Utilities Blamed For Stalling Smart Grid Roll-outs

Established utility companies are stalling the roll-out of smart grids and meters over concerns that the information available to customers will upset established business models.

That was the assessment from management consultant, Marchment Hill Consulting’s Neil Gibbs, speaking in a panel discussion at HP’s annual Executive Energy Conference in Dubai this week.

Responding to a question from eWEEK Europe UK, following an admission from HP that uptake of smart grid technology had been sluggish outside of the US, Gibbs said that established players in the energy industry were worried about the status quo being upset.

“Utilities recognise this will change the way consumers interact. There is information asymmetry at the moment and many people have no idea what they are consuming,” he said. “Big businesses realise that this will change things pretty dramatically.” he said.

Benefits Not Understood

Gibbs (left) – who has held senior positions in consultant firms including Ernst and Young and Cap Gemini – also attributed the slow uptake to the benefits of smart meters not being made explicit to consumers. “The benefits flow to consumers have not been articulated to the industry,” he said. “Consumers look at this and think what does this really mean?”

Earlier this week, Ian Mitton, HP’s utilities industry director and global lead on smart grid technology, admitted that smart grid and smart meter technology had been overhyped and was not taking off at the rate tech experts had predicted.

“I think one of the problems is that in a good many parts of the world – projects are not happening fast enough,” he said. “Smart grid and smart meter projects are slow to take off.”

Concerns that some of the reason may be down to a reluctance on the part of utilities to upset their control of the market by handing too much information to consumers was reinforced by recent criticism of utilities by the UK’s Local Government Association. Last year, the organisation criticised power companies for failing to make smart meters usable for consumers.

“The plan to put a smart meter in every home is good but unless it is accompanied by an in-home energy display, for consumers, it is virtually worthless. What you can see, you can save. Why not give people all the information so they can make better choices about how much energy they use?”, Paul Bettison, chairman of the LGA told The Times newspaper.

Google Bypassing Utlities

Amid the concern about potential opposition to smart meter projects from utilities, Google teamed up with a small energy company last year to develop technology that effectively bypasses energy companies.

The search specialist announced in a blog posting in October last year that it was partnering with privately-held Energy Inc., which produces a smart meter device called the The Energy Detective (TED) 5000. Google explained the partnership means that anyone wanting to use its recently launched online energy monitoring software, Google PowerMeter, will no longer have to have a meter installed by the utility company.

“Today, we’re very excited to announce we have secured our first official device partner. (That means having a smart meter installed by your utility is no longer a prerequisite for using Google PowerMeter!),” the company stated.

According to Energy Inc, the TED 5000 is specifically designed to provide energy information to consumers rather than being a tool for utility to improve their margins. “Smart meters are designed primarily for the electric utility industry so they can better manage the supply-and-demand of electricity. TED is designed specifically for the consumer, so that one can better manage the use and costs of electricity. TED puts you in charge,” the company states.

But while there are concerns that utilities may be opposed to giving customers too much information via smart meters that sit in their homes, utilties are attracted to the wider potential of the technology. Overhauling networks and building so-called smart grids could help power companies save money by allowing remote repair and even termination of accounts of customers who do not pay, for example. Instead of having to send out expensive staff to handle the problems, utilities will be able to automate the process, according to experts.