If you modernize the grid, will consumers care?

The benefits of a smart grid are far clearer to utilities than consumers at this point, but changes in regulations could spur more interest, say a panel of industry execs.

NEW YORK--The technology is maturing and there's significant investment on the way, but the smart grid still lacks the regulations and consumer demand for it to take off like the Internet did.

On Wednesday, a conference panel of executives involved in the smart grid said that there are a lot of benefits to upgrading the grid with digital technologies, including the ability to use energy more efficiently and manage the flow of wind and solar power onto the grid.

Individually, consumers can also get benefits, such as remotely controlling home energy and charging electric vehicles to get off-peak rates. But at this point, most of the activity is focused on installing two-way smart meters.

"One of the biggest challenges and opportunities is customer acceptance ," said Gianna Manes, senior vice president of retail products and services at utility Duke Energy, during a panel at the Jefferies Clean Tech Conference here. "Consumers are not standing in line for this technology, but as they begin to see the benefits of it, that will change."

Part of the problem is the nature of the product--electricity is the ultimate commodity that consumers in the U.S. simply expect to work. Some smart-grid programs will include energy management tools for the customer to help them see their electricity usage and either software or touch-screen devices for managing home energy.

With more details on consumption, consumers can find ways to reduce waste and cut electricity by about 5 percent to 10 percent, according to early tests. With gear like a networked thermostat, consumers program appliances and home temperature settings to shave usage more, potentially curbing electricity usage at peak times in exchange for some sort of rebate.

Comparing usage data from home to home has proven to one of the best ways to encourage efficiency, according to utilities. And some companies, such as Tendril , plan to offer opt-in services to analyze home energy and provide recommendations, such as having an air conditioner serviced because it consumes more than it should.

Delayed gratification
Many of these services rely on having some sort of communications infrastructure in place, either a smart meter or a gateway that uses a home broadband connection . But many utilities, if they are investing in the smart grid at all, are focused now on smart meters, rather than the end-user services, said panelists.

"If you looked at the grid that Thomas Edison designed and you looked at the grid today, it's the exact same grid," said Brent Pearson, the vice president of business development of meter maker Landis+Gyr. "What we're really talking about today is smart metering as phase one and most utilities are approaching that as three or four year deployment."

Over time, utilities plan to also upgrade substations and transformers so they can automatically react to outages. Also, utilities need to upgrade the system to accommodate more distributed generation, such as solar and wind at households, and the significant draw from plug-in electric vehicles, Pearson added.

Because the technology has improved, utilities are interested in investing in smart meters, which can have immediate benefits. At Duke Energy in Ohio, for example, the company has a place where it stores 60,000 keys, which are used to get into people's houses to read the meter. Upgrading to an automated reading has clear benefit, said Manes.

Elephant in the room
Even though some utilities are pushing aggressively with smart-grid technologies, regulatory changes are still needed to drive adoption, panelists said.

To transmit solar and wind from the center of the U.S. to the larger load centers will require significant changes to regulations regarding transmissions, said Greg Yurek, CEO of American Superconductor.

Yurek cited the example of the Tres Amigas project in New Mexico to use high-voltage transmission lines to manage the flow of large amounts of electricity generated by solar and wind. China, which is moving quickly on renewable energy, is a position to deploy American superconductor's transmission cable technology faster than the U.S., he added.

For consumers, they need incentives to change how they consume electricity, which means time-of-day pricing, said Adrian Tuck, CEO of Tendril Networks. Also, most utilities work under regulations that provide an incentive for them to sell more electricity, rather than encourage customers to conserve.

"The technology and standards are being addressed," said Tuck. "The elephant in the room is that as a CEO of utility in most jurisdictions, you have to choose between shareholders and national energy policy. Unless (energy efficiency) programs exist, deployments will be held back because there's an inherent conflict of interest."

 

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