Lessons for Averting Disaster in the 21st Century

Ten years ago, when the clock struck midnight on 1/1/00, nothing happened...

At one time, the world expected everything from airplanes to cardiac monitors to stop functioning.  This doomsday vision was referred to as Y2K - a computer bug that had the potential to disrupt all life upon the arrival of the new century.

Achieving 21^st century global consensus and cooperation will require more effort and creativity.

Slate technology columnist, Farhad Manjoo, has garnered some recent attention for suggesting that we can learn something from Y2K.  Mr. Manjoo makes a reasonable assertion that we averted a potential crisis in Y2K because we achieved global consensus and cooperation.

Over the past decade, the rest of the world grew up.  The United States is no longer the biggest kid on the block.  We’ve been humbled by financial busts, terrorism, natural disaster, prolonged wars, and the rise of new super-powers such as India and China.  If global consensus and cooperation are required to solve many of today’s biggest national and international crises, then we’ll need better tactics, creativity, and a more prolonged effort.

There are no perfect responses to complex and long-running problems.

Averting today’s potential disasters in financial collapse, H1N1, cyber-security, terrorism, and global warming for example, are also more complex and long-running.  We could go on spending billions or trillions of dollars in any one of these areas, and perhaps never know if we’ve been successful (aka Precautionary Principle).  At the very least, any resources spent or actions taken will be imperfect.  Therefore we can invariably expect claims that unnecessary and incorrect measures were taken to address potentially hyped-up scenarios.

People have the power to produce meaningful progress and solutions.

When it comes to global warming, I am not the most competent judge of science, but I know that I care enough to make changes in my lifestyle that are more sustainable for living on this planet.  And, I care enough to help and encourage others do the same.  What’s more important is that this same eco-conscious and passion are growing in America and around the world. 

Unlike Y2K, where most of us sat back and let governments and technology professionals solve the problem for us, progress on global warming can also be achieved from the bottom up.  In our 2.0 world, we all have powerful new ways to search, network, communicate, learn, and share information.  Individuals can now be recognized as thought leaders and influencers.  Businesses are answering the call with greener alternatives for their customers, and implementing more sustainable ways of operating.  Whether you are interested in saving money, or saving polar bears, the motivational levers are growing for consumers and businesses.  So are the tools and technologies for making an impact.

As for governments of the world, we should continue to see attitudes and policy evolve as the voice of the people grows stronger, and the scientific data continues to support positive change.  They may also find frameworks that harness the power of the 2.0 people of the world.

Embracing failure, debate and imperfection can result in discovery, innovation, and the truth.

I’ll close with some recommended reading.  Check out the New Year’s edition of Wired Magazine with the word “FAIL” on the cover.  Failing doesn’t strike you as something that would contribute much to your New Year’s resolution, but this featured section explores lessons we can learn from “screw ups, disasters, misfires, and flops.”  Moreover, “if we can train our brains to embrace failure, we open ourselves to new discoveries.”

As someone who has built businesses, developed new software, and managed large scale technology deployments, I believe that if perfection does exist, then it is fleeting.  That’s because everything is evolving.

In the context of addressing many of our biggest challenges in global warming, healthcare, and financial markets, what’s often seen as a sub-optimal or overblown response, can be better than a late response or possibly no action at all. Additionally, these actions can open the door to innovation and fine-tuning that might not have been possible without them. 

It’s time to raise our glasses... 

Here’s to worrying less about perfection, embracing failure, and making small changes that improve the quality of our lives and the world we live in.

Happy New Year!

Could You Let Me Off With a Warning?

A while back I wrote of the public backlash against PG&E’s smart meter deployments in Bakersfield, CA (see Incident in Bakersfield). Since that time a lawsuit has been filed against the utility. As a result, PG&E has slowed their pace of smart meter deployments in Bakersfield, however they maintain that the new meters have been working correctly. Moreover, it was the combination of approved price hikes over the past year and a longer, hotter summer that lead to the higher electric bills.

Central to the educational shortcomings of PG&E’s smart meter deployment program are the lack of tools and incentives for customers to stay knowledgeable about their energy usage, particularly once they have real-time energy usage data via the smart meter.

