethan3milliontonnesofoilequivalent(Mtoe)peryear.Correspondingly,savingsinJapancouldbeintheregionof4MtoeperyearandintheUSmorethan23Mtoeperyearcouldbesaved.AccordingtoIEAforecasts,smarttechnologiescouldbetween2017and2040lowerenergyconsumptionofresidentialandcommercialbuildingsgloballybyasmuchas10%leadingtocumulativeenergysavingsovertheperiodto2040of5589Mtoe–equaltomorethanallthetotalfinalenergyconsumedinnon-OECDcountriesintheyear2015.Inadditiontoenergysavings,smarthomescanbeanintegralpartofsmartgriddevelopmentand,throughin-homerenewablesgenerationanddemandresponse,playaninstrumentalroleindecarbonisingtheenergysector.TheIEAforecaststhatby2040,globally,1billionhouseholdscouldactivelyparticipateininterconnectedelectricitysystems,providing185GWofsystemflexibilityandsavingUSD270billionofinvestmentinnewpowerplants.However,theuptakeofsmarthometechnologieshastodatebeenlimited.Whilegrowthisprojected,therearebarriersandgapsinenablingtechnologiesandmarkets.Thekeybarriersarecosts,uncertaintyaroundbenefits,privacyconcerns,cybersecurityconcerns,andtechnologyrisk.Enablingtherightmarketconditionsforsmarthomestoparticipateinandgainbenefitsfrominterconnectedelectricitysystemshasyettooccur.Thebarriersandgapswhicharepresentcontributetoaweakvaluepropositionforhouseholdstoinvestinsmarthomes.Inlightofthemagnitudeofenergybenefitsthatcouldbegainedthroughsmarthometechnologyandinterconnection,thereisastrongcaseforpolicyintervention.Thisreportfocusesonthebarrierstosmarthometechnologyuptake,particularlytechnologiesrelatedtoenergymanagement.Thisisfollowedbyanidentificationofactionstoaddressthesebarriers,particularlythosethataretypicallywithinthemandateofpolicymakersdealingwithpoliciesforenergyusingappliances,equipmentanddevices.Thisreporthighlightstheroleofenergyefficiencypolicymakersinimprovingthevaluepropositionforsmarthomesforenergymanagement,bysupportingthedevelopmentofmethodologiesandstudiesquantifyingbenefits,andtheprovisionofaccessibleinformationtoconsumersvialabelsorothermechanisms.Whilethepreconditionsforlargescaleimplementationofdemandresponseandin-homerenewablegenerationneedtheinterventionsofotheractors,energyefficiencypolicymakerscouldaccelerateprogressthroughthedevelopmentofstandardsandapproachesthatensurethatrelevantsmarthomedevicesare“demandresponseready”.Thereisastrongcaseforinternationalcooperationtopoolresources,developapproachesandengageindialogue.TheIEATechnologyCollaborationProgrammeonEnergyEfficientEnd-UseEquipment(4E)anditsElectronicDevicesandNetworksAnnex,togetherwiththeConnectedDevicesAlliance,areexcellentplatformsforfacilitatingthis.
MARCH 2018 - INTELLIGENT EFFICIENCY - A CASE STUDY OF BARRIERS & SOLUTIONS - SMART HOMES 9
Background
“Intelligent efficiency” (IE) is the deployment of network-connected ICT technologies to facilitateefficientoperationofenergy-usingequipment,leadingtoenergysavings.IEtypicallyoperatesatthesystem level, rather thanat thedevice level, tooptimise theoperationofa systemofequipment,leadingtoenergysavings.There is currently a wide range of materials available from a variety of sources that provideinformationonthepotentialforIntelligentEfficiencytoachieveenergyefficiencyandotherbenefits.TheConnectedDevicesAlliance(CDA)CentreofExcellencenowhosts60publications,36ofwhichare inthefieldof IE. However,eventhoughmanyseethat increased implementationof IEwillbebeneficialinageneralsense-bycreatingagreatercapacityforenergymanagement,IEisstillquiteintangibleformostpolicymakersanditremainsunclearwhat,ifany,responseisrequiredintermsofpublicpolicy.Toaddress this, theCDAhasstartedtodevelopcasestudies, specificallydesignedtoincreaseunderstandingamongstpolicymakers.ThiscasestudyonsmarthomesdescribesscenarioswhereIEcouldprovidesubstantialbenefits,andaddressesquestionsthatarecentraltotheconcernsofpolicymakers:
• WhatbarrierscurrentlypreventtheoptimisationofIEthatmightjustifypolicyintervention?
• Howcanpolicyovercomethesebarriers?
ThecasestudycontributestotheworkoftheCDAtoestablishtherationaleforpublicpolicyinthisfield,andtoencouragegreaterparticipationbygovernmentsintheongoingworkoftheCDA.Itwascommissioned by the IEA Technology Collaboration Programme on Energy Efficient End-UseEquipment (4E)ElectronicDevicesandNetworksAnnex (EDNA)onbehalfof theConnectedDevicesAlliance.
• The IEA Technology Collaboration Programme on Energy Efficient End-Use Equipment (4E)wasestablished in2008andbrings together twelve countries from theAsia-Pacific, EuropeandNorth America to share information and transfer experience in order to support goodpolicydevelopmentinthefieldofenergyefficientappliancesandequipment.4Ealsoinitiatesprojects designed tomeet the policy needs of participants, enabling better informedpolicymaking.https://www.iea-4e.org
• TheIEA4EElectronicDevicesandNetworksAnnex(EDNA)isanannexof4Ewhichfocusesonnetworkconnecteddevices(devicesconnectedtoacommunicationsnetwork).EDNAaimstoensure that thenextgenerationof suchdevicesuseelectricityasefficientlyaspossibleandthat opportunities for energy management enabled by connectivity are promoted.https://edna.iea-4e.org
• TheConnectedDevicesAlliance(CDA)providesanindustry/governmentumbrellaforworkontheenergyefficiencyopportunitiesprovidedbynetworkeddevices.Itwasformedin2015byparticipantsintheG20NetworkedDevicesInitiative.https://cda.iea-4e.org
MARCH 2018 - INTELLIGENT EFFICIENCY - A CASE STUDY OF BARRIERS & SOLUTIONS - SMART HOMES 10
Introduction
Buildingsaccountfornearlyone-thirdofglobaltotalfinalenergyconsumption(TFC)1.Globally,theenergyconsumptionoftheresidentialsectorconstitutes2051milliontonnesofoilequivalent(Mtoe),whichismorethanafifthofglobalTFC(IEA,2016).Residentialenergydemandissettoincrease-theIEAprojectsanannualgrowthof0.8%inhouseholdenergydemandto2040(IEA,2016).Buildings-relatedCO2emissionshavegrownby45%since1990andhavecontinuedtorisebynearly1%peryearsince2010.Takingintoaccountupstreampowergeneration,buildingsareresponsibleformorethanone-quarterofglobalenergy-relatedcarbondioxide(CO2)emissionstoday(IEA,2017a).Buildingelectricitydemandconstitutesmorethanhalfofglobalelectricitydemand(IEA,2017d).Electricitydemandgrowthinbuildingshasbeenrapidoverthelast25years,accountingfornearly70%oftotalgrowthinglobalelectricityconsumptionbetween1990and2014.Insomeeconomies,includingChinaandIndia,electricitydemandinbuildingsgrewonaveragebymorethan8%peryearoverthelastdecade(IEA,2017d).Electricityconsumptionbylighting,appliancesandequipmentinbuildingsiscurrentlyincreasingby3%onaverageperyear(IEA,2017a).Electricityuseinbuildingsissettonearlydoublefrom11petawatthours(PWh)in2014toaround20PWhin2040,requiringlargeincreasesinpower-generationandnetworkcapacity(IEA,2017d)2.Globally,energyexpendituresarejustbelow5%ofhouseholddisposableincome(IEA,2016).Significantprogresshasbeenmadearoundtheworldinimprovingtheenergyefficiencyofbuildingenvelopesandofappliancesandequipmentusedinbuildings.However,particularlyinOECDcountriesandincreasinglyinemergingeconomies,efficiencygainsarebeingoffsetbyincreasesinthenumberofelectronicappliancesusedperhousehold.Therearestillmanyopportunitiesforenergyefficiencyimprovements,especiallyinareassuchaswhole-homeperformanceandsystems(ACEEE,2017a).Anemergingopportunityisintelligentefficiencyforhomes,i.e.“smarthomes”.The term “smart home” is used to mean different things in different contexts and there is anambiguity about its meaning. In this report, smart homes mean residences where enhancedmonitoring and control functionality has been introduced. Smart homes could significantlycontributetoachievingenergysavingsintheresidentialsectorandcouldcontributetootherenergypolicyobjectives.However,therapidgrowthofsmarthometechnologiesandsystemsthathasbeenprojected has not materialised - uptake has been limited. For example, currently, only 5% of UShouseholdshavesomeformofhomeenergymanagementsystem(ACEEE,2017b).Therearebarriersconstrainingtheuptakeofsmarthomedevicesandsystems includingconsumerawareness, cost, unclear value propositions, immature technology, lack of interoperability,complicated sourcing and installation, operational and usability problems and data privacy andsecurityconcerns.Furtherconstraints includeregulatorybarriers, lackofdynamicelectricitypricingandgaps inthewiderenablingenvironment“smart” infrastructure(distributedgeneration,electricvehicle charging, energy storage solutions), and lack of services thatwould contribute to a bettervalue proposition. This report focuses primarily on barriers affecting the uptake of smart homedevices and systems. However, some of the barriers and gaps related to the wider enablingenvironmentarealsocovered,astheseaffect thevaluepropositionandusefulnessofsmarthomedevicesandsystems.
1Includesresidential,commercialandpublicsectorbuildings2IEAcentralscenario
MARCH 2018 - INTELLIGENT EFFICIENCY - A CASE STUDY OF BARRIERS & SOLUTIONS - SMART HOMES 11
There have been isolated attempts by policymakers to take action to remove some barriers andpromote theuptakeof smart devices and smart homes.However,most countries donot have anexplicitvisionorpolicyroadmapthatwouldprovideoveralldirectionforpolicymakinginsupportofenergy efficient smart homes. Typically, there are a range of differentministries and governmentbodies dealingwith issues related to smart grids, and the involvement of energy efficiency policymakers is limited. Intelligent Efficiency and smart homes are technically complex areas,which arecontinuouslyandrapidlyevolving.Thisreportaimstoprovideguidanceforenergyefficiencypolicymakers onwhat the rationale for energy efficiency policy in this areamight be, andwhat actionscouldbetakentoaddressbarriers.There isagrowingbodyof literatureonsmarthomesandhomeenergymanagementsystemsandthe topic has received increased coverage in the past few years. However, this information istypically either highly technical, targets an industry or academic audience, is limited in scope, isspecifictoacertainregionorcountryordealswiththepotentialroleofpolicymakersinasuperficialorlimitedmanner.Asaconsequence,anenergyefficiencypolicymakerinterestedingettinginsightsonsmarthomesandtheirenergyefficiencypotential,energysystembenefits,currentandprojectedmarket, key barriers and possible policy responses is faced with difficulties in quickly accessinginformationthatcouldbeusedasabasisfordecisionmaking.Thisreportprovidesasynthesisoftheknowledge,informationandresultsfoundinreports,scientificandpopulararticles,andprojectandprogrammeevaluations.Thereportprovidesastartingpoint forexploringenergyefficiencypolicy interventions inthisareaandforinitiatingdialoguewithothergovernmentbodiesandstakeholders.Box1Definitionofkeyterms
Forthepurposeof thisreport,“Intelligentefficiency” (IE) is thedeploymentofnetwork-connectedICT technologies to facilitate efficient operation of energy-using equipment, leading to energysavings. IE typically operates at the system level, rather than at the device level, to optimise theoperationofasystemofequipment,leadingtoenergysavings.For the purpose of this report, a smart home device is a device that can connect to acommunicationsnetworkviaahuborcentralinterface(ordirectly)andcanbecontrolledremotelyor set to be controlled automatically based on user preferences and sensor inputs. Following thisdefinition,smarthomedevices includebutarenot limitedtodemandresponseenableddevices.Aconnectedthermostatthatcanbecontrolledviaanapplicationonasmartphoneisanexampleofasmart home device. This smart thermostat can be controlled remotely by householdmembers orpotentially be controlled by an energy provider in certain circumstances to reduce peak powerdemand.Asmarthomesystemconsistsofmultipledevicesthatcanbecontrolledviaonehuborinterface.Asmarthomesystemcanencompassmultipleservicesorbededicatedtoasingleservicecategorye.g.smart lightingsystemor smart security system.Smart home technologies encompass smarthomedevicesandsystems,andothersupportingorenablingtechnologies.
A smart home isa residence thathasa system(composedofa rangeof smartdevices)or severalsystems thatarenetwork connected, and canbe controlled remotelyorautomated. Smarthomescan provide a range of services such as enhanced entertainment (e.g. a smart TV, streaming andaudio system) and security (e.g. a system of cameras, sensors, controls and locks) and energyefficiency(e.g.ahomeenergymanagementsystem).
MARCH 2018 - INTELLIGENT EFFICIENCY - A CASE STUDY OF BARRIERS & SOLUTIONS - SMART HOMES 12
Anenergysmarthomedeviceisadevicethatisconnectedandcontrollableandcanenableenergysavingsorotherenergy systembenefits.Examplesofenergy smarthomedevicesandsystemsaresmart meters, controls (for heating, ventilation, cooling, lighting, windows, shading), network-connectedlighting,homemanagementsystemsandenergystoragesystems.Ahomeenergymanagementsystem (HEMS)comprisessmartconnecteddevices thatcanprovideinformationon,anddynamicallyadjust,energyusewithinahome.Energyproviderisatermusedtoencompassenergyutilitiesandenergyretailers.Smart gridsare networks that intelligently monitor and manage the transport of electricity fromgeneration sources to meet the varying electricity demands of end users. In this report, focus isplacedexclusivelyon smart electricity grids. Smart gas systems, smartdistrict heatingother smartenergysystemsarenotcovered.Afurtherglossaryisprovidedearlierinthisreport.
MARCH 2018 - INTELLIGENT EFFICIENCY - A CASE STUDY OF BARRIERS & SOLUTIONS - SMART HOMES 13
1 What are smart homes?
A smart home is a residence that has a system (composed of a range of smart homedevices) orseveralsystemsthatarenetworkconnectedandcanbecontrolledremotelyorautomated.Itenablesthecontrolandautomationoflighting,heating,ventilation,airconditioning,andsecurity,aswellashomeappliancessuchaswasher/dryers,ovens,refrigerators/freezersandhomeelectronicssuchasTVsandstreamingdevices.Smarthomescandeliverarangeofservicesandbenefitstohouseholds:
• Energymanagement(energyefficiency)• Demandresponse(contributetoregulatingenergydemand)• Electricitygeneration,storageanddeliverytothegrid• Comfortenhancement• Security• Entertainment• Householdmanagemente.g.helpwithorderinggroceriesorplanningotherchores• Specialisedservicessuchaswellnessorhealthmanagement• Assistedliving.
