Smart meters, connected and integrated with a Smart Grid, will have as great an impact on how we consume energy as the internet did on how we consume information.
The internet transformed both consumer behaviour and business models with a host of highly agile market entrants. Many of these entrants built billion-pound businesses by responding rapidly and effectively to new forms of consumer demand.
New opportunities from the Smart Grid
Businesses can realise similar opportunities from the transformation to a smart infrastructure in the energy sector, however the challenges in securing the benefits of the Smart Grid are significant.
In the UK, the roll-out of smart meters will be the largest project the energy market has seen since the conversion to North Sea Gas in the 1970s. It will affect 27 million homes and two million non-domestic sites, requiring smart meters for electricity and gas costing approximately £10.05 billion.
Globally, the challenges surrounding smart energy transformation on this scale are becoming evident. For instance, in Boulder Colorado, USA, a segment of the consumer base that actively sought a Smart Grid is coming to terms with what management of their home appliances actually means. In addition, technology costs are reportedly heading towards triple the original estimate.
This highlights the need to help consumers understand the benefits available from smart meters and how to modify their energy consumption behaviour to secure those benefits. Equally, Smart Grid developers need to meet the challenges of relatively new technology which, in most cases, is not yet selected, trialed and woven into a complete business change programme. This means the business case for smart energy will be complex, particularly for a deregulated market like the UK.
Yet energy leaders moving towards a future with smart energy infrastructure have a huge business opportunity. The shift to smart meters and a Smart Grid allows them to take their business onto a ‘real-time’ footing, offer energy billing to the kilowatt/second, and offering online energy management services for consumers. They can also look beyond smart meters and the Smart Grid to the potential applications of electric vehicles and micro-generation to meet the needs of smarter consumers of energy.
Key questions on Smart Grid strategy
In order to do this, organisations have to answer questions including: Have we got the right IT infrastructure in place to capitalise on the Smart Grid? With smart meters generating detailed data on energy use, how do we ensure consumer privacy is protected? Are our consumers ready for smart meters?
The essential elements to securing the benefits of smart meter and Smart Grid implementation are set out in PA's Connecting the Smart Grid Dots™ strategy. This outlines how to:
• engage key stakeholders in smart energy
• identify interdependencies between benefits and smart meter and Smart Grid activities
• clearly communicate the Smart Grid strategy
• develop a roadmap for achieving the Smart Grid strategy.
If these elements are in place, then it is possible to realise the true benefits of smart energy infrastructure and transform the way we supply and consume energy.
To find out more about connecting the dots of your Smart Grid strategy and developing your roadmap to a future with smart energy, contact us now.