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Keeping consumers informed may address some of the issues relating to utility smart meter rollout but doesn’t really deal with, as so aptly stated in Kate Rowland’s article “Are consumers ready for the smart grid?” (Intelligent Utility, December 28, 2009), the psychological factors. We still wrestle with understanding consumer motivation and want. We don’t really know how consumers will react to more intrusion by smart meters into their lives (if it is an intrusion or a mere nuisance) and what they will embrace in terms of technology. Maybe the lessons learned in WiFi will be an indicator. WiFi took quite a long time in becoming common within homes. As the internet grew in importance so did the need for technology to facilitate its use.
Being untethered has become norm in our society due to the consumer need to connect while busy doing other things. That is a social behavior that runs common in this society. Translating these type behaviors or habits into a DR/DSM program is difficult because no one has identifies which behaviors are a paradigm shift to the technology need. The strategy industry is using completely reverses this approach. Industry believes that technology will cause a paradigm shift in the way consumers use energy. Hence the smart meter, the smart appliances, the smart grid, and so on. While these technological implementations do make behavior changes, the impact of these changes is more visible within the utility industry and not as much in the consumer world. Bridging the gap between these two worlds is challenging but not daunting.
Energy cconsumers would like systems that integrate their energy use with their social lifestyles. After all, we do “twit” our lives openly to all to see. A social networked HAN would get more results that using any utility program in DR/DSM. Only by combining the energy habits of home residents with the social and competitive conscience of what a community is doing will users really focus on what’s right and what’s best for the community in energy consumption. Not only do utilities have a responsibility to inform its consumers, but the community also has an obligation to encourage and interact within itself and its members.
With that in mind, it would be nice if my home network bought the lowest cost electricity for me based on preset parameters that I chose. Then I wouldn’t need to constantly track pricing on the spot market or worry about TOU (and all those utility terms that get tossed out to the public) to get the best deal. I would prefer to place it on autopilot and let the HAN place limitations on my appliances based on electricity bought. Yes the HAN will need to keep me and family members in the loop – we don’t like surprises.
Taking this further, what if the home network also linked with the neighbors and collectively implemented solutions that benefited the entire community being served by the utility? A paradigm shift in social behavior is possible but only when that community is ready for it, desires it, and has tools that simplify its implementation. Providing tools in and of itself only prematurely sours the social interaction with technology. It clouds the real issue of the need for change in energy use and leads to technological and financial abyss.
Current trends indicate a move towards a more ecologically responsible society. How this translates into behavior change is anyone’s guess. Let’s face it, the world is shrinking and getting competitively crowded in all areas that impact resources and its use. The shift in lifestyles has only just begun. How we, as a society, respond now in implementing energy solutions will have profound affects on community behavior in the future. Since the problems are larger than the technology deployed or being considered; it becomes paramount that utilities, industry and consumers engage the issues openly and transparently. The industry will need to embrace a more social conscious approach to energy reduction and management by inclusion verses exclusion of the people they are committed to serve.
A social network provides opportunities for social change in attitudes and behavior but only if its implementation incorporates the minds and hearts of its community. In an isolated gadget society such as ours accomplishing this is difficult but not improbable. Moving energy users, and collectively the community, towards a socially responsible mindset requires instilling a sense of community purpose and destiny that only comes through interaction. And while technology tend to guide individuals towards “gadget isolationism”, society as a whole desires more social interaction – not less. Facebook, Twitter, YouTube and other such social networks have more then demonstrated this trend. Capturing the “spirit of social networking” can only enhance the use of smart meters and smart HAN deployment — but only if such solutions are part of the public strategy.
The smart grid may be the panacea for energy woes – or we would like to think it is, but it is futile and dangerous if the society it intends to serve is left behind in the frenzy to feed on the benefits sought.
Here’s another me too organizations pushing their agenda unto the industry and trying to compete with the many others who stand to gain or loose in the battle for “oneness.” While I do applaud the efforts of the Association of Home Appliance Manufacturers (AHAM), I am somewhat aware of the bias interest they have in the final outcome of the smart grid initiatives. Let’s face it, they are my competitors so I do tend to (tongue in cheek) become alarmed at their agenda. They do have some good points (why didn’t I think of it first?) as seen in their push for integration of home and grid. It is interesting that they posit the Energy Independence and Security Act of 2007 as making smart appliances integration mandatory and thus inferring that smart appliances are essential to fulfill the law.