Table1Typicalsmarthometechnologyfeatures
Networkconnectivity usenetworkstosenddatatoandreceivedatafromhouseholdmembers,otherdevicesandotherentitiessuchasenergyproviders
Automation canbesettoturnon,turndownoradjustinresponsetopre-setsettingsorlearningbasedonhouseholdpreferences
Contextawareness canviasensorsandothertechnologiesrecognisehouseholdmembersandsituationalcontexts
Adaptiveness canchangesettingsorofferingsinresponsetohouseholdmembersInteractive providealertsandnotifications,canbevoicecontrolledRemotecontrollability
canbecontrolledremotelybyuseofnetworkconnectionviae.g.asmartphoneortablet
Abilitytobepersonalised
canbetailoredtoneedsanddesires
Anticipation cananticipatedesiresorneedswithoutconsciousmeditationSource:ACEEE(2014)Thereisnostandardset-upforasmarthome.Thetypesofdevicesandthesystemorsystemswithinasmarthomewillvarydependingontheneedsanddesiresofthehouseholdandcanchangeovertimeasdevicesareremovedfromoraddedtothesystem.
MARCH 2018 - INTELLIGENT EFFICIENCY - A CASE STUDY OF BARRIERS & SOLUTIONS - SMART HOMES 14
Figure1Illustrationofasmarthome
Smarthomesystemsgenerallyconsistofsensorsandswitchesconnectedtoahub(sometimescalleda gateway) fromwhich the system is controlled with a user interface via wall-mounted terminal,mobilephoneorcomputer,oftenviainternetcloudservices.
MARCH 2018 - INTELLIGENT EFFICIENCY - A CASE STUDY OF BARRIERS & SOLUTIONS - SMART HOMES 15
Figure2Simplifiedillustrationofcloudservicesforsmarthomes
Note: The cloud can provide a range of services including processing power for smart devices andsystems,relayingdatabetweendevicesandstoringdata.Currentlyavailablesmarthomeenergymanagementtechnologiesincludesmartthermostats,smartplugs, connected lightbulbs or smart lighting systems, smart appliances, energy-use displays andsmarthomemanagement systems. In termsof energy management, smart homes offer a rangeoffunctions such as near real time3energy use information, enhanced feedback on energy use andadvancedorautomatedcontrol(Hargreavesetal.,2015).Thereareanumberofwayssmarthometechnologies can help improve energy efficiency. Technologies can provide households withinformation about energy consumption to prompt changes in behaviour or can via automationcontrol settings todelivercomfortandconvenience inanenergyefficientmanner. It ispossible tosetupsmarthomeswithoutmuchconsiderationof thewiderenergysystem. Insuchaset-up, thesmart home receives electricity (and gas) from energy providers and delivers benefits to thehouseholdintheformofincreasedcomfort,controllabilityandsomeenergysavings.Smarthometechnologiescanbeutilisedtomakesmarthomesintegratedandactiveparticipantsintheenergysystem.Inthissetup,thesmarthomereceivespartofitsenergyrequirementfromthegrid, uses in-home renewable energy generation and energy storage to lower its need for gridelectricityandassociatedcosts,andoptimisesenergyconsumptionbyenablingsmartappliancestorunautomaticallyatappropriatetimes.Furthermore,thehouseholdcansellexcesselectricitytothegrid and provide demand response services to further lower its energy expenses or generateadditionalhouseholdrevenue.Thelatterset-updeliversmorebenefitstothehouseholdintermsofabroadersetofenergymanagementoptionsandabetterreturnoninvestment.Itcontributestotheenergy systemby supporting grid stability, reducing theneed for additional large-scale generationcapacity,andincreasingtheuseofrenewableenergy.
3Nearrealtimereferstodatacollectedandcommunicatedinspecificintervals.Thedurationofintervalsvariesfordifferentbrandsandtechnologiesandcanrangefrom15minutesormoretomereseconds.
MARCH 2018 - INTELLIGENT EFFICIENCY - A CASE STUDY OF BARRIERS & SOLUTIONS - SMART HOMES 16
Figure3Illustrationofasmarthomeaspartofthewiderenergysystem
Box2Arenetzeroenergyhomessmart?
Anetornearzeroenergyhomeisahighlyenergyefficienthomethatproducesasmuchrenewableenergyon-siteasitconsumes(onanannualbasis).Netzeroenergyhomeshaveverylowenergyconsumptionowingtotheirdesignandthematerialsandtechnologiesused.Theyaretypicallywellinsulatedanduseavarietyofmethodstoreduceenergydemandandhavehighlyefficientequipmentandappliances.Itispossibletoachievenetzeroenergyusingbothnewconstructionandretrofittingofexistingbuildings.Netzeroenergyhomesaretypicallyconnectedtotheelectricitygridandpurchaseelectricityfromthegridwhenon-sitegenerationorstorageisinsufficient.Incasesofover-supply,theelectricitycanbestoredortransmittedtothegrid.Homesthatproducemoreenergythantheyuseareknownasenergy-plusbuildings.Smarthomescouldbenetzeroenergyorevenenergy-plushomes,butasmarthomedoesnotnecessarilyentailanetzeroenergyhomeandviceversa.Thedefinitionusedinthisreportdoesnotmake“smart”conditionalonenergyefficiency,consequently,smarthomescanbeinefficient(netzeroenergyhomestypicallyhavetobeveryenergyefficient).Someofthesmarthometechnologiesdescribedinthisreport(e.g.smartmetersandhomeenergymanagementsystems)areintegralorbeneficialelementsofnetzeroenergyhomes.Promotionoftheuptakeofsmarthometechnologiescouldbeameanstoachievingnetzeroenergyhomedeploymentpolicyobjectives. Smarthometechnologiesareevolving.Currenttrendsincludeintegrationofvoicecontrol,artificialintelligenceandmachine-to-machinelearning.Thedevelopmentandintegrationofthesetechnologieswillmakeiteasierforuserstointeractwiththeirdevicesandsystemsandwillenabledevicesandsystemstobetteradapttohouseholdbehaviour,needsandpreferences.Ofparticular
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interestintermsofenergyefficiencyaredevelopmentsinenergyawareness.Energyawarenessenablesenergyusedataofindividualdevicestobemadeavailablebythedevicesthemselves,whichcanopenupopportunitiesfornewenergyefficiencyactions,aswellasnewwaysofmeasuringenergyuseanddevelopingpolicies(EDNA,2016c).Theuseofgeo-fencing(creatingavirtualcirculararea,orfence,aroundthehome)toaddressstandbyenergyconsumptionandotherplugloads(i.e.byautomaticallyturningeverythingoffonceoccupantshaveleftthehome)couldalsohavesignificantimpactsonreducingenergyuse.
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2 Technology pathway
Toaccessthefullrangeofenergybenefitsofsmarthomesatanindividualhouseholdlevel,andonanenergysystemlevel,anumberofelementsarerequired-frompurchasetoinstallationofdevicestocombiningtheminafunctioningsystemtoconnectingthissystemwiththewiderelectricitysystem.Inturn,therearetechnologicalandmarketchangesthatneedtobemadetoenabletheenergysystemtointeractwithsmarthomes.Thisisnotalinearpathwayandstepsalongthewayareaffectedbywhetherotherelementsareinplace.Notallelementsmaybeessential,however,thepotentialenergybenefitsgenerallyincreaseasmoreofthesearefulfilled.Table2liststheelementsthatareconsiderednecessary.Table2Smarthometechnologypathway
ElementRequired-“WhatHastoHappen”
Description Status
UptakeofsmarthometechnologiesSmarthomedevices
Smarthomedevicesincludeappliancesandlightingwhicharenetwork-connectedandhavetheabilitytoadjusttheirownenergyusageinresponsetoremotecommands.Theymightalsoreporttheirownenergyconsumption.
Limiteduptake-withforecastsofgrowinguptake.Developmentsneededintermsofinteroperabilityandplugandplaycapabilities.
Sensorsandcontrols
Asmarthomewillrequireanumberofdevicestoprovideinformationaboutambientconditions,userbehaviour,etc.Actuatorsforthingssuchaswindowshadingcanalsobeincludedinthiscategory.
Limiteduptake-withforecastsofgrowinguptake.Furtherdevelopmentsinmergingsystemsanddevelopingintegratedsolutionsareneeded,aswellasimprovedbatterylifeforsensors.
HomeEnergyManagementSystems(HEMS)
TheHEMSistheinterfaceforallindividualappliancesandequipmentandtypicallyincludessomeformofvisualfeedbackfortheconsumer.Itmayalsoincludeaconnectiontothecloud.Itshouldideallyalsorecordtheenergyconsumptionofallend-usedevicesinthehome,enablecontrolofdevicesandbeabletoquantifyenergysavings.Tooperate(andcontinuetooperate)theHEMSsystemmustbecommissionedappropriately(easilyandpreferablyautomatically-“plugandplay”).Itmustalsobeeasytooperate.
Limiteduptake-withforecastsofgrowinguptake.Developmentneededintermsofinteroperabilityandplugandplaycapabilities.
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ElementRequired-“WhatHastoHappen”
Description Status
Developmentoffullinteroperabilityofsmarthomeappliances,sensorsandcontrolswithHEMS
FortheHEMStoeffectivelymanageenergydemandinthehome,allappliances,lightingandotherdevices(includingthosefromdifferentmanufacturers)mustbeabletocommunicatewitheachothereffectively,andwiththeHEMS.
Progressisunderwaybutmoreworkisneededtoensureinteroperabilityandtodevelopsolutionsthatenablealreadydeployedtechnologiestointeractwithnewdevicesandsystems.4
OptimisationanduseofHEMS
Whilesomeresponsesmaybefullyautomated,inmanycasesconsumerswillneedtoactoninformationprovidedbytheHEMSinordertobenefit.
Experienceindicatesthatconsumerstendtoloseinterestafteraperiodoftime.Technologydevelopmentisneededtoprovideautomationsolutionsthatsuitconsumerneeds.
DeploymentofsmartgridelementsDevelopmentofsmartgridcapability
Energynetworksthatcanintelligentlyintegratethebehaviourandactionsofallusersconnectedtothem-generators,consumersandthosethatdoboth–inordertoforecastdemandandefficientlydeliversustainable,economicandsecureelectricitysupply.
Progressandinvestmentsareunderwaybutmoreinvestmentsareneededasisthefurtherdevelopmentofstandards,methodologies,enablingtechnologiesandregulations.
Installationofsmartmeters
Smartmetersallowthereal-timeremotemonitoringofhouseholdenergyconsumption/demandandenablemoreaccuratedemandforecasting.Smartmeterscanenableadvanceddemandresponseandnetmeteringtoencouragehomeenergygenerationandstorage.
Deploymentisunderwaywithmanycountrieshavingambitiousroll-outtargets.Someofthealreadydeployedsmartmetersarenotsuitableforsmartgriddevelopment.
Developmentoffullinteroperabilitybetweensmartmeters,smarthomedevicesandHEMS
Smartmetersprovidetheinterfacebetweenthehousehold(HEMS)andtheenergyprovider.
Progressisunderwaybutmoreworkisneededtoensureinteroperabilityandtodevelopsolutionsthatenablealreadydeployedtechnologiestointeractwithnewdevicesandsystems.
4Currently, machine to machine communication in smart home environments is limited. The majority ofexistingsmarthomedevicesandsystemsrelyuponcloudservicesinthemiddle.Effortsareunderwaytohavetheseservicescommunicatingbetweeneachother(mainlythroughtranslationplatformsbetweenprotocols),ortobuildmetaservicesuponexistingones.Furtherdevelopmentsthatwouldenablesmarthomedevicesandsystemstocommunicatedirectlywitheachothercouldhavebenefitsintermsoffunctionalityofsystemsandenergysavingse.g.byreducingtheneedforcloudbasedcommunication.
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ElementRequired-“WhatHastoHappen”
Description Status
Renewablein-homeenergygeneration
In-homegeneration(e.g.photovoltaiccellsorfuelcells)allowsconsumerstouserenewableelectricitywhenavailable,storeexcesswhennotneededorsellexcesselectricitytothegrid.Thisrequiresagridwithatwo-waycommunicationandtransmissioncapacityandfeed-intariffs.
Deploymentisincreasingandpricesarereducing.Furtherdevelopmentisneededintermsofsolutionsformulti-tenantbuildings.
Homeenergystorage
Energystoragecapacitymaybeprovidedbybatteriesorotherstoragetechnologies.
Newsolutionsarebeingdeveloped,deploymentisincreasinginsomesegments,pricesarereducing.Furtherdevelopmentofsolutionsisneededformulti-tenantbuildingsandhousingareas
Electricvehicle(s) Electricvehiclescanbeusedasstorageforenergygeneratedin-houseorfromthegridwhenotherdemandislow.
Uptakeisincreasing(butisstillmarginal),anumberofcountrieshaveambitiousplans.Requiressignificantcharginginfrastructure.
CreationofsmartelectricitymarketsEstablishmentofdynamicpricingforenergy
Pricingthatrewardsconsumersforreducingdemandattimesofpeaksystemloadortoachieveoptimalsystembalancing.
Limitedtoafewlocations.Enablingconditionsneedtobeestablished.
Establishmentofflexibilitymarkets
Flexibilitymarketsenableotheractorssuchasaggregatorstobecomeinvolvedindemandresponse,providingservicestoenergyprovidersandaddedvaluetoconsumers.
Limitedtoafewpilotprojects.Furtherdevelopmentisneededintermsofenablingtechnologiesandconditions.
UseofsmarthomeenableddemandresponseDemandresponsereadydevicesandappliances
Appliancesthatcanbeautomaticallycontrolledbyenergyproviders.
Limitedbutuptakeisprojectedtoincrease.
Establishmentofdemandresponseprogrammes
Energyprovidersgiveincentivestoconsumerstoreduceorshiftenergyuse(canalsowithconsumeragreementbedoneautomatically).
Limitedtoafewlocationsandafewpilotprojects.Ingeneral,programmesshowpositiveresults.
Householdsengageindemandresponsee.g.respondtotariffsignalsorotherincentives
Thesystemforenablinghouseholdstoengageinthemarketneedstobesimple,userfriendlyandtherewardsneedtobesufficientlyattractivetomaintainconsumerinterest.
Pilotsarestartingtoprovidelearningtoenabledevelopmentofsystemsandmechanismstoeffectivelyengageconsumers.Moredevelopmentisneeded.
Sources:IEA(2017a),IEA(2017b),IEA(2016c),IEA(2017d),Eurelectric(2017)
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2.1 Current smart home technology uptake and forecasts Smarthometechnologyadoptionhasbeenslowtogaintractionamongconsumers(PWC,2017).However,salesareontheincrease.In2016,eightymillionsmarthomedevicesweredeliveredglobally–up64%comparedto2015,130milliondeviceswereprojectedtobedeliveredin2017(IHSMarkit,2016)5.Itisforecastthatglobalshipmentsofsmarthomedeviceswillreach1.4billionunitsby2021(Ovum,2017).6Intermsofsmartmajorhomeappliances(washingmachines,clothesdryers,dishwashers,refrigerators,roomair-conditioners,andlargecookingappliances),theglobalmarketisexpectedtogrowfromaround1millionunitssoldin2014to223millionunitsby2020i.e.470millionunitsdeployedbetween2015and2020.Thepenetrationoftheseappliancesisprojectedtogrowfromanestimated0.2%in2014to31.3%in2020,withthatofsmartroomair-conditionersreaching52%andsmartwashingmachines42%in2020(IHSinEC,2017a).7EuropeInEurope8,attheendof2014,anestimatedtotalof3.3millionsmarthomesystemsanddeviceswereinuse,upfrom1.75millioninthepreviousyear.Itisassessedthat,around0.34millionofthesesystemswerewhole-homesystemswhereas2.93millionweresmarthomedevices.Takingintoconsiderationoverlaps(somehomesmayhavemorethanonesystem),thiscorrespondstoaround2.7millionsmarthomes(1.2%ofallhouseholdsinthisregion)(BergInsight,2017).AEuropean9surveycarriedoutin2017,indicatesthat13%ofhouseholdsexpecttohaveasmarthomewithin12months,comparedto10%in2016.(Context,2017).Forecastsindicatethattherewillbe29.7millionsmarthomesinEuropeby2019(BergInsight,2017).Intermsofspecifictechnologies-theinstalledbaseofsmartthermostatsinEuropewas2.3millionin2016andisexpectedtoreach13.6millionhomesby2019and34.7millionby2021(BergInsight,2017).ThepenetrationofHomeEnergymanagementSystems(HEMS)isprojectedtorisefrom2%ofhomesin2014to40%by2034(WaideStrategicEfficiency,2014).NorthAmericaIntheUS,in2015,penetrationofsmarthomedeviceswasalmost19%androsetoalmost25%in2016.Thenumberofsmarthomedevicesinoperationwasassessedtobe294millionunitsin2015andexpectedtoriseto1billionin2016.Forecastsindicatethatby2021,69%ofUShomeswillbesmart(Ovum,2017).Around28%ofconsumersinCanadacurrentlyownsmarthomedevices(Nielsen,2016)andtheshareofsmarthomesisexpectedtogrowto54%by2021(Ovum,2017).Intermsofspecifictechnologies-USsalesofsmartthermostatsgrewfrom2millionunitsin2013to5millionunitsin2015(ACEEE,2017a).Forecastsindicatethatby2019,therewillbe24.6millionhomeshavingsmartthermostatsintheUSand43.4millionby2021(BergInsight,2017).Currently5%ofUShomeshavesometypeofhomeenergymanagementsystem(ACEEE,2017a).
