Welcome to the second part of the 5th webinar of Smart Talks with Jovan. Our guests were:

Ištvan Papp, Professor at the Faculty of Technical Sciences, University of Novi Sad and VP Engineering at OBLO living, Boris Turha, Senior Development Engineer in the Technological Development Department at Electro Ljubljana and Tomaž 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.

If you haven’t read the first part, we recommend checking it out before coming back to this one. Read it here. 

Are the advantages offered by Home Energy Management Systems sufficient to serve as the primary impulse for its greater implementation?

Boris Turha:

Maybe homeowners need to be asked this question. I think that for them, it is sufficient. Perhaps we just need to ask how HEMS gets a signal from the DSO to reduce energy consumption because of overload in the grid. We talked about it when we established our flexibility platform, and we currently have three ways to send requests to homeowners.

One way is the relay output on a smart meter, but the consumer has to make a physical connection to their HEMS, which is not very practical. It’s a simple on-off activation signal. For advanced users, we can send MQTT requests to their HEMS. The third way, which is a manual method, involves sending an email and SMS message 15 minutes before activation, and then the customer inputs the request into their HEMS application to turn off a device or perform some other action.

Tomaz Dostal:

I guess the state of the art HEMS does not allow this yet. I see this as a big problem with photovoltaic installations right now in Slovenia because many new requests are getting declined or have very limited export power. For them, if there were a technical solution to overcome this and if the utilities or legislation allowed it, that would be a good motivation.

Financially, I’m not sure we are there yet, as the benefits are still too little. What I think is that we are still looking for this “killer app” that would make home energy management systems very attractive to people. Maybe it’s just around the corner, but I don’t see it being heavily implemented right now.

Istvan Papp:

Since we are smart technology providers, we are not happy with the speed of adoption of HEMS. We would like it to be faster. It’s moving at a slow pace – everyone is talking about it and sees the potential, but the killer app is not there yet. We’ve seen some specific solutions, especially in Scandinavian countries, but they are quite narrow and don’t exploit the full potential of this technology.

I would like to see an additional push for HEMS. I believe some level of standardization, legislation, and incentives could help with greater implementation by providing a stable market where more companies could enter and compete. This would surely drive development.

It would also be beneficial to have projects that involve different players to understand various aspects in this quest for the killer app.

Currently, we have two parallel systems – one is the data flow through the energy meter from the home to the energy company, and the other is out-of-band connections, run through our smart home solution. However, this is our solution, and our competitors might not adopt it. Until there is consolidation, the market will remain fragmented. Therefore, a push through standardization and incentives is necessary.

How to encourage collaboration of different companies in order to achieve the standardization in Home Energy Management Systems?

Istvan Papp:

I will make a parallel with the quite new standard called Matter, which is being pushed by the big players like Google, Amazon, Samsung, and Apple. It’s a consumer protocol, and while it may not be directly applicable to the energy system, some aspects could be copied. These companies realized they needed to create a critical mass of diverse participants to get this to work. Of course, as with any standardization, it’s not an easy thing to push through, but they managed to pull together device vendors, service providers, and different market players where Matter is expected to be used.

I think the same approach should be applied in this domain. One of my takeaways from some research projects is that everyone approaches the problem from their own perspective. Distribution companies have their own view and problems, IoT technology providers look at the issue through the lens of technology, and academic people focus on algorithms. Nobody has the full picture.

In some cases, it was eye-opening for me to see that a technologically simple issue was perceived as a big problem by the distributor due to business or other dependencies not seen by us. The first step should be to bring together different people because every standard is a long-lasting effort. We need to define a platform that meets today’s needs but also anticipates the future, thinking about five or ten years ahead. We should create a standard that can evolve because digitalization is happening quickly, and traditional energy companies may not be used to this pace of technological evolution.

Partnering up is key. Research projects can be a vehicle for this, and if there is a critical mass behind it, this will be the key to success.

Boris Turha:

I will add our DSO point of view because I think that the European Union or even DSOs among themselves should determine the protocols for sending activation requests. As soon as we determine these protocols, manufacturers will adapt their hardware to enable them.

That’s why we used MQTT, which is a quite general protocol for sending activation requests. HEMS just have to establish a secure connection to our entry point and subscribe to the correct topic. Maybe in the future, we will send some tokenized requests to HEMS. That’s our point of view.

Tomaz Dostal:

Standards are good. Let’s say that ETSI is a great example of a successful standard. The IETF is also a good representative of when standardization can really boost business. However, we also have very unsuccessful trials of standardization, where something has been standardized but not used. The main and only driver is business need, so when the business need is there, a standard will follow.

In the Smart Home, I’ve seen five to ten different attempts to standardize protocols, and nothing significant has happened until now. Matter is maybe getting somewhere, but it’s still not widely implemented. I’m not sure standardization alone is the only way to boost business.

