Smart Grid and Consumers

Date: July 23, 2010
Pages: 192
US$ 3,500.00
Publisher: SBI
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)

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Smart Grid and Consumers
The zone of interaction between the smart grid and the consumer has been characterized as “the great unknown.” Yet ready or not—with the smart grid rapidly taking shape, a rush of companies swarming the market, state mandates kicking into effect, and actual deployments being built out—the smart grid is now poised to plunge headlong into this largely unexplored land of consumer demand. Yet so far, despite optimistic reconnaissance gathered from pilot projects and other preliminary tests, real-world expeditions into the new consumer frontier have met with a host of problems—from cost overruns to consumer resistance. So perhaps at this point it would be prudent to step back and reassess this terra incognita.

The smart grid is currently conservatively valued at just over $20 billion in the United States and over $70 billion globally. Yet only about 10% of this amount is accounted for by consumer applications—mostly smart meters. The smart grid will only truly achieve its goals if it establishes positive two-way communications between utilities and consumers. This means that residential applications and services must necessarily gain significantly in share before the smart grid can realize its visionary promise.

This study presents a wealth of insights into smart grid/consumer dynamics. It examines the issues involved in building positive two-way communications interactions, and the intrinsic negative resistance that can be expected. With a focus on residential applications and services, it provides an in-depth analysis of advanced metering infrastructure, smart meters, demand response, dynamic pricing, home energy management systems, home area networks, smart appliances, popular communications platforms, and futuristic technologies. The competitive situation is also discussed, showing how giants like Cisco, Duke Energy, and Google are entering a fledgling field so far dominated by relatively recent startups, such as Enernoc, Control4, and a flock of other companies. Other areas covered in this study include product and marketing trends, recent smart grid deployments, and consumer surveys regarding smart grid acceptance.


Need for This Study
The Smart Grid: Three Major Sectors
Applications/Software Sector Focus of Study
Eight A/S Categories
Smart Meters
Advanced Metering Infrastructure (AMI)
Demand Response
Dynamic Pricing and Time-of-Use Pricing
Home Energy Management Systems
Smart Appliances
Electric Vehicles

Consumer Issues

Consumer Issues: Costs/Savings
Consumer Issues: Smart Meters
An Obvious Response
Education and Customer Relations
Consumer Issues: Privacy
Consumer Issues: Safety/Health
Consumer Issues: Distributed Generation
Consumer Issues: PHEVs
Consumer Issues: Marketer Momentum

Appliance and Software (A/S) Marketers

Marketers: Smart Meters
Marketers: Advanced Metering Infrastructure
Marketers: Demand Response
Marketers: Home Energy Management Systems
  Table 1-1: Selected List of HEMS Marketers
Marketers: Home Area Networks
Marketers: Smart Appliances

Applications/Software Trends

Projected Number of U.S. Smart Meter Installations
Projected Number of World Smart Meter Installations
Communications Network Trends
Residential Demand Response Likely to Grow
Dynamic Pricing Trends
HEMS Trends
Compelling, Engaging EIDs
HAN Trends
Vast HAN Possibilities
  Table 1-2: Selected List of HAN Applications by Category
Media Possibilities
Global Giants Enter HAN
Smart Appliances: AHAM Definitions
Appliance Giants Forging Ahead
Fuel Cell Trends
Electric Vehicle Trends
Vehicle to Grid (V2G)
EV Charging Infrastructure

Consumer Surveys

Little Consumer Awareness of Smart Grid
Bright Spot: Consumer Concerns over Energy Costs

Market Size and Projections

Overall Smart Grid: Size and Projections
  Table 1-3: Overall Smart Grid Market: Size and Projections, 2009-2014 (in billion $)
Category Size/Projections: Smart Meters
  Table 1-4: Smart Meter Category: Size and Projections, 2009-2014 (in billion $)


Need for This Study
Two Key Terms Described and Defined
  Description: Smart Grid
  Smart Grid vs. Dumb Grid
  Table 2-1: Smart Grid Benefits: Positive and Negative
  Smart Grid Still in Its Infancy
Definition: Consumer (Residential Focus)
  Figure 2-1: Number of Electrical Accounts by Consumer Class (in Millions)
Average Residential Electrical Consumption
  Table 2-2: Average Residential Electrical Consumption and Pricing, 2008
Two Other Important Terms
Electric Utilities
  Distributed Generation (DG)
The Smart Grid: Three Major Sectors
Applications/Software Sector Focus of Study
Three-Sector Interactions
Grid Infrastructure
  Three-Tier System
  Four North American Power Interconnections
  ISOs and RTOs
Grid Infrastructure Problems and SG Solutions
  Transmission Problems
  Maintenance Problems
  Efficiency Problems
  Interconnection Problems
  Peaker Plant Problems
Information and Communications Technology (ICT)
Information Technology
  Grid Visualization Hardware and Software
  Multiple Resolution Views
  Layered Information
  User-Specific Views
  Analytical/Decision Software
  Engineering Analysis Software
  Mapping Software
  Distribution Management Software
  Storage Management Software
  Meter Data Management Software
  Outage Management Software
  Renewable Energy Management Software
  Security Management Software
Communications Technology
Communications Platforms
  Power Line Communications
  Broadband Over Power Lines
  RF Mesh Networks
Comparison of Communications Platforms
  Table 2-3: Selected Smart Grid Communication Technologies
Smart Sensors
Applications and Software
Eight A/S Categories
Smart Meters
Advanced Metering Infrastructure (AMI)
Demand Response
  Interruptible Tariffs
  Direct Load Control (DLC)
  Manual and Automatic DR Programs
Dynamic Pricing and Time-of-Use Pricing
Home Energy Management Systems
  Smart Appliances
  Electric Vehicles



