By Kathleen Davis, Senior Editor
Consumers are the key to a smarter grid. Along with the growing intelligent technology on the utility side, the smart grid increasingly brings in customers, average guys and gals at the end of the switches. To educate them about their power use and make power management easy and fun, vendors have developed services, programs and technologies ranging from utility demand response initiatives to in-home devices that can break down savings into candy bars and movie rentals. Knowing the players will be the key to navigating this new smart grid subset.
POWERGRID International interviewed three residential energy management players–eMeter chief marketing officer (CMO) Sam Klepper; Paul Nagel, vice president of Control4 Energy Systems; and Greg Memo, GreenWave Reality CEO–about the importance of the systems, what consumers should know and what the residential energy management future looks like.
PGI: How important are residential energy management systems to the smart grid?
Klepper: Residential energy management is a key element of the utility business case to move to the smart grid. Not only does it provide significant potential upside with tools to address energy efficiency and demand response, but it also gives consumers a direct way to control their costs and reduce their impact on the environment.
Nagel: The smart grid will be a complete failure if the consumer does not win or participate. In-home solutions such as energy management systems (EMS) give the consumer a better understanding of their energy use. Successful EMS systems will engage the customer not only with energy consumption specific insight, but lifestyle features such as weather, top news and automatic device control. Failure to engage the consumer will lead to them not participating in load-reduction programs of energy efficiency programs. Deploying in-home technology that gets thrown in the kitchen drawer after three months is a very real problem.
Memo: One of the main challenges in energy conservation today is that the smart grid infrastructure stops outside the home, at the smart meter, leaving untapped the fastest and biggest opportunity for conservation, which is residential energy management. Recent studies in the U.S. and UK have indicated that the vast majority of consumers want tools to give them greater visibility and control over their personal energy consumption, but to date, most solutions have been hard to use, prohibitively expensive or built on proprietary technology, which limits their expandability.
PGI: Why should consumers be concerned about energy monitoring?
Klepper: The demand for electricity is outstripping supply. Prices are only going to go in one direction: up. Energy costs will continue to rise as a percent of household income. We all need to find a way to use less energy overall and especially during peak times, and energy efficiency is the lowest-hanging fruit. Because of inherent inefficiencies in the generation and transmission of electricity, for every one kilowatt of electricity not consumed, we save 3 kW from being generated and transmitted. Once consumers understand the dynamics–and admittedly, most do not–they will be more interested in making home energy management an important part of their routine.
Nagel: Most consumers want to have more insight into their energy use. More important, most consumers want to know how they can control or manage their energy costs. Energy monitoring plus analytics equals energy insights. This leads to peer comparisons and recommendations to save money and customer satisfaction. How does my energy consumption and/or costs compare to others in my neighborhood? What are they doing differently? How does this month’s bill compare to last year? Why is it different? I am partially through the month, what is my likely electric bill? EMS systems answer these questions for the consumer.
Memo: Most consumers want to participate in global conservation efforts but don’t know how to get started, so the key concern is how to get an affordable, easy-to-use solution to better manage their energy usage and save money. (Customers should look for a) platform that gives them an in-depth understanding of the total home energy consumption and the power footprint of individual appliances in their home.
PGI: Utilities often are not excited about residential consumer participation in electricity consumption. Will they change their minds? If so, what will be the trigger?
Klepper: Utility action is driven by policy and in deregulated markets by competitive forces. The key in either case is consumer demand for more choices and flexibility from their utilities in regard to pricing options, home energy generation and energy management tools. Consumer pressure will lead to new energy policy, which will ensure utility compliance while utilities in deregulated markets must respond to consumer preferences to remain competitive.
Nagel: Utilities are not all alike. Some need demand response (DR) programs, some don’t need DR, but need EE (energy efficiency). Some want TOU (time-of-use) or dynamic rate plans implemented. Some are active because their customers are energy-conscious and want programs to increase customer satisfaction. Most want a smart grid for their own internal business efficiencies, however, if the customers don’t benefit, there will be big trouble ahead. Pilots have shown that customer engagement is critical. Products to date have not engaged the consumer.
Memo: Due to increased government control and other market factors such as deregulation, especially in Europe, utilities are facing new challenges to acquire and retain customers. Solutions need to help strengthen the relationship between utilities and their customers by offering value-added services to their ratepayers that build loyalty and reduce attrition. Furthermore, as consumer energy demands increase, utilities are looking for creative ways to avoid the costs of building more power plants. Many utilities have also made significant investments in providing smart meters to their service areas but need residential energy management systems to bring value to the consumer from those installations.
PGI: What will be the most important residential energy management system development in the next five years?
Nagel: As the consumer can add additional devices in their home for energy-related programs, there will also be an increase in lifestyle integration and control. In other words, more and more consumer electronics and appliances will be able to connect to a well-designed HAN (home-area network) controller or EMS. As each device is added to the network, the value of the EMS device grows.
Life is better when everything works together. When consumers experience seamless, effortless integration of the devices in their home, they will be more engaged with DR programs and rates from the utility. EMS systems will appear in the devices they already want to buy, including the new LCD TV, Blu-ray player or Internet tablet.
Memo: Over the next five years, you will see a number of innovations that advance residential energy management systems. Some of the key trends will be mainstream adoption of intelligent plugs and power strips, the integration of new connected appliances, the movement to intelligent LED lighting, monitoring gas and water, and even the integration of residential renewable energy sources.
Klepper: Unfortunately, the most impactful development would be a significant blackout or global warming event. This would create consumer and regulatory pressure for more tools for consumers to manage their energy use and reduce peak demand.
About the Panelists
Sam Klepper is eMeter CMO and leads its marketing and product strategy. He founded eMeter’s Consumer Energy Group, where his team launched Energy Engage, a next-generation, online consumer-engagement service that empowers utilities and consumers to work together to drive sustainable energy conservation and cost reduction.
Paul Nagel is vice president of Control4 Energy Systems, one of the first companies to offer home automation systems.
Greg Memo is CEO of GreenWave Reality, a company that works with utilities to provide consumers home energy solutions through a HAN that connects existing appliances into one, easily controllable at-home smart grid.