The smart meter is the first and most essential component of a smart grid enabled home. The advantage to PG&E’s rapid deployment strategy (12,000 installations per day) is that they can install these across their entire customer base of 10 million customers by 2011. The disadvantage of this strategy is that customers are missing out on the tools and services that give them greater control of their energy usage (see Moving Beyond an Energy Conservation Mindset…Scenario 1: Smart Meters installed without complementary in-home energy monitoring and management device(s)).

Getting your smart meter installed is not like getting your cable TV installed. The “utility guy” is not there to answer all your questions and make sure everything runs smoothly going forward. At least this will not be the case until you receive an in-home energy management display from the likes of Tendril Networks.

At a recent industry conference, Tendril CEO, Adrian Tuck, commented on the danger of utilities delaying the installation of tools like the in-home display once a smart meter has been installed. Despite the self-serving commentary, Mr. Tuck is right!

Even in the absence of formal in-home displays, most smart grid residents should have online access to their energy usage, either through the utility or other online tools such as Google’s PowerMeter (available for FREE). Yet, without the right education and incentives to check our usage, why should we bother?

Utilities could certainly create the incentive for these tools by jacking up our electricity rates, but this would no doubt create a huge backlash and possibly stunt the entire modernization effort. Another one of Mr. Tuck’s suggestions is to frame the picture for customers differently. For example, conserve energy or face rolling blackouts. Framing the message is essential, however this particular alternative to energy conservation may be an ineffectual threat especially if it does not materialize on a consistent basis.

At the end of the day, this is largely an energy conservation effort with the near term goal of reducing strain on the grid and pushing out the building of new, costlier power generation infrastructure.

Utilities and all stakeholders in the value chain need to adopt and promote multi-faceted and enduring education programs that inform customers about what’s new today and what’s on the horizon. In the short term, this is indeed higher electrical rates and the potential for more costly blackouts if our energy consumption continues on the current trajectory unchecked.

If we want to avoid the Electrical Speeding Ticket analogy where large numbers of customers are facing a costly and unexpected utility bill, then we’ll need the tools, education, and incentives to take greater control of our energy usage. Short of this, a more effective approach to issuing speeding tickets is to pull people over, let them know how “fast” they’ve been driving, familiarize them with the cost of the ticket, and let them off with a warning.

In the meantime, if you’ve had a smart meter installed without a complementary in-home display, don’t hold your breath until one is delivered. Higher rates are on the horizon. It will pay to get smart today about your usage.

Moving Beyond an Energy Conservation Mindset

I was discussing energy conservation with a friend recently. I posited that over time people would need to adopt a new mindset. Example: Instead of my wife telling me repeatedly to turn off the lights after I leave a room, eventually it will be ingrained in my mind to consistently do this on my own. My friend challenged me on this concept and I’m glad she did. Even though I am proof that it is possible to become “much better” about turning off the lights, her position was that you shouldn't have to remember. “The lights should just turn off automatically when you leave the room.” She was right. But in fact, both these scenarios are going to play out over time.

Knowledge is Power

Numerous utilities are pointing to early data suggesting that consumers will reduce their energy consumption simply by understanding how much electricity they are actually using. This basic ‘knowledge is power’ argument does hold water and will materialize in two residential smart grid deployment scenarios:

Scenario 1: Smart Meters installed without complementary in-home energy monitoring and management device(s)

This is how PG&E in California is approaching their Smart Grid rollout. PG&E’s field technicians are installing smart meters at the rate of 12,000 per day. Customers receive a letter in the mail in advance of the installation, and a door tag once the old meter has been replaced with a smart meter. The smart meter will allow for two-way communication between the home and the utility. Customers can also go on the web to get real-time usage information.

Scenario 2: Smart meter installed with complementary in-home energy monitoring and management device(s)

Instead of having to go on the web, an energy management display can be placed in your home for central viewing.

If you don’t have a smart meter, or any of the add-ons such as the in-home energy management display, I would suggest placing your utility bill on the fridge. In addition to the helpful reminders amongst family members, we might all eventually become more cognizant of the energy we’re using throughout the day, and automatically turn off the lights (among other things) when we leave the room.

Scenario #2 is likely to have a greater impact on energy usage than scenario #1, but neither will be as effective without employing a Demand Response program.