Into the Unknown Zone
The Land of Consumer Demand
The Smart Grid Is Utility-Oriented
Debunking the Internet Analogy
Business Relation with Utilities
Popular Appeal Necessary for Success
Utility Benefits
  Greater Reliability
  Reduced Overhead/Administrative Costs
  Fewer Customer Service Issues
Consumer Benefits
  Personal Empowerment
  Increase Intelligence
  Advance Civilization
  “Saving” Benefits
  Saving the Environment
  Saving the Grid
  Saving Money
Skeptics on Consumer Benefits
Countering the Skeptics?

Consumer Issues: Costs/Savings

Minimal Money Savings
Expensive Equipment
Utilities Pass-Along Costs
Future Savings?

Consumer Issues: Smart Meters

Backlash in California
First-Stage Consumer Burdens
Smart Meters, Dumb Rollout
Independent Audits Ordered
Unaddressed Problems
Smart Meter Controversy Spreads
Questions of Accuracy
Sowing Suspicions
Little Transparency
No Opt-Out
Generating Paranoia
Ambiguities in the Savings Claims
Savings Not a Straightforward Proposition
No Visuals, No Savings
The Off-Peak “Fairy Tale”
A Look at Time-of-Use Pricing in Canada
  Table 3-1: Sample Utility Bill: Before and After Time-of-Use Pricing (3/09 vs. 3/10)
  Table 3-2: Sample Electricity Use by Time-of-Use Period, March 2010
Shifting Rationale
Alarm in the SG Industry
Fear of Organized Opposition
TURN’s Smart Meter Critique
Barreling Ahead into the Unknown Zone
An Obvious Response
Resisting an Adversarial Relationship
Poor Utility Customer Relations
Reasons for Negative Relations
Improving Customer Relations
Educational Efforts
The Consumer Enlightenment Model
  Table 3-3: Smart Grid Benefits: Positive and Negative
Utilities Begin to Get the Message
The Question of Education
SG Educators Appeal to the Future
SG Educators Disregard the Current Economy

Consumer Issues: Privacy


Consumer Issues: Safety/Health


Consumer Issues: Distributed Generation


Consumer Issues: PHEVs and Fuel Cells

Fuel Cells
Consumer Issues: Marketer Momentum

Miscellaneous Consumer Issues

Convenience Issues
Entertainment Issues
Customer Service Issues
Energy Efficiency Issues
Employment Issues



Number of Marketers
Size of Marketers
Smart Grid Specialists
Corporate Giants
Where Are the Clean/Green Tech Marketers?
Partnerships and Alliances
Marketers: Smart Meters
  Table 4-1: Selected List of Smart Meter Marketers
Marketers: Advanced Metering Infrastructure
  Table 4-2: Selected List of AMI Marketers
Marketers: Demand Response
  Table 4-3: Selected List of Demand Response Marketers
Marketers: Home Energy Management Systems
  Table 4-4: Selected List of HEMS Marketers
Marketers: Energy Information Displays
  Table 4-5: Selected List of EID Marketers
Marketers: Home Area Networks
  Table 4-6: Selected List of HAN Marketers
Marketers: Smart Appliances

Competitive Profiles

  Table 4-7: Selected List of Itron Partners
Echelon Corp
Silver Spring Networks
Cisco Systems
General Electric


Trends: Smart Meters

Projected Number of U.S. Smart Meter Installations
Deployments Planned or in Progress
  Table 5-1: Utility Smart Meter Deployments Planned or in Progress, 2010
Projected Number of World Smart Meter Installations
Nations with Advanced Smart Meter Programs
The Ongoing Accuracy Controversy
Open Questions on Communications and Functionality
Greater Speed
Retrofitting AMR Meters

Trends: Communications Networks

Wired Approaches
Wireless Long-Distance Approaches
  Table 5-2: Long Distance Wireless Communications Platforms
Wireless Short-Distance Approaches
Flexible Communications Options

Trends: Demand Response

DR Statistics
Three Scenarios: 2009-2019
Questioning the Scenarios
Residential DR Likely to Grow
DR Marketers with Residential Programs
DR Marketers Entering Building Management
Trends: TOU Pricing
Trends: Dynamic Pricing
  Table 5-3: Dynamic Pricing Pilot Projects and Rate Structures, 2010

