Saturday, April 30, 2011

Post # 66 - DOE Hoping to Fund Smart Grid Consumer Awareness Efforts

The Department of Energy this month issued a "Funding Opportunity Announcement" (FOA) aimed at enhancing "the awareness and knowledge of smart grid attributes and benefits for consumers." The FOA, entitled Smart Grid Consumer Engagement, seeks major involvement in such funded projects by consumer advocacy and community organizations.

FOAs such as this are subject to Congressional authorization, so nothing is definite. But if an appropriation is authorized, DOE envisions two basic types of projects. The first category is "Community-Level Smart Grid Consumer Engagement," expected to establish and carry out smart grid consumer engagement programs targeting all residential electricity consumers within a single utility service territory. Each such program would include three key elements:
(1) Development of research- and facts-based outreach and educational materials on smart grid and its applications and benefits to each segment of electricity consumers.

(2) Distribution of outreach and educational materials through multiple channels and media.

(3) Continuous performance monitoring and data gathering and analysis to gauge the effectiveness and success of consumer engagement against the metrics developed for the program.

The second category is "State-Level or Regional-Level Smart Grid Consumer Engagement," expected to establish and carry out smart grid consumer engagement programs targeting all residential electricity consumers, within a single State or across two or more States, served by two or more utilities.

As noted, DOE envisions a major role in these projects for consumer advocacy groups and/or community groups "with established trust relationships with their constituent residential electricity consumers." Indeed, the FOA specifies that such groups should be either the proposing applicant or a significant team member to the applicant.

DOE also suggests that project participants include (in particular) utilities, technology/application vendors, state and local governments. While, along with consumer advocacy and community groups, such stakeholders would be considered "preferred," other stakeholders could include firms or institutions with expertise in advertising/promotion, public relations, marketing, educational materials, and delivery through multiple-channel communication.

Sunday, April 24, 2011

Post # 65 - A New Consumer Rating System

The Galvin Electricity Initiative, a non-profit organization founded by former Motorola CEO Robert W. Galvin to promote "microgrids" (see Post # 45) has developed a ranking and recognition program for smart microgrid projects intended to encourage innovation in the electricity industry by emphasizing consumer needs.

Microgrids are small-scale versions of the centralized electricity system, generally, low voltage distribution networks with distributed energy sources. The Galvin Initiative’s new program, the Perfect Power Seal of Approval, will rank projects based on performance in the key categories of reliability, consumer empowerment, efficiency and environment, and cost.

The rating system was developed in collaboration with an advisory committee of professionals in several sectors, such as power distribution, environmental advocacy, utility benchmarking, green buildings and product safety. The committee uncovered precedence for each of the new metrics but found that until now, they have not been combined to form a comprehensive picture of electricity system performance from a consumer perspective.

The new program is based on the U.S. Green Building Council's LEED certification for buildings. The Galvin Initiative is working with Underwriters Laboratories, Inc. to train and certify evaluators. In a pilot phase, the program will test the beta version of the rating system by evaluating a select group of projects. Beyond the pilot phase, the program will expand to additional types of projects with the help of a broader stakeholder process.

Sunday, April 17, 2011

Post # 64 - New Study Suggests Consumers May Be Ready to Look Beyond Traditional Utilities With Respect to Smart Energy Services

According to a recent report by Accenture, the global management consulting firm, most consumers would consider getting electricity and energy efficiency products and services from sources other than their electric utilities.

The Accenture report, Revealing the Values of the New Energy Consumer, provides the results from a survey of 10,199 consumers in 18 countries. Accenture reports that that 73% would consider buying electricity and related products and services from a company other than their local electric utility. More than half (59%) would consider buying from product retailers, and 49% from cable/phone companies and 45% from online sites and brands.

When considering the purchase of energy-efficient products such as smart thermostats, 54 percent would opt for their electricity supplier, 50 percent would consider buying from retailers, 32 percent from online sites and 22 percent from cable/phone companies. At least 90 percent of respondents in China, South Africa, South Korea, Singapore and Brazil would buy electricity, energy efficiency products and related services from non-traditional electricity providers, compared with 23 percent in France, 50 percent in Belgium and 59 percent in Germany.

The report also says 57% of consumers surveyed would use an electricity management program even if it didn't cut their utility bills – and that almost a third would pay a little more. While cost is an issue, consumers are getting more interested in the convenience of automated energy management and mobility, like being able to download apps on their mobile phone to keep track of their energy use.

Among Accenture's other findings: 60 percent of respondents would be interested in technology that can completely automate the management of their electricity. Thirty-five percent would install a smart device that automatically turns on or off pre-selected appliances, a ‘set and forget’ program. more than a third would be interested in monitoring and managing their usage through personal electronics (36 percent). Thirty-five percent would be interested in the ability to customize the design of the in-home display or the online portal of their electricity management program. Mobility is important with almost a third (32 percent) of consumers interested in applications they can download on their mobile phone to measure their consumption in real time.

At the same time, Accenture found that Consumers exhibit a strong preference for face to face contact when purchasing energy-related products and services. When buying energy-efficient products, such as smart thermostats, 52 percent of respondents say they want to make a purchase with a staff member in a store location. Only 29 percent would be happy purchasing online without interacting with staff. When buying a "set and forget" energy program, 63 percent would want to purchase from a staff member either in store or at their home.

