Smart Grid: Who benefits most - Utilities or Customers?

There is a lot of buzz about the "Smart Grid", and I've written several article on the topic in the "monitoring" section, but nobody really knows what the electricity grid in the U.S. will look like 10-20 years from now.  Government hails the smart grid as the savior for renewable energy and energy efficiency, consumers look forward to learning more about how they use their power (or at least a small percentage of us do), and utilities want to know more about how the power they put on the grid is used (which helps them adjust their economic models).

One of the perks of being a blogger is that you get to meet other bloggers located all over the world who share your interests and passion.  One of those bloggers is Alexander Bischoff who runs the blog Open4Energy and has posted an excellent article about an event on the Smart Grid hosted by Earth2Tech that was held out in San Francisco.   Alex is posting his experience at this event as several posts, and his first one focuses on PG&E's efforts to make the smart grid a reality for their customers.

I highly recommend reading his whole article, but there are several excerpts that I found interesting:

Over 50% of the distributed energy generation in the United States, in particular rooftop solar, is produced by consumers within PG&E's coverage area. Providing reliable energy with this level of distributed generation (will increase), and a complex system of demand response is soon to be further challenged by the availability of electrically powered vehicles. The traditional nighttime storage capabilities may be lost as thousands of consumers use nighttime electricity to charge their car batteries. Electric cars do require energy, and although the break from a dependence on fossil fuels is welcomed, the energy to charge the batteries still needs to be delivered. I was pleased to hear that PG&E have joined with 30 car manufacturers and epri to define the common standards for a smart vehicle charging system. Can you imagine if a home would only support charging a particular manufacturer's vehicle?

In describing the similarities and differences in the internet and the smart grid:

The first difference is found in the driver of demand. The Internet was built by the telcos in response to consumer demand for information access. The smart grid is being driven by the utilities as a way to better serve their consumers. These could not be more different, end user pull vs. supplier push. The second difference is in rate of change. The Internet refreshes it's technology every few years. Consumers are willing to replace computers, routers, screens in order to get what they want. The electrical grid must deal with 40 year technological increments. I am still digesting the implications of this statement as I reflect on the purchasing criteria and standards issues utilities must consider.

In describing how utilities value energy data vs. how consumers will use energy data:

Customers need to to be able to use the data about their electricity supply to make changes to what their bill will be, and not simply be told what it was one month after the event. He likened the existing billing structures to receiving a credit card statement with a single amount, and no ability to compare to what had been done. But there was an implied statement here, for at the moment the only way I can change my bill is to reduce the number of kilowatt hours. If the utility company is going to introduce other factors making up my bill, then they will need to provide ways for me to manage these other factors.

I suddenly realized that there is a huge disconnect between what the utilities think the opportunity in providing more granular electricity consumption data is, compared to what I, TED and other monitoring/display technologies companies think the data can be used for. We have been examining the use of individual appliances on a second by second basis and suggesting that this information be displayed to help consumers change behavior and save electricity. The utilities are thinking that more data is an opportunity to invent new billing models, and to equip the home owner to manage these. Both are correct, both are useful, but they are fundamentally different.

I look forward to seeing what the smart grid has to offer, and I love seeing how it unfolds and the perceptions that people have of its progression.  In any scenario, I believe consumers in the near future will use less electricity either due to increased energy awareness or higher bills from their enlightened utilities.  Either way, we'll all be better off.

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Excellent post, Chris. Thanks for the open4energy link. From the consumer's perspective, I think the focus of the power grid of the future must be to help reduce costs and increase reliability to the consumer, as cost and quality are always a priority and a point of tradeoffs. It is to the producer/supplier to communicate and educate the consumer. And, of course, we are all consumers. The pull-quotes from the article made an interesting observation about the disconnect between the utilities and the tech suppliers. I hadn't thought that all the way through before. As an investor in energy and power grid technologies, that was a potentially very valuable insight. Smart meters? Important and necessary but, by not the rocket science for what is really needed: a paradigm shift toward sustainable energy sources. Thanks again.
PG&E are installing smart electricity and gas meters as fast as they can. But there is currently very little information about the long term plans for how they will help consumers. The electricity meters will apparently be able to provide usage data on some level of fine grain basis (but I can't find out how fine grained ... hour-by-hour?). The gas meters will provide day-by-day data. This looks somewhat useful for helping reduce usage. Though I see some difficulties as day-to-day variations in usage are, for me, much higher than the amount of power likely to be saved in any realistic behavior change ... so it would be hard for me to see whether constant nagging of my daughter to turn off lights when she leaves rooms was actually saving any significant amount of power. I believe that in my house the over-riding factor in electricity use is the number and type of loads in the clothes dryer. But the other part of the smart power grid is demand based pricing - charging more for power at peak times of day. There is absolutely NO information about how these new smart meters will help me migrate power usage from expensive to cheaper times. To do that we will need smart appliances that get price signals from the meter. E.g. a freezer that drops the temperature a few extra degrees before the start of a peak charging period so that it can avoid running the compressor in peak times. Coordination of large loads around the neighbourhood would be good too. E.g. those car chargers should not all turn on at exactly 11:00:00 PM. In fact the charger should interrogate the car battery to see how many hours are needed to charge it, and then negotiate with the power company which times to run during the night so it can be done by the time I need the car in the morning. It's unclear whether the "smart" meters being installed today can do any of these things (or are capable of being remotely s/w upgraded to do so). I fear that in ten years PG&E will be back at the PUC asking for permission to bill customers hundreds of millions more dollars to finance a new round of smart meter upgrades.
Tony, State Grid Corporation of China is spending 7 billion dollars in 2010 and 208 billion over the next 10 years on smart grid and AMI. The U.S. is spending 4.5 billion over the next SEVERAL YEARS and olny 36 billion over the next 10 years. Get the picture? European regulators have mandated that 80% of their utility customers have smart meters by 2020. Ever hear of Energy Policy Act (EPACT) of 2005? Why do so many of my fellow Americans miss the big picture?

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