Welcome to the first part of the interview with Tomaz Dostal, member of the Task Force “Next Generation Smart Metering” within the ESMIG working group and Head of the Strategic Engineering Management Team at Iskraemeco. With his years of experience in the field of smart metering, he shared insights into the evolving integration of smart energy management systems within smart homes, accentuating how these advancements not only focus on efficiency and grid stability but also encourage mutually beneficial outcomes for all stakeholders involved.

What is Smart Energy Management in Households and what are the differences compared to Smart Home from your perspective and your experience?

Smart Home is a concept where everything is communicating with each other, the lights, TV, heating, and so on. From my perspective, Home Energy Management System (HEMS) is one of the subsystems of smart homes. It is a part of it and it couldn’t be separated. 

Smart homes were initially seen as a luxury offering comfort for the homeowner. However, HEMS is shifting the focus towards controlling high-consumption devices. It’s only a matter of time, when smart homes and smart energy management systems will become more integrated. For example, voice assistants like Alexa might control not just lights but also systems like heating, EV chargers etc.

There are already some systems like that existing. For example, there is a heat control system in Slovenia, which knows when to heat the bathroom. It keeps the bathroom at a moderate temperature during the day and warms it up in the evening in anticipation of bath time. This home heating system knows about the behavior of the inhabitants of the house. So it’s already a part of smart home, right?

So, we need to continue to develop these systems and combine them with Alexa, Matter protocol and so on, so that these devices can communicate with each other and be united in the future.

I don’t see this happening rapidly, not within five years. But it will eventually come to realization because smart energy systems are becoming a driving force for people. Indeed, smart homes are currently only a privilege of wealthy people or some tech enthusiasts, but the real value lies in the potential to offer more than just comfort.

What are your personal experiences regarding Smart Energy Management at Households so far? You are holding the position of Head of the Strategic Engineering Management Team at Iskraemeco, can you tell us a little bit more about work related to Smart Energy Management at Households in that group?

I’m coming from the smart metering field, so my perspective is shaped by that expertise gained from Iskraemeco. We started to work on the smart home smart energy management system based on the request from one big car manufacturer. The goal was to prevent power outages due to EV charging. The issue arose when people with electric vehicles (EVs) connected them to their homes at full power which is 11 kW, leading to fuses blowing typically on Sundays. Initially, the idea to use smart sockets was considered but dismissed. Instead, we realized we could use information from the smart meters. This successful strategy led to the development of the first control system for EV chargers, which was then expanded to also include heating systems and others. 

At the moment we are trying to regulate the demand to keep the connection point to the grid within a certain limit, not to overburden the grid.

What do you think, what is the main purpose of Smart Energy Management?

The main purpose goes in two directions. One is simply to reduce the monthly electricity bill. Our prediction is that the cost of electricity will get higher, so developing HEMS would be a huge benefit for the homeowner to keep the cost within the acceptable limits. 

The second purpose is more from the system perspective, more about how the system itself works, and it more or less relates to demand response. This helps maintain the entire energy system’s operation within normal and safe conditions. The goal is to avoid overloading the system and potentially reduce the need for major investments into distribution or grid infrastructure.

Slovenia has introduced a new tariff system, which will result in additional costs based on peak power. Therefore, the energy management system, or more accurately, the power or demand management system, should be able to maintain household consumption and demand within these limits. This way, people won’t overload the grid or exceed the power limits set by the distribution network.

Talking about making a profit from HEMS by producing and then selling energy, I can see the option if the homeowner connects to energy community and/or energy market. Homeowners who decide to install PV systems can also decide to join the energy market, and smart energy management system can help in optimizing the cost of that. We know that such energy markets exist even today and optimize their profits. Today we know the selling price of electricity is much lower than the buying price. There’s also a lot of limitations in the grid to do it. Last summer, the selling price of electricity in the local energy market in Slovenia was negative. The reason for that was a surplus of energy in the field, caused by PV generation.

But, if you have a smart energy management system installed well, and if you have comprehensive battery storage, then you can manage these costs properly by storing electricity and selling it back when appropriate, instead of pushing energy into the grid and paying for that.

