We have had generous appliance trade in programs in order to get older inefficient refrigerators out of houses and replace them with newer models which use half as much power to do the same job. Recently I saw a notice in our community center that there was a utility sponsored (at least partially sponsored) program that provided free refrigerators to people below a certain income level. All they had to do is turn in their old clunker.

We can commonly purchase brand name CFL light bulbs for $0.59 because of utility company subsidies.

I’m not sure how the system works. I think it might be that retail rates are fixed while wholesale rates are allowed to fluctuate. That would put electricity distribution companies in the position of wanting to keep demand limited as much as possible to what can be supplied by less expensive producers. The more they can avoid buying expensive peak power, the more money they can make. If you have to pay eleven cents and can sell for only twelve cents you make no money.

Utility companies operating under rules such as these are likely to welcome smart meters. Just shifting some demand to off-peak hours can improve their bottom line. Selling five cent wind for twelve cents makes the shareholders smile….

In the same way, utilities are motivated by the $$$’s and what CEO wants to go back to stakeholders and tell them that “next years revenue will go down because we will help our business customers and consumers consume less because we will invest in new devices that empower our customers reduce their expenditure and reduce our revenues year on year”.

As Bob Wallace stated, when you give people a sense of their consumption – you allow them to measure it (in an easy interactive way – rather than some complex bill from a billing system)and even compete – they will curb their behaviour. Refer to study from North Carolina.

I am also working with clients that provide consumption visualisation dashboards that allow buildings on campuses to compete with each other curbing resource consumption by more than 20%.

Another client provides savings of $30 to $100 per computer (that is approx 500kg of carbon a year in Australia)- with the help of the same resource consumption visualisation. (Also recommend reading Richard Thaler – Nudge, behavioural economics)

Dashboards help visualising that consumption behaviour to the consumer (business or residential) and that is where Google sees the opportunity I believe, in empowering companies and households with data.

The utilities world wide are not in a great rush to see their revenues go down and here in Australia or in Europe it is very much the same.

Innovation in the grid will almost certainly come from outside and as stated before by Kathie and others – it is looking like the Telco’s will bring part of that innovation and smart start ups.

Today it is still a cottage industry. Because there is no smart grid – but in 10 years time, those small start ups that made the right steps and alliances combined with the Telco’s – will pose a serious threat to the traditional energy companies.

Energy companies are just now coming out of a space of purely generation in the background – not a great deal of customer interfacing if any at all. Those that do not learn quickly how to create that customer interface, will risk a lot.

So smart metering and utility companies represent a conflict of interest and only impetus from outside the traditional utility space will bring about the necessary change.

http://greeninc.blogs.nytimes.com/2009/09/21/smart-grid-project-cuts-electricity-usage/

Sorry for forgetting to include it in my post.

What Google is doing is putting its name behind a device you can install yourself that also reads your energy use. Combined with its software, it will provide you information. Pretty expensive device combined with free software, guess it is more hype than an offensive.