Exclusive interview with Patty Durand, Executive Director, Smart Grid Consumer Collaborative, and Lisa Magnuson, Senior Director, Brand and Consumer Programs, Silver Spring Networks
The U.S. utility industry has been facing similar issues to the ones Australian distributors have faced with regards to consumers’ acceptance of smart meters and smart grid related technologies. What do you think are the industry’s biggest challenges related to engaging customers in smart grid programmes and what needs to be done to overcome them?
Consumer understanding of the relevance of and value in modernizing and adding intelligence to the electric grid is the biggest challenge the industry faces. Utilities around the world have struggled to clearly explain the benefits of smart meters and a smart grid to their customers in terms that make sense to them. Add to that, it’s hard to get people to think about something they can’t see and that they take for granted.
Research from the Smart Grid Consumer Collaborative (SGCC) shows that half of U.S. residential consumers have never heard of the terms smart grid or smart meters, and another 25% have heard of the terms but don’t know what they mean. This adds up to a stunning 75% of consumers who need more information. This presents a very heavy educational lift that industry needs to address.
The SGCC has been working to articulate the consumer value proposition, to show consumers that meters and related smart grid technologies empower them to manage their own energy use and, therefore, costs, without sacrificing comfort and convenience. Smart grid technologies also detect outages automatically and reduce time to power restoration, which provides another positive value proposition for consumers.
To that end, SGCC has worked with its industry partners to launch several consumer oriented smart grid educational materials, including a Consumer Concerns and Educational Toolkit and a consumer-facing educational website www.WhatIsSmartGrid.org. In addition, Silver Spring has created a number of tools and programs, including a school curriculum, a Smart Energy Future, to assist utilities in educating their customers.
Smart meter/smart grid messaging should emphasize that the related costs and investments are far outweighed by the value of the resulting benefits. Indirect benefits need to be communicated as well. Smarter grids enable the integration of renewable energy resources, defer or eliminate expensive, high polluting “peaker” plants and make the overall system more efficient, which lowers pollution as well as operational and maintenance costs. More reliable power and fewer, shorter outages have massive economic benefits that make communities more productive and competitive. These facts need to be clearly and consistently explained, through a variety of channels, many times.
With Australia’s smart meter rollout moving from a mandated, distributor-led rollout to a market/retailer-led rollout, consumer engagement and education will become paramount for Australian energy providers to ensure the smart grid unlocks its full benefits. In your experience, how important is to involve all stakeholders in smart grid programs?
It is critically important to involve all stakeholders in smart grid programs and to involve them early in the lead-up to any smart meter or advanced meter infrastructure (AMI) deployment and to communicate often during the program.
The benefits of proactively engaging your stakeholders as partners cannot be overstated. Engaging stakeholders as part of the planning process can create advocates to engage with the community to help educate their members on the positive benefits of a smarter grid. Research shows that utilities and government agencies who work with civic, nonprofit and other community leaders such as churches and environmental nonprofits, were able to avoid significant consumer backlash as well as help stakeholders see the value of smart grid technology investments. Often, community leaders are better messengers than the utility itself. If stakeholders and community leaders are educated and engaged prior to AMI implementation, these collaborative efforts help avoid issues.
Each stakeholder group has its own motivations and point of view and the value proposition for each group may be different or expressed differently. Understanding the benefits, costs and risks to each group is essential to educating each and every stakeholder in terms that matter to them.
Finding common ground among all stakeholders is crucial to building support for the investments needed in smart grid and to unlock its value.
How do you think the grid of the future will look like by 2030 and what do you think energy providers, regulators and customers need to do in order to unlock this scenario?
The grid of future is going to look dramatically different than it does today. Some of the many changes to occur will be a greater reliance on renewable energy like wind and solar, to meet baseload needs. There will be significant penetration of demand response and time-of-use pricing programs to meet peak demand. There will be greater use of electric vehicles to meet transportation needs and greater consumer knowledge of and control over energy consumption to meet varying consumer interests, whether those interests are a cleaner environment, saving money, or energy security.
The grid in 2030 is likely to be more efficient due to the increasing use of digital sensors and devices and will become more self-healing and automated, and the widespread implementations of distributed energy resources will likely augment the centralized grid. Today’s static, one-way power flows will give way to a more dynamic system. Balancing centralized and distributed generation with responsive, controllable loads will require increased technological visibility and flexibility.
Additionally, the grid of 2030 will not just be power, but a shared network across states and counties. This would enable connectivity of things like streetlights, water, gas, charging stations which can be achieved today, but will be ubiquitous in 2030. The grid of today will morph into the smart state or smart country and support multiple applications.
Australia has an ambitious renewable energy target of 20% of all electricity generated by RE sources by 2020. How does the energy industry need to prepare for this?
The integration of intermittent, renewable power sources at significant levels of penetration on the grid will require technological innovation and continued policy and popular support. The costs and benefits of renewable energy need to be articulated as a value proposition for individual consumers and society as a whole in order to build support among stakeholders.
Utilities could be encouraged to explore both utility-scale, centralized renewable energy as well as supporting distributed RE implementation by their customers. Regulators need to ensure that utilities earn a fair return on investment while also enabling consumers to contribute to the 20% RE goal.
At the same time, energy efficiency measures can be applied to the grid via modernization, while energy efficiency measures at the consumers’ end also reduce overall energy consumption. Reducing consumption while increasing RE penetration will contribute to reaching the 20% goal. California’s example in reducing demand through energy efficiency is a remarkable demonstration that this dynamic – reducing demand, increasing RE – can be accomplished.