No, energy is not too cheap!

Dumb Thermostat UI

Is energy too cheap to motivate consumers to change their habits and use less?

In the Smart Grid Technology conference I attended in London last week a number of discussion points came up over and over again. I wrote already about how utility companies are wondering how to engage their customers around smart grid projects. Another topic which raised its head frequently was the question of how to motivate customers to change when energy is so cheap!

The obvious answer is to raise the price of energy, and this will happen over time, but it is the wrong answer – in the short-term at any rate.

The issue is not that energy is too cheap, rather it is that people have lots of demands on their attention. To make it worth people’s time to become involved in energy saving activities, if the return is not very high (because energy is cheap) then the process of reducing energy consumption needs to be made simple!

Look at the thermostat above. This is the thermostat to control the central heating/air conditioning in my home. I like to think I am reasonably technical. I have been a Windows sysadmin for a multi-national company, managing Windows, Exchange, Active Directory, ISA and SQL Servers. I edit php files regularly, I remotely manage my own CentOS server via SSH and I’ve even done quite a bit of regex scripting of .htaccess files!

But this thermostat is beyond me!

I know it has a timer, so it should be possible to set it to come on and off at pre-arranged times. Should. Getting it to do so seems to require a Stephen Hawking-like intellect. And, even if I did manage to figure it out, it is so unintuitive that the next time the clock goes forward (or back), I’d have forgotten again and would need to start over! Which begs the question, if my phone knows when to change its clock forward or back, why doesn’t the thermostat – but I digress!

This is far too much hassle entirely. So I don’t use the timer in my thermostat. Or any of its functionality (apart from on/off). And I’m far from being alone in this.

Home energy management systems have, to-date, suffered from having appalling user interfaces. Consequently, no-one uses them. Why would they? They are hard to use and energy is cheap. The room is too hot? Rather than trying to figure out how to turn it down, just open the window!

However, if energy management were made simple and no effort were required to make changes, then it wouldn’t matter nearly as much that the savings were not substantial.

Making energy device interfaces easier to use is no silver bullet mind. This kind of approach needs to be combined with a culture of increased client communications, as I outlined in my earlier post. However, combining these two strategies would go a long way towards making people energy responsive.


Smart Grid Heavy Hitter series – Tropos Networks CEO, Tom Ayers

In this, the fifth of my Smart Grid Heavy Hitters’ interviews, I talk to the CEO of Tropos Networks, Tom Ayers. Tropos develop wireless broadband networks for Smart Grid applications and offer complete network management, as well as enhanced security features. Tropos is the only wireless broadband network provider with FIPS 140-2 certification.

Tom and I had a great chat, we talked about:

  • Tom and Tropos’ definition and the benefits of a Smart Grid
  • Why we need Smart Grids and the efficiency gains we will achieve from them
  • The security issues round wireless Smart Grids
  • Tropos IP, Smart Grid standards and open protocols
  • Best practice Smart Grid rollouts

Klaus Heimann espouses SAP’s smart utility of 2020 at International SAP for Utilities conference

I attended the 7th International SAP for Utilities event in Munich last week.

Having attended the SAP for Utilities event in San Antonio last year, I had reasonably high expectations from this conference and I wasn’t disappointed. At the San Antonio event SAP talked very much about the ‘State of the Now’ talking up their, then recently launched, Energy Capital Management software. At this event however, Head of SAP Service Industries, Klaus Heimann keynoted introducing SAP’s vision for the utility company of 2020!

In what was a very forward-looking address, Klaus confidently predicted that:

In two years time this will no longer be a Utilities conference, it will be en Energy conference

This must have had a lot of the people in the room squirming in their seats because, as Klaus himself said, “Utilities are not known as being good at change!”

But change they must.

Just a few of the upcoming major changes utility companies are going to have to cope with include the growing imperative to move to a greater penetration of renewables in the generation mix, the impending explosion in the numbers of electric vehicles to be charged, and the need to roll-out smart grids and take in distributed generation.

Klaus’ vision for the utility company of 2020 is summarised in the video interview I conducted with him above, but briefly he talked of an energy market vastly more complex than today’s. An energy market:

  • where customers can be consumers and producers (via micro-generation)
  • where customers may have shares in a wind-farm which sells electricity to the local utility
  • where customers receive rebates on kWh’s saved during times of peak demand (compared to avg previous day’s use at same time, for example)
  • where utilities will have special renewable-only power offerings (I wish they had that now)
  • where utilities will need to be able to bill customers for energy used to charge electric vehicles, away from home (at the office) or even in different countries and
  • where utilities will need to be able to offer real-time consumption information, generation data and a control interface to the customer’s appliances

Nothing too earth-shattering in that list to be honest. But, when put against the types of changes utilities have gone through in the last 100 years, this is an enormous upheaval. This is probably a good time to be a change management consultant in the utilities sector 😉

For this vision to become real (and any utilities who don’t start to move in this direction can start writing their own obituaries now), there needs to be massive changes in utilities communications infrastructures and their data handling capabilities.