5Itshouldbenotedthatinthecontextofsalesfigures,smarthomedevicesincludedevicesthatarenotintendedforenergymanagementordemandresponsesuchassmartTVs.6Definitionsofwhatisasmarthomedeviceandwhataresmarthomesvaryandarenotalwaysexplicitinmarketstudiesandforecasts,consequentlydatafromdifferentsourcesisnotdirectlycomparable.7Thiscategoryencompassesappliancesthatcanconnecttonetworks,informationontheshareoftheseappliancesthatisdemandresponseenabledisnotavailable8EU28+29BasedonsurveysinUK,France,Germany,Italy,Spain,Sweden,Netherlands,RussiaandTurkey
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AsiaPacificItisestimatedthatthereare3.2millionsmarthomesinChina,expectedtogrowto29.5millionby2021(Statista,2017).Forecastsindicatethatsmarthomepenetrationcouldreach48%inSouthKoreaand41%inJapanby2021(Ovum,2017).Penetrationcouldreach100%inJapanby2030ifthegovernmentsuniversalHEMSadoptiontargetismet(METI,2015).InAustralia,in2016,29%ofhouseholdshadatleastonesmarthomedevice,by2017itisexpectedthatthenumberofhouseholdswithsmarthomedeviceswillincreaseto40%.By2021,Australianhouseholdscouldhaveanaverageofmorethan30internet-connecteddevices,14ofwhichwouldbesmarthomedevices(Telsyte,2017).
2.2 Drivers and motivators for smart home technology uptake Surveysindicatethatenergysavingsarenotnecessarilyastrongmotivatorforsmartdevicepurchases.One2016surveyintheUSliststhetopthreebenefitsofdeviceinterconnectivity:makinglifeeasier(71%);offeringconvenience(42%);andentertainment(30%)(PlumChoiceandZ-WaveAlliance,2016).Thissurveyshowedthatwhilein2015energyandresourceefficiencywaslistedasatopmotivator,itwasreplacedbyotherconsiderationsin2016.AnotherUSsurveyfoundthatonefourcurrentsmarthomeusers(26%)saytheyboughttheirfirstdevicetoeitherincreaseoverallconvenience,improvetheirqualityoflife,orhelpthembemoreproductive.Meanwhile,10%wantedtomaketheirhomesafer,andanother10%citedaffordability(PWC,2017).Only6%ofcurrentsmarthomedeviceusersrankedenergysavingsasamotivatorforpurchase(PWC,2017)10.
2.3 Status and forecast of smart grid capabilities Smartgridsarenetworksthatintelligentlymonitorandmanagethetransportofelectricityfromallgenerationsourcestomeetthevaryingelectricitydemandsofendusers.Smartgridsusethetwo-wayflowofelectricityandinformationtooptimisegeneration,transmission,distributionandmanagementofdemand.AccordingtotheIEA,thewidespreaddeploymentofsmartgridsiscrucialtoachievingamoresecureandsustainableenergyfuturethroughaddressingcurrentconcernswithexistingelectricitysystems,suchasageinginfrastructureandincreasingpeakdemand.ICTtechnologiescanincreasetheefficiencyofoperatingthegrid,counteractnetworkcongestionandcandeferoravoidtheneedtoinvestinnewtransmission(IEA,2016).Furthermore,smartgridsareanimportantelementforexpandingtheuseoflow-carbontechnologies,includingelectricvehiclesandrenewables(IEA,2017b).Theextentandrateofsmartgriddeploymentdependsonlocalcommercialattractiveness,compatibilitywithexistingtechnologies,regulatorydevelopmentsandinvestmentframeworks(IEA,2017b).Elementsofsmartgridsinclude:
• SensorsandICTthatmonitorgeneration,andtransmissionanddistributionlines.• SensorsandICTthatcollectandprocessdatatoforecastdemand.• Smartmetersthatenablethecollectionofnearreal-timedata.• Demandresponsetechnologiesandprogrammesthatenableend-userstosupportthe
electricitysystembyshiftingorreducingdemand.• Dynamictariffsthatprovideincentivestoconsumerstoparticipateindemandresponse.• Distributed(includingin-home)renewablesgeneration.• Energystorage.• Electricvehicles.
10However,respondentsnotowningasmarthomedeviceawardedsignificantimportancetoenergysavingsasamotivator(53%veryimpactful,33%impactful)(PWC,2017).
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Aspectsofparticularrelevancetosmarthomesincludesmartmeters,demandresponseandincentives(includingenablingmarketframeworks),in-homerenewables,storageandelectricvehicles.SmartmetersThediffusionofadvancedmeteringsystemsvariesaroundtheworld.Chinahasmoreinstalledsmartmetersthantherestoftheworldcombined:about70%ofhouseholdsarealreadyconnectedtoasmartmeter,andChinaiscommittedtoafullcoverageinthecomingyears(IEA,2016).Theshareinotherregionsislower,butitisincreasingfast,withmanygovernmentshavingsetatargetofreachingfullcoveragewithinthenextfewyears.IntheEuropeanUnion,thetargetdateis2022,buttheaverageshareremainslow(around15%today)–althoughItalyandSwedenhavecurrentadoptionratesofover90%(SEDC,2015).AccordingtotheestimationsmadebytheEuropeanCommission,200millionsmartmetersforelectricitywillbeinstalledby2020,representingapproximately72%ofallEuropeanconsumers(EC,2017a).TheUShasanadoptionrateof40%(IEA,2016).DemandresponseDemandresponseisastrategythatisusedtogetelectricityconsumerstoreducetheirconsumptionattimeswhenelectricitysupplyisconstrained.Beyondsmartmeterrollout,technologiesandmechanismsareneededtoenabledemandresponse.Consumptionrecords,dataprocessingandbillingproceduresneedtobeputinplacewhichrequiresinvestmentininformationtechnologyinfrastructure.Manysmartmetersaremostlynotabletodynamicallyidentifyaparticulartime,orsetcertainhoursascriticalandadditionalenergymanagementsystemshavetobedevelopedandintegrated(Eurelectric,2017).Theuseofdemandresponsetargetingtheresidentialsectorisstillrelativelylimited,thoughanumberofprogrammes(notablyintheUS)exist,residentialdemandresponsehasbeenpilotedinseveralcountries(e.g.UK,Belgium,theNetherlands),somejurisdictions(e.g.Australia)havestartedusingautomatedresidentialdemandresponse(i.e.agreementswithcustomersthattheenergyprovidercanautomaticallyadjustdevicestomanagepeakdemand).Box3End-usesmostsuitablefordemandresponse
• Space heating and cooling which can be shifted over a certain number of hours, the extentdependingon the thermal insulationof thebuilding– thebetter the insulation, the longer theperiodofshiftindemand.
• Water heating, most households in cold climates that use electricity tomeet their hot waterneedsareequippedwithastoragetank,sowatercanbewarmedafewhoursbeforeitisused.
• Largeappliances:o Cleaningappliances(washingmachines,dishwashersanddryers)canberunatanyme
ofthedayo Refrigerators can be turned off for short periods, with no loss of service by taking
advantageoftheirthermalinertia(IEA,2016).ElectricitymarketdevelopmentFordemandresponse,tariffstructuresareatooltoimprovecustomerawarenessandresponsiveness.Dynamictime-basedtariffsvaryduringtimeofdayandseasonstoreflecttheactualcostofelectricity(IEA,2016).Integratinghomeenergymanagementsystemswithdynamictariffscanfacilitatedemandmanagementbyautomatingresponsestothesetariffs.Studiesshowthatpeakdemandreductionis60%to200%greaterfordynamictariffswithautomationcomparedtothosewithout(BPIE,2017b).
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Theuseofdynamicpricingisstilllimited.Thenumberofcustomersondynamicpricingratesgloballyisexpectedtoincreasefromaround3.4milliontodayto113.3millionin2025(ACEEE,2017b).IntheUS,lessthan5%ofhouseholdshaveaccesstodynamictariffs(IEA,2016).Astrategyforrealisingalargershareofdemandresponsepotentialistoenableconsumerstoparticipateinthemarketviaaggregateserviceproviders.Aggregatorscombinetheflexibilityfrommultiplecustomerstoprovidebalancingservicestothegridbyadjustingpowerdemandand/orshiftingloadsatshortnotice.Theaggregatedload-reductioncanbesoldtothemarketsorenergyprovider(IEA,2016).Aggregatorscanplayanimportantroleasintermediariesbetweencustomergroupsandtheelectricitymarket,andcantakechargeofmanagingtheprocess,withtheconsentofcustomers(BPIE,2017b).In-homerenewablesgeneration,energystorage,electricvehiclesInasmarthomecontext,rooftopphotovoltaicsolar(PV)isthemostprevalentformofin-homerenewableenergygeneration.Theunitcostofsmall-scalePVhasdroppedbyafactoroffoursince2008(IEA,2017d).From2008tomid-2016,residentialPVelectricitysystempricesfellbyover80%inmostcompetitivemarkets(JRC,2016).In2016,photovoltaiccapacityincreasedbyatleast75GW,witha50%growthyear-on-yearofnewinstallations.Thecumulativeinstalledcapacityreachedatleast302GWbytheendoftheyear,sufficienttosupply1.8percentoftheworld'stotalelectricityconsumption(IEA,2016).ThetheoreticalpotentialofrooftopPVishuge.Forexample,intheUSthetheoreticalpotentialofrooftop(alltypesofbuildings)PVisintheregion1.1TWofelectricalpowerand1432TWhofannualenergygeneration(NREL,2016).Energystoragecanenableconsumerstomoreeffectivelyutilisetheirin-homerenewables.Theunitcostforbatterystoragehasfallenby85%since2008(IEA,2017d).Estimatesindicate,thattheglobalmarketforresidentialenergystoragesystemscouldexperiencegrowthintheregionof3to10GWhin2020and6to15GWhin2025(EC,2017a).Withrapidelectricvehicleadoptionaroundtheworld,powergridsarefacinganewproblem,astheywerenotdesignedtosupportthisnewtypeofuncontrolledload,whichcancausepowerqualityissues(IEA,2017c).Smarthomescanhelpenergyprovidersmanagechargingbymakingsurethatchargingdoesnotaddtopeakloadstressonthegrid.Smarthomesequippedwithrenewablescanuseelectricvehiclesasstorageforrenewableelectricity(e.g.byautomatingchargingwhenrenewableenergygenerationishigh).EVscanalsobeusedasstorageenablingthehometodrawpowerfromthevehiclewhenrenewablesdonotcoverthehome´senergydemand.Theenergystoredinvehiclebatteriescouldalso(forcompensation)bereturnedtothepowergridattimesofincreasedenergydemand.Thenumberofelectriccarsontheroadsgloballyroseto2millionin2016.Itisestimatedthatbetween9and20millionelectriccarscouldbedeployedby2020,andbetween40and70millionby2025.InNorway,electriccarshada29%marketsharelastyear,followedbytheNetherlandswith6.4%,andSwedenwith3.4%.Globally,electriccarsmakeuponly0.2%ofthetotalfleet(IEA,2017c).
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3 Energy savings potential and other energy system benefits
Smarthomescanenablesignificantenergysavingsandcontributetowiderenergysystembenefits.Smartenergymanagementcanprovideuserswithinformationaboutreal-timedevice-levelconsumption,andviasensorsandautomationprovidecomfortandenergysavingsaswellasavarietyofalerts,promptsorenergysavingssuggestions.Advancedset-upswithlearningandenergysavingsalgorithmscanadapttouserneedsandpatternsandprovideservicessuchaslighting,coolingorheatingwhenneeded,whileautomaticallymakingadjustmentstosaveenergywhenpossible.Whencombinedwithhome-generatedrenewablesandenergystorageorelectricvehicles,smarthomescanprovidehouseholdswithadditionalbenefitsintermsofsavinggrid-purchasedenergy.Whensmarthomesareconnectedtotheenergysystemtheycanprovidevalueintermsofmanagementofpeakdemand,bettersupplyanddemandbalance,andrelatedbenefits(IBE,2012;IEA,2017).
3.1 residential energy efficiency benefits Todate,onlyalimitednumberoffieldstudiesandothertypesofassessmenthavesoughttoquantifythebenefitsofsmarthomes.Intermsofenergysavingsachieved,theresultsfromfieldstudiesvary.Thesevariationsarelargelyduetodifferencesintheset-upofsmarthomes,i.e.whichtechnologiesareusedandhowtheyinteractandthelevelofautomationused,differencesinexternalconditionse.g.climatezoneanddifferencesinhowefficientthehomewastobeginwith.Themethodologiesusedinfieldstudiesandothertypesofstudiesvary.Somestudiesalsoindicatealackofpersistenceinregardtosomeofthesavings(e.g.vanDam,2013).Lackofpersistenceistypicalforset-upsthatrequireuserstotakeanactiveroleinmanagingenergyuse-automatedsystemsdonotsufferfromthisproblem.Thenetenergysavingsofasmarthomewilldependonarangeoffactors:
• Thesmarthomedevices–howmuchelectricitytheyuseindifferentpowermodesandtheintervalsatwhichtheypowerdown.
• Thesmarthomesystem(s)–theinfluenceofcontrollingdevicesintermsofturningonoroffotherdevices,makingthemoperatemoreorlessefficiently.
• Thelevelofautomationandthepremisesbehindautomation–whetherenergyefficiencyisapriorityandtherearerobustalgorithmstoensureenergyefficiencyindifferentsituationsorwhether automation is basedonuserpreferenceswithnoormarginal considerationofenergyefficiency.
• User behaviour –whether the user looks at energymonitoring information, whether theuserusesthisinformationtochangesettingsorchangebehaviour.
Asingledevicewithenergysavingcapabilitiescanalreadyprovidesomesavingsopportunities,whileamanagementsystemcanprovidegreatersavingsbycoordinatinglighting,shading,ventilationandheatingorcooling.Sinceseveraltechnologiesaddressthesameenergyend-use(e.g.,connectedthermostatsandsmartzoningbothaffectheatingventilationandcooling(HVAC)energyconsumption),thecombinedsavingspotentialislessthantheirsumbutadditionalsavingsandbenefitscanbeachievedbyintelligentlycoordinatingtechnologies.
