Task 23 – The Role of Customers in Delivering Effective Smart Grids

Synopsis

The current pace of change within the electricity supply industry worldwide is unprecedented. The wide ranging measures being implemented to reduce the emissions of greenhouse gas emissions, particularly the wide-scale deployment of time variable renewable generation, presents a number of challenges in relation to the balance of supply and demand. No longer is it considered viable for electricity to be provided ‘on demand’ in response to the requirements of end-users. Rather, a co-ordinated approach is required whereby energy production and demand are integrated to ensure the use of renewables can be optimised whilst also minimising the use fossil fired generation and network infrastructure investment. Such an approach is the essence of the Smart Grid concept.

Whilst there is considerable focus on the technological aspects of delivering Smart Grids, little is understood of the extent to which consumers are willing to embrace new technologies and initiatives that enable their use of energy to be actively managed. There is a real risk that if customers do not adopt new approaches to the way that they consume electricity, Smart Grids may not be able to achieve their full potential

Therefore, this Task was set up to focus on investigating the role of consumers in delivering effective Smart Grids.

Achieved Results

The results of the project have been collated to provide general guidance on how Smart Grid initiatives should be designed in order to make them more attractive to consumers.

The guidance document is written in the form of ‘step-by-step’ approach to implementing Smart Grid related initiatives that involve energy behaviour change. The step-by-step approach, which is described in Table 1, has been designed to ensure that all elements of the energy behavioural model (shown in Figure 3) are addressed in the design of the Smart Grid initiative. The guidance is intended for

Energy Suppliers, Distribution Network Operators and System Operators who are the main stakeholders responsible for the development of Smart Grids, and thus stand to directly benefit from the engagement of consumers. However, there are many aspects of the design of Smart Grid initiatives that can be directly influenced by other industry stakeholders. These include:
Government and Energy Regulators who are responsible for setting policy, legislation and the rules defining the way the energy market operates. There are a number of specific areas where they can directly influence the way Smart Grid initiatives evolve.
Third-party aggregators, who act as intermediaries between consumers and Smart Grid implementers. They have a pivotal role as facilitators, and co-ordinate between multiple Smart Grid implementers.
Energy service companies, who help consumers manage their electricity consumption, and can design initiatives specifically to meet the needs of the consumers themselves.
Technology developers / appliance manufacturers, who develop technical solutions that meet the needs of Smart Grid implementers, third party aggregators, energy service companies and the consumers themselves.

The guidance focusses specifically on the design of Smart Grid initiatives from the perspective of the consumers themselves.

The figure below provides a high level overview of the step by step approach.

If any one of the steps is omitted, there is a risk that the initiative will not deliver benefits to the energy system as a whole and/or will not be adopted by consumers.

The top five findings from Task 23 are:

The impact of electricity markets on consumer engagement in Smart Grid activities is wide ranging and often poorly understood. There is rarely a one size fits all solution, with many elements of electricity markets representing both facilitators and barriers to participation.
Very little information is currently available on customer attitudes and experiences towards Smart Grids. Most of the published data focusses on measuring outcomes, with little data available to help with understanding what works and for whom it works.
Information collated from consumer surveys shows that consumers saythey want a financial reward in return for actively engaging in Smart Grids. However, evidence from trials shows that there are many reasons that lead to consumers not engaging in Smart Grids.
Whilst significant progress has been made on the development of technologies, the market is not yet ‘ready’ to accept them. This is referred to as ‘crossing the chasm’ that exists between early adopters and the early majority.

Early adopters (see illustration) see new technology as a way to “beat the herd” and reap the advantages of the new technology/practice before it becomes common practice. The early majority, however, are hesitant to new technology, and choose to sit on the fence until it is proven.

Participation

Netherlands, Norway, Republic of Korea, Sweden and United Kingdom

Task duration: 2012 – 2014

Contacts

Country	Role	Name
United Kingdom	Operating Agent	Linda Hull
Netherlands	National Expert	Yvonne Boerakker
Norway	National Expert	Even Bjørnstad
Republic of Korea	National Expert	Yoeung-Jin Chae
Sweden	National Expert	Magnus Brolin
United Kingdom	National Expert	Ducan Yellen