“In establishing policy on the development of a Smart Grid, the Energy Independence and Security Act of 2007 requires integration of Smart Appliances and consumer devices that can interact with the Smart Grid. This law also requires that consumers be provided with
timely information and options for controlling energy use.
How will the Smart Grid involve and affect the consumer?
o The deployment and integration of “smart” consumer appliances and devices are mentioned in two of the ten primary Smart Grid objectives as defined by Congress.
o The Federal Energy Regulatory Commission (FERC) identifies important Smart Grid features that will “…facilitate consumer transactions and allow consumers to better manage their electric energy costs.
o A key feature of the Smart Grid is Demand Response, where the consumer, utility or designated third party can reduce the consumer’s energy consumption during critical usage periods. Since the residential sector accounts for 37% of electrical retail sales, it is logical that the utility industry would engage residential consumers in efforts to manage consumption.”
http://www.aham.org/ht/a/GetDocumentAction/i/44191
They redefine the smart grid as being designed for the consumer’s benefit and use. I’m all for that too. However, they also express a sense of alarm in that “without proper consideration of consumer needs in the development of these initiatives, the vision of the Smart Grid is at risk.” Talk about their focus and perspectives…hmmm.
Overall, the downloadable white paper has some serious and important points that smart grid developers and device manufacturers do need to be dwell on. It brought to mind several questions that are yet to be answered and, quite frankly, may not answerable until we gain more understanding of consumer interaction with deployed technologies.
1. How does the utility shift loads of millions of appliances so as to not disrupt peak demands or even create a new peak demand period?
2. What infrastructure, both external and internal to a home would smart appliances really need (no sugar coating hype like I’ve been reading lately coming from news briefs and press releases).
3. How does the industry account for the millions of appliances currently deployed and working without any need for upgrading. What option will consumers have other then purchasing a new appliance? Note that the difference in smart appliances and normal appliances is the communications link and electronics needed to respond to remote command and control (other then the normal “panel” controls on the appliances.
4. The call for one standard protocol for communications into the home from the smart meter seems to be counterintuitive of the market and free enterprise in our society. Who makes that call as to the one standard? Who gains and who looses in the shuffle to influence which is selected?
The final outcome of smart appliances may be more of a matter of consumer preferences verses manufacturer’s push. The number of appliances in use and the brands, types, makes etc is the millions. This implies a transitional period where smart appliances are gradually phased in to replace older and less efficient devices. No one has yet to measure the effect of smart meters since the goal of deployment is utility biased and doesn’t necessarily take into account consumers (other then the normal marketing hype and consumer friendly language used).
Next year will be a critical year for metering companies as the trends show a progressive split between the utilities and the energy consumer in home energy management systems (EMS). While the utilities are content to use communicable thermostats as a “control” mechanism in demand response programs, the world of energy management and home automation is shifting towards the telecoms, cable, SaaS companies, and appliance manufacturers. Add to the mix Google’s and Microsoft’s web based “free” solutions and the dynamics of energy management quickly change.
Google makes no bones about their thrust into the home energy markets. Their primary goal is to interface with “whole house” energy management products that accentuate their market focus. Microsoft also has a similar approach that basically places the utilities and therefore the smart metering companies as possible secondary goals for consumer to electricity management interfacing. Companies that meter the “whole house” will have an advantage of a larger customer base when coupled with the Google or Microsoft SaaS platforms. Will the meter move inside the home? If we follow the trends, I would say yes — but not any time soon. Once the infrastructure and experience dealing with consumer EMS is established, it would be a matter of time before legislation would follow “practice” in the market. Companies like Google open the Pandora’s Box of possibilities never imagined before in AMI/HAN/EMS options. The concept of “whole house” metering can easily change to “in-home” monitoring with products such as T.E.D. and others.