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Table3Energysavingsbenefitsofsmarthometechnologies
Technology Benefit EnergysavingsrangeSmartthermostat Heatingandcoolingcanbeswitchedonandoff
remotelyandthetemperatureadjustedupanddown
5-10%forheating(Fraunhofer,2016)8-16%forcooling(Fraunhofer,2016)2-16%electricity(NEEP,2015)5-22%gas(NEEP,2015)
Smartzoning Allowsindividualroomsorzonestobeheatedorcooledtoaspecifictemperature,ataspecifictimeofday
10%forheatingorcooling(Fraunhofer,2016)
Smartwindowcontrol
Controlstheamountoflightletthroughandcanblockheatorcold
11-20%ofheatingorcooling(Fraunhofer,2016)
Occupancybasedlighting
Sensorsmonitorroomoccupancyandturnonlightingwhenneededandturnitoffwhenroomsareempty
30-41%oflightingenergyuse(Fraunhofer,2016)
Smartlighting Lightingthatcanbecontrolledremotely,automated,reactstooccupancy
1-10%11ofwholehomeenergyuse(NEEP,2015)
Smartplugs Turnanunconnectedproductintoaconnectedone,enablingcustomerstoreceivesomeofthefunctionalitiesofferedbysmartapplianceswithexisting,traditionalappliancesatamuchlowercost
1-4.6%ofwholehomeenergyuse(NEEP,2015)
Homeenergymonitoringsystem
Providesenergyconsumerswithinformationabouthowtheyuseenergyinthehomeand/orpromptstomodifyconsumption.
4-7%ofwholehomeenergyuse(PG&E,2015)
Energyportal Atypeofhomeenergymonitoringsystemthatislinkedtoaweb-basedplatformwhichprovidesinformationonenergyuseandsuggestionsonhowtoimproveefficiency.
5.7%-7.4%electricity(NEEP,2015)5.7%-13%gas(NEEP,2015)
Homeenergymonitoringsystem(display)plusdynamicpricing
Providesenergyconsumerswithinformationabouthowtheyuseenergyinthehomeand/orpromptstomodifyconsumptionconnectedtoademandresponseprogrammethatgivesincentiveviaelectricitytariffstoreduceenergyuse.
8-22%electricity(NEEP,2015)8-22%gas(NEEP,2015)
Homeenergymanagementsystem
Providesthehousehold(orthirdparties)theabilitytocontrolenergy-consumingprocessesinthehome,eitherremotelyviaasmartphoneorwebserviceorbasedonasetofrules,whichcanbescheduledoroptimisedbasedonuserbehaviour.
7.8%12ofwholehomeenergyuse(vanDam,2013)20%ofwholehomeenergyuse(Bhatietal.,2017)
Smarthome Combinationofsmarthometechnologiesthatprovidemeasurement,monitoring,informationdisplays,management,control,automation,zoning,occupancysystems,etc.
27%ofwholehomeenergyuse(BPIE,2017a)
Smarthomeenabledenergysavingscouldbeintheregionof20-30%ofhouseholdenergyuse.Astechnologiesareoptimised,developedandlinkedwiththeimplementationoffurtherenergyefficiencyopportunitiesinhomestheenergysavingspotentialcouldincrease.Asanillustration,thepotentialenergysavingsintheUKcouldbemorethan3Mtoeperyearwithasmarthomepenetrationshareof30%.Correspondingly,savingsinJapancouldbeintheregionof2.6-3.9Mtoe
11Thelowerendoftherangeshowssavingsincaseswherethehomealreadyhasefficientlightingandthehigherendshowssavingsincaseswherethesmartlightingreplacesinefficientlightingproducts12Studyshowssavingsreducingovertime
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peryear.EnergysavingsintheUScouldbearound15.7–23.5Mtoeperyearandcouldgrowinexcessof30Mtoewith40%deployment.Figure4PotentialenergysavingsintheUKfromenergyefficientsmarthomedeployment
Source:OwncalculationsbasedonIEAenergybalancedata.TheIEAforecaststhatsmarttechnologiescouldbetween2017and2040lowerenergyconsumptionofthebuildingssectorgloballybyasmuchas10%leadingtocumulativeenergysavingsovertheperiodto2040of65PWh(or5589Mtoe)–equaltomorethanallthetotalfinalenergyconsumedinnon-OECDcountriesin2015(IEA,2017d).
3.2 Benefits in terms of collecting and analyzing data Smarthomeenergymanagementdevicesandsystemsprovidenewopportunitiesforevaluation,measurementandverification.Thiswouldenableidentificationofenergysavingsordemandresponseopportunities,monitoringandprogrammeevaluationatavastlylowercostthantraditionalmethods.Shortintervaldatacanbeusedasatooltoevaluatesavingsfrominstalledmeasureswithgreateraccuracyandtoevaluatesavingsdeliveredthroughenergyefficiencyordemandresponseprogrammes.Analysisofthesedatacanalsohelpidentifyandfixprogrammeissuesmid-cycle(LamoureauxandReeves,2016).Suchdatacouldalsobeusedperformremoteauditstoidentifyopportunitiesforenergyefficiencyanddemandresponse.Suchauditscanidentifypotentialforindividualhomes,aswellascustomizedestimatesoftheenergysavingspotentialandpaybackperiodofretrofits(Fraunhofer,2016).Post-retrofitdatacouldbeusedtoconfirmthattheretrofithadbeensuccessfullycompletedandprovideremoteevaluation,measurementandverification(EM&V)ofactualenergysavingsanddemandreduction(Fraunhofer,2016).Smarthomedatacouldalsobeusedbypolicymakerstogetinformationthatwouldhelpdesignmoreeffectiveenergyefficiencyprogrammessuchasdataontheactualenergyuseofappliances,householdbehaviours,andotherfactorsthatimpactonenergyconsumption.
0.71.5
2.22.9
3.74.4
1.1
2.2
3.3
4.4
5.5
6.6
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
10% 20% 30% 40% 50% 60%
EnergysavedMtoe
Smarthomedeploymentrate
20%
30%
savingsperhome
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3.3 Energy system benefits Smarthomescanprovideawiderangeofbenefitstoenergyprovidersandelectricitysystemoperation.Benefitsinclude:• Accesstodatathatenablesbetterforecastingofdemandtohelpbetterplanandprepareto
meetdemandmoreefficiently.• Moresophisticateddevice-leveldemandresponseandhelpshiftloadsfrompeaktooff-peak
timeswithmoreefficientgenerationorrenewablegenerationsources.• Reductionoftheneedtoinstalladditionalgenerationviademandresponse.• Preventionofsupplyinterruptionsviademandresponse.• Reductionofgridcongestionviademandresponsetherebydecreasinglinelossesand
contributingtoimprovedefficiency.• Facilitatingtheuseandintegrationofin-homeorotherdistributedrenewablesgeneration.• Helpingenergyprovidersmanageimpactondemandbyelectricvehiclesbymakingsurethat
chargingdoesnotaddtopeakloadstressonthegrid.• Providingbalancingservicesbyshiftingoperationandadaptingenergyconsumptiontoshort
termpositiveornegativediscrepanciesbetweenforecastedandrealgenerationbyintermittentrenewableenergysources(IBE,2012;EC,2017a).
3.3.1 Quantification of benefits to energy systems Thereareanumberofsmarthomedemandresponseprogrammesandpilotsthathavebeencarriedoutthatprovidesomeindicationofthepotentialbenefits.However,themagnitudeandvalueofthesebenefitsdependonthesizeofthegrid,energymix,optionsforpeakdemandmanagement,thenumberofsmarthomesandtheextenttowhichsmarthomesparticipateindemandresponse.Benefitsincreasewithincreasedinvolvementofsmarthomesintheenergysystem.Programmesindicatethatevenarelativelylowpenetrationandinvolvementofsmarthomescanprovidevalue.AccordingtotheIEA,inallregions,mostofthecurrentandfuturetechnicalpotentialofdemandresponseatloweroverallcost(upfrontandopportunitycosts)liesinthebuildingssector,especiallyinspaceandwaterheatingandcooling.Assessmentsindicatethat,providedthatallenablingconditionsareinplace,demandresponsecouldbeappliedtoalmostafifthofannualelectricitydemandintheEUandtheUS(IEA,2016c).Globally,about3600TWhofcurrentelectricityconsumptionistechnicallyavailablefordemandresponse,anditisexpectedtodoubleby2040toaround6400TWh,oralmost20%ofelectricityconsumptionworldwide(IEA,2017d).TheIEAforecaststhatby2040,globally,1billionhouseholdscouldactivelyparticipateininterconnectedelectricitysystemsproviding185GWofsystemflexibilitysavingUSD270billionofinvestmentinnewpowerplants(IEA,2017d).ThevolumeofcontrollableloadbysmartappliancesintheEUisestimatedtobeatleast60GW,ofwhich40GWisassessedtobeeconomicallyviable.Theshiftofthisloadfrompeaktimestootherperiodscouldreducepeak-generationintheEUby10%(BertoldiandSerrenho,2017).Ongoingprogrammes,pilotandresearchprojectsconfirmthatsmarthomeenabledpeakreductionscanbesignificant,forexample:• 20%ofelectricitycustomersinCaliforniaparticipateindemand-sideprogrammes,contributing
5%oftotalpeakdemandsavings(IEA,2016c).• InJapan,fourpilotprojectsimplementedbetween2011and2015haveshownpeakreduction
levelsof10%to20%byrelyingonacombinationoftechnologiessuchasHEMS,aswellastime-of-use(TOU)orcritical-peakpricing(CPP)(Bloomberg,2016).
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• InSweden,thepeakreductionpotentialofdishwashingandlaundryisbetween150MWto300MWandremainsthesamethroughouttheyear.Expressedasapercentage,thepeakloadinSwedencouldbereducedby1.1–2.3%.(Puranik,2014).
• InGermany,theprojecteTelligenceusedatimeofusetariffwithtwopricelevels(pricespreadof0,26€/kWh)incombinationwithbonus(0€/kWh)andmalusevents(1,2€/kWh)thatwerebasedontheavailabilityofrenewableenergy(announcedday-ahead).Electricitysavingsupto20%incaseofmaluseventsandadditionalelectricityconsumptionupto30%duringbonuseventswereobserved(EC,2017a).
• TheGermanprojectMoMaprojecttestedareal-timepricingtariffwithdailypriceupdates(pricespreadof0,075€/kWh).Theprojectshowedthat,onaverage,adoublinginpriceresultedareductionofdemandofaround10%(EC,2017a).
Thevalueofdemandresponsevariesbutisconsiderable,forexample,intheUS,100hoursofpeakdemandcomprise10-20%ofannualelectricitycosts(ERC,2013).Therearealsopotentialclimatebenefitsofpeakdemandreductionasitcanenabletheretirementofoldergenerationfacilitiesthatarekeptinoperationtocoverpeakdemand.Forexample,intheUS,shuttingdown10%oftheplantsthatarenecessaryonlybecauseofpeakconditionscouldprevent100millionto200millionmetrictonsofgreenhousegasesannually(NDRC,2016).Therearecurrentlynostudiesthatquantifythepotentialcontributionofsmarthomestoavoidanceofsupplyinterruption.However,thecostofblackoutstoenergyprovidersandtoeconomiesisconsiderable.Studiesindicatethatcountriestendtolose1to2percentofGDPgrowthpotentialduetoblackouts,over-investmentinbackupelectricitygenerators,andinefficientuseofresources(UnitedNationsDevelopmentProgramme2010).IntheUS,gridfailurecostsapproximatelyUSD150billionayear(USDepartmentofEnergy,2014).
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4 Energy costs of smart homes
Aswithallelectricalappliancesandelectronicdevices,smarthometechnologiesrequireenergythroughouttheirlife-cycle,frommaterialsextractionandmanufacturingtouseanddisposal.Allnetworkconnectedtechnologiesalsocontributetotheenergydemandofnetworks,servers,datacentresandotherICTinfrastructure.Studiesshowthatnetworkconnecteddevices,includingsmarthometechnologies,willberesponsibleforagrowingshareofresidentialenergyuse.Forexample,theIEAassessesthat50%ofhouseholdelectricitydemandforappliancesby2040isexpectedtocomefromconnecteddevices(IEA,2017d).13Thereasonsforthisareseveral:
• Conventionaldeviceswillbereplacedbyconnecteddevices.
• Connecteddevicesgenerallyneedtobeonorathigherpowermodesforextendedperiodsoftimetomaintainconnectivity,increasingtheirenergyconsumption.
• Connecteddevicesoffernew functionsandserviceswhichmay lead to intensifieduseandincreasedenergydemand.
Akeyissueofconcernisthestandbyenergyconsumptionofsmarthomedevices.Tofunction,smarthometechnologiesneedtobeonorathigherpowermodesforextendedperiodsoftimetomaintainconnectivity.Consequently,networkconnectivityiscausingadditionalenergydemand.In2014,theIEAforecastthat,ifleftunchecked,theenergydemandofnetworkconnecteddevicesinhomesandofficescouldgrowfrom616TWh/yearin2013to1140TWh/yearby2025(IEA,2014).Sincethisforecast,policiesandprogrammestoreducenetworkstandbypowerenergyconsumptionhavebeenputinplaceinseveraljurisdictions(e.g.EU,USandSouthKorea).Recentstudiesindicatethatthepowerrequiredfornetworkstandbyhasreducedsignificantlyinmanyproducts.AstudyfocusingoncompliancetoECregulationsonnetworkedstandbymeasuredagamesconsoledrawing0.2watts(W)andavideogamesconsoledrawing0.3Winnetworkstandby,whilea2010modelgamesconsolerequired10W(EDNA,2017b;IEA,2014).Thestudyalsoshowedvariationsintermsofnetworkstandbyforsimilarproducts,forexample,onewirelessBluetoothspeakerrequiring0.9Wwhileanotherrequired5.2W–indicatingthatthereisfurtherscopeforreducingnetworkstandbyinsomeproductcategories(EDNA,2017b).Thereiscurrentlynocomprehensivestudyonthestandbypowerrequirementsandenergyconsumptionofsmarthometechnologies.Consideringthepotentiallylargequantityofsmarthomedevicespersmarthome,networkstandbycouldamounttoaconsiderableenergydemandperhomeandcumulatively.Thereisariskthatincreaseddeploymentofsmarthomeswilloffsetpartoftheenergysavingsthatsmarthometechnologiescanenable.Thefollowingexamplesindicateanorderofmagnitude:
• Smart lighting-standbypowerrangesfrom0.15Wtoover2.71W,potentiallyconsumingasmuchas25kilowatthours(kWh)perlightfixtureorbulb(IEA4E,2016).
• Home automation technologies - globally currently use in the region of 12 TWhwhile instandbyandcouldincreaseto36TWhby2025(EDNA,2016b).
• Networked audio products - global annual energy consumption in the lowest responsivepowermodecouldbealmost11TWhin2018(EDNA,2016a).
13IEAcentralscenario
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• Smartappliances(excludinglighting)-couldbesettogloballyuse7TWhannuallyby2025(EDNA,2016b).
• Smart devices (excluding televisions and computers) - the standby power energyconsumption ofmains-connected smart devices is projected to grow to 46 TWhby 2025,with36TWhcomingfromhomeautomation(IEA,2017d).
• Energy storage – may have a high stand-by consumption due to the controllers, powerelectronicsandinternetconnection.Thereisalargespreadinstandbyrequirements:5to80W(averageis30±20W)(EC,2017a).
