The Energy Ecosystem – Managing Its Evolution

The electrical grid in the USA is sometimes called the greatest machine ever built.  Its evolution into a Smart Grid is often described as an energy Internet or Internet of things that will improve overall grid operations, reduce inefficiencies, reduce greenhouse gas emissions, and improve reliability.

Something is missing from these descriptions, and it is time to recognize that the Smart Grid is an energy ecosystem.  Ecosystems are marvelously complex, inter-related environments.  Remove a food source from the food chain, and watch it change.  The same is true with our energy ecosystem – just substitute a form of energy, like coal, for food, and consider the impacts of its absence.

We have to plan the reduction, if not outright extinction of the dirtiest fossil fuels, and replace them with renewables.  Since many renewables are intermittent energy sources and not steady-state, it means we also need to introduce layered (generation to distribution) energy storage into the grid to accommodate not only ancillary services but complete continuation of electrons even when the sun isn’t shining or the wind isn’t blowing.

However, the challenges of introducing new technologies are even more numerous.  For some technologies that make the grid more robust and reliable – like synchrophasors, their deployment won’t cause disruptions – they improve and enhance existing operations.  Most importantly, they are invisible to the average consumer.  But there are other classes of technologies that are much more visible to consumers, like smart meters.

And here is where the challenges really surface for the evolution of the energy ecosystem.  Yes, developing technology is easy.  Deploying technology is hard, especially when it is visible to consumers.  Take the unfortunate example of Pacific Gas and Electric (PG&E).  This utility is the subject of a lawsuit regarding its introduction of smart meters in the Central Valley of California.  Residential consumers in towns like Bakersfield are understandably alarmed at increases in their summer electricity bills, which reflect lots of days with air conditioning to cope with the blast furnace temperatures outside.  I would be too if I were in their shoes – what consumer likes increased bills?  And I should be in their shoes, since my small niche of the PG&E energy ecosystem was altered with a smart meter this past summer.   But I’m not in their shoes.  My bills did not increase.   PG&E did raise electricity rates this summer, but unless you pay close attention to every insert in your bill, these changes in the ecosystem could escape your notice.  However, introduce something new like a smart meter, and an increased electricity bill is the result of that most visible change.

It’s a planning problem influenced by corporate culture, marketing and communication plans, and consumer awareness.  It is easy for those of us in the Smart Grid and energy sectors to forget that not everyone has the same level of awareness about Smart Grid technologies and benefits.  That’s one reason why I wrote the Smart Grid Dictionary, but this great resource alone won’t be enough to educate consumers about the powerful and compelling reasons to embrace smart meters and other technologies that will be coming to our homes in the next few years.  And face it, most utilities in the USA do not have to compete for consumer mindshare.  That’s one of the tradeoffs of being a regulated business, and the deficits of knowledge resulting from this environment can have expensive ramifications for introductions of visible technologies into the consumer base.

In hindsight, PG&E should have conducted an advance information campaign to inform, demystify, and reassure consumers about what changes smart meters would bring to their energy ecosystem.  They might have chosen to rollout smart meters first along the cooler coastal areas and go the Central Valley in the wintertime, thereby avoiding a correlation of higher electricity bills as a result to smart meters instead of higher electricity rates.  As a consulting veteran of technology introductions, the best practices include extensive interdisciplinary planning and execution of the plan.  Properly managed evolutions in the energy ecosystem keep the call volumes down in the contact centers, avoid legal entanglements and bad publicity, and maintain harmony with the regulatory agencies.