Executive Summary

The purpose of this paper is to focus digital energy technologists on the pressing need to collaborate in developing communications devices and controllers to detect and submeter electric vehicles (EVs), and allow for new types of transactions to take place with EVs, at scale. Essential physical and transactional values must be analyzed, computed, communicated, and understood for different parties to gain control of EV electricity loads, and put them to use in different ways. Detection, metering, and development of related transactional systems for EVs are fundamental to the creation of new energy marketplaces. Individual EVs and fleets of EVs connect to energy and infrastructure systems (buildings and charging stations) in some new and unique ways, allowing for the creation of different communications and controls devices for people to manage energy and conduct related transactions. EVs also represent large enough electrical loads in homes and businesses for a range of market participants to be interested in controlling, managing and transacting with them in different ways.

When residences and businesses acquire EVs and their electricity demands subsequently rise, they become incented to reduce their electrical costs. This can be accomplished through a variety of utility programs – some of which already exist in certain states across the country, and others still need to be built-out and refined.[i] As costs for distributed energy products like solar panels and battery storage devices continue to decline through global investments, cooperation and economies of scale, financial burdens associated with acquiring home energy systems and corporate microgrid solutions decrease. Utilities and energy providers in different parts of the country are experimenting today with a range of incentive programs and market approaches to engage residential and C&I (business) customers in acquiring, maintaining and transacting with energy systems equipment.

Aggregates of EV fleets introduce very attractive electricity loads for utilities and energy management companies, incenting operators at all levels to harness and control them as a growing alternative power source for the grid. Virtual power plant (VPP) technologies that connect and dispatch distributed energy resources (DER) are already allowing for scaled penetration of renewable energy sources in Germany, and other countries across Europe and Asia. Renewable energy’s share in the German electricity system is more than 50% today, and remains on-track to reach 80% by 2030.[ii] The digital tools connecting these energy assets are technologies that American innovators excel at developing. Digital connectivity tools have also become the next critical pathway in the continued buildout of national distributed energy systems, and will thus require particular focus and significant resource investments and networked collaboration to develop them over the next three years.

The experiences of electricity “load disaggregation” technologists in the energy market to date provide some valuable keys to building needed digital communications platforms to manage fleets of EVs today. The ambition of the disaggregation innovators to detect and identify distinct electrical loads in the American home and quantify their usage in real-time illuminates the pathway to achieving bi-directional, transactional marketplaces for energy. The challenges faced when advancing the technology in the market also demonstrate that the existing regulated utility business model in the United States has become, in many cases, a real chokepoint for needed grid-edge innovation.

The private sector must continue to widen commercial circles and deepen networks of relationships between organizations investing in and working on innovations in electricity distribution systems and customer-facing energy assets, including those focused on the emerging electric mobility industry. By extending government participation into more private-sector led initiatives and creating more competitive commercial space and pathways for investors and technologists to collaborate and deploy grid-edge innovations, we can overcome existing structural barriers to energy system innovation. The private sector is capable of working together to effectively connect and orchestrate emergent digital energy marketplaces across the United States. In fact, this is already happening in some parts of country.[iii]

The utility business model must continue to be evolved to meet the current and future needs of American society and deliver decarbonized, digital, distributed, and resilient electricity grids. This is an on-going effort, and it will not happen in a vacuum. Rather, it is going require new investments and technologies from the big IT and cloud providers (Microsoft, Amazon & Google, etc.) who continue to supply most of the nation’s compute infrastructure. Large technology firms like IBM must continue leaning into the EV digital technology challenges, along with sophisticated AI companies like Nvidia, and companies that build electrical control systems of different kinds like GE Vernova, Schneider Electric (and their technology partner Sense), ABB, and others. There is a lot of room at the edge of the grid for communications, media, and technology companies like Comcast, Verizon and others to collaborate in providing bandwidth, compute power and a range of needed customer-facing applications. Automakers also have enormous opportunities to build their own technology and communications platforms and to become the primary orchestrators of energy and infrastructure data, insights, and transactions for their customers.

