Consumers have more influence in the electric industry every day. They choose what to buy and use. Energy innovators will pay attention.
Early in 2018 ECC noted that the electric industry is changing and consumer knowledge will support the evolution of the electric industry in the Carolinas. As we end 2018 we are reflecting on a few of the points we suggested to watch in the electric industry:
- Changing government role in the business and energy environment
- More individual control over energy use; more teamwork, too
- Deeper and more thorough understanding of what is “clean”
Over three blogs we look at each point. Just a glimpse because each point has volumes that can be written. Each blog this week looks at this point in time. We’ll write more about these and other issues in 2019.
This is our second column –
More individual control over energy use; more teamwork, too
More control over individual electric usage corresponds with increased use of technology at home. Consumers are adopting new technology fast, too. Almost a third of consumers now own a smart speaker or interactive device (think – Alexa from amazon), and that is up from 28% in January. This holiday season will likely extend that figure. (Source) These devices may be fun for trivia or sports scores now, but they will be enablers for energy management in the future. “Internet communications, inexpensive sensors, and data analytics are enabling a high-tech, holistic approach to energy efficiency.” (Source)
That means the “behind the meter” (BTM) people – customers – are gaining control and, in all senses of the word, power. In the spring, ECC said, “A customer sitting at home or in a business is BTM. That electric meter is the electric front door. Behind the meter; inside the door. The electricity, and the system to make and deliver that electricity, is in front of the meter until it goes through that meter.” (Reference)
An empowered customer will find an evolving grid increasingly aligned with his or her needs. Utility companies and entrepreneurs will bring in this new technology that adds new capacities in planning, control, sensing, generation and distribution of electricity.
There’s a label for that evolving for that kind of electric system. “The programmable grid requires – and enables – utility companies to rethink operations and business models. It also opens the door to new industry entrants, from prosumers [people who both consume and produce a product] to digitally native consumer giants like amazon and Google, who could recast the industry’s shape and value proposition. Change of this magnitude is not unprecedented; the telecom and insurance industries experienced it, and the companies that adapted have thrived. For utilities, an initial step is thoroughly assessing strengths and weaknesses in five key categories: technology, system operations, organization, strategic alignment, and DER [Distributed Energy Resources] readiness.” (Source)
Customer engagement is not one-way. It carries a responsibility for consumers, who need to act in their interest and frankly for the benefit of the electric grid. As consumers care about the grid, the grid returns the favor. For instance, when the electric system is stressed, as in very hot or very cold weather, consumers can help each other by conserving electricity so electric companies do not need to crank up less efficient sources of generation. Electric companies use the most efficient generation first, then use less efficient systems only when needed.
ECC pointed out that process in a blog about changes in electric demand: “Dispatchable generation is electricity that can be sent out according to what the market needs. Market need is not constant, though. Demand changes all the time. Society will need more electricity, for instance, when it is very hot or cold (AC, heat) or during the weekdays (offices and factories are running). Demand changes by the second and season.” How consumers act with their electric usage impacts demand.
Cloud-based and consumer tools let customers know when the grid can get loaded up, when consumers need to reduce usage, and how to do it. Here’s a good explanation of the importance of that concept from an expert with the software company, Oracle: “There are 8,760 hours in a year, of which most electric companies experience about 300 or 400 hours of ‘peak load’ consumption, some during the winter but most during the summer months, when air conditioners are on overdrive. Because utilities must build their generating capacity to ‘serve the peak,’ it’s important for them to be able to predict those high points, both in strength and duration. And if they can control those high points, either by reducing consumption or moving it to a lower demand period, they can save money—short term, by not having to buy power from another generator, or longer term, by deferring or avoiding investment in new infrastructure to generate more electricity.” (Source)
Smart customer engagement has ample, data-driven two-way communication in front and behind the meter.
The bottom line is that new energy tools let consumers have more control.
Check our first column that looks at 2018 and the role of government and business, click here.