Smarthomesalsodriveenergyconsumptionbyprovidingnewservices(e.g.,pre-heatinghomesorrunningautomatedsecurityroutines)orbyintensifyingexistingservices(e.g.,audiovisualentertainment).Therearecurrentlynostudiesontheenergyimplicationsofnewservicesornewpatternsofusage.
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5 Barriers to implementation
Thereareanumberofbarriershinderingtheuptakeofsmarthomedevicesandsystems.Moststudieslistbarrierssuchas:lackofawarenessorinterest,costs,uncertaintyaroundbenefits,privacyconcerns,cybersecurityconcerns,andtechnologyrisk(e.g.GfK,2016,Houzz,2016,PWC,2017).Inthecontextofenablingaconduciveenvironment,therearealsoarangeofbarriersandgapsincluding:slowrolloutofsmartmeters,smartmetersthatarenotcompatiblewithothersmarttechnologies,absenceofdynamicenergypricing,highshareofelectricitycostbeingfixedcosts,highpriceoftechnologiesfordistributedrenewableenergygeneration,lackoffeed-intariffs,highpriceofelectricvehiclesandlackofcharginginfrastructure.
5.1 Barriers to implementation pathway Ifsmarthomesaretobeintegralplayersinsmartenergysystems,therearearangeofhurdlesthatneedtobeovercome.Asmentionedearlier,thetrajectorytoenergy-savingsmarthomesisnotlinear-partsoftheimplementationneedotherpartstobeinplace.Forexample,thebusinesscaseforconsumerstoinvestinsmarttechnologiesisimprovediftheycanbenefitfromdemandresponseopportunities.Thishoweverrequiressmartmetersanddemandresponseprogrammestobeinplace.Table4liststheknownbarrierstoenergy-savingsmarthomes.Table4Barrierstotheimplementationpathwayofsmarthomes
Elementrequired/Whathastohappen:
Barriersthataffectthis:
UptakeofsmarthometechnologiesInstallationofsmarthomedevices(e.g.smartlighting,smartthermostats)
Costofdevices,lowconsumerawareness,lackofinterest,benefitsareuncleartoconsumers,longreplacementcycles,mistrustoftechnology,cybersecurityconcerns,dataprivacyconcerns,lackoftrustinenergyproviders(fordemandresponseenableddevices)
Installationofsensorsandcontrols
Costs,complexity,lackofinteroperability
Installationofhomeenergymanagementsystem(HEMS)
Costofthesystem,costofservices,unclearwhatthebenefitsareandiftheywillbeachieved,cybersecurityconcerns,dataprivacyconcerns,lackoftrustinproviders,lackofincentives(lackdynamicpricing,lackofdemandresponseprogrammes,lowenergypricesinsomejurisdictions)
Developmentoffullinteroperabilityofsmarthomedevices,sensorsandcontrolswithHEMS
Lackofstandardsandcommunicationprotocolsthatenabledevicesfromdifferentmanufacturerstointeract,mightrequireexternalassistancetosetupthesystems,useoftechnologiesfromdifferentmanufacturersmayleadtoproblemsgettingtechnicalsupport
Commissioningandoperation Costofservices,lackofserviceproviderexpertiseinorinterestinhowtooptimiseforenergyefficiency,lowqualityofservices,insufficientproductsupportservices
OptimisationanduseofHEMS Complexity,lackofinteroperability,lackofuser-friendlyinterface,sometimesneedtouseseparatedisplaysandcontrols
EstablishmentofsmartgridelementsDevelopmentofsmartenergygridcapability
RequireslargeinvestmentsinICTandotherenablingtechnologies,regulationsneedtobechanged,newregulationsmaybeneeded,newformsofcooperationneedtobeestablished
Installationofsmartmeters Customeropposition(privacyissues,costissues),technicalissues,partofthesmartmetersrolledoutarenotsuitablefordemandresponseandadditionaltechnologiesneedtobeinstalled,andrequiresenergyprovidertobecapableoffinancingtheinstallation
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Sources:NEEP,2015;PG&E(2015);PWC(2017);IEA(2016c);IEA(2017a);IEA(2017b);IEA(2017d);Eurelectric(2017).
5.2 Barriers To the uptake of smart home technologies Arelativelylargenumberofconsumersurveyshavebeencarriedouttounderstandreasonsforwhyconsumersarenotpurchasingsmarthometechnologies.Resultsvarybutmostlistthefollowingkeybarriers(e.g.PWC,2017):
• Highcostsandunclearbenefits• Privacy,trustandcybersecurity• Complexityandtechnologyrisk
5.2.1 High Costs and unclear benefits Smarthomedevicescostmorethantraditionaldevices,forexample,intheUSanaveragepriceforasmartthermostatisintheregionofUSD250,whereasatraditional,basicprogrammablethermostatcostsUSD25.Inadditiontothecostofdevices,thereareofteninstallationcostsandinsomecasesservicecosts.Thereiscurrentlyalackofsolutionssuchasbundlingwithotherservicesorleasingthatcouldhelpconsumersreducetheupfrontcostoftheinvestment.Non-monetarycostscanalsoactasadeterrent,forexample,timeandeffortassociatedtosearchingforacontractorormissingworktobeathomeduringinstallation.Anotheraspectdeterringpurchaseofsmarttechnologiesisthatmosthomesarefullyequippedwithfunctioningconventionaldevicesandconsumersarefacedwiththedecisionwhethertodiscardfunctioningnon-connecteddevicesandpurchaseasmartdeviceorwaituntiltheconventionaldevicestopsworking.Akeybarrierconstrainingconsumerinterestinsmarthomedevicesandsystemsisalackofclarityabouttheenergybenefits.Averylimitednumberoffieldstudiesabouttheimpactsofsmarthomeshavebeencarriedout.Consequently,thereisalackofindependentlyverifiedempiricaldataon
Developmentoffullinteroperabilitybetweensmartmeters,smarthomedevicesandHEMS
Lackofstandardsthatenabledevicesfromdifferentbrandstointeract,somesmartmetersarenotcompatiblewithhomeenergymanagementsystems
Establishmentofdemandresponseprogrammes
Absenceofenablingtechnologye.g.loadcontroldevices.Lackofstandardisedmethodologies,regulatorybarriers(e.g.toenableenergysavingstobepartofcapacitymarket)
Establishmentofdynamicpricingforenergy
Absenceofenablingtechnologye.g.manysmartmetersneedtobeequippedwithadditionalsystems,regulationsmayneedtobechanged
Establishmentofflexibilitymarkets
Frameworkconditionstoenablenewmarketparticipantstoparticipateinthemarketneedtobeestablished
Householderengageindemandresponsee.g.respondtotariffsignals,etc.
Complexityofdesignandfunctionality,fallawayinconsumerinterestifbenefitsarenotapparentorifitistootimeconsumingorcomplicated,lackofconfidenceintheorganisationthatispermittedtocontrolsmarthomedevices,energypricestructuremayconstrainbenefitstohouseholdsfromshiftingconsumption/makingenergysavings
Installationofin-homerenewableenergygeneration
Upfrontcost,technologyrisk,lackoffeed-intariffs,uncertaintyabouttariffstructureandincentives,lackofspace,needtogetagreementfrombuildingowners,needtoreachagreementswithallhouseholdsofmulti-tenanthouses
Installationofhomeenergystorage
Upfrontcost,lackofspace,needtogetagreementfrombuildingowners,needtoreachagreementswithallhouseholdsofmulti-tenanthouses
Purchaseofelectricvehicle(s) Cost,technologyrisk,lackofcharginginfrastructure,rateofturnoverofstock,limiteddrivingrangepercharge
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savingsimpacts(Fraunhofer,2016).Whilemanufacturersprovidesomequantificationsofsavings,measurementmethodologiesaretypicallynotharmonisedacrosstheindustryandvarybymanufacturer(CDA,2016).Energycostsarenotasignificantexpenseformanyhouseholdsandsavingenergymaynotbeasufficientlycompellingargumentaloneforinvestinginsmarthomedevicesandsystems.Benefits(e.g.energycostsavings)maynotoutweightheinvestmentcostsandotherbarriers.Forexample,atypicalUShouseholdspends8-14%oftheirincomeonenergy.Heatingandcoolingcostsareapproximately3-5%ofgrossannualincome(Zhaoetal.,2016).Asmartthermostatthatisclaimedtosave23%ofheatingandcoolingenergywouldprovidethehouseholdwithsavingsintheregionof0.7–1.15%i.e.correspondingtoUSD39–64(comparedtoUSmedianhouseholdincomeUSD55,775).WithanaveragepriceofUSD250thisgivesapaybackperiodof4–6years,whichmightbeconsideredlonginlightofhowlongthesmartthermostatwillactuallyworkbeforeneedingtobereplacedorhowlongpeoplestayinthesamehome.Dynamicpricingcouldenhancethebenefits(costsavingsorotherincentives)ofusingahomeenergymanagementsystem–however,thisrequiresdemandresponseprogrammesandtoolstoenableconsumerstoparticipateinthemarket.Thevalueofotherbenefitsofsmarthometechnologies(increasedcomfort,security,control)couldcontributetoamorecompellingcaseforinvesting,however,thereisalackofinformationabouthowsmarthomeenergymanagementcanhelpcontributetotheattainmentofthesebenefits.Earlyadoptersofsmarthometechnologieshavesocio-demographiccharacteristicswhicharesimilartothoseofinformationcommunicationandtechnologiesmoregenerally(Wilsonetal.,2017).Thereisariskthatsmarthometechnologiesreinforcethedigitaldivideassociatedwithinformationcommunicationtechnologiesfurtherintohomes.
Impact: Without clear and reliable information about the energy benefits of smart hometechnologies, thecaseforconsumersto invest inordertomakeenergysavingsremainsweak.Theinvestmentcostsfortechnologiesarestillrelativelyhighconsideringthemonetaryvalueofpotentialenergysavings.
5.2.2 Privacy, trust and Cyber security Privacyandtrust-relatedissueshaveinsomecasesdelayedorhaltedsmart-meterrollouts(AlAbdulkarimandLukszo,2011;Hoenkampetal.,2011).Similarissuesmayarisewithdatacollectedbysmarthometechnologies(Cavoukianetal.,2010;Balta-Ozkanetal.,2013b).Oncedevicesareconnectedtotheinternet,informationabouthowandwhendevicesareusediscommunicatedonlineandoftenstoredincloudservers.Thisdatacanrevealpersonalidentities,behaviours,locationandhealthandcouldbeaccessedandutilisedbynon-authorisedparties(e.g.burglars,identitythieves).Recentlargedatabreecheshaveleftmanyconsumerswonderinghowsafetheirprivateinformationisinthecloud(NEEP,2015).Manyconsumershaveconcernsabouthowmuchoftheirinformationisbeingtransmittedelectronically,andwhoisreceivingit(NEEP,2015).Beyondunauthorisedaccess,someconsumersareinprinciplenotcomfortablewithhavingothers(energyproviders,internetproviders,serviceproviders)havingaccesstotheirdata.Lackoftrustinenergyprovidersrepresentskeybarrierinadoptingdemandresponseenabledappliances(NEEP,2015).Fordemandresponsepurposes,energyprovidersmayenterintoagreementswithconsumersthattheycanremotelyshutdownorreducetheenergydrawoftheirsmarthomedevicesifneededfor
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theelectricitysystem.Consumershaveconcernsthatthiswillhaveanegativeimpactoncomfortorservices(e.g.foodspoilinginthefridgeorclothesgettingruinedinthewashingmachine)ifenergyprovidersmakechangesinhowdevicesoperateatinappropriatetimes. Recentlargescalehackingoperationsthathavebeenintenselycoveredinmediaareboundtointensifyconcernsrelatedtohackingandhavingnon-authorisedpersonsaccessingdataorcontrollingtheirhomedevicesformaliciouspurposes.Becauseoftheirlimitedcomputingcapacitymostsmarthometechnologieshavenotbeendesignedwithproperprotectioncapabilitiessoaresusceptibletohackingattacks.Inthecasedeviceshaveadvancedprotection,consumersmaynotunderstandhowtousethesecuritysettingstoprotectthemselves.Impact:Withoutproperfeedbackloops,failsafes,andnetworksecurity,thepotentialforunwanteduse,accessandinteractioncanbeoff-puttingforconsumersandpotentiallydangerous(NEEP,2015).
5.2.3 Complexity and technology risk Connectingdevicesandsystemsmakesthemcomplexandmoredifficulttomanagethanconventionalproducts.Increasedcomplexityaddstorisksofthingsgoingwrong.Thereisagreaterriskforerror-pronenessofsmarthometechnologiesbecauseofadditionaltechnicalcomponents.Smarthomedevicesutilisenewtechnologies,makingthemsusceptibletoproblems.AsurveyintheUSin2016foundthat28%ofsmarthomedeviceownersreportedexperiencingproblemswiththeirdevicesorsystems.In2017,thatnumberincreasedto34%ofconsumershavingissues.Thetopproblemsreportedwereconnectivityanddeviceperformanceissues(Martin,2017).Box4Smarthomeautomation–openvsclosedloopsystems
Understandinghowautomationworkscanhelp identify thecauses for someof theproblemswithsmart home technologies. In general, there are two types of control systems, namely, open loopcontrolsystemsandclosedloopcontrolsystems.Inclosedloopcontrolsystems,theoutputissensedandgivenasfeedbackalongwithinputtothesystem.Meanwhile,inopenloopsystems,theinputisgiventothesystemthatgeneratesoutputbuttheoutputisnotsensedorfedback.
Source:Shetab(2017)Forexample,asmartthermostatwithaclosedloopcontrolsystemwoulduseinput(readingsfromsensors on indoor andoutdoor temperature, occupancy andother parameters) tomake a change(e.g.adjust temperatureupordown)andthencollect informationontheresult (i.e.newreadingsfromsensors)andthenmakeadditionaladjustmentsifrequired.Comparedtoclosedloopcontrolsystems,openloopcontrolsystemsaresimplerintheirlayout,cheaper,morestableandeasiertoconstruct.Notallsmarthometechnologiesuseclosedloopcontroland,consequently,maynotprovidetheservicelevelthatusersmaywishfor.
