Thinking Tech

Utility industry bets on smart grid by 2030, but concerns remain

Utility industry bets on smart grid by 2030, but concerns remain

Posting in Energy

The utility industry is banking on a smart grid by 2030, but still worries about what that smart grid can achieve.

Power utility companies are feeling pretty confident about smart grid upgrades with a new survey out by PriceWaterhouseCoopers (PwC) indicating that the industry believes it will have smart grid technology in place by 2030. Because PwC’s Annual Global Power & Utilities Survey specifically projects out to the 18-year mark, it’s not clear if utilities expect to have a smart grid foundation in place even earlier. However, there appears to be no ambiguity around the idea that smart grid tech will arrive. Instead there’s a bigger question. What will the smart grid achieve?

The potential benefits of a smart grid are numerous, including the ability to manage new renewable energy sources, better interconnections between power networks, and more visibility and control over energy usage at the consumer level. However, utilities are worried about customer engagement, and the possibility that consumer apathy will negatively impact smart grid success.

An astounding 80% of North American utilities surveyed, and 74% of European respondents cited lack of customer engagement as a likely limiting factor (medium to high probability) on the ability of smart grid technology to live up to its potential. In addition to the environmental concerns that evokes, it also suggests utilities are seriously concerned about being able to meet their top smart grid goals, which are: to establish closer relationships with customers (66% of respondents), and to better manage peak energy demand (62% of respondents).

The concern over customer apathy seems odd given recent consumer buzz around the home energy market. Most notably, techies went wild over the launch of Nest, a smart thermostat that learns your habits and helps you adapt to save money and cut down on energy usage. But perhaps power companies are mainly concerned that customers will be apathetic around utility-directed initiatives.

Indeed, the PwC report shows that 27% of utilities are worried about threats from major consumer brands outside the utility space. That fact may be why start-up companies like OPower see huge upside in helping utilities connect with customers over web-based and social platforms.

Meanwhile, the assumption that smart grid tech will fall into place over the next two decades neatly glosses over the struggles taking place now around how to upgrade utility communications. Debates include how to extend connectivity, which communications technologies are best suited to the smart grid, and whether public or private networks should be used. In other words, the smart grid is on its way, but we’re still likely to see a few bumps in the road between here and 2030.

On a positive note, utility execs quoted in the PwC report still see a lot of room for optimism. Says Brian A. Dames, chief executive at Eskom: “Every home could probably consume 20% less energy and still achieve the same quality of life.”

That’s a good reason to invest in the smart grid today, whatever the potential pitfalls ahead.

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Mari Silbey

Contributing Editor

Mari Silbey is an independent tech writer based in Washington, D.C. With a background in cable and telecom, she's a contributor to several trade publications, and part of the GigaOM analyst network. She also writes for the long-running digital media blog Zatz Not Funny, and has written for both corporate and association clients focused on broadband networks, mobile apps, and video delivery. She's a graduate of Duke University. Follow her on Twitter. Disclosure