Accenture's basic conclusion is that utilities will to, in effect, "retool."
Utilities/electricity providers must focus on not only understanding how energy savings influence the decision to adopt a program, but also on building and managing programs that cater to many different needs and values. This means developing innovative offerings that blend the optimal mix of attributes, such as loyalty rewards and installation services. As a result, the traditional commodity service may no longer be at the heart of utilities’/electricity providers’ offering set, but just one component of a whole range of services making up the entire product offer.

Accenture finds that utilities/electricity providers still maintain "a trust advantage with energy consumers when compared to other commercial providers." Nonetheless, Accenture warns that to the extent that consumers are willing and able to purchase energy-related products and services from a broad set of providers, utilities and electric provides will have to reevaluate their marketing strategies.

Sunday, April 10, 2011

Post # 63 - Two New Reports Highlight the Benefits (and Costs) of Smart Grid Development

The past week saw the release of two major studies that emphasize both the benefits of fully implemented smart grid technologies and the costs of implementation.

First, and from an international perspective, a new report from the International Energy Agency (IEA), an autonomous organization of 28 member countries (including the U.S.) created to pursue reliable, affordable and clean energy initiatives, says that widespread smart grid deployment can play a significant role in enabling nearly all clean energy technologies, including renewables, electric vehicles and energy efficiency.

The IEA report, Smart Grids Technology Roadmap, provides a consensus view from more than 200 government, industry, academia and consumer representatives on the current status of smart grid technologies, and charts a course for expanding their use from today to 2050. As well as addressing current concerns with existing electricity systems, such as ageing infrastructure and increasing peak demand, the IEA report highlights smart grid technologies as important elements for expanding the use of a number of low-carbon technologies, such as electric vehicles. The report also outlines the potential for smart grids in rural areas of developing countries further down the line. Small "remote‟ systems - not connected to a centralized electricity infrastructure and initially employed as a cost-effected approach to rural electrification - could later be connected easily to a national or regional infrastructure. Further, smart grids could be used to get electricity to sparsely populated areas by enabling a transition from simple, "one-off" approaches to electrification (e.g. battery-based household electrification) to community grids that can then connect to national and regional grids.

IEA recommends greater international collaboration in sharing experiences of pilot programmes and in leveraging national investments in the development of required technology. It also stresses a need to develop common standards between countries that will help optimise and accelerate both the development and deployment of necessary technology while at the same time, reduce costs for all stakeholders - governments, industry, and the public.

But, as a second (and pro-smart grid report) indicates, there is a price tag. The Electric Power Research Institute (EPRI), an independent, non-profit company that conducts research and development relating to the generation, delivery and use of electricity, has just released a broad assessment of the costs and benefits to modernize the U.S. electricity system and deploy smart grid technologies.

The EPRI assessment, Estimating the Costs and Benefits of the Smart Grid, factors a wide range of new technologies, applications and consumer benefits the investment needed to implement a fully functional smart grid ranges from $338 billion to $476 billion and can result in benefits between $1.3 trillion and $2 trillion.

EPRI's estimate reflects new technologies related to the grid, information, and communication technologies; market structures; demands of an increasingly digital society; more widespread deployment of renewable power production and its integration into the grid; expansion and maintenance of existing infrastructure; and technologies and systems to address grid security. The report balances costs with benefits, which include: (1) more reliable power delivery and quality, with fewer and briefer outages; (2) enhanced cyber security and safety with a grid that monitors itself and detects and responds to security and safety situations; (3) a more efficient grid, with reduced energy losses and a greater capacity to manage peak demand, lessening the need for new generation; (4) environmental and conservation benefits, better support for renewable energy and electric-drive vehicles; and (5) potentially lower costs for customers through greater pricing choices and access to energy information.

The analysis updates EPRI's 2004 EPRI assessment, which estimated the cost of implementing a smart grid at $165 billion. The updated analysis assumes steady deployment of smart grid technologies beginning in 2010 and continuing through 2030.

Sunday, April 3, 2011

Post # 62 - Consumers Still Sketchy on What the Smart Grid Is.

A new survey says most consumers who are aware of smart grid technology only somewhat understand it and what it does.

The survey, prepared by the NAHB Research Center for appliance giant Whirlpool Corporation and Habitat for Humanity International as part of their joint global housing initiative, says that 70% of consumers who know about the technology are pretty shaky on the details. In addition, only 43 percent of all consumer respondents indicated they know what Smart Grid technology is, although the number was greater for respondents in the upper middle (63%) and high-income (57%) segments.

The survey reported opinions from consumers and builders on topics related to green home building. The consumer portion of the survey also showed that of all Smart Grid-aware respondents, only 35 percent believe their community somewhat understands Smart Grid technology. A total of 46 percent of the same segment said they feel their community does not understand the technology at all.

The builder portion of the survey showed a similar perception of consumer knowledge on the subject. Of all Smart Grid-aware respondents, 62 percent said that they believe homeowners do not understand Smart Grid technology at all. Smart Grid-aware builder respondents generally felt more confident with their own knowledge of the technology, with 79 percent answering that they at least somewhat understand how it works. A total of 51 percent of Smart Grid-aware builder respondents noted that they believe the home building industry as a whole understands how the technology works.

On the plus side, at least from Whirlpool’s point of view, 48 percent of Smart Grid-aware respondents to the consumer portion of the survey indicated that Smart Grid-compatible appliances will be very important to green homes. In the builder survey, 64 percent of Smart Grid-aware respondents said these appliances will be at least somewhat important to green homes in the future.