This is a pessimistic view that I hope can be avoided, but today many utilities are resisting adoption of smart grid technology and the heavy investment required. It seems more likely that the early adopter utilities will lead the charge, reap the benefits, and others will follow later on. This will be good for some business interests, but consumers and the environment as a whole will gain less. So, it is incumbent on consumers to demand smart grid technology to put pressure on utilities (which will take serious effort given today's consumer mentality related to energy use). Consistent government policy with incentives and power to enforce policy (to drive real accountability) will also be critical to the effort.
Thursday, October 7, 2010
Smart Grids and the Forgotten Utilities
Ok, so utilities are not really forgotten in the smart grid discussion, but they often attract far less attention than the technology-focused players in the smart grid arena, like Cisco, IBM, GE, Google and a host of start-ups. Despite the lack of public attention, any business operating in the arena of smart grids is keenly aware of the importance of the utilities role going forward. But what is the role of the utilities? Will they be reactive and rely on other players to drive the change, or will they emerge as leaders of the grid transformation? Without utility leadership, the transformation to a universal smart-grid will be slow, hobbled by failures, and detrimental to long-term customer adoption of energy-efficient practices. Without broad utility engagement, a lack of consistent smart grid standards will likely emerge and could lead to an inefficient system that will need another transformation. And in the process, much of the cost and energy savings could be lost.
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Those are great points Aaron. I recently read this article on how Governments in US and UK are subsidizing manufacturing of electric cars.
ReplyDeleteHighly Charged Motoring: http://www.economist.com/node/17199894
I think same is the case with utilities. Electricity is subsidized in many parts of the world. If we want to influence the consumers to demand efficient energy systems and cleaner energy, those subsidies will have to go away. This will make the consumers feel the pinch when they pay their monthly bills and demand for efficient and smart grids.
Another intersting fact that ties in with Smart Grids in the concept of smart metering which is gaining alot of traction in the telecom market. Companies like Ericsson see alot of revenue for themselves as well as for their customers - mobile operators such as AT&T, Verizon, T-mobile and Sprint.
ReplyDeleteThe concept of smart metering says that future homes will be smart, in essense wireless electric meters will sends reports to cell towers telling the electricity generators which areas are consuming more electricity at real time. It will help optimize the distribution and reallocation of power, within a few seconds, through smart grids. It will also let the average consumer know if we left the light, fan or air-conditioner on while on vacation and switch it off through his mobile phone.
Since large volumes of data would be sent and received through these smart meters it would help raise alot of reveneu for mobile operators and its vendors.
This is a great post that succinctly drives home the issues at hand. I found the article interesting as well, it seems the utilities short term investment/payoff fears could be subdued if the risk is spread amongst other players that invest and own pieces of the smart grid solution.
ReplyDeleteMoreover, of equal concern is the privacy issue that needs to be addressed. The data must be collected to manage consumption, but the opportunistic allure of monetizing the data by selling it for marketing purposes creates consumer concern.
There is a link at the bottom of the article page called "Smart Grid Privacy: How to Keep Your Customer Data Protected" that addresses the privacy issue.