This electricity thing Part 2
December 14, 2010 § Leave a comment
The definition of the Smart Grid varies depending on who you are talking to. It basically means a more responsive, customer centric electricity industry. But for adoption of the products/services the grid will offer, you and I have to understand in more depth. This is where I think the utilities trying to force these changes down our throats as consumers will have to change their tactics: the days of the unidirectional relationship with the utility is over. Up until now the most we ever had to do with our electricity supplier was
– We paid the monthly bill
– We called to complain when the bill seemed exorbitantly high (even if we didn’t know what the bill amount was actually supposed to be)
– We called to complain when we lost our electricity supply
The new engagement between the utility and the consumer (you and I) will be one where the utility recognizes that
- We do not have to get our supply from one utility/supplier so they have to be on their best behavior. Other sources of electricity are/will be coming online. This means choice. This means competition.
- Your usage information (when do you run my dishwasher?) will have to be used to improve how you’re treated as a paying consumer
- We the paying consumers will demand more. Period.
So what elements of the ‘smart grid’ will force this shift of power? Not the tools, though I will give examples of those, but the underlying drivers;
- Your electricity (and soon other utility) usage data: with increasing ability to measure how much electricity we use in real time (from the meter or equipment in your house), the utility will know how much more/less electricity to generate at what time of the day and more effectively manage their fuel usage. Think of the utility as a bus driver who only drives when the passengers have somewhere to go. And not idling the engine waiting for the passengers to go somewhere. And therefore conserving fuel. This also means the bus in our example (or turbines for a power plant) will last a bit longer. This makes the bus company, the bus driver and the passengers happy when the bus eventually starts moving and running efficiently.
- Analytics (or the sense we make of the information around us): the level of sophistication of data mining algorithms that predict/forecast trends or even just make sense of the present is quite astonishing. The shame is that most of this strength has not been widely utilized in providing value to electricity consumers (it’s already being applied for generation forecasting and pricing by the utilities). But this is changing. The insight that can be drawn from our usage will enable the utility to share more with us the consumers and enable us make better decisions. You know that reaction you have when you look at your cell phone bill and see that you spent too much time shooting the crap with ‘you don’t even remember who’ on a Tuesday afternoon (peak time)? That decision you made to move that call to much later in the evening (off peak)? You’ll soon start to have those reactions when you see more usable information on your electricity bill (or the charts that will represent that bill through your web based account).
- The most important driver of the shift of power from the utilities to the consumer is the consumer: Yes, you. You are more aware of what is going on. You have information at your fingertips and have a better understanding of what that information means. You engage your politic representatives and ask them to implement the policies that are changing your relationship with any business that tries to sell to you (or at least you try to), you vote with your money by only engaging with vendors that value you as a customer. And you will come to demand even more from your utility. You want ‘cleaner’ electricity. With no increase in cost.
All these things are forcing a gradual shift that the utilities are starting to feel. Can you feel the shift too?