In 2010 and 2011, Smart Grid News participated in five separate “future of the smart grid” workshops organized by three different groups. We also conducted more than four dozen interviews with utility CEOs and CIOs. Those executives and experts made these nine predictions about the forces that will be driving the smart grid’s future:

1. Diverging demographics. We will have an increasingly diverse population with strong geographic, gender, generational, income and aspirational differences, with each segment expecting to “have it my way.”

2. Choosy consumers. Our increasingly sophisticated population increasingly demands choice, control and “transparency” — full and complete information delivered via multiple platforms (web, phone, TV, etc.) They will soon come to expect the very same thing in electric power. Our industry will NOT survive as Earth’s last bastion of one-size-fits-all.

3. Cost-conscious consumers. Trained by freeware and $.99 iTunes downloads, consumers will expect technology to add value at little or no extra cost.

4. Multiplying market choices. The market will grow more and more crowded as new vendors continue to pour into the sector as they recognize the smart grid as the next high-tech frontier.

5. Continuing service obligations. Despite the growing demands on utilities, nobody is talking about lessening their obligations regarding reliability, universal access and provider of last resort.

6. Deepening jurisdictional tensions. The push and pull between federal and state entities will increase, often “trapping” utilities in the middle and making regulatory issues more complex.

7. Increasing security and privacy demands as safety, security and privacy become critical.

8. Complex utility challenges including asset obsolescence, decoupling, dynamic pricing and other issues.

9. Higher labor costs due to the aging workforce and the shortage of skilled workers.

We were surprised at the broad consensus — the majority of industry observers support these nine predictions. But I was even more surprised by their near-universal prediction that the financial viability of utilities will be severely challenged in the next decade. Absent new regulations and new business models, many of them expect several large utilities to face bankruptcy or failure.

They believed that one or more prominent utilities would be caught between the rock of increased smart grid costs and the hard place of reduced revenues. In addition, they predicted utility consolidation by the end of the decade. As the grid goes digital and utilities adopt enterprise computing, consolidation will make even more sense. It will offer even more opportunities for shared IT infrastructure, operating efficiencies, outsourcing, headcount reductions and other ways to shave costs. The increasing shortage of skilled workers may also encourage consolidation.

Consolidation can be a positive thing. And certainly, the electric power industry needs more economies of scale to capture all the efficiencies made possible by the smart grid. But the goal should be voluntary mergers made to improve profitability, not mergers made necessary by financial weakness. All the more reason that utilities must be proactive and intentional if they hope to prosper in the Electricity Economy.