Trends: HEMS

Shifting Category Boundaries
Statistics on Energy Information Displays (EIDs)
EIDs and Savings Percentages
Fall-Off in Engagement
Compelling, Engaging EIDs
New EID Products

Trends: Home Area Networks (HANs)

Logical Endpoint of A/S Development
Vast HAN Possibilities
  Table 5-4: Selected List of HAN Applications by Category
Media Possibilities
Global Giants Enter HAN
  Table 5-5: Selected Global Marketers Interested in HAN Development
Competition Could Quickly Heat Up
Marketing-Oriented Questions on HAN
Brief Focus: Control4
Brief Focus: 4 Home Control

Trends: Smart Appliances

2001 Statistics: Energy Use of Home Appliances/Devices
  Figure 5-1: Percentage of Electricity Use by Appliance/Device, 2001
2009 Statistics: Soaring Home Electronics Energy Use
Smart Appliances: AHAM Definitions
Smart Appliances: Inhibiting Factors
Appliance Giants Forging Ahead
Demand Response Capabilities by Appliance
DR Appliance Programs
Smart Appliances: Projections
Brief Focus: GE
Brief Focus: Whirlpool Corp.

Trends: Fuel Cells/Other

Fuel Cells
On the Horizon
  Thermoelectric Technologies
  Thermoacoustic Technologies

Trends: Electric Vehicles

EVs Are Coming
EV Challenges/Opportunities
Major EV Challenge: Load Control
Other Worries
Solution: Off-Peak Charging
Vehicle to Grid (V2G)
EVs Necessitate Dynamic Pricing
EV Problem Areas and Issues
  Table 5-6: Electric Vehicles: Problem Areas and Issues
Focus: EV Charging Infrastructure
Two States with Advanced Charging Plans
Charging at Work and Home
Economic Questions about Charging
EV Charging: Companies/Products
Brief Focus: Better Place
Charging Infrastructure Rollouts

Trends: Marketers

Competitive Marketer Trends
Cooperative Marketer Trends
Fight the Power
Kaleidoscopic Partnering Activity
  Table 5-7: Selected Examples of Smart Grid Partnering Activity, 2009/2010
  Table 5-8: Selected Trilliant Partners
Alliances and Coalitions
Brief Focus: The Smart Grid Consumer Coalition
Duke Energy: A Contrarian Approach to Collaboration


Consumer Surveys

Smart Grid? Never Heard of It
Bright Spot: Consumer Concerns over Energy Costs
Attitudes Favorable among the SG-Aware
Surveys on A/S Categories
Smart Meters: Vague Awareness
Demand Response Resistance/Indifference
HEMS: Open to the Idea
Willingness to Pay for HEMS
But Not Nearly Enough
HAN Has Growing Appeal

Utilities Surveys

Oracle Survey Shows Utilities Lagging
GTM Survey on Utilities
Microsoft Survey on Utilities

Deployment: SmartGridCity (Boulder, CO)

Overview: An Ambitious Effort
Phase I
Phase II
Advancements on the Utility Side
The Next Phase: Consumer Integration
Consumer Services
Most Services Not Yet in Place
Testing Dynamic Pricing
Financial Problems
Legal Problems
Unresolved Financing Questions

Deployment: Pecan Street Project (Austin, TX)

Overview: A Methodical Effort
Needed: New Business Model
Recommendations Emerge
Most Vexing Problem: Profit from Efficiency
The Distributed Generation Problem
Relevant Recommendations
Seven Parameters
Recommendation: Testing/Pilots/Demos
Recommendation: Promote PEVs
Recommendation: Dynamic Pricing
Recommendation: New Business Model
Recommendation: Flat-Rate System


Market Size and Projections
Overall Smart Grid: Size and Projections
  Table 7-1: Overall Smart Grid Market: Size and Projections, 2009-2014 (in billion $)
Category Size/Projections: Smart Meters
  Table 7-2: Smart Meter Category: Size and Projections, 2009-2014 (in billion $)
Category Size/Projections: Demand Response
  Table 7-3: Demand Response Category: Size and Projections, 2009-2014 (in billion $)
Segment Size/Projections: In-Home Displays
  Table 7-4: In-Home Displays Segment: Size and Projections, 2009-2014 (in billion $)
Category Size/Projections: Home Area Networks
  Table 7-5: Home Area Networks Category: Size and Projections, 2009-2014 (in billion $)
Category Size/Projections: Smart Appliances
  Table 7-6: Smart Appliance Category: Size and Projections, 2009-2014 (in billion $)
Category Size/Projections: PHEVs and Fuel Cells
Smart Grid Investment Estimates

Factors In Future Growth

Imperative to Upgrade the Aging Grid
Sheer Marketer Power
Technology Drivers
Ecological Driver: Climate Change
  The Grid and Weather-Related Incidents
Ecological Driver: Resource Limits
Inhibitors: The Economy and Consumer Demand
Political Drivers
  Government Stimulus
  Rule Changes Rewarding Efficiency
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