With big change, comes big opportunities so it is not surprising to see SAP are all over this and helping the utilities visualise where they need to go.


Alcatel-Lucent partners to rollout smart grid in Germany


Photo credit Kaptain Kobold

Alcatel-Lucent announced that it has signed an agreement with the German municipal utility Stadtwerke Pasewalk to implement smart meter operation services.

New European Union rules, which come into effect on January 1 2010, will require consumption dependent billing of gas, electricity and water and by utilities. The Alcatel-Lucent solution being used here is designed to address that legislation. Interestingly, according to the release, Stadtwerke Pasewalk customers will be given a home energy monitor which will enable them to see their energy consumption in real-time and optimise it accordingly. There are no details on whether there are plans to automate the in-home energy reductions, nor do they talk about whether the the meters can be updated remotely.

Alcatel Lucent have partnered with Vodafone Germany, DIEHL Energy Solutions and SIV AG for this project. Alcatel Lucent will operate the central meter data management system to monitor and control the smart meters, Vodafone will provide communications, DIEHL Energy Solutions will deliver the smart meter systems while SIV will provide the backend ERP system to handle the data. The SIV ERP system (kVASy) is based on an Oracle database.

Stadtwerke Pasewalk is one of nearly 900 utility companies in Germany (!) and is quite small with only 12,000 meters so this is akin to a trial-sized project.

The involvement of so many partners, in even this modest rollout, is a clear indicator of just how complex smart grids can be to implement. Partnerships (and interoperability) amongst smart grid solution vendors will be critical to the success of these ventures.

The skills learnt here will benefit not just Stadtwerke Pasewalk and its customers, but all of the companies involved as they move onto future larger smart grid projects.


Utilities are too top-down, command and control


Photo Credit Mikey aka DaSkinnyBlackMan

Utilities are top-down.

Whenever I talk to utilities about Smart Grids and Smart Meters they always trot out the same speech. They want to use Demand Response for peak shaving and they want to implement it by having a mechanism whereby they can come in to their customer’s houses at times of maximum demand and turn down the settings on the aircon, immersion heater, etc.

Unfortunately this kind of traditional top-down, command and control attitude is more likely to turn people off Demand Response programs than to sell it to them.

I know that as a consumer I want to be able to program my appliances myself so that I decide when they turn on/off in response to price signals from the grid. The same is true for fridges/freezers and water immersions – I want them to change thermostat settings to take in electricity at times when energy is cheap and not when it is expensive by MY definitions of cheap and expensive.

I want control of my appliances. I do not want the utility deciding to come in and adjust or turn them on/off for me because it suits them.

Demand Response programs will be hugely beneficial to the utilities and consumers alike but they are complex to explain. If you couple that with the utility having control of your appliances they suddenly become a far harder sell.

Give customers more control of their electricity bill. Allow them reduce costs without reducing usage, by owner controlled, programmatic, time-shifting of consumption and suddenly Demand Response programs becomes an easy sell.

And when you couple that with how Demand Response will stabilise the grid facilitating greater penetration of variable supplies (i.e. weather-based renewables like wind and solar) and you have a win, win, win!


Smart Grids and unlocked Smart Meters

Smart Meter

Photo Credit Tom Raftery

I have been talking to a lot of Smart Meter and utility companies in the last few weeks and it has been fascinating. I have learned a huge amount about some of the challenges and opportunities involved in rolling our Smart Grids.

The first thing to say is that Smart Grids are coming. None of the utilities I have spoken to have given me feedback to indicate that they are rolling back on their Smart Grid projects – and they all have Smart Grid projects at some level, whether it is in planning, in trial or in roll out.

One of the questions I have asked and not received a satisfactory answer to yet is “What happens if I decide to change utility co.? Does my existing utility come along, take the Smart Meter off my wall and my new utility then needs to send an engineer to install their Smart Meter?” Unfortunately, so far the answer to this appears to be “Yes”!

In reality, this will probably be solved with some kind of cost or asset transfer solution.

As an electricity consumer (be that industrial or residential), ideally what I want is either an ‘unlocked’ Smart Meter, or one which is owned by the grid management company, as opposed to one which is locked into a particular utilitity.

In fact, for me the ultimate solution would be a neutral Smart Meter which can go out at all times, find the cheapest electricity at that time and pull from that utility!