What’s in It for Us? Societal Benefits and Consumer Acceptance of the Smart Grid

What’s in It for Us? Societal Benefits and Consumer Acceptance of the Smart Grid

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By: Joe Miller

The success of the Smart Grid depends heavily on consumer involvement.  The previous installment of this series examined the economic incentives for customers and found them to be less than compelling on their own. Would the Smart Grid’s possible benefits to society provide the necessary incentive to motivate us all?

 

The Value Proposition for Society

The societal value proposition answers the question, "What’s in it for us?”  The Smart Grid is expected to provide benefits in a number of societal areas, some of which include the following:

·       Downward pressure on electricity prices

·       Improved reliability reducing losses that impact consumers and society

·       Increased grid robustness improving grid security

·       Reduced emissions

·       New jobs and growth in our gross domestic product

·       Transformation of the transportation sector leading to a reduction in the U.S. dependence on foreign oil.

 

The societal areas include no incremental costs.

 

Further work is needed to quantify these opportunities, but they are expected to be quite large.  Unfortunately, it’s not clear whether social value is enough to broadly change individual behavior. A 2008 survey conducted by BuzzBack Market Research found that among U.S. consumers who worry about global warming, only half have made changes in their behavior (buying green products, turning down the thermostat, recycling, etc.).  Presumably the number is even lower among the segment that doesn’t worry about global warming at all.  (See link at bottom.)

 

On the other hand, the same survey found that 72 percent of green friendly consumers use energy-efficient light bulbs, suggesting that perceived cost savings combined with an awareness of the value to society can influence behavior.

Taken together, the consumer and societal value proposition is compelling and both should be included in consumer education programs and Smart Grid business cases.

 

The Way Forward

If residential consumers are made aware that their individual value proposition for the Smart Grid is positive and that it will also yield major benefits for our U.S. society while addressing their doubts and concerns, perhaps we can gain their support and enthusiasm for moving ahead with a Smart Grid.  Smart Grid consumer education programs that collaboratively include consumers are needed to provide the understanding, alignment, and motivation to "enable active consumer participation” on the front end. We should increase our efforts to engage the consumers up front, thus gaining their participation, support, and enthusiasm, before we build it.

 

The Modern Grid Strategy team is developing guidance for defining region-specific Smart Grid implementation plans.  From these plans, business cases that quantify the value proposition from both consumer and societal perspectives can be created.  These regional specific values can then be used to support consumer education programs.  The results of this work will be available on the Modern Grid Web site later this summer at the NETL link below.

 

   Email Joe Miller at Horizon Energy

   Part 1 of this series: What about Consumers?

   Part 2 of this series: What’s in It for Me? Selling the Smart Grid to Consumers

   Toronto Daily News report of BuzzBack research

   NETL’s Modern Grid Strategy Web page