  Power to the People: Giving consumers more control over energy will pay off big
Reported by VentureBeat on Tuesday, 17 November 2009 (on November 17, 2009)
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Timely information is essential when you’re operating in a competitive marketplace. Information enables better, more informed decisions — whether you’re trading stocks, bonds, precious metals or soybeans.
It’s no different when it comes to consumers and the services they use in their homes. Energy is by far the most expensive. But unlike the others, like cable, broadband or cell phone service, consumers have almost no idea how much their monthly energy bills are going to be. Faced with rising energy prices, they are becoming increasingly motivated to get their consumption under control. In doing so, they are also managing their household budgets — but today, they lack the means to do this.
About 27 percent of U.S. national energy consumption happens in the home. Research shows that giving consumers visibility into where their energy, and therefore their money, is going, leads to changes in behavior and more conservation. This in turn translates into significant and rapid benefits for the climate and energy security.
Let’s face it, utilities have a lot to worry about. Consumers expect energy on tap whenever they flip a switch or plug in, and utilities are charged with managing these processes quickly and invisibly, even when demand surges and supply falls. But utilities can’t do it all, and they shouldn’t have to. These companies maintain the platform upon which new ideas and innovations can be built to help empower consumers.
One big worry for utilities is the growing demand for electric power, which is expected to rise by 30 percent by 2030. No wonder the government and industry are pushing hard for big investments in infrastructure in the U.S. grid to make it more efficient.
The American Recovery and Reinvestment Act of 2009 allocated 13 percent of the $104 billion stimulus package to green technology, of which Smart Grid initiatives received $4.5 billion. Utilities in North America are expected to spend a combined $10 billion annually on smarter technologies to transform the grid into a digital, self-monitoring and adaptive system.
All of this investment is critical as the next-generation grid will have to accommodate and balance all sorts of new elements, from plug-in all electric vehicles serving as distributed battery storage to intermittent sources of electrical generation like solar and wind. Keeping the grid in balance requires vigilance on the part of utilities — supply and demand must stay in equilibrium.
No doubt, a smarter U.S. electric grid is necessary — but it is not sufficient on it’s own. It won’t bring about the timely changes that consumers and utilities truly require. If partners and suppliers can succeed in stimulating consumer “pull” for change, alongside reforming the infrastructure, then the market can transform at an astonishing rate.
This has been demonstrated time and again in the technology revolutions of the past century. Just think about the introductions of fixed-line, broadband, cell phones and television — in each case, the infrastructure had to be built. But what really helped them take off were the end-user applications that drove wide adoption.
A few years ago, energy wasn’t the hot conversation topic that it is today. Now, it is connected to our everyday lives — security, economics and climate change all intersect. It’s in our newspapers, on TV, in magazines and books. We even talk about it over dinner. Energy has become an obsession because it is core to our current and future lives.
Ultimately, once the consumer is empowered with information and control over their energy use, there’s going to be a ripple effect as waves of new applications spring from the developer community to address other problems. Partners and innovators are critical to providing these new technologies to realize the new grid and how it will interact with the consumer in the home.
What about the longer-term needs for innovation and the utility grid? First, we need an open ecosystem, and right now the grid is pretty closed to innovation. Sure, the grid needs to be protected and guarded to ensure reliability, but openness will afford new opportunity for innovation and re-invention of the monolithic grid that has served economies well, but now needs to be more nimble and adaptable to consumer choices. That will surely bring more power to the people.
VentureBeat is hosting GreenBeat, the seminal executive conference on the Smart Grid, on Nov. 18-19, featuring keynotes from Nobel Prize winner Al Gore and Kleiner Perkins’ John Doerr. Register for your ticket today at GreenBeat2009.com.
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