The trends show four distinct approach to home EMS/HAN with one being utility driven, the second being telecom/cable driven, smart appliance manufacturer driven, and the fourth being pushed by web portal type companies (Google, Microsoft, etc.). The opportunities for AMI/HAN are enormous and will result in many new startups and M&A activity before the dust settles in this market. Meter companies may soon find themselves competing with telecoms, cable, and the likes of Google/Microsoft as they “enable” less expensive options (smart appliances and smart AC sockets) for metering commercial and residential buildings. The key is building integration. As technologies expand the role and education of consumers and smart home solutions become economical to deploy, more consumer driven products will proliferate the EMS/HAN landscape. Utilities and meter companies will need long range vision to anticipate the paradigm shifts in consumer preferences and the impact technologies, climate change perspectives, increasing energy demand and the political environment have on their business. Many meter manufacturers are doing just that by including AMI/HAN representation within their companies. With the move toward consumerism in EMS/HAN, both utilities and meter companies need to ensure their role is not diminished within this market.
The recently passed stimulus bill has impacted greatly the electricity industry’s business models and notions of consumers as partners in reducing energy consumption and carbon footprint. In the pass the utilities’ actions on Federal and State demand response initiatives have been mixed. Now there is a new drift towards energy reduction as a means of reducing carbon footprint. But to do this, the utilities will need to elicit energy consumer buy-in and support. Research has shown that consumers do have an interest and desire in reducing energy, in doing their part towards eliminating global warming. The lack of a clear business and technological model within the electric industry, however, has hindered this effort.
To date, there are only a few multi-year studies with smart metering AMI/HAN that capture the energy consumption lifestyles of energy consumers – particularly residential users. There are many pilot programs being deployed (or deployed in the past) to capture some data on consumer trends and habits in home appliance use. These programs are limited in scope with mixed results that may be interpreted either positive or negative, depending on points of view or bias. In order to truly know how consumers can and do respond to energy use reduction, to understand how technology and consumers may interact now and in the future, a new approach needs to be implemented. If the industry is serious about understanding consumer behavior and how technology shapes perspectives and attitudes then tracking ALL appliance use within buildings is the best option to do this. A “whole” house power monitoring system that identifies each and every energy-consuming appliance, which integrates consumer needs, perspectives, and lifestyles with how they consume energy via their appliances and every day living, is needed.
The common problem in the studies published is the focus on electricity consumption and pricing (commodity) verses other potential data that better portray consumer mindsets. Most studies use a question and answer approach to understanding what motivates the consumer to reduce consumption or change appliance usage habits. An old saying state that “actions speak louder than words” and ingrained consumption habits tend to reveal themselves after prolongs periods. Energy use within a home is complex with multiple factors impacting the amount of electricity consumed. Getting a “lifestyle” sampling would help verify data given.
Understanding consumer lifestyles through the way they apply appliances to their every day living is key to modifying consumption behavior. Integrating conservation programs with how people live is the right step towards winning the minds and hearts of energy consumers and getting successful results in demand response or AMI/HAN implementation.
When our company first started pitching in early 2004 about the HAN technology it was developing, the initial response was negative. As one individual put it: “saving electricity when it is so readily available and cheap is a waste of my time.” Things have changed since and consumers are more prudent with this valuable resource. Converting the 2004 mindset of the industry and consumers to the current focus on “green” and global warming issues that now dominate the political and social landscape has been an upward battle. If minds can be changed due to social and political changes, then any implementation of technology has to take these market factors into consideration as part of the strategy for successful HAN development and deployment.
Home automated systems that do not consider the lifestyles of consumers and the impact it has on reducing energy use limit the benefits of smart technologies. In fact, current implemented technologies lack the capacity to do lifestyle analysis and to automatically modify the home network accordingly so as to meet customer expectations while focusing on reducing energy waste. The systems model needed would encompass the emphasis on “energy services” rather than “commodity consumption” and billing. Such home networks advance intelligence in understanding consumer needs while balancing those of the industry. The trend towards consumer partnering with energy providers and service companies will eventually influence what the industry perceives and develops in technology. As the market matures in this area of home automation, convergence of multiple technologies will seamlessly provide energy services never before imagined or contemplated. Energy management would be an integral part of a typical home environment.