It is clear that market leaders must collaborate in the private sector to scale the technologies required to predict, detect, monitor, measure, and control EVs effectively on the grid system. The technical and engineering challenges involved in the effort will require innovators and market participants from multiple fields to work together at the grid edge to create new technologies, platforms, and to harness the power and economic growth potential of EVs to achieve maximum benefit for society and the planet.

EV Detection & Submetering is the Next Frontier for Distributed Intelligence Technologies

Most of the global automakers (Ford, Mercedes Benz, GM, Volvo, BYD, Volkswagen, Jaguar, etc.) and some 56 countries have made public commitments by now to phase out the production of internal combustion engines in favor of electric engines over the next 20 years, with most of the ramp up of EVs taking place within the next decade.[iv] The industry’s decision to transition the energy source for vehicles has direct ties to sustainability and environmental concerns that have reverberated across global energy, financial and policy circles for decades. The decision is also linked to global macroeconomic realities and technological feats of various pieces of distributed energy equipment in the world. Notably, battery production costs have come down rapidly since 2010, from about $1200 per KwH to $140 per KwH in 2020. They are now projected to be at $65 per KwH by 2030.[v] Much like the cost of solar panels in prior years, individual innovators like Tesla have contributed massively to this battery cost reduction goal, as has entire nations like China, who have sourced, manufactured and deployed the technologies at a rapid and immense scale (e.g. nearly 80% of global supply of EV batteries are produced by Chinese firms). [vi]

Average ranges for EVs have also improved, from about 125 miles in 2010, to an average of 260 miles today, and expected to reach an average of 440 miles by 2030 – a whopping 252% increase.[vii] The number of vehicles sold went from 300 in the United States in 2010, to 600K in 2020 and is now expected to reach about 30 million by 2030.[viii] That figure, the most important one to pay attention to right now, is a 10M% increase, a staggering amount. It’s also a conservative estimate when you consider the current US administration’s goal to have 50% of all vehicles sold in the country be zero emission by 2030 would mean an even bigger amount sold (48 million and a 16M% increase).[ix]

What does this kind of growth mean for the US electrical system? It means electricity demand will increase exponentially as well, with estimates ranging around 600-1K TwH over the same timeframe. It’s estimated that 12M+ electrical chargers will be needed across the nation, about 150K of those being DC-fast chargers. [x] Keeping track of this constantly changing data is important to better visualize and evaluate energy systems as they are evolving over time. Increased understanding, visibility and control are exactly what is needed now with EVs to effectively manage all of this expected growth.

How will the evolution play out in more practical, everyday terms? The anticipated up-tick in EVs, without focusing efforts on developing more enhanced controls over their loads, will eventually pose a threat to existing electrical equipment in different and potentially very costly ways. Marissa Hummon, CTO for Utilidata, an AI-powered technology company providing utilities with real-time insights says, from her own personal experience in Colorado, “Our 1960s neighborhood has 25 kVA of load, and it always provided enough to power the homes. Now, when we plug in our EV, we are taking up half the transformer at 12 kW.  If just one more person in the neighborhood installs a home charging system, we will surely blow the transformer.” Hummon explains that the worst part is that the utility will be mostly blind to the EVs and where this is going to happen.

The idea of ripple effects of increased spontaneous loads in different states across the country is beginning to be understood by energy providers. It has the potential to generate an array of new costs to maintain and fix problems, while we simultaneously miss out on all the value the new electrical loads can provide. It is critical now to focus on the development of the energy system’s abilities to detect and predict EVs coming on-line, and increasingly harness them through digital controls.

The technology elements required to accomplish this task with EVs exists in the world today, and needs to be assembled and put to work to protect and harness the evolving US electrical system. One of the key technologies illuminating the pathway to this goal is load disaggregation technology, which is focused on reading the “e-signature” profiles of different devices utilizing energy in homes and allowing residential customers to see how much energy their HVAC systems are using in comparison to their other household devices. Technologists like Sense, Bidgley, Powerly, and others have been working to commercialize this technology in the US residential market for more than a decade, improving the granularity and processing speed of the data and striving to provide customers more of a real-time view of their home energy profiles. For all of the work to incorporate load disaggregation technology into utility meters and electrical panels, these devices are still not accurately and reliably detecting and measuring EVs, today. It’s technically feasible for the devices like Sense to accomplish, but simply requires more bandwidth and compute power to do so.

