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Realizing full benefits from a smart grid ultimately means controlling devices in customers’ homes, businesses, and other facilities. But who should exercise that control, and how?

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Realizing full benefits from a smart grid ultimately means controlling devices in customers’ homes, businesses, and other facilities. But who should exercise that control, and how?

My esteemed colleague, Harvey Michaels, stays young by examining the questions raised by how technology is transforming the energy industry. He teaches an energy efficiency course to eager students at the Massachusetts Institute of Technology.

A recent paper he co-authored with Kat Donnelly considers these questions:

  • Should utilities provide dynamic pricing or control customer systems directly?
  • Should utilities be required to give customers access to their detailed energy usage data?
  • Should consumers be allowed the option of sending their energy data to web applications, third parties, or community initiatives?

According to Michaels and Donnelly, addressing these issues involves comparing architectural options for controlling home energy networks, also called home area networks (HANs). There are two ends to this spectrum:

  • Utility control.The intelligence of devices in a home or business is derived from a central control point via a private utility network.
  • Consumer control. The control system for devices is located on the customer’s premises, or on the Internet. But ultimately it is managed by the customer.

Both of these extremes, as well as blended approaches to control, affect not just how much energy efficiency (conservation) and demand response (peak reduction) can be achieved. Network control choices also can either support or limit innovation in energy management.

Michaels and Donnelly found that architectures which enable innovation and efficiency should include consumer-controlled energy networks. Such networks, they said, create strong benefits from dynamic pricing and energy information derived from smart meter data, web-enabled thermostats, in-home displays and other devices.

They also believe these elements support coordinated consumer-managed systems that can suit individual tastes and objectives, while fostering a more energy efficient society.

Regarding innovation in products and services, they found that sustained innovation is most likely if the utility creates a friendly environment for market-based innovation ecosystem. To accomplish this, utilities, regulators, and policymakers should focus on:

  • Consumer-centric architectures for appliance control.
  • Public architectures for smart meter data.
  • Collaborative architecture for content.

Under this scenario, Michaels and Donnelly conclude that innovative firms would most likely invent strategies that appeal to various consumer needs and tastes — while building value through the efficiency, demand, and environmental effects that they produce.

Perhaps such architectures might pave the way for the Steve Jobs of home energy technology…

This article originally appeared on eMeter’s Smart Grid Watch blog. Chris King is the Chief Regulatory Officer for eMeter. He is a nationally recognized authority on energy regulation and competitive energy markets, and is widely recruited by regulators and legislators to consult on technology issues in electric restructuring and grid management.

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