4 Reasons Why The Smart Grid Has Failed To Take Off

Since performing research for my book, Climate Capitalism (written with Hunter Lovins) a few years ago, I have become increasingly convinced that the smart grid has the potential to be one of the "holy grails" in the clean tech revolution. I believe that the smart grid can be the enabling technology that allows all kinds of other low-carbon innovations to flourish.

The smart grid will give industrial, commercial, and residential consumers real-time access to energy consumption and costs, which will lead to demand side reductions (i.e. energy efficiency). It also promises to support distributed, renewable energies from rooftop solar panels to electric vehicles (EVs). Combined with smart homes, the latter could even be used to power a consumer's home for a few days in the case of power outages, which could be reduced in frequency, volume, and duration with help from smart grids.

With corporate behemoths like GE, Cisco, and IBM as well as hundreds (if not thousands) of tech startups already in this space, why hasn't the smart grid become more ubiquitous? Unsurprisingly, Europe seems further down the path with the potential to leverage wind power from the North Sea Grid and solar power from southern Europe in a continental supergrid. But why hasn't the U.S. made more progress towards smart grid connectivity?

  • I think one of the biggest challenges is the industry's lack of stakeholder engagement from consumers (corporate and residential) and politicians. When utilities have in the past held referendums regarding the investment in smart grid technologies, the vote does not always go in their favor. This is often because consumers believe that the costs outweigh the benefits. More needs to be done to clearly establish the business case for smart grid adoption. Of course, I am not alone in recognizing this issue. The Smart Grid Consumer Collaborative is focused squarely on the problem. And Katharine Brass, the Program Manager for GE's Ecoimagination program, recently argued that the biggest barrier to more widespread adoption is consumer perception.
  • Security Concerns. In today's world of heightened concerns over terrorism and increasingly sophisticated hackers, there is no wonder many worry about the vulnerability that our energy system could be exposed to if it truly were as IT-focused (and dependent) as we envision. This is a legitimate concern being addressed by the industry, as evidenced by the forthcoming Smart Grid Security Summit to be held next week in San Diego.
  • Standards. To Fast Company readers, this will sound like a familiar problem. Numerous technology providers are offering a range of technology solutions ,from smart meters to grid automation software—and many of them have a vested interest in using proprietary, closed standards. The smart grid will only succeed on a large scale if technology suppliers agree to work on an open standard.
  • Regulatory and Policy Support. The U.S. has a difficult landscape for bringing the energy industry into the 21st century. We have a mix of federal regulation and state legislation, as well as some level of autonomy at the municipal level. A great book that explains this issue is Smart Power: Climate Change, The Smart Grid, and the Future of Electric Utilities. Guido Bartels, IBM’s head of Global Energy and Utilities, Chairman of GridWise Alliance and an adviser to the Obama Administration, has also spoken up about the need for more regulatory action to provide the proper incentives for the adoption of smart grid technology.

I have no doubt that we will see continued progress towards the adoption of smart grid technology in the U.S. And yes, there has been progress. More than 20 million smart meters have already been installed in the country, with approximately 60 million planned for near-term installation. However, the barriers discussed above are legitimate challenges that the industry and its stakeholders need to overcome.  For example, in the past few months, BC Hydro encountered opposition from consumers and municipalities in British Columbia to its smart reader rollout because of fears about low-level radiation.  For now, BC Hydro has committed to moving forward with or without community support. Perhaps the utility should consider addressing barriers number one and four for their next phase of the smart grid deployment.

[Image: Flickr user pgegreenenergy]

Boyd Cohen, Ph.D., LEED AP, is a climate strategist helping to lead communities, cities and companies on the journey towards the low carbon economy. Dr. Cohen is the co-author of Climate Capitalism: Capitalism in the Age of Climate Change.

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5 Comments

  • Doug Hinebaugh

    The one thing that sticks in the back of my head and, of course wasn't mentioned by the left-leaning author, is the potential for Big Brother to not only monitor how much energy I consume but to control(remotely) my ability to use the energy that I pay for and thus forcing me to "go green." I have nothing against people who voluntarily wish to curb their use of resources, but they obviously have a problem with me choosing to use what I wish regardless of my intention and ability to purchase those resources as a free market consumer.

    Just as the Federal Government and New York City having teamed-up to create a cellphone signal override for their mobile emergency broadcast system could compromise my freedom as a consumer during anything that THEY perceive to be an emergency, I can see the same thing happening with the smart grid. By claiming an emergency and interrupting my cellphone service, I would not be able to call my loved ones or make my own decisions about what would be the best next move for myself and my family. I would be under their authority, cut off from the world around me, and thus be a ward of trhe state.

    What would stop the Federal Government, exercising their authority as established by the Supremacy clause in the Constitution, from shutting off my electricity on a whim? They could "claim" a terrorist attack but in actuality be operating under the auspices of mandating lower carbon emissions. I don't personally believe the "science" concluding that humans are responsible for global warming. So what would stop an Administration that wishes to put me in my place from doing just that? While I am all for not using more than what I need, it is not my place to force anti-free market policies on my neighbor in the name of environmentalism. For all of this talk of a smart grid, it seems like the promoters of it think alot of us are quite stupid.

  • lngtrm1

    "I have become increasingly convinced that the smart grid has the
    potential to be one of the "holy grails" in the clean tech revolution."

    Thats funny, I have seen it as increasingly unlikely as a single project or effort. To do that effectively, all states and the feds would have to work together. But - our political mess in Washington prevents anything like that from happening.

    Compound that with an industry, either regulated or not, that is slow to change and not very entrepreneurial, and you get a recipe for very little change.

    Waiting around for a smart grid is a bad idea. We just need to move forward wherever we can and realize that it will become a smart grid eventually and probably well after the the optimal time to do it.

  • John Sarter

    Part of the problem from a consumer standpoint is lack of trust. Do we trust our energy and economic futures to utility companies and infrastructures that have proven to be less than reliable and efficient in their own proceedings? For many consumers and professionals even the answer is less than clear. There is a lack of cohesion in the energy industry in the U.S., in part as a result of our voracious capitalist anomalies from time to time, (remember Enron?). If I as a business man or consumer develop or own economically viable systems that are completely capable of being off-grid and even generating excess power for export to the grid, can I trust the local utilities in charge to handle this responsibly and compensate fairly?

  • Wize Adz

    "I have become increasingly convinced that the smart grid has the potential to be one of the 'holy grails' in the clean tech revolution."
    I've done a fair bit of reading on these subjects, and I'm convinced that the Smart Grid represents picking the low-hanging fruit of infrastructure improvement.  Before we spend a few hundred dollars rebuilding the actual electric infrastructure, spending a few billion dollars here and a few billion dollars there on improved controls to improve the way we use our existing power infrastructure makes a LOT of sense.

    But, like driving a gasoline-powered Prius instead of a gasoline-powered SUV, it's an incremental improvement -- rather than a revolution, a panacea, or something that will "save the world".  I'm all for using more efficient vehicles and adding smarter controls to our power grid, but we've got to keep this in perspective.  Once the Smart Grid controls are in place, then we'll be able to plan the next (more expensive) round of improvement to solve the remaining problems.

  • Dan Brantley

    One of the issues that is frustrating in Dallas is that renters can not get smart thermostats of access to any of the readouts from their smart meter. Even though we pay the bill. Only homeowners qualify for any of these items. In an area where over 30% of the homes are rented. It will be tough for any technology to catch on when 30% of the users are disenfranchised.