Smart grid consumers up for grabs?
- January 10, 2011
- 73 views
On Monday morning, on a whim, I searched for news pertaining to the phrase "electric vehicles." What I found in the general media connected a few dots for me.
The topic had been on my mind since last week's lively and informative Intelligent Utility Reality webcast, "Electric Vehicles: A Tale of Three Cities." During the webcast, Chris Chen, who works on EV-related business cases at San Diego Gas & Electric, said that SDG&E's future may be significantly bolstered by widespread EV uptake.
The reasoning? Significant uptake of EVs in SDG&E's service territory, Chen said, would tend to preserve the utility's role and its business model in a centralized power grid as distributed generation increases in popularity. Distributed generation just won't meet an individual homeowner's need for EV charging levels, Chen explained. In other words, EVs might save utilities from being marginalized.
Now, a few snippets of EV-related news from Monday:
- The 2011 Chevrolet Volt, made by GM, was named North American Car of the Year at the Detroit Auto Show yesterday by 49 automotive journalists, following similar accolades at the Los Angeles Auto Show and by Motor Trend and Automobile Magazine last fall. (GM Vice Chairman Tom Stephens crowed that "electric vehicles are without a doubt the hottest items at any auto show.")
- Ford Motor Co. and Best Buy said yesterday that the latter will offer the former's 240-volt home charging station designed for the electric Ford Focus. Ford called Best Buy "a familiar, trusted source" for EV-charging installations. (Best Buy, a purveyor of consumer electronics, is less than 30 years old.)
- ABB Group invested $10 million in ECOtality, which makes EV charging equipment and has a leading role in The EV Project, a public-private venture that with a $115 million grant from the U.S. Department of Energy will install 15,000 chargers in 16 cities this year.
Having seen these headlines, I asked my colleague Christopher Perdue, who attended last week's Consumer Electronics Show (CES), whether it was true that smart grid-related products and services were cropping up in the Land of the Amazingly Large Television Screens (aka CES). He said that NRG EV Service's eVgo charging stations captured a lot of attention and, he said, gave lay people a very solid explanation of the smart grid. (You'll recall that Arun Banskota, president of NRG EV Services, participated in last week's EV webinar. Look for more smart grid-CES connections in Perdue's column this Thursday.)
In the past five years, energy-related topics at CES tended to focus on the energy efficiencies of mobile devices or in-home consumer electronics, Perdue reminded me. Now, electric vehicles, home energy management and automation are part of that landscape. (I'd add that home networking of information and entertainment sources has already begun to encompass security and energy management.)
"We have to stop competing on price upon a commodity that everybody has the same access to," said Chris Deutschen, a senior manager at Direct Energy, at a smart grid panel at CES, quoted by CNET. "So really we need to get into a more services model. And that's where we're looking at energy management—the home area network as a place where we can provide services to the customer."
These somewhat disparate news items, taken together, reminded me of the old saw that electric utilities are marketing challenged. As they mull over the possibilities—do we want to "own" the customer and what level of resources do we assign to consumer engagement?—it seems likely their message, whenever they get around to honing and delivering it, will take a back seat to those with pedigrees in sparking consumer desire.
Finally, to my point: How in the world will electric utilities become consumer-facing players in a world in which shiny new cars and gadgets capture the public's imagination?
Right now, the public perception of smart grid, according to various polls, is approximately zilch. On the periphery are the headlines over "controversial smart meters." Trust in one's local utility may be a variable based on each utility's transparency and past outreach efforts. But in general, I don't sense the sort of trust—nor the ability to create cachet—that would make utilities the first stop for consumers.
Rather, I see the utility industry mimicking the wireless telecom carriers, which tried to offer their own branded, narrow access to Web-based services—the so-called "walled garden"—in an effort to not own but basically to trap consumers and keep them from straying further afield. Apple took one look at that industry, saw those paltry efforts, weighed the market for a device-and-software-services approach that gave consumers access to whatever they wanted and introduced a truly game-changing handset with a related, digital ecosystem.
Now, telecom carriers worldwide vie for iPhones of their own. The biggest news from Verizon Wireless, for instance, is that today it may announce its own version of the iPhone.
In short, shiny gadgets and their interactive software are cool and the electron business is ill-prepared to imagine and execute innovative strategies for real consumer engagement. If the Monday morning headlines are any indication, the utility business is very likely to be brushed aside as the primary, trusted source for energy management and related products and services.
Perhaps the industry is better suited to making long-term bets on aligning their businesses with market developments such as EV adoption (as in SDG&E's case) and smartphones as the consumer interface of choice.
Intelligent Utility Daily