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Homeownersarealsoincreasinglyscepticalofwirelessinternetandcableprovidersandtheirabilitytoreliablydeliverservice(NEEP,2015).Thiscontributestoconcernsthatsmarthometechnologiesmaystopworkinginthecaseofserviceinterruptions.Forexample,asmartlightingsystemcouldstopworkingwhenWiFiisdown.Furtherconcernsarehowthesetechnologieswillperformincaseofaccidentssuchasfireorflooding.Glitchesinsoftwareupdatescanleadtodevicesorthesystemmalfunctioning.Forexample,inAugust2017,asoftwareupdatefromawell-knownTVbrandledtothousandsofnewlypurchasedsmartTVsetsintheUKtostopworkingforseveraldays.Theneedforsoftwareupdatesalsoleadstoconcernsthatsmartappliancessoftwareupdatescouldchangesettings(e.g.differentdefaultstandbymode,higherwashtemperature,brighterscreen,etc.)(EC,2017a).Atthecentreofmanybarriersconstrainingsmarthomeuptakeisthelackofinteroperability.Therearecurrentlymanynetworks,standardsandtypesofdevicesthatcreateinteroperabilityproblemsandconfusionforconsumersneedingtosetupandcontrolmultipledevices.Thereareeffortsunderwaytoestablishcommunicationprotocolsthatcanenableallsmartdevicestocommunicatewitheachother.Somecompaniesandorganisationshaveformedalliancestopromoteinteroperabilityamongsolutions(PG&E,2015).However,manymanufacturersarestillusingproprietarytechnologyi.e.theirsmarthomedeviceswillonlycommunicatewithdevicesfromthesamebrand.Whyisinteroperabilitycrucial?Interoperability is necessary to allow householders to switch systems, strategies, suppliers andindividual appliances irrespective of their previous purchases and contracts. To enable demandresponse, interoperability isneededtoensurethatsmarthometechnologyhardwareandsoftwaredesignscancommunicatewithsmartmetersorviaotherchannelswithenergyproviders.Thiswouldenablesmarthometechnologycontrolalgorithmstorespondtosupplyconstraintsbyshiftingtime-flexibledomesticloads.Promoting theuseof open source communicationprotocols (as opposed to proprietary solutions)enables other actors to develop solutions that can ensure communication between devices fromdifferent manufacturers. Use of open source also enables other parties to develop solutions e.g.additionalsoftwaretohelpusersanalysetheirdataandidentifyenergysavingsopportunities.Forconsumers,lackofinteroperabilityposesariskforvendorlock-in,aswellasinabilitytoaccessfullbenefitsbothintermsofcontrollabilityandenergysavings.Evenwherethesamecommunicationprotocolisusedfordifferentproducts,theusermaystillhavetousedifferentsoftwareapplications(apps)tocontroleachproduct(IEA4E,2016).Insomecases,consumersmayhavetodealwithmultiplesystemsandinterfaces,forexample,smartmeterdisplay,lightingcontroldisplay,heatingandcoolingcontroldisplay,windowsystemdisplayetc.).Thisnotonlynegativelyaffectsuserexperienceswithsmarthometechnologiesbutmightresultinfatigueandleadtousersnotmakingeffortstomonitorandmanageenergyuse.
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Figure5Illustrationofasmarthomewithmultiplesmartsystems
Smarthometechnologiesareevolving,newproductversionsarebeingdevelopedandmarketedandmanynewactorsarelaunchingnewproductsontothemarket.Thisleadstoasituationwheresolutionsarerelativelyquicklyreplacedbynewsolutions.Asaconsequence,consumersmayprefertowaituntilthemarketismorematurebeforemakingacommitmenttosmarthometechnologies.Someofthemanufacturersofsmarthometechnologiesarealsonewmarketentrants,whichincombinationwithanimmaturemarketcanleadtoariskofcompaniesgoingoutofbusiness.Ifamanufacturergoesoutofbusiness,thenaconsumercanfacetheriskhavingpartsofortheentiresmarthomesystembecomingobsolete.Itisalsounclearwhatthelifespansofdifferentsmarthometechnologiesare.Thereisariskthatdevelopmentsininformationandcommunicationtechnologiescouldrendersmarthometechnologiesobsoletequickerthanconventionalnon-connectedcounterparts.Settingupasmarthomesystemiscomplicatedandmayrequireexpertassistance.Thequalityofsuchserviceshasanimpactonsystemperformance.Poorqualityservicecanactasabarrierforfurtheruptakeordeterpotentialconsumers.Impact:Thelackofstandardisationtoensurecompatibilityandenableconsumerstoeasilychooseandswaptechnologieswithoutimpactingtheirinteroperabilitycausesproblemsforconsumers(BPIE,2017b).Problemswithsmarthometechnologiesreceivealotofattentionparticularlyinonlinenewsandsocialmedia.Negativepublicitycanactasastrongdeterrentforhouseholdstoinvestinsmarthomes.Oftensmarthomedevelopmentoccursincrementallyratherthanatthewholehomelevelatonce,iftheuserexperiencesproblemsthismaydeterthepurchaseoffurthersmarthometechnologies.
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5.3 Establishment of smart grid elements and markets Thefullenergybenefitsofsmarthomescanonlybeaccessedifsmarthomesareanintegratedpartofawidersmartgrid.Whileelementsofthesmartgridarestillbeingdeployed,thereisnofullyoperationalsmartgridinplace.Therearecurrentlygapsintechnologies,methodologies,infrastructure,aswellasinmechanismsthatwouldenableandincentivisehouseholdstoparticipateinasmartgrid.Therearenumerousbarriersconstrainingthedevelopmentanddeploymentofsmartgridelements.Rolloutofsmartmetersandcompatibility Mostdevelopedcountriesareintheprocessofimplementingarolloutprogramforsmartmeters.Someconsumersarechoosingto‘opt-out’duetocostorprivacyconcerns,withtheresultthattheyforgothepotentialbenefits.Thereisconsiderablediversityinthecapabilitiesofthesemetersandtheircommunicationtechnologies,whichmaylimittheircapacitytobeusedfordemandresponseprogrammesandtheircapacitytocommunicatewithothersmarthometechnologies.Thereisalsocurrentlyalackofstandardisedcommunicationprotocolsallowinginteroperability.Demandresponseprogrammes,dynamicpricingandgettinghouseholdstoengageindemandresponseAkeybarriertoestablishingdemandresponseprogrammesistheabsenceofenablingtechnology(meteringequipmentandrelatedinformationcommunicationinfrastructure)andprocesses.Manycountrieslackstandardisedmeasurementandbaselinemethodologies,orhavemethodologieswhicharedesignedforgeneratorsanddonotaccuratelymeasureconsumptionchanges.Withoutpropermethodologies,consumerscannotreceivepaymentforthedemandresponseservicestheydeliver(SEDC,2015).Anotherbarrierislackofincentivessuchaslowerenergybillsduetodynamicpricing.Dynamicpricingreferstoretailelectricitypricesthatpassthroughatleastpartofthewholesalepricevolatilitiestotheenduser.Dynamicpricingcanincludetime-of-usepricing,criticalpeakpricingandreal-timepricing(RTP)ortimeofusepricing.Dynamicpricingistodateusedonlyinveryfewjurisdictions14.Eveninjurisdictionswheretherearetimeofusetariffs,theymaynotprovideconsumerswithsufficientincentivetosubscribetodynamicpricingandtomodifybehaviour.Togetconsumersinterestedindynamicpricingtheyneedtobewellinformedandschemesneedtobedesignedinaneasy-to-usewaytomakesavingsachievable.Withoutinformationabouttheirlevelofexposuretopricevolatility,i.e.knowingthatwhenelectricitypricesincrease,theymaypotentiallyfacesignificantincreasesintheirbillsduringcertainmonths.Forexample,inthecaseofrealtimepricingwithadirectexpositiontospotprices,customersneedtobeawarethattheycouldononedaypaymorefortheirelectricitythanfortherestofyear(Eurelectric,2017).Consumersmayfinddynamicpricesandrespondingtothemtoocomplex,resultinginresponsefatigueandonlyverylimitedbehaviouralchanges(Eurelectric,2017).Thereisalackofautomatedsolutionsthatwouldenableconsumerstomoreeasilyengageinthemarketandadjusttheirconsumption.Forexample,theresultsoftheAlpEnergyprojectinGermany,indicatethatinthecaseofsystemsrequiringhouseholdstokeeptrackoftariffsandmodifybehaviouraccordingly(i.e.notautomatedsystems),complexitycanlimitconsumerengagement.Theprojecttrialledtwotimeofusetariffs-asimplerstatictypewith2timeblocksandanannualpriceupdate,andamoredynamic
14Forexample,intheEuropeanUnion,spotbasedpricingexistsforresidentialconsumersonlyintheNordic,EstonianandSpanishelectricitymarkets
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tariffwith5timeblocksandapriceupdateevery36hours.Resultsshowedanaverageloadshiftof2%forthemorestatictariffandanaverageloadshiftofonly1%forthemoredynamictariff(EC,2017a)Evenwithdynamicpricinginplace,insufficientorevennosavingscanoccur,duetoweakpricesignals(Eurelectric,2017).Thereareseveralreasonswhythiscouldoccur:
• Pricesinthewholesalemarketmaynotbehighandvolatileenough.• Theenergy component representsonlypartof electricity bills. For example, in the EU the
energy component is only a third of the bill, the remaining 2/3 of the bill are regulatedcharges,includingnetworkcostsandtaxesandlevies(Eurelectric,2017).
• Lackofincentivestoshifttoe.g.electricheating(thatwouldenablethemtoparticipatetoalargerextentindemandresponseprogrammes)(Eurelectric,2017).
Purchaseofin-homerenewableenergygeneration,energystorageandelectricvehiclesDistributedin-homerenewableenergygeneration,homeenergystorageandelectricvehiclesareseeinganincreaseinuptakebutthisisstillrelativelylimited.Barriersconstrainconsumerinterestandfurthersolutionsareneededtoenabletheoptimalusageoftheseresourcesforthebenefitofconsumersandtheenergysystem.Costandtechnologyriskarekeybarriersaffectingin-homerenewables,homeenergystorageandelectricvehicles.Bothin-homerenewablesandstoragerequirespaceandmayrequirepermitsfromauthoritiesandenergyprovidersandpermissionfrombuildingowners.Obtainingpermissiontoinstallandoperateanenergystoragedevicecanbeacomplicated,expensive,anduncertainprocess(NREL,2016).Adecisivebarriertoin-homegenerationislackoffeed-intariffsorinsecurityoverthelongevityoffeed-intariffs.Electricvehicleuptakeisconstrainedbylackofcharginginfrastructure,rateofturnoverofstock,limiteddrivingrangeperchargeTosupportlargescaledeploymentofdistributedrenewableenergygeneration,changesareneededinelectricitysystems,especiallyintheareasrelatedtobalancing,reliability,flexibility,resilienceorenvironmentalconstraintswhichrequirere-optimisingtransmissionanddistributionnetworks(ETPSmartGrids,2016).
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6 Policy rationale
Smarthometechnologiespresentanewchallengeforenergyefficiencypolicymakers.Thetechnologiesaremorecomplexandintangiblethanconventionalhomeappliancesbecausetheyarepartofnetworkedsystems.Technologydevelopmentisrapidwithmanynewproductsenteringthemarketeveryyear.Theirbenefitsintermsofenergysavingsandtheirownenergyusedependonahighernumberoffactorsthanconventionalnon-connecteddevices.Smarthomesinterfacewithsmartgrids,withdistributedrenewableenergygeneration,energystorageandelectricvehicles.Smarthometechnologiesarealsoanareaofinnovationandpotentialeconomicgrowthintermsofenterprisedevelopmentandemploymentcreation.Inconsequence,energyefficiencypolicymakersarefacedwithanevolvingsituationthatintersectswithareaswherepoliciesarealreadyinplaceorarebeingdeveloped.Energyefficiencypolicymakinginthisarearequiresdevelopingapproachesenablingcooperationandsynergiesbetweenpolicyareasthatmaynottypicallyhaveworkedtogetherinthepast,suchasenergyefficientproductpolicy,buildingregulations,telecommunications,andenergysupplyanddistribution.
6.1 Benefits of action Thereisastrongcaseforpolicyaction.Aproactiveapproachcouldacceleratethedevelopmentanddeploymentofsmarthometechnologiesthatareoptimisedforenergysavingsanddemandresponse.Benefitsinclude:
• Significantenergy savings couldbemade, contributing toa rangeofpolicyobjectives (e.g.energysecurity,climatechangemitigation)
• Significant energy system benefits (e.g. peakmanagement,more efficient supply, supportintegrationofrenewables)
• Opportunitytoinfluencethedevelopmentofdevicesandsystemstowardsachievinggreaterenergysavings.
6.1.1 Possible risks of action Therearerisksassociatedwithaproactivepolicyapproachatthisstageoftechnologyandmarketdevelopment.Thesecouldforinstanceinclude:
• Backlashiftechnologiesdonotmeetexpectationsintermsofenergysavings• Backlashifsomeoftheissueswithsmarthometechnologiesarenotfixede.g.homesecurity
breaches, spread of personal information, cyber-attacks or hacking causing damages tohouseholds
• Making a push for demand response when the market conditions are not in place couldmakehouseholdsdisenchantedanduninterestedinfutureofferings
• Rapid technological changecouldmakepreparatorypolicyeffortsobsoleteas technologiesevolve and the products considered become something else (e.g. smart lighting gatewayscouldpotentiallyevolveintowholehomemanagementsystems).
Furtherdrawbacksincludetheneedforsignificantresourcesintermsoftimeandefforttosourceandcommissioninformationaboutsmarthometechnologies,andtheresourcesrequiredtoengagewithrelevantactors.
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6.2 A case for delaying action? Consideringthecomplexityofthetopicandtheresourcerequirementsforpolicymakingandthepotentialrisks,oneoptionistodelaypolicymakingtoapointwherethemarketandtechnologysituationisdeemedtobemorestable.Benefitsofdelayedpolicymakinginclude:
• Withtimethemarketwillmatureanditmaybeeasiertounderstandwhichtechnologiestofocuson.
• Othercountriesmayhavealreadyputpolicies inplaceandadaptation/replicationcouldbeexplored.
Intheabsenceofactiveenergyefficiencypolicymaking,technologyandmarketdevelopmentswilltakeplaceandotherpolicieswillbeplannedandimplemented.Evenwithoutenergyefficiencypolicies,somesmarthomeenergyefficiencysavingswouldbeachieved,butwithoutafocusonthedevelopment,uptakeandoptimisationofenergymanagementsystems,itwouldbearelativelylowreductionandalargershareofthesavingscouldbeoffsetbyenergyintensification.However,thereareriskswithdelayingactionincluding:
• Missedresidentialenergyefficiencyopportunities.• Householdsdonotachievesignificantenergysavingsandbecomedisenchantedwithsmart
homeenabledenergyefficiency.• Missedopportunitiestopromotethedevelopmentofenergyefficientandenergyefficiency
enablingtechnologies.• Technologieswilldevelopwithoutconsiderationtoenergyefficiencyandlimitfutureenergy
efficiencyopportunities.• Energy efficiency is not a core consideration in smart grid development and that
technologicallock-inpreventaccessingenergyefficiencyopportunities.Increasinguptakeofsmarthometechnologieswillhappen.Basedupontrendsandtheforecastsbymarketresearchcompanies,connectivitywillbeacommonfunctioninmostappliancessoldfrom2020onwards(HISMarkit,2016).However,thistendencydoesnotnecessarilymeanthattheseapplianceswillbeinteroperable,supportenergyefficiencyorwillprovidedemandresponsefunctionality.Somesurveysindicatethatconsumersaremoreinterestedinsmartentertainment,comfortandsecuritythansmartenergymanagement(e.gPWC,2017).Thereisariskthattheenergyefficiencyopportunitiesthatcouldbeenabledbysmarthometechnologieswillnotbeattained,productsenablingenergyefficiencywillnotbedevelopedduetoperceivedlowconsumerinterest.Serviceprovidersinstallingsmarthometechnologiesandsystemswouldnotconsiderenergyefficiencyintermsofdefaultsettingsandadvicetousers.Therewouldbeasmarthomedrivenintensificationofdemandduetomoreconnecteddevicesandlackoffocusonenergymanagement.Actorsworkingonsmartgriddevelopmentwillcontinuewiththeirprojectedcourseofaction.Thiscouldpotentiallyleadtowide-scaledeploymentofsmartmetersthatarenotcompatiblewithothersmartenergysavinghometechnologies,leadingtolostsavingsopportunitiesorsituationswherehouseholdshavemultiplesmartsystemsforenergymonitoringandmanagementandloseinteresttoengageinthemduetocomplexityandinteroperabilityissues.Orthiscouldalsoleadtoasituationwherehouseholdshavemoredevicesthannecessaryforenergymanagementthatdrawenergytoprovidethesameservices.Demandresponseprogrammescouldbedevelopedwithoutnecessarilytakingintoconsiderationopportunitiesforenergyefficiencyandoverallenergysavings.Thenetimpactonenergy
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consumptiondependsonhowtheprogrammesaredesignedi.e.iftheyalsoprovideassistanceorincentivestoreduceoverallconsumption.