This is one of the reasons advanced energy technology firms like Nvidia, Utilidata, and others are becoming increasingly vocal about investments needed at the edge of the grid to advance what is now being called “distributed intelligence” or DI. Andrew Barbeau, President of the Accelerate Group explains, “Utility advanced metering networks are generally only capable of retrospective analysis of energy use in the past. They rely on mesh networks of data that send information back to nodes on the system, which can only send so much data. That wasn’t a problem for utilities when their primary concern was easier metering and billing, but it leaves these networks typically lacking for real-time operations. Further, low-bandwidth utility communication systems are a relic of regulatory structures that make it more profitable for them to build and manage their own information networks, rather than rely on public systems or public clouds.” The challenge at the grid edge is thus to get enough compute power and platform control systems out across the distribution system to process data at the scale required to have more real-time information and customer engagement.

DI & Load Disaggregation: How Far Have We Come in the last Five Years?

American commerce is deeply rooted in the notion of the individual consumer as the locus of innovation and ingenuity, with the most iconic brands being consumer brands like Ford, McDonald’s, Disney and Apple. This may seem like a cultural inclination, but it is also structural. The American commercial system has always relied on innovation in consumer circles to prove out ideas and identify the value in the private sector before regulatory bodies engage to support what is deemed most useful and instructive of future growth and opportunity. The American electrical system largely contravenes these commercial currents. Its regulated monopoly structure controls the vast majority of energy generation, transmission, and distribution, leaving utility customers as recipient, non-active participants in the innovation process. The American grid system was built with the intent to unleash electrification and economic development across the national territory. The system largely achieved society’s market development objectives in the 20^th century, powering the industrial revolution and US growth and expansion. Today, as societal needs have shifted toward achieving greater levels of energy efficiency, decarbonization, resilience and consumer engagement in energy systems, the utility regulatory structure and business model design is typically impeding, if not outright stifling what would otherwise be a natural progression of technology innovation and investment.

This is why, when customer-facing energy innovation does emerge in the United States, it demands particular attention be paid to it. Load disaggregation is one such technology that has had enough of a market breakthrough to illuminate an essential pathway to distributed energy grids, at scale. Load disaggregation technologies provide consumers enhanced data and information about energy use in terms of how much, which devices, and at what costs. Sense is a market leader in the field, continuing to focus on the technology capabilities required to activate the smart home, even in the face of considerable utility system constraints.

In 2018, Accenture published a whitepaper, [xi] focused on DI technology by the utility industry. At the time, Sense was developing a market approach to move beyond the consumer hardware devices originally developed to prove out the value of load disaggregation readings. The company was aiming to convert the boxes into embedded firmware with AI layers within energy meters and electrical panels, allowing them to communicate with a broader range of smart home devices. In the last five years, Sense was able to accomplish the conversion, and its technology was adopted by cutting-edge energy providers like Schneider Electric and the nation’s leading meter makers, Landis & Gyr and Itron.

Sense and their commercial partners today continue to focus on improving the granularity and resolution of disaggregated data streams and the user interface and user experience (UI/UX) of the products to improve communications with customers about their energy consumption profiles. Driving for enhanced data clarity and image production speed, they want to provide an accurate real-time energy usage dashboard for customers. Real-time energy use visualization is a world apart from the physical on-bill notices many people still receive in the mail each month. These notifications provide a comparison of a residence’s typical energy usage to other “similar” (undefined) homes in the neighborhood. While it has been suggested that retroactive usage perspectives do sensitize people to their home energy consumption habits, the data in its current format is only modestly useful. It is also intuitive that real-time notifications should be far more useful to people, and more effective in getting them to adjust their energy consumption at the time of use, or when it would be most beneficial to grid operators for customers to take an action.

