Revolution or evolution?

“Many governments are promoting a modernised electricity network as a way of addressing energy independence”
-Ramon van der Wal

According to Wikipedia, a smart grid delivers electricity from suppliers to consumers using digital technology to control appliances at consumer's homes to save energy, reduce cost and increase reliability and transparency. Many governments are promoting a modernized electricity network such as this as a way of addressing energy independence, global warming and emergency resilience issues. Increasingly, energy companies are adopting the smart grid theme and new product development is booming. The question we need to ask ourselves is do we believe smart grids will achieve the goals we set ourselves? Those goals being to reduce energy consumption (including impact on global warming), increase grid reliability (emergency resilience) and reduce energy dependency.

Several field tests show that it is possible to merge a diversity of techniques in such a way that energy consumption can be reduced, where a greater understanding of the grid usage is accomplished, thus allowing grid operators to optimize their grids which should lead to an increased grid reliability at minimum costs. By reducing energy consumption, one can argue that energy dependency will also be reduced. From this point of view smart grids will help in achieving the goals we have set ourselves.

Currently the focus of smart grids is for the most part technology based. We foresee a greater amount of decentralised energy production, and smart metering will give us the means to properly monitor energy usage (customer based) and distribution grid usage. Smart techniques make it possible to hook up appliances to smart meters and make us aware and take control of our energy consumption. Besides the technology we can also count on a green focus that has never been greater, both for the customer and the industry. Therefore one could conclude that all ingredients are in place to successfully transform current 'dumb' grids into smart grids in due time.

Why would a customer want to take part of this? What's his incentive and will a customer be able to fully make use of the possibilities? In our opinion these questions aren't asked loudly enough. We see the transformation to smart grids not as an evolution solely based on new techniques, but as a revolution based on the involvement of customers in their own energy production and the way they put this production to more efficient use. Because of the complexity, customers will not fulfil their new tasks as efficiently as possible. Help is needed.

This is where suppliers come into place. They will need to transform into advisory companies, helping their customers make optimal use of the available technologies. These companies will need to change the way they look at a customer and what they need to offer the customers.

This will revolutionize the way customers, energy suppliers, new energy service companies and grid operators need to interact. Even though the technology seems to be able to help in achieving our goals, we believe we won't come close if we don't focus on the way of involving the customer as an integral part of the smart grid. The changes the energy market and its customers need to make are huge, but the benefits will be even greater.

Ramon van der Wal is managing consultant at Zest Utilities, with over 10 years experience in the Dutch energy market. He was involved in the liberalization of the Dutch energy market and the incorporation of smart metering into a new market model. Prior to Zest Utilities, he was Senior Business Consultant at Eneco. Van der Wal specialized in Environmental Business Economics at the Vrije Universiteit, Amsterdam.