Utilities wary of consumer reaction to smart grid

The smart grid is expected to deliver more reliable and efficient electricity service, but many utility executives say consumers need to see clear benefits, according to an Oracle survey.

As efforts to modernize the electricity grid take hold across the world, there's growing evidence that the concept will prove a tough sell to consumers , at least in North America.

Software giant Oracle on Tuesday released results of survey showing that the electric power executives are committed to the smart grid, but also that a significant number are concerned about potential rate increases that could have consumers balking.

The smart grid describes a number of aspects of upgrading power transmission systems with digital communications to improve reliability and efficiency, and helping to foster the use of solar and wind power. At this point executives say their top priorities are improving reliability, installing smart meters, and establishing demand-response programs with peak pricing, according to the Oracle study.

With a smart meter, consumers can get more detailed information on how they are using electricity, which should help them find ways to save money. An energy provider in Texas, for example, set up a Web site to let people see which appliances use the most electricity and to get data on usage patterns, which can help people be more efficient.

Demand-response programs are designed to curb electricity use during peak times, such as a hot summer day when the grid capacity is strained. By providing incentives for consumers to automatically adjust the temperature on a water heater or run a dishwasher later at night, for example, utilities can avoid building new power plants to meet growing demand.

Utility executives expect that the most compelling products for consumers will be in-home energy displays and smart appliances that can operate more efficiently, according to the survey.

But even though utilities believe that consumers will see the benefits of more reliable service and efficiency, many U.S. utilities are moving tentatively, with only one in five executives saying they are doing systemwide deployments.

Utilities are known for adopting technology slowly in part because their top priority is reliability. Also, 43 percent of respondents to the Oracle survey said they are worried about consumer reaction to higher costs. Smart-grid programs are slowed down as well because many states lack regulations that create an incentive for utilities to use less energy.

The Oracle report reflects the view of many executives at progressive utilities and smart-grid companies that the benefits to consumers haven't been fully spelled out. On Tuesday, a group called Smart Grid Consumer Coalition will be launched at the DistribuTech utility conference. The goal of the group is to improve consumer awareness of smart-grid technologies, according to one of the executives involved in the effort.

 

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