With the enhanced data and analytics on home electrical loads, the Sense team can provide safety-related alerts to people about clogged dryer vents, which cause an average of 4,000 fires in US homes each year,[xii] or even more dangerous and costly floating neutrals and arc faults in stoves, and warnings of faulty capacitors that are about to fail. These insights are, of course, in addition to personalized energy efficiency recommendations. Information gleaned from energy analytics may be transmitted as nudges or encouragements to customers to replace inefficient lighting, heating and cooling appliances, along with notices of rebates and opportunities to take advantage of money-saving programs to charge electric vehicles (EVs). The information can also be used to provide meaningful customer support in the purchase of solar panels, Powerwall devices, and other home energy system equipment.

All transactive digital marketplaces in existence today are based on foundational data and analytics capabilities that establish and track the states and values associated with transactions. Accessing, analyzing quality data, and being able to accomplish calculations in ways that foster common understandings or “conventions of truth” between parties to transactions is the logical pathway to conducting these transactions at scale. The common conceptions of digital marketplaces known today, from on-line banking to mobile credit card transactions, or on-line shopping and stock trading, is underpinned by perceived “real-time” understanding of the critical transactional elements (value, price, funding mechanisms, etc.). This is why ensuring EV charging equipment operating in the United States complies with the ISO-15118 standard is imperative today. The standard is aimed at establishing the foundations for a transactive energy marketplace involving consumers through EVs and fleets.[xiii]

Structural Barriers to Achieving the Smart Home & Transactional Energy Marketplaces

How far has DI technology come in the residential energy sector over the years? Sense embedded its technology in a variety of critical hardware, including Landis & Gyr’s “next-gen” Revolo meters, which are rolling out to approximately 3 million customers in National Grid territory alone. Sense is also embedded in Schneider Electric’s Square D home energy panels and breakers. These partnerships extend Sense’s data and analytics capabilities and will allow more Americans to utilize their commercial application, and better understand their home energy profiles, usage patterns, and related costs.

Sense CEO Mike Phillips believes that since their load disaggregation capabilities are also included in Itron meters, DI technology will continue to improve the utility’s visualization capabilities and understanding of their customers’ unique load profiles and behaviors, which will eventually lead to new breakthroughs in grid management techniques. He views DI as an essential part of the overall effort to integrate behind-the-meter (customer side) renewables to the grid, but this is a future-focus for the company. Phillips says, “The first challenge is to make sure that homes have the right appliances in them, and that people are participating in electrification and replacing inefficient products, like air conditioning. Big picture, we recognize that customer participation in providing demand flexibility is the key to driving clean, energy-efficient grids at scale.” While the fact that new advanced utility meters will have DI features built into them is a significant advance for overall grid transparency and customer engagement, it’s difficult to imagine a resounding national impact at this time, when utility meter rollouts happen so slowly and unevenly across the country.

There are utilities today that were early adopters of advanced metering technology 15 or 20 years ago (AMI 1.0), and for the billions of dollars invested in the various aspects AMI since then, the most significant advances have been in achieving digital billing or “meter-to-cash” capabilities and eliminating the need for utility workers to go out and physically read meters. The US Energy Information Administration also calculated in 2021 that more than a quarter of Americans still did not have access to residential smart meters.[xiv]

Andrew Dicker, Managing Director in the Utilities Strategy group for Accenture, explains the way the regulated utility business model creates challenges to effective technology adoption and advancement over the years. To secure the funding for AMI, utilities construct value cases where they convince regulators that it is worth it to invest. Dicker explains, “In the past, utilities justified meters largely based on data and insights that would allow customers to save energy and money. Today, there are emergent themes of using the technology to support customer adoption of solar, EVs and batteries, or to use meters to control the distributed energy resources at the edge for grid reliability. The most advanced cases may reference FERC 2222 and the creation of new energy marketplaces.”  However, while those are thoughtful and inventive cases, Dicker says regulators then struggle to put the right hooks and accountabilities into their approvals and reviews to make sure that different aspects of value are realized. Absent appropriate oversight and controls, utilities lose sight of most of the expected value and fail to capitalize on it.

Conclusion: Private Sector Collaboration in Developing Grid-Edge Digital Systems is Required

Advanced grid-edge technologists like Nvidia and Utilidata are correct in asserting that the United States will need a lot more bandwidth, compute power, nodal communication structures, and grid system control platforms moving forward to make distributed energy systems and markets function most effectively and beneficially for society. Marc Spieler, Senior Managing Director of the Global Energy Industry for Nvidia, a world-leading technology company specializing in AI computing, believes innovators like Sense are on the right track with load disaggregation technology.

