Why the Smart Grid Won’t Have the Innovations of the Internet Any Time Soon

Many people (myself included) have painted a picture of how the consumer piece of the smart grid could develop into a real-time, two-way communication network that looks a lot like the Internet. In that world, consumers would be able to see variable pricing change in real time, while smart meters and energy management devices read and visualize energy consumption data every second, leading to changes in consumer behavior. The ultimate vision of that landscape is that real-time energy data unleashes innovations and applications that we haven’t yet thought of, which will deliver substantial behavior changes.

Well, that’s the outcome for which entrepreneurs and innovators are hoping. The reality is that the consumer piece of the smart grid will look very different for many years to come. While it’s significant that utilities are starting to build out smart grid infrastructure, utilities are largely opting for networks that provide connections that are far from real time, and this could stifle the desired innovation.

What Utilities Are Planning

Utilities today are largely designing smart grid networks to collect data from smart meters in a time frame that ranges from between every 15 minutes to an hour, then bringing that data back to a collection point on the network. From there, many utilities are only bringing data back to the utility back office where the numbers are processed and packaged for consumers once a day. As Google’s Tom Sly explained to me recently, there are two different temporal issues: the resolution of the energy data (at what intervals the energy consumption is tracked) vs. the age of the data (how long it takes before it makes it back to the customer). PG&E, Duke, San Diego Gas & Electric and Southern California Edison are all planning slight variations of this setup.

When an outside company partners with a utility to provide smart grid and energy management tools, it’s beholden to this setup. When Google — which largely believes that the more information the better — works with a utility, smart meter data that is pushed to Google’s PowerMeter energy tool has to make its way back to the utility before it can be sent to Google. That means that even for Google’s energy tool, there can be both a significant delay before information reaches consumers, and significant gaps in energy data details. These delays and gaps can undercut the premise of how smart meter technologies will empower consumers to make decisions about their energy use based on real-time costs.

When it comes to providing real-time pricing to the consumer — with the idea that raising prices when demand goes up will discourage energy use during those times, lowering peak demand — the utility execs we spoke with didn’t even want to speculate on how frequently consumers will eventually get pricing updates. It’s just too early in the smart grid network design, most said. Google’s first version of PowerMeter also isn’t working with pricing information.

Read more . . .

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Tags: energy consumption data, energy data, energy management, Google, grid infrastructure, Innovation, innovators, management devices, smart meters, time energy

This entry was posted on Friday, June 5th, 2009 at 5:31 pm and is filed under Innovation, Project Energy, Reuters. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.