DLMS is a standardization organization used widely in smart metering, and we are now working on standardized interfaces for Smart Homes, particularly for Energy Management Systems. It can work, but outside the energy industry, DLMS is not used for various reasons. Standardization is one way, but another way is open-source initiatives.

I’m experimenting with Home Assistant, an open-source platform for Home Management. It already integrates Smart Meters directly, connects to the P1 interface, and integrates charging stations and PV systems. This approach doesn’t rely on a single standardized protocol but instead integrates various protocols into one solution through the open-source community. This might even work better in some situations.

The problem with standardization is that it takes a long time – two to three years is considered slow. If a killer app comes out tomorrow, do we wait three years for a protocol to go through all the standardization procedures, or do we find something like Modbus or TCP which works quite fine as a common denominator, and use Home Assistant to connect different devices? I guess there are two different approaches to the same problem.

Also, the question was how to motivate different companies to work together. The answer is simple – business interest. We’ve talked with several HVAC manufacturers in Slovenia and globally. We had good ideas and believed in the technology, but without business interest, nothing happened. There was no business case for it – if we build it, how can we sell it? Without business interest, nothing will happen.

Should the European Union, through its member states, provide incentives to interested parties in order to more quickly engage in the implementation of energy management and standardization of the Home Energy Management System?

Tomaz Dostal:

Probably yes, at the end of the day, if you want to have something, it should be pushed. Just in May, I believe Europe accepted EEBus as an official standard for energy management in houses. Whether it will succeed or not, I don’t know. However, if Europe wants to push this green transition and move towards everything electrical, we have to initiate this.

We have standardization organizations within the EU, like CEN-CENELEC, and DLMS. Additionally, there are organizations like ESMIG and EDSO that can help work on this. Whether it will be successful or not, only time will tell.

Smart metering involves two stakeholders: the smart metering manufacturers, this is us, and the utilities, such as the DSOs and Elektro Ljubljana. This collaboration can work easily, but even within widely accepted standards like DLMS, there are different dialects that do not communicate completely transparently. Some parts of the standard are common to everyone, but other parts are specific to individual utilities, not even to entire countries.

So, while DLMS is a good example, it’s not a perfect one. A really good example is MID, but that is a legislative directive.

Boris Turha:

Incentives are always appreciated, free money. However, we must keep in mind that the purpose of HEMS is to make life simple for the customer. The use of HEMS for third parties like the DSO is of secondary importance. As a DSO, we are concerned that incentives alone won’t solve all our problems. For instance, if HEMS is bought by customers connected to a grid that doesn’t have issues with overloads or overvoltage, the DSO won’t need to connect to these HEMS. In such cases, the incentives becomes a waste of money.

From our point of view, while incentives are beneficial, they might not always align with the DSO’s needs, making them a secondary consideration for HEMS.

Istvan Papp:

I think that from a business perspective, having an interest in entering this market is key. As I mentioned, there are two main things needed: a predictable standard and avoiding partial solutions. First, we need to consider the business models between the DSO and the end users up to the smart meter. Some DSOs have the need to manage or set strategic goals for the customer, while others don’t, so that relationship needs to be regulated on a mutual benefit.

Second, we need to focus on the household itself. To a certain extent, with HEMS, you can manage energy consumption at home. With the development of battery technology, heavily pushed by the electric vehicle industry, flexibility will continue to grow. Homeowners can exploit this to achieve savings, especially in combination with PV systems. However, in order to be a part of something bigger, the relation between HEMS and the grid needs to be standardized. The grid cannot communicate with different HEMS in different ways. It needs a unique protocol to avoid maintaining multiple protocol versions.

Until now, this has been pushed to the side of HEMS, but to create a market, standardization is necessary.

Going back to the projects again, we don’t yet have the full information and decisions needed to kick off this standardization to be widely accepted. Even when standards and the market are established, an initial push with intense incentives must be offered to all parties. I guess the only bodies that can do this are the European Union or governments, to kick it off. Once it rolls, it has a good chance to be successful.

In the past year and a half to two years, we’ve had many discussions. People and companies are really willing to discuss, more like a preparation for the future. However, so far, only a few have put money on the table to develop some POCs, and I know only very few who have some solutions in production.

Conclusion:

The adoption rate of Home Energy Management Systems (HEMS) remains unsatisfactory as they are still not very attractive to consumers. Increased standardization, supportive legislation, and attractive incentives could enhance their implementation by creating a stable market that encourages more companies to enter and compete.

It is essential for various stakeholders to agree on a platform that meets current needs while anticipating future developments. There should also be a business interest to motivate companies to collaborate and establish standards in this field.

The European Union, through its member states, should offer incentives to promote the implementation and standardization of HEMS. Additionally, standardization organizations within the EU, such as CEN-CENELEC, DLMS, as well as organizations like ESMIG and EDSO, can contribute to developing standards for HEMS.