Nvidia believes in a dynamic grid-edge future, but they anticipate all advanced metering infrastructure will become a single application of a larger digital energy platform in the future. What is really needed is a much more powerful compute platform at the edge that can harness renewable power generation. Spieler explains, “In a world where customers will increasingly be adopting solar panels, EVs and Tesla Powerwalls, you can see that we will need a centralized controller device in order to interoperate and control renewables at the residential level.” He says, “Over-indexing a technology focus on load disaggregation is not what is going to delight customers or fundamentally change the way they engage with the energy system.” Cutting edge technology firms rightly assert the country needs to be thinking bigger. There needs to be a fundamental realization that more investment in compute power is required for home energy systems and marketplaces to develop and function in the future.

The critical mission for distributed energy technologists is clear. EVs are the critical loads, capable of transforming energy systems and developing new energy markets. The key to controlling them will be accomplished by applying advanced detection, measurement and digital communications technologies, at scale. The constraints of the existing utility marketplace are preventing these innovations from coming to market at a pace that will be required for the conservatively expected volume of EVs in the next 5-10 years. This ultimately means there are enormous market opportunities for a range of private-sector investors and innovators at the grid edge to move in together to provide the required digital tools and capabilities for customers, unleashing the enormous value of distributed energy grids and related transactive marketplaces across the country.

[i] “State Policies Promoting Hybrid and Electric Vehicles,” National Conference of State Legislatures. August 20, 2023 http://tinyurl.com/ydbyaffh

[ii] “Renewables Cover More Than Half of Germany’s Electricity Demands for the First Time This Year,” Clean Energy Wire. December 18, 2023  http://tinyurl.com/4vvd3rzw

[iii] Microgrid Market. Microgrid Market by Connectivity, Offerings, Software, etc. Global Forecast to 2028  http://tinyurl.com/375ehzv9

[iv]Wikipedia. Phase-out of Fossil Fuel Vehicles – most comprehensive set of global commitments across different forums. https://tinyurl.com/mr2vd5rn

[v]Bloomberg NEF and Department of Energy have both done estimates that largely correlate. Inside EVs Reported on this Jan 10, 2023 in an article titled, “EV Batteries Almost 90% Cheaper Today Versus 2008, DOE Estimates.” https://tinyurl.com/y4vuzfxx  The future cost estimate is my own, leveled against various market estimates that exist on the market today.

[vi] “Visualizing China’s Dominance in Battery Manufacturing,” Visual Capitalist. January 19, 2003  http://tinyurl.com/2n9j72m2

[vii] J.D. Power regularly updates vehicle ranges and cohorts on market each year. https://tinyurl.com/4jrjvaww  The Online Electric Vehicle Database is also a comprehensive source for range and average range stats.  https://tinyurl.com/3t8x9ttf   Future estimate is my own, leveled against various market estimates on market.

[viii] Statista maintains a regular database of EV vehicle sale information in the United States each year. https://tinyurl.com/mr2kj4wd  Future estimate is my own.

[ix] McKinsey & Company. April 18, 2022  “Building the Electric-Vehicle Charging Infrastructure America Needs” https://tinyurl.com/yksdv56t

[x] International Energy Agency. “Global EV Outlook 2023, Catching Up with Climate Ambitions” https://tinyurl.com/5csa324v

[xi] Grossi, Erin. 2018 “Future of Distributed Intelligence: Breakthroughs in Load Disaggregation Technology.” Accenture Paper (non-public and available to clients only).

[xii] National Fire Protection Association. 2017 “Home Fires Involving Clothes Dryers and Washing Machines.” https://tinyurl.com/2efw9sv8

[xiii] “As ‘Plug and Charge’ and ‘V2G’ Tech Standardizes, CEC Says Widespread Deployment of ISO-15118 is Imperative,” electrek. February 28, 2022  http://tinyurl.com/2b4f2s9e

[xiv] Energy Industry Administration. 2021 “How Many Smart Meters are Installed in the United States, and Who Has Them?” https://tinyurl.com/53hrh3se