In the future, we’ll all be energy traders?

Journalists tend to focus a lot of attention on smart meters, simply because these are the piece of the smart grid puzzle what will be most directly visible to consumers. And as with any nascent technology, we’re treated to a lot of highly speculative “world of tomorrow” descriptions of the changes just around the corner. In the future, consumers will receive and react to a constant stream of energy price information. We’ll get text messages when electricity prices go up, and we’ll be able to control all of our appliances via an iPhone application. Or something like that.

Tyler Hamilton comments:

> There still exists, however, some skepticism in the market. A handful of utility executives have downplayed the new high-tech tools that give homeowners more control. All the bells and whistles are overkill, they argue, adding that most people don’t have the time to monitor their energy use or participate in demand-response programs.

> Sure, there’s an element of truth there, but only for those stuck in the past. A retiring boomer couple might not be so enthusiastic, but what about the next-generation of homebuyers who grew up text-messaging their friends, frequenting Facebook and Twitter, and doing their banking exclusively online? I would embrace this technology in a flash if it was available.

> It wasn’t long ago that some people dismissed the idea of banking online, or failed to see the value of carrying around a BlackBerry device all day. But my children, for example, will grow up managing their household energy just like they manage their finances, sell stuff on Craigslist, and keep track of friends and family on social networking sites. It will become second nature, and the fact that energy prices will be much higher than they are today will be strong enough incentive.

I dunno. Most people don’t manage their finances, electronically or otherwise, despite the clear incentives to do so. Certainly most people don’t sell stuff on Craigslist. Which makes me wonder.

TerraPass sells a lot of energy monitoring devices, including the ever-popular TED, the energy detective. I know consumer demand exists for these devices, and I’ve also read all the studies showing how effective this sort of direct feedback can be in lowering people’s energy consumption. I don’t question the value of the technology or the appeal to at least a subset of engaged consumers.

I do question whether the future is going to unfold in exactly the way that so many technology writers now envision. It strikes me that a lot of the boring task of responding to constant fluctuations in energy prices can probably be automated away. I really don’t think most consumer want to become energy speculators, although I do believe in the power of both pricing and real-time information to shape consumer behavior.

So, basically, I’m not sure how these changes are going to play out. The vision of homeowners reacting to constant fluctuations in electricity prices seems way too literal-minded. We certainly don’t respond this sensitively to movements in gas prices. On the other hand, turning the electrical grid into a communication network and application platform will surely enable uses that no one can yet imagine. As with many technology revolutions, in a few decades our early predictions will probably look both goofily utopian and strangely unambitious.

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adam

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  1. Dave - May 20, 2009

    I am thinking that people will be able to program in their preferences and price risk tolerances for fluctuations in energy prices relative to certain demand functions that their household may have– e.g. willingness to defer certain activities to times of day when demand is slackened and pricing is lower. This type of thing should be able to be automated so that a person can simply slide a bar and leave the settings for a while, sort of how we do now for our computers for energy savings modes or security level settings.
    When combined with EVs storing (and discharging back to the grid if called for) energy in a “smart” fashion, we should be able to moderate the need for so-called “peaking power” production that currently has the fossil fueler utilities preoccupied. And by this distributed, consumer-owned storage we will have a real renewable baseload power that changes the playing field so finally the consumers have more of the cards.
    I’m not surprised the status quo utilities (centralized monopolies) would pooh-pooh and try to delay or downplay until they can figure out how to control it to their continuing advantage, the coming fundamental market shift that is likely when this transition plays out fully, say by 2020 or 2025. The shift toward more sustainable, local distributed and renewable energy production– and more informed responsible discretionary consumption, should be good for everyone (except the monopolies now entrenched) and for the planet too.

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