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7 Possible policy actions
Realisingtheenergybenefitsofsmarthomesrequiresaportfolioofpoliciesandmeasures.Energyefficiencypolicymakerscanplayanimportantroleinaddressingsomeofthebarriersandsupportingtheenergymanagementpotentialofsmarthomes.Thecombinationofmeasuresthatcouldbeconsideredwilldependoncountryspecificcircumstancessuchaspolicypriorities,mandatesforpolicymaking,themarketforsmarthometechnologiesandtheenergysystem.Someoftheactionsrequiredarenotinthemandateofenergyefficiencypolicymakers,suchasensuringsafeguardsagainstpotentialcyber-attacksanddevelopingelectricitymarketsthatincentivisedemandresponse.Thissectionofthereportfocusesonthetypesofactionsthataretypicallyinthemandateofenergyefficiencypolicymakersdealingwithpoliciesforenergyusingappliances,equipmentanddevices.Someoftheactionsthatcouldberequiredbutarenotwithinthescopeofenergyefficiencypolicymakersarecoveredastheyarerelevanttoboostingtheuptakeofsmarthomes,andtheremaybeopportunitiestodeveloppolicysolutionsjointlywithotherpolicyactors.Thekeybarriersforsmarthomeuptakeidentifiedinthiscasestudyare:
• Highcostsandunclearbenefits• Privacy,trustandcybersecurity• Complexityandtechnologyrisk
Otherbarriersdiscussedinthecasestudyinclude:
• Lack of smart grid capabilities and electricity market conditions that would enable smarthomes to become and integrated part of smart grid and effectively contribute to theattainmentofenergysystembenefits.
7.1 Vision and engagement Astartingpointforenergyefficiencypolicyactionsinthisareacouldbetodevelopavisionorroadmapforsmarthomeenergyefficiency.Thiscouldhelpclarifypolicyobjectives,communicatetherationaleforpolicymakingandprovidesomethingagainstwhichtotrackprogress.Engagingwithotheractorstostimulateeffortstowardsincreasingenergyefficiencyshouldbeapriority.Thereareanumberoforganisationsoractorsthatcouldberelevanttoconsiderinthiscontext,including:
• Policy makers in other areas (smart grids, energy systems, renewables, climate changemitigation,buildingregulations,etc.)
• Energyproviders(includingregulators)• Standardisationorganisations• Smarttechnologymanufacturers
Otheractorscouldalsohaverolestoplaysuchasinsurancecompanies(provideincentives),housingcompanies (procurement of technologies, technical assistance to households), energy servicecompanies(provisionoffinancingsolutions),municipalities(facilitateaccessforlowincomeorsocialhousinghouseholds to smarthome technologies toe.g. counteract fuelpovertyanddigitaldivide)andacademia(technologyresearch,modelling,impactassessments,fieldstudies).
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Box5Mappingofexistingstandardsandongoingstandardisationinitiatives
StandardisationinitiativesTechnical standards play an important part in energy efficiency policy making. In terms of smarthomes,technicalstandardscansupportthedevelopmentoftestproceduresandmethodologiesforlaboratory and field measurements. Technical standards can also be instrumental in developingsolutionstoprivacyandcybersecurityissues.Technicalstandardslieatthecoreofinteroperabilityandareanessentialpartofdevelopingsmartgridcapabilitiesandcanevenplayarole inensuringthedevelopmentofeffectivemarketmechanisms.Akeyrecommendationofthisreportistoengageinstandardisationprocessestoensurethatenergyefficiency is a priority and that solutions that promote energy efficiency are developed. Thestandardisation landscape inregardtosmarthomes iscomplex.Therearenumerousorganisationsworkingonnational,regionalandinternationallevelsthataredevelopingstandardsthatarerelevanttosmarthomes,includingcommunicationsprotocols.Amappingofrelevantinitiativescouldprovideagoodstartingpoint fordeterminingwhere itmakessense to focuseffort.Concertedefforts,e.g.undertheauspicesofEDNA,wouldmakesensefromaresourceefficiencyperspectiveaswellasinlightofthevalueofthedevelopmentanduptakeofinternationalstandards.Astartingpointcouldbeconsultation with national standardisation bodies that partake in international standardisationefforts.BusinessesparticipatingintheConnectedDevicesAlliance(CDA)couldbeavaluablesourceof information regarding international standardisation processes and work conducted by industryalliancesorgroups.AnoverviewofIoTprotocolscanbefoundon:www.postscapes.com/internet-of-things-protocolsFor a mapping exercise, it would be relevant to include at least the following organisations andinitiatives:Internationalstandardisationorganisations/bodiesInternationalTelecommunicationsUnion(ITU),theInternationalOrganisationforStandardization(ISO), the International Electrotechnical Commission (IEC), The Institute of Electrical andElectronicsEngineersStandardsAssociation(IEEE),InternetEngineeringTaskForce(IETF).RegionalCEN,CENELECandETSI(Europe),AsiaPacificEconomicCooperation.Alliances,consortiums,initiativesoneM2M,OpenStand,ThreadGroup,OpenConnectivityFoundation,Z-WaveAlliance,ZigbeeAlliance,OASIS.
7.2 High costs and unclear benefits Lowerup-frontcostsThereareanumberofpolicymeasuresthatcouldbeusedtostimulatemarketdevelopment,reduceupfront costs and help finance investments in smart home technologies. Examples includeprocurementofenergysavingsmarthometechnologies(forexampleforsocialhousing)orprovisionof subsidies or grants for the purchase of energy saving smart home technologies. This has beendone,forexample,inOntarioin2017,wherethegovernmentagencyGreenOntarioFundlaunchedaprogramme providing free smart thermostats together with free energy reviews to 100,000households(GreenOntarioFund,2017)andJapanhasbeenprovidingasubsidyforHEMSsince2001(IEA PAMS, 2017). Other options include supporting financing schemes e.g. “pay as you save” forsmart home technologies and the development of reliable and user-friendly payback periodcalculators. Some efforts are already underway to develop suitable financial mechanisms. Forexample,theRockyMountain Institute intheUS,hasexploredhowtheuseofresidentialpropertyassessedcleanenergy(R-PACE)couldbeusedtopromotetheuptakeofnetzeroenergyhomes(RMI,2017).
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ImprovethevaluepropositionTheperceptionofhighcostsandunwillingnesstopayupfrontcostsiscloselylinkedtoperceivedbenefits.Thereareanumberofmeasuresthatcouldbetakentoimprovethebusinesscaseforsmarthometechnologies.Thevaluepropositionforsmarthomeenabledenergyefficiencycouldbeimprovedbylinkingenergysavingstootherbenefits,howeverthisrequiresthattheyareavailableandcommunicatedtoconsumers.Thebusinesscasecouldbefurtherimprovedbydevelopingmechanismstofairlyshareenergysystem-widecost-savingswithhouseholdsthatenabletheachievementofthesebenefitsi.e.householdsthatparticipateindemandresponseprogrammes.DevelopstandardsandmethodologiestomeasurebenefitsUncertaintyaroundbenefitscouldbeaddressedbythedevelopmentofteststandardsandfieldmeasurementmethodologiesandthedevelopmentofsuitableevaluation,measurementandverificationprotocols.Effortsarealreadyunderway,forexample,theEuropeanUnionstandardprEN15232establishesmethodsforestimatingtheimpactofautomation,controlandmanagementonenergyperformanceandenergyuseinbuildings(EDNA,2017a).TheChinaSmartHomeIndustryAllianceplanstoestablishasetofsmarthomesystemregulationswhichwillbelinkedtoaverificationplatformtotestandverifysmarthometechnologies.Thiswillcontributetoenablingthereplacementofproducts(duetosametechnicalspecification)andtostandardisationofthesmarthometechnologyvaluechain(CSHIA,2017).ENERGYSTAR®hasalsodevelopedenergymeasurementprotocolsforsmartthermostats.ConductresearchonbenefitsCommonmethodologiesandstandardscouldthenbeusedtocommissionandpublishreliableandcomparablestudiesonbenefits(energysavings,costsavings,otherbenefits,energysystembenefits)ofsmarthometechnologiesandsmarthomes.Policymakerscouldhelpdevelopastrongercaseforenergyefficiencybycompilingandprovidinginformationonhowenergyefficiencyenablingtechnologiescancontributetootherbenefitssuchasincreasedcomfort,betterindoorairqualityandenhancedhomesecurity.SuchworkcouldbuildonworkdonebytheIEAsecretariatandtheIEADemand-SideManagementTechnologyCollaborationProgrammeonmultiplebenefits. ConductresearchonenergyconsumptionResearchontheenergyconsumptionofsmarthometechnologies(particularlyonenergymanagementrelatedtechnologies)wouldhelpconveyreliableinformationonthenetenergybenefitsofsmarthomes.Demonstrationandinsituresearchprogrammescouldfurthercontributetoreliablequantificationsofbenefits.Astheattainmentofpartoftheenergyandcostsavingsbenefitscanbeconstrainedbysub-optimalinstallationandconfiguration,informationonbestpracticescouldbecollectedtodevelopguidanceformanufacturers,consumersandinstallers.ExploreopportunitiestoaccessandusesmarthomeenergydataEnergyefficiencypolicymakers,couldinvestigateopportunitiesforhowtogainaccesstogranulardatafromsmarthomes(viaHEMSorfromenergyprovidersviasmartmeters)thatcouldbeusedtotrackenergyefficiencyprogressandinformfuturepolicymaking.Thiswouldrequireanexplorationoftoolsandexpertiseneededanalysebigdatasetstogetinsightsintodevicelevelenergyefficiencyimprovements,behaviouralimpactsandotheraspectsthatcanhelpinformpolicymakingandbeusedtoevaluatetheimpactoffuturepolicymeasures.Theuseofbigenergydatarequiresfindingsolutionsforthefollowing:
• Collection,storageandmanagementofbigenergydata• Methodsforhowtoanalyseandminebigenergydata• Howtousebigenergydatatosupportmoreeffectiveandefficientdecisionmaking• Preventionofrisksandadequateprivacyprotection(Zhouetal.,2016).
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DeveloplabelstoinformconsumersUncertaintycouldalsobeaddressedbydevelopinglabelsorcertificationsthatcanservebothasasealofapproval,andasamechanismtorecognisefeaturesandbenefits(EDNA,2017a).Aninformationlabelcouldprovideafoundationonwhichtobuildaminimumenergyperformancerequirementatalaterdate,providingconsistencytomanufacturersandclaritytoconsumers.Forexample,intheUS,productsthatsatisfytheenergyefficiency,connectivity,anddemandresponsecriteriasetbyEPA,canbecertifiedasENERGYSTAR®connectedproducts,alabelthatconveystoconsumersaproduct’sreliabilityandsuperiorperformance.TheEPAlabelhelpscreateconsumerconfidenceinconnecteddevices(EDNA,2017a).InGermany,thereisasmartgridreadylabelavailableforheatpumpsandasearchabledatabaseofproductsthatthatthelabel.ThelabelhasbeendevelopedbytheGermanheatpumpindustryassociation(BWP,2017).Smartfunctionalitiescanbeincludedasrequirementforcertainlabelclasses.Forinstance,theSouthKoreanregulationforairconditionersandmultiheatpumpsystemsrequirethat,togettheenergylabel‘grade1’,theindoorunitsofairconditionersof4-10kWandtheindoorunitsofmultiheatpumpsystemsof1-30kWinsizemustincludesmartfunctionsi.e.displaypowerconsumptionusingasmartphone,tabletorcomputerapplication,andtheabilityfortheusertocontrolthemode,temperature,airvolume,andotherfunctionsusingtheapplicationFigure6GermanheatpumpindustryassociationSmartGridReadylabel
Source:BWP(2017)PromoteenergyefficiencyandenergysavingsSmarthometechnologymanufacturerswillprioritiseenergyefficiencyifthereisacleardemand.Asthisreportindicates,consumerdemandforenergysavingandenergyefficientsmarthometechnologiescouldbewaning,andtherecouldbeacaseforpolicymakerstopromotethedevelopmentofenergyefficientsolutions.Thiscouldbedoneviaregulationbutcouldalsobeachievedthroughengagementanddialogue.Energyefficiencypolicymakerscouldforinstance,incooperationwithsmarthomedeviceandsystemmanufacturersandotherrelevantparties(e.g.ITserviceproviders,energyproviderassociations,componentandsoftwaredevelopers)developguidingprinciples(e.g.modelledontheCDAVoluntaryGuidingPrinciplesforEnergyEfficientConnectedDevices)forenergyefficientsmarthomes.Lessonslearnedonsuchanapproachcouldbe,forinstance,drawnfromtheUnitedKingdomwheretheDepartmentofEnergyandClimateChange(DECC)wasintegraltoanindustry-wideefforttosetdesignandoperatingstandards,andofferin-homedisplaysasanintegralpartofthesmartmeterinstallationprocess(DECC,2014;DECC,2015).Furthermeasurescouldincludeinvestigatingfutureopportunitiesforenergysavingsandotherenergysystembenefitsindialoguewithsmarthomedeviceandsystemmanufacturersandotherrelevantparties(e.g.ITserviceproviders,energyproviderassociations,componentandsoftware
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developers).Measurescouldbetakentoincentivisemanufacturerstoincludeenergyefficientfeaturesinproducts.Forexample,severalUSENERGYSTARspecificationsforappliances(clotheswashers,clothesdryers,dishwashers,refrigeratorsandfreezers,roomairconditioners,andpoolpumps)havecontentonenergyawarenessandenergyreporting(EDNA,2016c).Energyefficiencypolicymakerscouldalsodevelopprogrammesfortrainingandqualificationsintheconstructionandelectronicsinstallationsectortoensurequalityandthatenergymanagementopportunitiesareenabledandcommunicatedtohouseholds.Effortsinthisareaarealreadyunderwayinsomejurisdictions.Forexample,ChinaSmartHomeIndustryAlliance(CSHIA)launchedthe"smarthomesystemsengineer"trainingin2012.Studentsreceivea"smarthomesystemsengineer"certificateissuedjointlybytheMinistryofIndustryandthesmarthomeindustryalliance,andrecordintheMinistryofEducationandExaminationCenter(CSHIA,2017).CurtailenergyintensificationAnaspectofpromotingenergysavingsisensuringthattheparasiticenergyconsumptionofsmarthometechnologiesandsmarthomes(e.g.duetonetworkcommunicationsfunction)iskeptataminimum.Smarthomescanalsoleadtoanincreaseinenergyconsumption(posingariskofenergyintensification)thoughincreaseduseoftechnologies(e.g.toturnonairconditioningorotherservicesbeforeyougethome),increasednumberofdevicesandincreasedenergyconsumptionofdevices(duetobeingonhigherlevelsofpowerforlongerperiodsoftime).Toaddresstheriskofenergyintensification,thereisaneedformethodologiestomeasuretheenergydemandofsmarthometechnologiesandtocommissionresearchtomeasurehowmuchenergyisusedinactualconditions.Intermsofhomeenergymanagementsystems,researchcouldbecommissionedtounderstandwhatisactuallyneededtomanagehomeenergyandtocheckwhetherequivalentresultscanbeachievedwithfewerdevices(Wilsonetal.,2017).Afurthermeasureinthisareacouldbetodevelopguidelinesforenergyoptimisationtosteerindustrytoincludedesignfeaturesinsmarthometechnologiesthatmitigatethepotentialforenergyintensification(Wilsonetal.,2017).Othermeasurescouldbetoenterintodialoguewithsmarthomedeviceandsystemmanufacturersabouthowfutureproductscouldbedevelopedtomaximisesavingsandminimiseownenergydemand.Energyefficiencypolicymakerscouldalsodemandthatmanufacturersensureenergyefficientsettingsasadefaultandprovideinformationtoconsumersaboutwhichsettingsaremostenergyefficientandimpactonsavingsifsettingsarechanged.Guidelinesforuserscouldbedevelopedoutliningtheenergycostoftheuseofdifferenttypesofservicesandsettings.Policymakerscouldalsocommissionresearchontheextenttowhichenergy-managementalgorithmscanautomatecertainfunctionstoavoidrisksofenergyintensification(Wilsonetal.,2017).Finally,policymakerscouldconsiderinitiatingpreparatorystudiesorconsultationsonthefeasibilityandvalueofminimumenergyperformancerequirementsforsmarthomedevicesandsystem.Forexample,theEuropeanCommissionRegulation(EU801/2013)placesminimumenergyperformancerequirementslimitingnetworkstandbyofnetwork-connecteddevices.
