|
GE Energy recently invited thought leaders from a variety of industries to Chicago to postulate about how emerging smart grid technologies could impact consumers in the future. The participants in this special roundtable event included:
· Ross Hemphill, director of regulatory affairs and rates, ComEd, who is currently driving smart grid pilot projects to assess impact on residential power users.
· Anthony Star, director of policy and evaluation, CNT Energy, who has been studying demand response programs for more than seven years.
· Chris Thomas, policy director, Citizens Utility Board, who conducts research into how smart grid benefits can be passed on to consumers.
· Humayun Tai, principal, McKinsey & Company, who advises global energy clients on a range of strategic, organizational, operational and environmental issues.
· Kurt Haunfelner, vice president of exhibits & collections, Chicago Museum of Science and Industry, who leads the execution and management of next generation and temporary exhibits at the museum, including The Smart Home: Green + Wired exhibit.
The importance of smart grid benefits for consumers is increasingly relevant in Chicago, as ComEd, the utility serving the region, began rolling out smart meters earlier this month, with plans to test dynamic pricing and in-home devices to better quantify the value of these technologies to various customer segments.
Today, many consumers are in the dark about how much power they’re using and how much they’re spending. Consumers use electricity daily, but are billed monthly with no insight into how their spending or usage is progressing throughout the month. Smart grid technologies in the home could change this – giving consumers real-time information on their consumption, These technologies can also enable dynamic pricing rates, offering consumers lower rates during periods of the day when energy demand is lower.
Anthony Star, an executive at CNT Energy -- the creative think-and-do-tank, that researches, invents, and tests urban strategies that use resources more efficiently and more equitably -- believes this technology can help consumers save money and reduce their energy usage during times of day when energy use is traditionally the highest. Anthony believes one of the barriers to the success of this technology is consumers’ acceptance of the communications technologies that will convey dynamic pricing, such as in-home displays, web portals, and the like. He believes that the industry still has a long way to go in understanding consumer preferences.
Panelists agreed that these preferences – and the pace at which consumers adopt these technologies – will vary based on a number of factors, including basic demographics and even geography. Consumers in states like California or Hawaii, which have some of the highest electricity prices in the nation, might be more apt to sign up for programs simply because their utility bills constitute a much higher percentage of their household income than someone in Iowa, for example. And as utilities gain an understanding of these preferences, through in-depth consumer segmentation, they will have the opportunity to move from an industry that sells kilowatt-hours, to an industry that sells services based on consumer need, much like cell phone companies offer different plans for different lifestyles.
In addition to segmentation, education will be critical. According to Humayun Tai, consumer awareness around energy efficiency is growing across the U.S. In fact, he shared research showing that many pilot programs providing consumers more information regarding their electricity usage have achieved results of 5 to 14% in energy conservation. However, the magnitude of the benefits will be contingent upon number of consumer participants. Underscoring this point, GE research has shown that moving consumer participation in these programs from five percent to 20 percent could increase utility savings by $15 million annually and improve CO2 reduction equivalent to taking an additional 9,000 cars off the road, for utilities with 1 million customers.
While utilities will play a critical role in education, the industry will also rely on solutions providers, government, and other third parties to help educate, engage, and excite consumers around the true potential of a smarter grid. The Chicago Museum of Science and Industry plays a tremendous role in this effort – with the museum’s Smart Home: Green + Wired exhibit, in particular, which demonstrates the big and small ways people can make eco-friendly living and unique home technologies part of their lives. With smart grid and smart pricing, these benefits will only be magnified.
John Krenicki, president and chief executive officer of GE Energy, made a critical point earlier in the day, regarding the importance of education in “re-branding” the power industry in the public’s mind. “For so long, our electric utilities have been rewarded for generating and selling electrons, not saving electrons. For utilities to be successful, regulation must reward utilities for encouraging their consumers to ‘use less’, which represents a tremendous paradigm shift for the industry. Consumers will also need to be more aware of their electricity usage, especially as we enter a new point in history when the endless flow of electrons from our sockets may become a thing of the past.”
This shift in attitudes and behavior could take years, and will require true collaboration, Tai pointed out. Smart grid success will require the right technology, partnerships, education, information, incentives, and more, according to Tai. Echoing this, Chris Thomas, policy director with the Citizens Utility Board, said that smart grid success will take “smart technology, smart consumers, and smart policy.”
|
