Why apathetic consumers could be the salvation of (traditional) utilities



Quick Take:  As I explained in a recent article about Australia's future grid plans, the Australian electric industry is undergoing the same soul-searching as its North American counterpart. And fretting about the same existential threats.

An article from Tristan Edis at Climate Spectator suggests that some of the more forbidding scenarios -- wholesale grid divorce -- may not happen simply because of consumer apathy. Yes, there are more and more ways for customers to produce much of their own power or even divorce themselves from the grid. But most consumers may be too apathetic and disengaged to take advantage. Read the abstract below, or click the link above for the full article. - By Jesse Berst


A recent study of Australia's future grid plans painted several scenarios, including one in which electricity consumption would be 1/3 lower in 2050 than in 2006. If it were to come true, this scenario would have drastic consequences for existing utilities.


But most consumers couldn't care less. A research paper on consumer attitudes is sobering reading. Knowledge of energy use is low. Many of the technologies proposed for the future electricity grid require consumers to be much more aware and involved.

But consumers, it appears, aren't interested in altering how they use electricity. They have to be hit by a very big price shock to become engaged.

Many new schemes work only with time of use or similar dynamic pricing structures. But changing pricing faces big consumer resistance. In addition, the new models require smart meters, which imposes another cost on households which they are likely to resist.

A better model might come from France, where households are asked to select a maximum amount of electricity they will use each year. This locks in a payment per kilowatt and a switch prevents them from drawing more power than they paid for. The beauty of such a model is that it creates an active and engaged consumer.


Jesse Berst is the founder and Chief Analyst of SGN and Chairman of the Smart Cities Council, an industry coalition.


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