One of the things that an AMI/HAN needs to ascertain is the impact that a continuous interactive technology has on how the occupants use energy. In part this can be derived from historical data, whether the occupants reduce consumption when the system is implement or if there is an increase or flat lining. Manufacturers and implementers need to know what specific things move occupants towards energy conservation and a greater awareness of carbon footprint reduction.
a. Provide occupants with information as to carbon footprint and how they rate when compared with other participants.
b. Provide occupants with information of energy saved and cost and their rating when compared to other participants.
c. Provide occupants with information of energy saved and cost and their rating when compared with previous historical records.
d. Provide occupants a means to gauge savings goals (budget) verses actual accomplishment in savings on a daily, weekly and monthly basis.
e. Provide occupants with “energy credit” capacity for trading usage allocations among participants across the network. Swap or sell energy credits on a social network environment.
f. Provide occupants with real-time pricing information so they can make decisions as to consumption rates and times.
g. Provide an auto response method for real-time pricing that automates any adjustments needed within the network so as to minimize peak demand costs.
h. Provide occupants with warning messages that relay costs and usage status
i. Provide occupants with the capacity to identify critical appliances and receive status messages on those appliances when those appliances meet set criteria as defined by the owner.
j. Provide remote capacity for distance interaction with the home appliances.
While the list is not all encompassing, it does show the need for a complex software base that takes the AMI/HAN beyond the dollar and kilowatt-hour mindset. Lifestyle systems take into consideration a conglomerate of consumer behavior and adjust accordingly to accommodate utility and consumer needs.
One of the things that we looked at during our discussions with the utilities in California was the HAN ROI to the homeowner, which had to be extremely short based on the costs savings per year.
The HAN Return On Investment (ROI) would require low cost devices that required little to no support or installation. A ZigBee or OpenRF based device that includes measuring power usage plus ON/OFF capability (for scheduled ON/OFF) needs to be priced for the markets it is intended. A more sophisticated device which determines load signature would, for the time being, cost more but not much. Prices, and therefore the ROI, that are most often quoted are designed for B2B which takes into account the large amount of money the commercial sectors are willing to pay for technology or whatever the market would bear. When dealing with HAN markets, the dynamics are different. Two markets exist — the consumer markets and the utilities/conservation service companies. Pricing would evolve around expected costs associated with those markets.
Within the utilities/conservation service markets, the main approach so far has been to link to an in-home display or to a communicable thermostat. The trend in consumer markets, however, is focused towards energy efficient and energy smart appliances as depicted by GE. GE’s approach basically meters each appliance but does so by moving the monitoring circuit internal to the product. A cheaper alternative would be to meter every plug. While GE’s initiative is futuristic, one can monitor appliance now using inexpensive plug-ins. Instead of calling it a Smart Appliance, as GE does, we can easily say it is being “smart socket.” With consumers demanding more involvement in energy management, but unwilling to pay for such involvement, it is foreseeable that smart sockets will become default in new homes. Particularly if the price per unit is low enough that it can be enveloped into the price of the home much like security systems are now included in most new homes. Since we are not just talking about the USA market but globally, the idea of monitoring appliances via smart sockets is becoming increasingly more attainable. HEMS looked at factors that influence home automation and particularly the energy reduction-demand response side of the equation and concluded that we are on the right track as to our product offering.
Utilities are cautiously looking at load curtailment and reduction through home systems — they are just not saying it publically. Note that Google’s and Microsofts efforts seem to strike a positive note with utilities. Our dialogue with utilities, particularly in California, tells us that utilities are interested in HAN and that metering individual appliances is a strong consideration (see Pacific Northwest National Laboratory’s recent studies and the use of in home displays and PCTs in various other studies). They just don’t see themselves as the owners/custodians of such systems.
There is no study that covers integrated HAN systems for energy reduction (DR or DSM) or the monitoring of individual appliances other than those being pushed by the home control companies, appliance manufacturers, Google, Microsoft, and the recent crop of HAN solutions manufacturers. To grasp the significance of appliance level monitoring one really needs to be looking at the home control, home security, home networks, and home media industry trends. The utility industry is moving towards HAN technologies to include appliance monitoring but because of the much hype surrounding smart grid, these type developments become background noise no one focuses on. That’s not to say that monitoring appliances is not a market nor that it has no future — on contrary, turfs are being carved out now with appliance monitoring as the center with GE, Silver Springs, and Google putting their fingers into the pie and now Microsoft There is so much misinformation (speculative expert comments) on smart grid and smart meters that developments such as these are not that noticeable.
