Big lessons can come from small places.
In 2009, the IT giant IBM agreed to transform the utility operations of a small Mediterranean island country, Malta, by implementing a national smart grid system for water and electrical use.
At the time, the tiny country-whose population barely reaches 300,000-was facing a growing population and a depletion of natural resources. Two years later, the technology and infrastructure for a national smart grid system is fully in place with a third of the smart meters deployed.
IBM was invited to implement a customer meter system, in collaboration with the local electrical Enemalta Corporation and Water Services Corporation, in which consumers could modulate their electricity and water usage based on real-time prices. The goal was for consumers to reduce total usage.
IBM, about to celebrate its upcoming centenary, focused on improving the technology throughout the system, not just the actual meter deployed in homes. That being said, it also worked to give consumers more than just a view of their energy use, but also transactional capabilities with their smart meters so that they could interact with the data and decide how to use it.
But Michael Valocchi, vice president and partner in IBM’s Global Business Services emphasizes that IBM could not have done it alone.
“There is no such thing as a smart grid in the box and you have pretty large players that are components of the solution,” Valocchi told Breaking Energy. The project, he said, “provided some larger players to see how it is that you could work together for the good of the smart grid and that was a pretty big lesson learned.” It pointed, he said, to “the necessity of the larger technology players to play fair, play nicely together.”
Costs for the project will ultimately be shouldered by consumers on their bills, but Valocchi said that the country’s utilities hope to see savings and even profit in the long term.
“There have been investments made earlier in the project, but it is anticipated that in the long term the benefits will outweigh the costs,” IBM said.
Critical to the deployment was educating and even convincing the public to use the smart meter. Malta launched advertising campaigns that spoke of national pride and the societal benefit these meters could bring.
Even so, Valocchi said that education is not enough. While energy savings have been seen, customers still do not have major financial incentive to participate.
“The phase that we’re not 100% ready to talk about yet is what we are going to provide the customers to fundamentally change their energy usage,” he said. “Providing early benefits is going to be critical and I think that’s what we’re seeing in some of the implementation.”
He noted that early on, IBM found ways to give consumers a product they could use, even if minimally, to give them direct contact with the technology and the product. Yet he also said that this too was not enough.
Smart meters, he said, will require a fundamental shift in the relationship between consumers and their energy providers.
The question going forward, for Maltese utilities and countries around the world looking to implement smart grid, will be: “How do I excite the consumer about that new relationship?”
Picture: An Italian naval ship sits docks in the Maltese capital, Valletta on February 25, 2011.