The smart grid needs smarter marketing

Smart grids are touted as vital to the foundation of a low carbon energy network but, while experts agree on the need for deployment, there is little consensus on how precisely to define a smart grid, or how best to accelerate its development.

Experts gathering at a smart grid roundtable co-hosted by BusinessGreen and US technology provider Trilliant last week, detailed the huge opportunities presented by smart grid technologies in terms of emissions savings, energy efficiency, job creation and economic growth.

The UK also boasts the skills and deregulated energy market that should make rapid investment in smart grid technologies feasible.

Despite recent accusations by politicians that the UK energy market is an anti-competitive oligopoly, Rob Conant, chief marketing officer at Trilliant, said that the country in fact boasts a more competitive energy market than in many other countries.

“The UK has an open electricity market driven by efficiency. It has a unique opportunity to lead the world in smart grid deployment,” he said, arguing that the competitive need for energy suppliers to retain customers provides them with the commercial incentive to deploy smart meters and other smart grid technologies.

However, experts warned that smart grid systems will be rolled out only if a number of significant barriers are overcome.

Top of the list of challenges for the industry is overcoming a lack of understanding among consumers of the benefits a smart grid could bring, such as lower energy bills, greater energy efficiency and lower carbon emissions, and just why they should fork out to rewire much of the country’s electricity network.

“The future is all-electric, just look at DECC’s 2050 work,” said Dustin Benton, senior policy adviser at the Green Alliance think-tank. “But who has told consumers they cannot replace their gas boiler with a similar one?”

Promoting the benefits of the smart grid is not helped by the nebulous nature of the word, experts argued, adding that the waters are further muddied by products such as in home energy use displays, which are not truly smart meters but are often marketed as such.

The UK is looking to fit 53 million smart meters by the end of 2019, but experts bemoaned a failure adequately to promote this rollout and the difficulty of explaining that smart meters are just one component of a smart grid that should ultimately include demand management functionality and improved load balancing across the grid.

Moreover, experts are concerned that a top-down approach to the £11bn smart meter rollout could spark suspicion and mistrust among consumers, especially as some energy companies are guilty of trying to push other products and services when installing the meters.

“Smart meters have been perceived as a way to get more information or raise rates,” Conant said. “We need to get to a point where consumers recognise them as a technology that solves the problems they need solving.”

His comments were echoed by Howard Porter, chief executive of the British Electrotechnical and Allied Manufacturers Association, who warned that UK consumers are “not yet aware of the future challenges to the UK electricity grid that require the suggested smart solutions”.

“In countries like Denmark, where they already have a much higher percentage of renewables and the resultant intermittency problem, there is already a higher degree of consumer recognition for smart grid solutions,” he added. “But that is not yet the case in the UK.”

Attendees agreed that energy companies have not done a good job in communicating the benefits to customers, who are on the whole unaware that the UK energy network faces serious long-term challenges.

However, they remain divided on how best to communicate the case for smart grid technologies, disagreeing over how much information consumers require.

Some argue that there is no need to underestimate the public’s ability to understand and embrace emerging technologies such as smart meters, while others argue that people do not need to understand how the smart grid works or even see how much energy they are using through smart meters. They just have to see the reduction in energy bills that should result from a more intelligently managed grid.

After all, Dunstan said, people don’t care about ethernets as long as their wireless broadband works.

In contrast, experts agreed that the government needs to do more to promote smart grid technologies.

Some cited a lack of understanding among politicians as to how best to decarbonise the economy, accusing policy makers of concentrating on greening the electricity sector, but forgetting heat and transport.

“People assume that to decarbonise electricity will be easy and that’s why we started there,” said Professor Dermot Roddy of Newcastle University’s School of Chemical Engineering and Advanced Materials. “Only very latterly have we had incentives for [green] transport and heat.”

The perennial difficulty of raising funding is another barrier. The UK needs £200bn of private investment to upgrade the grid, but a CBI survey earlier this month revealed that the country’s transport, waste and digital networks are putting investors off.

“People who pay for [the grid] will want some returns,” said Conant, adding that the same is true for consumers funding upgrades through higher energy bills.

“The smart grid business model hasn’t been considered,” stressed Colin Calder, chief executive of PassivSystems. “And if it’s not fully considered, endorsed and supported we won’t be able to deliver any of this at scale.”

The solution, as with most new technologies, is greater policy stability, delegates said. Roddy argued that focusing on one or two low carbon technologies, such as the smart grid, will be more beneficial than trying to encourage a whole range.

Calder suggested levelling the playing field in the electricity market so that micro-generators and the Big Six operate on an equal footing.

“The wholesale energy trading market is broken,” he said. “Any energy producer needs to have the right to put energy on the grid on the same terms as everybody else.”

Ultimately, however, experts returned again and again to the urgent need to convince consumers to embrace smart grid technologies.

It seems increasingly apparent that, with smart grid technologies ready to roll, the industry now requires a smarter marketing plan.

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