New roadmap for modernizing electricity grid...but why wait to realize the gains from access to usage information?
The White House today released a report (titled "A Policy Framework for the 21st Century Grid") (here's the fact sheet) that provides provides a compelling vision and addresses challenges of modernizing the electricity grid.
One point stands in very high relief for me.
A central theme in every "smart grid" discussion is that great value will flow from giving consumers (homeowners, tenants, business) the ability to access much more and better information about their electricity usage. Yet, these gains are possible today without new meters or a much smarter grid. There is no need to wait for new hardware to implement new ways of delivering usage data to consumers.
Compare the information delivered to you from your bank to the information delivered in your electricity bill.
At any time of the day I can go to my bank's website and get a detailed (and sometimes depressing) view of my checking account activity. I can see every deposit and withdrawal from my account, all charges, credits, fees, interest, etc. I can easily download the data into financial planning services, like Mint.com or Quicken, which provide charts and tools to help me manage my finances and understand where I spend money.
Now, imagine if your bank provided only a static snapshot of your account balance as it was at the end of the prior month, with nothing about individual charges, deposits, credits, withdrawls, or ATM use. Just the balance as of May 30 and how much less or more this was than the balance April 30. Sounds absurd, yet most electricity bills today provide customers with information about electricity use that is this opaque and coarse, showing only total energy hours but nothing about refrigerator use, air-conditioners, lights, dryers, which uses were most expensive, or whether you probably left the refrigerator door open while on vacation.
It's often noted that Thomas Edison working in Menlo Park in 1880 would recognize the electricity meters in our homes today and would easily understand an electricity bill sent today.
There has, in fact, been great innovation in electricity meters and tools to measure energy use in a granular way – modern tools, hardware, software, websites -- but they have not been implemented widely.
Most utilities, along with state and local regulatory commissions, have been grappling with the difficult questions related to "smart meters" for several years. And, the decisions are genuinely difficult -- implementing new hardware and systems can be very expensive. Decisions must be approached with care after considering other opportunities to invest in efficiency and infrastructure.
The Administration's new comprehensive report is a must-read for anyone interested in this subject. The Administration’s leadership is tremendously valuable and will help to spur progress. And, to be clear, there are very good reasons to implement new and better meters. But the few most difficult challenges related to smart meters have obscured measures we could begin today to implement with low costs and high benefits.
Chapter 5 of the report is titled “The Path to Empowering Consumers and Enabling Informed Decision Making.” I’ve seen more crisp titles, but it expresses the point perfectly. Access to better information about energy usage will enable people to make better decisions about their usage – which is essentially about how they spend their money -- and access to this information can trigger innovation among service providers to deliver great new tools to people. Enterprising developers and technologists could compete to deliver to homeowners the kinds of tools that Mint.com and Quicken delivered to bank customers,
Smart meters and new hardware are not needed to realize value from access to better information. There is no reason to wait for smart meters to give consumers better access to usage data. Consumers could have better access to their energy use data today -- even with every-30-day meter data. Better information would deliver value to the market, to homeowners, in the form of innovation, and in the form of greater energy efficiency in our homes and buildings.