In the case if prosumers have good prices from their supplier, it can be done easily. Then, smart energy management systems should be aware of these market prices, and they should be directly connected to the energy market. This concept it’s not yet common in Slovenia but it exists. Slovenia does have a real-time energy market where prices change based on demand, but this system isn’t integrated with smart home energy management systems yet. Currently, managing energy sales or purchases is done manually or through a third party, not automatically by the HEMS, but we are currently working on achieving that automatization. So we can expect that prosumers will start to use smart energy management systems, it will not happen overnight, may be a long process, but it will happen. First step is having that kind of supplier, and developing energy communities which are now quite popular.

What are the benefits for the key stakeholders (distribution companies, suppliers, homeowners, etc.) when using Smart Energy Management in households?

Distribution networks are facing challenges with grid stability that is no longer being guaranteed. This is due to significant issues with overvoltages, which are a result of the widespread use of PV systems and other distributed power generators. And this is a real threat right now. Second threat is overloading the distribution grid, cables and  transformers. 

From that perspective distribution companies have two options. Either will they continue to invest into the hardware, changing cables, changing transformers etc. Or they can be part of the smart grid system with a smart energy management system, working on the system level and keeping the grid operational limits to prevent overload of the grid.

From my perspective, that is a benefit for distribution. For example, combining a smart home energy management system with a smart grid energy system allows for the control of photovoltaic generators that prevents system overload or overvoltage. By keeping PVs within specified parameters, like maintaining the standard voltage at 230 volts with a tolerance of plus or minus 10 percent, you ensure stability. Today, if the voltage exceeds around 250 volts, the power plant must shut down to avoid operating outside allowed parameters.

With adopting smart grid and smart home energy management systems, controlling this becomes straightforward, not too complex or expensive. It simply requires a bit of standardization and willingness, and it’s something people can implement. 

DSOs can additionally benefit out of this to provide a good power quality to the consumer. In that case, HEMS would be under control of DSO indirectly through the smart meters. In this manner, the DSOs can inform homeowner indirectly regarding grid conditions, such as when the grid is approaching its maximum power capacity or is overloaded. This information is communicated to the smart meter, which then relays it to the HEMS. The HEMS has the capability and autonomy to respond as needed, adjusting the household’s energy consumption to help maintain the grid within operational parameters.

This setup doesn’t give the DSOs direct control over the HEMS but allows them to provide essential data for informed energy management. If the homeowners are motivated, they can use the HEMS to either reduce or increase their energy usage, contributing to the stability of the grid. This approach is envisioned to be mutually beneficial, ensuring the grid’s efficiency without compromising consumer satisfaction. The key is the homeowner’s willingness to participate actively in this energy management process.

Talking about benefits for a supplier, their interest is to sell as much energy as possible, of course. They have one limitation which is crucial for them and it is day ahead forecasting. Demand forecasting is essential from the system’s perspective to ensure that generation and demand are aligned. If predictions are not met, companies can face significant penalties, potentially up to 30% of their profits. By collaborating with smart consumers or prosumers, companies can encourage them to adjust their consumption to stay within limits, saving substantial money by adhering to forecasts. Employing technologies like artificial intelligence for smarter forecasting can enhance these efforts. Together with real-time management systems, it’s possible to maintain operations within these predicted limits.

The main question is why homeowners would want to use HEMS. Their benefits are often financial. Homeowners receive advice or requirements from DSOs or suppliers. Suppliers can offer incentives like better pricing for electricity. For instance, in Slovenia, there’s a use case involving different tariff blocks or windows throughout the day, with specific rates for summer and winter. Exceeding power limits during these windows results in heavy penalties, and there are some rumors suggesting network fees could be up to ten times higher. Such system strongly motivates homeowners to keep their consumption within contracted limits to avoid these penalties.

The pricing structure from retailers includes two parts: the network fee (which goes to the distribution) and the energy fee (which goes to the supplier). For homeowners to benefit financially, these fees need to be synchronized, encouraging efficient energy use while minimizing costs. This alignment between financial incentives and energy consumption is crucial for motivating homeowners to participate actively in energy management.

Conclusions:

Home Energy Management System should be an integral part of the Smart Home and based on information received from DSO or suppliers, it should make decisions regarding the consumption/production management of devices in the household without compromising comfort for the homeowner.

The main purpose of the Home Energy Management System for the homeowner is the reduction of costs and the possibility of earning from the sale of electricity and for the DSOs is maintaining the overall distribution network stability and ability to provide a good power quality to the consumer without the additional investments into grid infrastructure.

Question for the audience:

Is it necessary for Home Energy Management System to be autonomous in its operation in order for the homeowner to have the maximum benefit from its use?