Smart Meters: Not So Brainy

I came across this rather interesting article on Business Week about 'Smart Meters: Not So Brainy'. In essence it was a debate about if the government investment in smart meters - to monitor and regulate energy consumption in homes - is a waste of money or not. Pro or Con?

Pro: Not Effective
The people who support the fact that it is really a waste of money believe that the smart meters, which would cost $500 to install and communicate, would only provide information to the average consumer how much he or she uses at real time. It would not provide them enough incentive to conserve energy. Believing in the 80:20 rule only 20% of the people would really do anything about cutting their needs where as the reminaing 80% would feel that the smart meters would not change their consumption needs significantly.

The US government is in the process of deploying $3.4 billion of federal Smart Grid Investment Grant Program funds, matched by $7 billion of state, local, and ratepayer funds for technological improvements to our electricity grid. A part of this would be used for Smart meters installation.

People believe that change in consumer behavior can only come about by economic or financial incentive. For the people to adopt using the smart grid, they need come up with incentive plans like if they use less electricity they get taxed less and also disincentives of higer charge rate for not conserving.

Cons: Built-in reminders to conserve
They say that knowledge is power. If smart meters are installed in US houses it would help the avg consumer save between $60-$180 annually. In a recent study it was found that when consumers tracked their energy usage, it declined by 15%.

Doing some basic calculations. If 338 million smart meters were installed in the US, each bringing in avg $120 savings annually, then that would be $40 bn in savings for the Govt. Just imagine that the $3.8 bn investment in smart grid technology would reap in savings of $40 bn! Clearly this would be really good use of tax payer's money.

Conclusion:
Smart Grid and smart metering seem very promising for everyone but we still do see many implementation challenges. To overhaul the electric grid which hasn't been done in the last 40-50 yrs is going to take time. It will benefit alot of industries, leading to a world of connected devices and internet of things.

Future:
The future would be where we would be living in smart homes where all devices will be controlled by our smartphones! The smart meter will just be one of these devices.



Below is a video of how smart metering is the foundation of the smart grid:

http://www.youtube.com/watch?v=zhT6-NCK0pM

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.

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.

buildings, energy, and smart devices

As I sit in these business school classes I inevitably try to tie them back to my experience of the world and my profession (architecture) and relate it to what I would like to do after school. One topic that is interesting to me is how the network of things may be a solution to some of our energy efficiency problems. Non-industrial commercial buildings account for 40% of energy usage, and much of that energy is un-monitored (except for the bill) and much of it is wasted. Building automation has been around for a long time, but hasn't been used to its fullest for a number of reasons. For one, all these systems typically have proprietary interactions and therefore do not play well together. So, you suffer lock-in using a single company's products or try to cobble together some Frankenstein, either of which your building engineers will resent. For another, building owners don't pay for utilities, tenants do, and it doesn't make financial sense for an owner to build or renovate a building using more capable but more expensive systems that don't add to their bottom line. Also, as eluded to before, the people operating the buildings don't want to deal with the extra complexity of managing and using a system that they don't understand, constantly have to fix, and generally makes their job harder without any benefit that they see. So how does the network of interlinked things fix this problem? It sort of depends on how this plays out. My hope is that the network will adopt some sort of web-based non-proprietary language of interaction and interface. This will make it easier to link sensors and other system parts together and is more likely to result in the human interface for monitoring and analyzing all these devices more user-friendly. Also, increasing publicity about energy usage and its costs and effects on the environment is making more potential tenants ask questions about how a building they are considering moving into fares in that area. As a result, energy efficiency is becoming more of an issue in getting a building leased.

Anyway, the trend that I see which hasn't been pointed out is for tech to reach into more mundane aspects of our lives, resulting in real societal benefit. As technology reaches saturation in markets where corporations find advantage (payroll/CRM/marketing) and in markets for things we don't really need but enjoy (music players/phones that tell you where your friends are), they will begin to penetrate that middle area that is useful but not glamorous (monitoring your home's electricity usage/adjusting your home's thermostat from work or from your phone/monitoring real-time water usage to detect leaks). In each of these cases the individual user receives benefit, however small, but as adoption becomes more pervasive, on the scale of a community or a city, the effect on total resource use will be immense.