Grid AND customer: a two-pronged strategy?

Readers weigh in smart grid goals, and means

Phil Carson | Jul 19, 2012

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Hands down, the column "Change the grid, not the customer?" stirred the most discussion this week and in keeping with tradition, I'd like to call out a few comments to provide more depth than the original piece did.

First, thanks to Steve Collier, an IEEE "smart grid expert" and executive at Milsoft Utility Solutions for his thought-provoking ideas on the subject set up by the headline, as well as on the direction that customer-facing developments might take and for articulating the mantra of decentralization. All in few words.

Collier's thesis, in a nutshell: "We should be concentrating more on what can be done on the utility's side of the meter instead of expecting the customers to do it all."

Our readers too were concise and even fairly effusive about Collier's points, while more than one said that either/or was a false dichotomy. Why not approach both distribution system efficiencies as well as customer engagement?

Let's look at a sampling and you can read the rest via the link if you're so moved. Collier also responded to most of the points raised here, so there's some interactivity to the discussion as well. (Thanks to all for their participation.)

Apparently, Collier's message was right up the alley for John Cooper, partner in NextWatt Solutions. "'Three Steps for Greater Reliability' are easy to remember," Cooper suggested:

"First, Modernization, including Outage Management Systems. Utilities should focus on what they control, setting priorities on what has a higher chance of success, namely, outage automation and grid modernization; Second, Hardening. As we modernize, utilities should evaluate the softest, most vulnerable spots in the grid and harden them, including undergrounding and greater protection of substations; and Third, Decentralization. As distributed energy technologies drop in cost and increase in capabilities, utilities should incorporate them into our grid, creating a hybrid energy economy that benefits from the best qualitites of both centralization and decentralization."

"Joel" wanted to be sure the emphasis on the distribution system did not eclipse the obvious gains to be had on the customer side.

"I wish you had titled your article, `Change the grid, *and* the customer.' Let us remember that the driving purpose behind so-called `behavioral' energy efficiency programs, also known as `customer engagement programs,'" is to cost-effectively reduce energy usage (for environmental benefits, energy security benefits, as well as to reduce longer-term costs, e.g., through deferred or avoided capital outlays). While Steve seems to be suggesting that a smarter grid is an alternative to consumer energy-saving action, I view it instead as a complement."

One reader, who remained anonymous, wrote in no uncertain terms:

"I agree that smart grids and utility-side efforts are important. It's OK to state that, `I think that most customers really have little interest in spending much time or effort changing how and when they use electricity.' [But] so what? Why is that relevant?

"First, some consumers will participate. Second, the grid becomes more resilient and reliable when consumers respond to price and reliability/emergency signals. Third, competition is enhanced. Rather than only supply-side options, we have competition during peak periods, high price periods and to manage ramping of wind and so forth. Fourth, the price elasticity of a few people will benefit everyone on the grid. Fifth, restrictions on demand participation, either deliberate or through laziness regarding the updating of rules and protocols, are anti-competitive. Sixth, investments on consumer premises are local investments, and a broader definition of `investing in the grid' is healthy. Seventh, innovators, entrepreneurs and communications technologists will facilitate these changes. They are transforming the electric industry in the same way that cogeneration transformed the industry in the 1980s.

"Consumers are smart. Consumers can learn. Consumers know what they want far better than any utility expert or well-intentioned regulator. Consumers are central to the future of the electric industry."

Finally, a "Michael P." capped off the discussion.

"Great interview with lots of interesting perspective," he wrote. "As one of the previous commenters mentioned, the optimal solution is not to just change the grid or to just change the customer. No doubt, utilities must take undertake initiatives on both sides of the equation. "Automation within the grid and hardening of assets is a no-brainer. But we can't lose sight that grid modernization by itself will not mitigate requirements for additional generation in the future as populations rise, standards of living rise and consumption rises along with it. Consumers cannot sit by passively anymore; they must become part of the solution through multiple strategies including dynamic pricing, TOU, load control, demand response, distributed generation, the list goes on. Automation and hardening will certainly improve reliability and outages and volt/VAR can positively contribute to efficiency and consumption deferral. But to defer additional generation investment, even if for just the short term, other consumer-engaging strategies will be required."

Thanks to all for your well-articulated thoughts. See you here Monday.

Phil Carson
Editor-in-chief
Intelligent Utility Daily
pcarson@energycentral.com
 303-228-4757

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