7.3 Privacy, trust and cyber security Privacyandcybersecurityconcernsarenotlimitedtosmarthometechnologiesbutareanissuerelevanttoallthingsconnectedtonetworks.Whileitmakessensetoaddresstheseissuesatanoverarchinglevelbydevelopingsolutionsforall“InternetofThings”applications,effortsfocusingonsmarthomescouldalsobeinitiatedorpromoted.Thiscouldincludethedevelopmentofguidelinesonsmarthomedatacollection,useandprivacyprotection.Forexample,theEuropeanUnionAgencyforNetworkandInformationSecurity(ENISA)hasissuedareportongoodpracticesandrecommendationsonsecurityandresilienceofsmarthomeenvironments(ENISA,2015).
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Effortscouldalsobemadetorequirethatmanufacturers,serviceprovidersandenergyprovidersdevelopandclearlycommunicateprivacypoliciesthatclarifywhatinformationisbeingcollected;whoownstheinformation;whohasarighttoseeit;whohasarighttouseit;and,whereinformationsharingisanticipated,towhom,forwhatpurposeandunderwhatconditions.Minimumrequirementsonsecurityanddataencryptioncouldbeincludedinspecifications,standardsorvoluntaryagreements.International,regionalandnationalstandardisationorganisationsareworkingonissuesrelatedtocybersecurityforIoTapplications.Forexample,theEuropeanTelecommunicationStandardsInstitute(ETSI)isworkingcloselywithrelevantstakeholderstodevelopstandardsforhorizontalandcross-domainapplicability,aswellasforthesecurityofinfrastructures,devices,servicesandprotocolsandsecuritytoolsandtechniques(ETSI,2017).Workonsecurityisalsounderway,forinstance,withintheInternationalOrganisationforStandardization,theInternationalElectrotechnicalCommissionandtheInternationalTelecommunicationUnion.Energyefficiencypolicymakerscouldsupportthedevelopmentofprivacyandsecuritysolutionsforsmarthometechnologiesthroughmappingexistinginitiatives,identifyinggapsandopportunitiesandengagingwithrelevantactorstoensurethatsolutionsforsmarthometechnologiesarecovered.
7.4 Complexity and technology risks Thedevelopmentandadoptionoftechnicalstandardsliesattheheartaddressingcomplexityandtechnologyrisks.Thedevelopmentofinternationalteststandardscanplayanimportantroleintheprovisionoftransparentandcomparableinformationandhelpalleviateriskperceptions.Thesecould,forinstance,alsoincludelife-timeandfatigueteststohelpaddressconcernsaboutthedurabilityofsmarthometechnologies.Effortsareunderwayonnational,regional,internationalandprivatesectorlevelstoaddresstheissueofinteroperability.Energyefficiencypolicymakerscouldstimulateprogressinthisareabymappingexistingstandardsandstandardprojectsandtheirstatusandcoverageandidentifygapsandopportunities.Somemappinghasalreadybeenconductedthatcouldbeusedasabasis,forexample,anoverviewofexistingstandardshasbeenpublishedaspartoftheEcodesignPreparatoryStudyonSmartAppliancesperformedfortheEuropeanCommission(EC,2017a).Energyefficiencypolicymakerscouldform,leadorsupportcollaborativeeffortstodevelop(preferablyinternational)technicalstandards,opensourcesoftwareplatformsandcommoncommunicationprotocolsfornetworksanddevices.AnumberofsmarthomerelatedtechnicalstandardssuchasGreenButtonandGreenButtonConnect,OpenADR,BACnetandmanyISOandIECstandardshavebenefittedfromtheleadershipandparticipationofgovernmentagenciesoverextendedperiodsoftime(EDNA,2017a).Theuseofproprietaryprotocolscanconstraininteroperability.Energyefficiencypolicymakerscanrequireorencouragetheuseofcommonstandardsandopensourceprotocols.Insomejurisdictions,policymakerscanplayanactiveroleinensuringinteroperability,forexample,inJapan,theMinistryofEconomyTradeandIndustry(METI)approvescommunicationprotocolstobeusedbetweensmartmetersandHEMScontrollers(JapanIndustryNews,2016).Voluntaryapproachestoencourageinteroperabilitycanalsobeeffective.Forexample,theUSEnvironmentalProtectionAgency’sENERGYSTARconnectedthermostatprogramme,hastakenmeasurestopromoteinteroperabilityandsupportdemandresponse.Inthisinitiative,manufacturersareencouragedtoincludecommoninterfacesintheirproductsandensuretheabilitytorespondtodemandresponsesignalsfromenergyproviders(EDNA,2017a).Informationlabelscouldalsobeusedtoencouragetheuseofopensourceprotocols.Forexample,theUSENERGYSTARhasdevelopedrequirementsforconnectedproductsinENERGYSTARproductspecificationswhere
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compliantproductsmustuseopenstandardsbasedcommunications(exceptforremotecontrollability)(Kaplan,2016).Furtheractionstoaddressrisksorriskperceptionscouldincludedevelopingqualitycontrolstandardsandmechanismsandensuringrightsorrecourseforinstallations.Initiatingdemonstrationandpilotprojectsandprovidingtransparentinformationaboutissues,solutionsandresultscouldalsohelpmitigaterisks.
7.5 Lack of smart grid capabilities and enabling market Thefullrangeofbenefitsforhouseholds,fortheenergysystemandforsocietyintermsofe.g.carbondioxideemissionreductionscanonlybeaccessedinasituationwhereasmarthomeisconnectedtoasmartgridandwheremarketconditionsencourageon-siterenewables,storage,electricvehiclesandparticipationindemandresponseprogrammes.Thismeansthatprogressintermsofsmartgridelementsandmarketdevelopmentsareakeyaspecttoacceleratingtheuptakeofsmarthomes(andattainmentofassociatedenergysavings).Thisisanareawhereenergyefficiencypolicymakersdealingwithproductpolicyaretypicallynotactive.However,thereareopportunitiestoviadialogueandengagementexplorepossiblewaystocontributetodevelopments.SmartmeterrolloutIntermsofsmartmeters,policyguidelinesorrequirementscouldbedevelopedtoensuresmarthometechnologyhardwareandsoftwaredesignsarecompatiblewithsmartmeter-enabledcommunicationsfromenergyproviders.Smartmeterrolloutschemescouldbeusedtopromotetheuptakeofenergysavingtechnologiessuchassmartthermostatsorhomeenergymanagementsystemsoratleastwithinformationaboutsmarthomeenabledpossibilities.LinkdemandresponseandenergyefficiencyIntermsofdemandresponse,energyefficiencypolicymakerscouldexplorehowsynergiesbetweensmarthomeenableddemandresponseandenergyefficiencycanbemaximised.Demandresponseandenergyefficiencycanbecomplementary,withenergyefficiencyreducingbothenergyuseandpeakdemand,whiledemandresponseprovidesadditionalpeakdemandreductions.Bycombiningtherevenuestreamofdemandresponsewiththeenergysavingsprovidedbyenergyefficiency,householdscouldgetbetterfinancialoutcomesthanwouldbepossiblewitheitherapproachalone.Bothdemandresponseandenergysavingsrequirethemeasurementandverificationofsavings.Therecouldbeopportunitiestosharetheunderlyingdatastructure.Furthermore,theavailabilityofalmostreal-timeenergyconsumptiondatacreatesaplatformfromwhichfurtherenergysavingsopportunitiesmaybediscovered(USEPA,2010).DevelopstandardisedapproachesfordemandresponseenableddevicesMeasurescouldbetakentodevelopstandardsforconnectivityandcontrollabilityandmandateorprovideotherincentivesformakingdevices“demandresponseready”(whichshouldencompass“smarthomeready”orviceversa)andforhouseholdstopurchasesuchdevices.Forexample,Australiahasbeenworkingfor12yearsonasuitofstandardstoenabledemandresponse.Increasinglyproductssuchasairconditioners,waterheaters,poolpumpcontrollersandelectricvehiclesupplyequipmentaresoldwithabuilt-instandardisedinterface,whichwillallowthemtoconnecttoacommunicationssystemandparticipateindemandresponseschemes.AnyAS/NZS4755compliantappliancecanworkwithanyothercompliantdevice(UtilityMagazine,2017).In2016,StandardsAustraliapublishedastandardrelatingtothedemandresponseofenergystoragesystems.Itsupportsthedevelopmentofthestoragemarket,openinguprewardsforstorageownersandmanufacturerswhointroducecomplyingproducts(StandardsAustralia,2016).ENERGYSTAR®
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specificationsforawiderangeofequipmentalsocontainoptionalrequirementsfordeviceenergyreportingandsmartgridcontrollability.TheEuropeanCommission´sEcodesignPreparatoryStudyonSmartAppliances(Lot33)isanalysingthetechnical,economic,marketandsocietalaspectsthatarerelevantforabroadmarketintroductionofsmartappliancesthatcouldsupportdemandresponse.ImprovethevaluepropositionofdemandresponseThebusinesscaseforhouseholdstoengageindemandresponseneedstobedeveloped,whichincludesmechanismstosharethebenefitsfromdemandresponsewithhouseholds.Studiesondemandresponsecostsandbenefitsincludingcostsandbenefitsforhouseholdscouldbeausefulstepindevelopingabusinesscaseforsmarthomeenableddemandresponse.Furtherstepscouldincludethedevelopmentofstandardisedprocessesforinformationexchange,transferofenergyandfinancialsettlementincludingfairmechanismstosharebenefits.Otheractionstoimprovetheattractivenessofdemandresponseforhouseholdscouldincludeloweringthefixedcomponentofelectricitypricee.g.byfinancingpolicysupportcostthroughalternativemeanssuchastaxcreditsorspreadingcostsoverotherfuels(Eurelectric,2017).Otherwaysofengaginghouseholdsindemandresponseisbyofferingsubsidiesorotherincentives.Forinstance,Energex(asubsidiaryofEnergyQueenslandLimited,aStategovernment-ownedcorporationinAustralia)thatbuilds,operatesandmaintainstheelectricitydistributionnetworkoffersrewardsfordemandresponse.Consumersareofferedarebateonthecostofanairconditionerifitiscompliantwithademandresponseplatformandactivatedatinstallation.Thedemandresponseisautomatedi.e.shiftedtolowerperformancemodewhenthenetworkisunderstress(Energex,2017).Similarly,intheUS,AustinEnergyandCPSEnergyofferconsumersafreethermostatorathermostatrebateinexchangefordemandresponsecontroloftheair-conditioning(EC,2017a).Promotein-homerenewables,in-homeenergystorageandEVsThereareanumberofactionsthatcouldbetakentopromotetheuptakeofrenewables,energystorageandEVsaspartofasmarthome.Solutions(technicalandadministrative)arestillneededintermsofrenewablesandstorageformulti-tenantbuildings.Asignificantbarriertouptakecanbeoverlycomplexpermittingprocesses.Feedintariffsandsecurityintermsofthelongevityoftariffsarealsoimportantfactors.Subsidiescanbeaneffectivetooltopromoteuptake.Forinstance,inGermany,asubsidyschemeforresidentialenergystorage(upto30%ofinitialinvestmentissubsidised),makesahomebatterysystemattractive.Estimatespredictthatby2018,theGermanmarketwillhavestabilizedwithonaverage100,000unitsperyear.By2020,atotalof500,000unitsareexpectedtobeinstalledinGermany(EC,2017a).Agreaterinterconnectionbetweenenergyefficiencyandhomesolar(orotherrenewable)policiesandprogrammeswouldbebeneficial.Forexample,theCanadianGovernmentofAlbertaagencyEnergyEfficiencyAlbertadesignsanddeliversprogrammesrelatedtoenergyefficiency,energyconservationandthedevelopmentofmicro-generationandsmallscaleenergysystems(EnergyEfficiencyAlberta,2017).TheuptakeofEVscanbepromotedbypurchaseincentivessuchasuseandcirculationincentives,waiversonaccessrestrictions.Promotingthedevelopmentanduseofuniformandnon-proprietarycommunicationsmessagingprotocolsbetweenEVsandsmarthomesisanimportantstepinensuringthatEVscanbeusedasenergystorageandthatsmartchargingsolutionscanbeimplemented.
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8. Conclusions and recommendations
Smarthomescanprovidesignificantenergysavingsforhouseholdsaswellasbenefitsfortheenergysystem.Currently,theuptakeofsmarthometechnologiesisstilllimited.Thereareanumberofbarriersconstraininguptakethatneedtobeaddressed.Thereisacaseforenergyefficiencypolicymakerstobeactiveinthisarea.Delayedactioncouldresultinthelossofenergysavingsopportunities,especiallyifthesolutionsdevelopedanddeployeddonottakeintoconsiderationenergyefficiency.Ataminimum,energyefficiencypolicymakersshouldtakeactiontosourcesufficientknowledgeofdevelopmentsintheareasofIntelligentEfficiency,InternetofThings,smarthomesandsmartgrids.Thisisneededtoassessenergyimplicationsandtobeabletoquicklydeploypoliciessoasnottoforgoenergyefficiencyopportunities.Inthiscontext,therearetwokeycoursesofaction–commissioningresearchandenteringintodialoguewithotherrelevantactors.Energyefficiencypolicymakerscanalsoplayanimportantroleinimprovingthevaluepropositionforsmarthomes,bysupportingthedevelopmentofmethodologiesandstudiesquantifyingbenefitsandtheprovisionofaccessibleinformationtoconsumersvialabelsorothermechanisms.Thevaluepropositionforsmarthomeenergymanagementcouldbeimprovedifitislinkedtodemandresponseprogrammes.However,smarthomedemandresponseisstillatanearlystageofdevelopmentandarangeofgapsandbarriersneedtobeaddressedtoenablehouseholdstoactivelyparticipateinelectricitymarketsandtoreapthebenefitsofparticipation.Inthiscontext,policymakerscouldconsiderthedevelopmentofstandardsandapproachesthatensurethatrelevantdevicesare“demandresponseready”aswellas“smarthomeready”(theseshouldideallybethesamething).ExperiencesfromAustralia,theUSandthecurrentEuropeanEcodesignpreparatorystudycouldprovidevaluableguidanceonhowtoproceedinthisarea.Thereisastrongcaseforinternationalcooperationtopoolresources,developapproachesandengageinahigh-leveldialogue.EDNAandtheCDAareexcellentplatformsforensuringthis.
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