GE (GE) said in a press release that Miami’s smart grid would save consumers money “by giving them more choices over how they consume and conserve electrical power,” but Lynne Kiesling at Knowledge Problem argues that the benefits will go to the utilities.
The problem in her opinion is that consumers have no choice for energy, there is no competition in the electricity business. As a result, there is no impetus for innovation. Sure the smart grid is useful, but it’s primary focus is helping utilities save money.
The problem with the current set up: If you approach the retail electricity market from a regulated, utility-centric perspective, not only will you view consumers as load to be centrally managed and served, you will think of “enabling the consumer” as nothing more than providing them with technology to increase their information on their electricity use. Information is a start, but a truly consumer-focused smart grid strategy must involve pricing, must involve allowing entrepreneurs to develop new products and services around the technology, and must be transactive.
While there will be new gadgets that help consumers monitor their electricity usage, it won’t be enough:
In order for price-responsive transactive “gadgets” and a home energy management portal to create value for consumers and save them money, the regulatory institutions have to allow dynamic pricing. Smart grids and smart appliances and dumb pricing squander the opportunities that the technology creates.
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