Thinking about Consumer Needs in Smart Grid Planning
As more companies like GE and Siemens delve deeply into the technological opportunities to be gained from a smart grid, CNT and other advocates stress that a smart grid will not be economically viable unless customer benefits are included as fundamental components.
As it stands, most discussions of infrastructure investment do not include customer benefits anywhere near the beginning of the discussion. Because many smart grid investments need to rely on consumer benefits as well as system benefits for a strong business case, lack of a robust consumer-oriented strategy weakens the argument for smart grid investments.
Recently, CNT CEO Kathy Tholin took part in the Economist magazine‘s “Thought Leadership” panel, as part of a Smart Grid Tour, sponsored by Siemens. The tour has been visiting major U.S. cities like New Orleans, Chicago and Washington, D.C. to communicate trends in the industry and identify leaders around the country who have been working and putting together all facets necessary to address the creation of a smart grid electric system—from generation to transmission as well as distribution through consumption. The event in Chicago focused on how to build sustainable energy and smart grid platforms that work within cities like Chicago, with a focus on buildings as a major consumer of energy.
Kathy zeroed-in on the need for critical information in order to make the decisions about one’s energy use as a key factor in reducing demand. Comparing energy usage to transportation use, Kathy pointed out that consumers do not really know what they are spending on transportation, because they do not have the kind of information (or the access to it) to make better choices about their spending. And the same can be said for energy consumption; without the necessary baseline of information on usage, it’s difficult for consumers to be most effective in consuming less.
Smart grids have the potential to disseminate key information on usage and reduction and savings mechanisms more readily than current outdated technologies. CNT Energy is actively involved in exploring the consumer benefits that come from the implementation of smart grid technologies and in 2008, convened the Illinois Smart Grid Initiative to begin the stakeholder driven exploration of Smart Grid benefits for Illinois consumers. Currently CNT Energy is a participant in the Illinois Commerce Commission initiated Illinois Statewide Smart Grid Collaborative.
A key to CNT Energy’s interest in the smart grid is how smart metering can enable new options for consumers. These include new rate options as well as the development and implementation of new web-based and in-home technologies that can better manage energy use and reduce costs for consumers. The work of CNT Energy on residential real-time pricing in Illinois informs CNT Energy’s belief that providing consumers access to variable market-based pricing is a powerful and effective way to make the electric system more efficient and bring real economic benefits to consumers. With Illinois’ initiatives in this area now the largest deployment of residential real-time pricing in the country, they provide important models for other states and utilities.
For a commentary on CNT Energy’s view of getting smart rates right, see Anthony Star’s blog post on GE’s smart grid blog, another major participant in the private’s sector’s participation in driving smart grid innovation.