To be honest, we don’t see HAN technologies as being a luxury item that only the few would purchase — instead, we think HAN technologies will only become more dominant as utilities and the public at large realize that reducing usage isn’t as easy as turning off a light switch. Energy consumers in developed countries habitually use electricity when there isn’t a mechanism to effectively alter that lifestyle.
When we did our market research, we had to review tons of data from various industries within the home appliance and home network industries since the utility industry had not even considered HAN and energy conservation/carbon footprint were vague terms. Now every meter manufacturer has a HAN department that is aggressively looking at where the HAN movement is leading them. What would happen if metering and monitoring moves outside the external meter? It is the meter manufacturers that need to be on top of this to stay competitive.
The HAN market is more of a consumer appliance market than a utility market though the utilities do benefit from the implementation of such home solutions. There is also the consideration of the energy management service companies that are considering or already moving into residential markets. Right now energy management systems or EMS is a commercial enterprise with large companies producing costly systems for building monitoring and control. Many are looking at ZigBee as a low cost alternative to market to home owners. Only time will tell if their market research or gut hunches are correct.
As a HAN developer and manufacturer, we are constantly evaluation standards (OpenAMI, OpenDR, OpenHAN, utilityXML, etc.) and our overall impression is that the trends towards standards are geared and designed to meet utility needs verses customer needs. Maybe it is just our perception. While developers such as us like to think we are current in all our product offering, trying to pin down a set industry standard is as elusive as a moving target. This brings up the issue as to HAN development and implementation — do we follow a utility view or a mass market consumer view? Are standards being proposed too geared towards solving utility needs while diminishing consumer needs? Or are the two compatible? As you might have guess by now, we do tend to follow the revenue creation approach that basically states that what the customer wants — they get, as long as they are paying for it. Our research via contacts within the energy markets, particularly energy conservation service companies, shows a disinterest in the business models and approach many of the standards organizations are proposing — partly because proposed standards are so new (lacking in a business model), partly because revenue is being created profitably with current business models and approach, and partly because of the concern energy providers have of being perceived too much like big brother by energy users/consumers. If this is the case, and I hear a lot of this echoed by our contacts, it stands to reason that HAN standards should be more in tuned to the market and less in tuned to perceptions and mindsets of industry biased experts. What do you think?
The recent headline in various newsletters has one wondering about Google and its thrust into the Smart Grid: Google Ventures Invests in Silver Spring’s Smart Grid Technology…. Top that with the recent announcement of GE and Silver Spring Networks Chosen For Smart Meter Deal (GE, EXC) and one can only surmise that Google indeed is moving BIG into the home energy conservation and demand response via these initiatives.
Mixing Google with Silver Springs and GE sounds more like a headache waiting for an aspirin solution. Silver Springs’ focus on smart grid really doesn’t extend into the HAN side. They do have a meter to HAN software solution and can move into HAN markets since they are IP based. Google on the other hand is more focused on providing information from second source — namely the utilities. That hasn’t been figured out yet as to business model — who pays who what. GE is really futuristic with their smart appliance approach. When considering that a large appliance has a life cycle of over ten years before it is replaced, it becomes difficult finding incentive to buy smart appliances at a higher cost. You probably are thinking by now: GE has the money! You are right; GE does have tons of money and could possibly pull it off (if they can also convince the government to provide cash incentives to consumers for upgrading on their energy star appliance).
I also believe Silver Springs is on the right track as to IP based systems but spread kind of thin as to partnerships and business model (just count the partnerships!). No one really knows how the smart grid will pan out. The key movers, the utilities, are just not walking the talk when it comes to implementation of technology. Take the smart meter — there are so many variations of “smart” meters and some are really dumb when one argues what “smart” is. Take the utilities’ deployment of smart meters. Right now they are deploying as a means of reducing overhead costs and not so the grid can be smarter, consumers can be more educated, or consumption better managed.
If we honestly evaluate all the partnerships being developed, most are centered either on developing credibility (credentializing) or positioning for “potential” markets. A prime example is the meter manufacturers. They have every possible AMI/AMR developer as partners even though these AMI/AMR partners are deploying different RF protocols or technologies. I guess they want to cover all their bases.
It is easy to forget the bottom line while jockeying for smart grid alliances. And while having partnership logos looks good on the web site and in press releases, only the balance sheet counts.
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