Smart Grid - Only Innovation and Competition Will Bring Consumer Engagement

Joao Batista Gomes | Feb 29, 2012

The only way to bring innovation, new ideas and intelligence for the Energy Sector is to accelerate competition. No other initiative will be successful, if we do not take the competition and the option of choice for consumers. Smart Grid will fail as a measure of energy conservation, unless suppliers motivate people to participate and demonstrate that change is worth it.

Today we are beginning to implement the projects called Smart Grid, this project has the clear objective of driving down energy consumption, influencing consumers and providing them the means to do so. To understand how to successfully achieve this change is necessary to use a field of research -- Psychology -- that lifts the veil on the concept of motivation and apply it to energy conservation. Only the information is not sufficient to change behavior, because people have to be motivated to change. Motivation is defined as a process that causes direct excitation, and persistence of behavior. To motivate the information disclosed must meet these conditions, and one of the most powerful techniques to cause excitement is to personalize the information.

The implementation of new technologies, including smart meters and the taking regulate automatic readings of energy consumption and send them to via a telecommunications network, promises to bring a new level of customization for the home. The idea is that each smart meter is capable of providing near real-time information on energy consumption in a readily comprehensible manner. It is hoped this will encourage consumers to take greater control over their energy consumption, carbon emissions and energy costs.

But history suggests that only the information is not enough, consumers should be continuously involved in this process.

The provision of feedback is so powerful because it meets the persistence condition of motivation. In other words, if consumers are repeatedly reminded of how they are performing, then the message is kept alive. However, for consumers to be motivated to participate, they must also believe that the result of their behavior -- their energy consumption -- explicitly linked to how they act. For example, running a dishwasher at peak times, or turn off the lights when not needed, should be explicitly linked to a reduction in energy consumption. The danger is that if the connection is lost, consumers may feel that their behavior has no impact on the result, and simply give up to participate.

What of cash? Can the promise of financial rewards alone -- predominantly accounts reduced due to lower consumption, but also in the form of lower rates for customers who are happy to relinquish some control over the runtime of their activities to motivate consumers to change their behavior? Perhaps, studies have clearly shown that the monetary reward can lead to energy savings, but unfortunately, the effect may be short-lived.

That should not surprise, not really, psychology has long championed the message that money is not a sustainable motivator, and that goes for energy conservation as well.

Whatever the approach, to succeed we need to better understand our consumers, and at the same time, the underlying message should be clear -- Smart meters alone will not cut power consumption -- only consumers can make this happen.

All market sectors where there is competition, we also have innovation, development and the consumer more aware and observant of other possibilities. In fact we will only have a Smarter Grid, when we have competition in this sector. With competition, consumer engagement will come easy, nothing better than a choice to make the proactive consumer. The competition also brings more health and vigor for the companies that are more competitive, the competition is a huge lever for creative solutions.

Changes in consumer habits are not easy, but it is possible. When the consumer can wake up one morning and think, today I'll change my energy supplier, so we really have a Smarter Grid. This is the part that Regulatory Agencies should be working now, and not creating new rules and obstacles that never protected the consumer. The area of energy is not regulated in a way that creates an incentive to invest in energy-saving technologies.

By bringing the competition to this sector, new technologies and tools will be created by the market and to attract create consumer loyalty, already a long time this process took place in the area of IT and Telecom. Almost every day we see the transformations that arise, and why it does not happen in the energy sector? The answer is simple, we have not still -- but certainly we still have -- innovation and competition and worse, a consumer who does not have the right to choose, is not a consumer.

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Len Gould's IMEUC market system proposals detailed on this website is precisely proposing what this article is talking about. It would be the visionary competition between energy suppliers using telecommunications technology with energy suppliers, much more consumer automation technology in the home that works with their smart meters, and the freedom for consumers to routinely purchase blocks of their electricity energy whenever and from whatever supplier they choose.

Too bad the regulatory regimes that govern the utility industry prevent them from raising the necessary money for changing the system to implement this vision.

Competition and Innovation is the best platform for the benefit of consumers, is only in this way that can fully realize the enormous potential benefits of Smart Grid, and also the opportunity to become active participants in the market.
The legislation, technology and energy planning are ways to help develop projects involving Smart Grid and other infrastructure demand.
But none is as effective as EDUCATION.
Without this, the laws do not take off and technology is without the support of those who can develop it.

By the time the purchasing power of populations of many countries increase, it is time to educate new consumers.

Interesting article. The earlier big-output power stations achieved their advantage through economy of scale. During an earlier period, small power stations ran at lower conversion efficiency and required more manpower per Mw-hr than the large installations.

There have been several recent technical breakthroughs that have resulted in small installations producing power at as high conversion efficiency as mega-power stations, with the ability to operate by remote control and by computer control. Cost-competitive, efficient and small installations can serve more highly localized markets.

The operation of big thermal power stations that need to accommodate varying power demand will benefit most from smart-grid technology. Hydroelectric power stations have far less need for smart grid technology and small power stations that serve highly localized markets will have even less need for smart (micro)-grid technology.

While smart-grid technology has a place in the power market, I am of the view that its future significance is "overblown", as is the future significance of the grid-scale battery-electric car that will serve as energy storage.

I think the way smart grids are being presented now, there is very little upside to the consumer. It's akin to those little scanned membership tags that every store wants you to have; so they can monitor your consumption, but they really don't help the consumer too much.

The reality is there probably is little upside to the residential consumer for the smart grid. In general, they don't pay all that much for electricity anyway. The big ticket item is generally A/C in the Summer, and consumers can already opt for a 'brown-out' meter for those sorts of things.

Maybe the best future of all this (for the residential consumer) is smart grid technology, plus electric cars, plus local power generation (I just saw that solar panels can be bought for $1/Watt now -- new panels!). Then the residential consumer (and their gas usage) becomes somewhat self-sufficient. The grid is still there for cloudy and windless days. Big electric is happy because they don't make money on residents anyway. Residents are happy because they are independent of the grid and perhaps don't have to buy so much gasoline.

I agree with Harry w.r.t. to grid-connect electric cars. Unless there is some huge premium for this power availability (I don't know) the cost of the high current back connection [at work AND the home] seems pretty high to me. But Roger Arnold seems to think there might be a pony there, and I don't readily dismiss Roger.

OTOH, electric storage via the car might be great for the residence itself. The needs for a single house aren't that high, and if the storage could double for home power storage, that could be a win.

I just noticed a news item saying GM is doing a short-term layoff at the Chevy Volt plant since they'd designed to sell 10,000 units last year and only sold about 8,300. Overstocked. Something about three battery fires during side crash tests, though EPA says "no worse than gasoline fueled car tests" some people don't trust federal government anymore. Sigh....

Jim, if the Tesla electric auto system is used, then no external charger equipment required. It uses the auto's internal drive electronics plus the motor windings as inductors for its charging system, nothing external required for 120 or 240 volt charging.

Tesla also can do battery-to-grid feedback with no additional equipment I think. All that's needed is a proper metering system to bill the electricity correctly.

One way to get the home customer involved with the Smart Grid is to provide them with benefits such as reliability, back up less outage, integrate renewables and record it all on the microchip they can read. See the Transverter technology that won the Buildy Award at Connectivity Week last year. The other issue is the Smart Grid has significantly different benefits for the different utilities. Base load nuclear power and wind at night needs to be used or stored so the Chevy Volt and other electric vehicles have merit in the right place.

Bill. "Microcontroller systems ... can be programmed to cheat customers. " That's why we need regulators like FERC. Or much better actually, considering the Enron debacle.