Smart grid (n). An overhyped and misunderstood term for making our electric grid more intelligent so we can all save energy and money.
Lie #1: Smart grid is a project for the utilities and its success rests in their hands.
Utilities really have just three public goals: operate a safe, reliable, cost-effective electric grid.
Our grid does need modernizing; it is congested and overloaded in some places and we need more real time information about what electrons are going where so we can balance variable renewable sources like wind and solar with electric vehicles and other consumer loads. On the metering side, having remote access to real time information will allow faster response to outages and a more accurate ability to plan for energy sources. The Recovery Act did a lot to subsidize that initial cost – and we still have a long way to go.
Consumers still do not trust their utilities and certainly don’t want them in their homes. But for consumers to have the control and choices that will change our culture and behavior about energy, we need entrepreneurs and innovators to be marketing their solutions-not through the utilities-but at Best Buy, Wal-Mart, and other retail outlets that consumers already know and trust.
Lie #2: Consumers won’t respond to different rates and pricing.
Regardless of the stimulus funded down payments, consumers will be bearing the brunt of the costs to modernize our grid. Many Americans do not even realize that our electricity rates are some of the lowest of any developed country and we have become accustomed to that. And yet, any increase comes at great pain to regulators and the consumers they serve. That said, every consumer study indicates that if you give consumers prices and the TOOLS to then react to those prices, they will change their behavior and, in fact, will maintain that change over time.
Consumers want to control their energy use as it relates to the price and will react if provided the means to do so, regardless of age, socioeconomic level, race, and gender. The more sophisticated our technologies get -and the more “apps” available (like electric vehicles, rooftop solar, appliance controls) – the more sophisticated and “energy literate” the public will become. With enough innovation and an ability to take control of their energy use, consumers will begin to demand smart energy technologies.
Lie #3: Everything is happening in the states; there is no need to worry about federal policy now.
While state public utility commissions control the ability of regulated utilities to make investments that are paid for by consumers, not all policy decisions rest in their hands. When the previous Congress failed to pass comprehensive climate legislation and the House switched control from Democrat to Republican, many folks lost hope that any legislation impacting smart grid would occur in this cycle. I am more hopeful and think we can achieve a great deal in this space without rewriting our tax code and putting a price on carbon. We could potentially come to agreement on energy efficiency, electric vehicles, and energy storage-technologies that are not politically charged but need smart grid to be fully effective.
Whatever you are hearing about smart grid, true or not, it’s here to stay and may actually do us some real good.
Katherine Hamilton is a director in the clean energy practice at Quinn Gillespie & Associates. She previously served as the first full time president of the GridWise Alliance. Visit her blog at www.cleangridview.com.