Energy Efficiency: Automation vs. Motivation

The last year has seen a wave of investment and utility interest in home and business energy intelligence tools. Power providers and companies that supply infrastructure envision a smart grid that will provide significant improvements over the current utility distribution grid. Targeted improvements include automated meter reading, faster outage detection and repair, demand response tools to reduce energy usage during peak usage times, and load shifting capabilities to distribute power to high demand areas in real time.

Residential lighting and air conditioning usage represents an estimated 40% of energy usage during peak usage times. Reducing discretionary consumer energy usage could reduce the need to build new power plants to meet the demand for the bazillionth giga-watt on scorching Central Valley on August afternoons. Proactively reducing consumer energy usage could realistically prevent future “brown-outs” like those California experienced in the 2001-2003 era.

Is the residential/consumer utility customer ready to change the way they use electricity either in response to time-of-use pricing, or to help prevent grid emergencies? Should such changes in consumer energy usage be voluntary or mandatory? Should they be automated or self regulated? Is the smart grid ready for prime time, and are consumers on board and supportive?

Consumer interest in time-of-use pricing trials has been modest. A recent PG&E trial obtained opt-in participation levels of only 0.4%, even with the offer of a cash stipend in addition to possible savings resulting from actively reducing consumption during peak usage days. Of the 0.4% (10,000 homes) that opted into the PG&E trial, 55% (5,500 homes) did change their energy usage on peak days during the trial, and provided a significant 15% reduction in their respective energy usage on those days. This begs the question: Why were participation levels so low? Would a broader base of consumers reduce their energy usage in a similar manner?

Smart meters are the first smart grid devices visible to the consumer, and they are all over the news these days. Some recent highlights:
• A few vocal utility customers are reporting steeply higher utility bills after smart meter installation
• State Senator Dean Florez has held a senate hearing regarding smart meter accuracy
• PG&E is beginning a comparison by installing smart meters and conventional meters side-by-side in 150 homes to test accuracy
• The California Public Utility Commission has hired an independent consultant to review smart meter accuracy and PG&E customer complaints

We are still in the early stages of technological deployment of the smart grid, and some of this may just be noise related to misunderstanding or misinterpreting smart meter data, but is this smattering of observations evidence of the public embracing the smart grid like teenagers snapping up ipads? It doesn’t seem to be.

So where does that leave us? I believe the early adopters who opted in to the PG&E trials may be drawn by the combined incentive of the stipend and the reduced energy bills, and are possibly a subset of the population predisposed to environmentally-friendly practices. I suggest that to get broad scale adoption, and any meaningful change from the general public, two things must happen. First, usage of smart meters must not lead to higher utility bills, or consumers will reject this fundamental smart grid tool. Second, significant advances in automation of consumer appliances will be required before meaningful changes in energy usage are achieved. We are a nation of consumers, and of convenience. If the average utility customer has to take action to reduce his energy usage, I believe that voluntary participation and ultimate impact will be low.