Demand Response

With the help of our snazzy new smart grid tools including the smart meter and add-ons, a Demand Response program allows for the change in energy consumption based on supply-side conditions. In other words, when there is a peak in demand such as during the evening hours of the day, or during a heat-wave, your utility can send you a message to reduce your electrical consumption. This is where things get tricky. There are variables on the utility side, the consumer side, and the systems used to operate such a program. Regardless, the success and benefits of all smart grid investments are inextricably tied to a successful demand response program. We will see many resources poured into this area, and numerous models being tested, but generally we can anticipate two high-level scenarios:

Scenario 1: Consumers physically respond to peak demand messaging from the utility. In other words, I get an instant message from the utility that demand is very high and the grid is strained, and as a result I physically choose to turn off the air conditioner. I may also have some reward or incentive for taking this action.

Scenario 2: The utility automatically shuts off my air conditioner during a peak event via remote control.

The two scenarios are not necessarily mutually exclusive, but scenario #2 is obviously more involved. Depending on which appliances are ‘smart’ or have controllers, and the ‘rules’ and preferences that we establish for ourselves in our energy management systems, we can ultimately allow the utility to manage our energy consumption for us (with our express permission). The right “set it and forget it” demand response program is generally viewed as the killer application of the smart grid.

Automated Energy Efficiency

In a truly smart home, the only thing that’s not “talking” is the furniture. Intelligent systems, appliances, and devices are all around us communicating wirelessly over our Home Area Network. Moreover, we have to think a lot less about what needs to be on or off at any given time. Our largest power consuming appliances are not only more energy efficient, but they’re operating under a demand response program that meets our individual or family preferences. And, our lighting, among other things, is sensor-based. The lights go on when we walk into a room, and turn off when we leave.

For most people this is a space-age vision, but there are some elements that are being employed today in various home and work environments, and certainly around the world. Sensor-based lighting and programmable heating/cooling systems are a couple good examples of modern-day technologies delivering substantial savings.

Present Day

So what’s your current mindset when it comes to conserving energy? I presume you’re not trying to figure out how to prevent the pets from wandering the house and setting off the sensor-based lights all day long. Hopefully, we are all building better habits and starting to take advantage of the smart grid tools coming to the market.

I’ll finish with a very timely news clip from the Today show, featuring two families in the Baltimore area. Each family is saving money through a combination of energy conservation measures, including the use of a smart meter provided by Baltimore Gas & Electric and a nifty energy management display from Tendril Networks. Enjoy!

Visit msnbc.com for Breaking News, World News, and News about the Economy

The Electrical Speeding Ticket

A friend of mine showed me an interesting piece of mail he received recently. It was a traffic violation ticket! A few weeks earlier, he got tripped up in a red light on New York City’s West Side Highway (not that hard to do if you’ve ever driven it). Sure enough, a camera snapped a photo of his license plate, routed the information to the appropriate city department, and issued him a ticket by mail.

Given all the comparisons of our nation’s electrical grid to our vast system of roads and highways, I couldn’t help but think about the factors that made this ticket so noteworthy. For one, there was some novelty in getting a ticket by mail because of a hidden camera. The ticket was also costly. Finally, it was unexpected.

Utilities are not planning on installing cameras outside your home, however they are investing billions in new technologies to monitor the health of the grid and the utilization of energy in real-time. They’re also deploying ‘smart meters’ to replace your existing meter. Instead of someone coming out to physically read your meter on a regular basis, smart meters will communicate real-time energy usage data back to the utility as well as to an energy management display in your home (costs extra). The displays will not only tell you how much energy you’re using, but also what it’s costing you. These Smart Grid technologies are most often positioned as tools that can help us reduce our energy bills. Perhaps a better way to position them is as tools that will help us to act more responsibly with our energy usage. The alternative may be an electrical 'speeding ticket' of sorts. For example, your energy bill for running your dryer or washing your dishes between the hours of 4 and 8pm may cost you three to four times as much as it would outside of those hours of the day.

In the future, we’ll all be extra careful when traveling on the West Side Highway. And, if one of us should happen to get tripped up in a red light, you can pretty much expect to get a ticket in the mail. The cost of the ticket however, may still be troublesome.

Utilities face a similar challenge in keeping customers engaged and educated when the novelty of these new technologies wears off. More importantly, they need to provide us with highly attainable energy conservation goals, with rather manageable and expected cost consequences.

Incidentally, I relayed this ticket-by-mail story to an executive from the U.K. the other week. Speeding cameras are apparently quite prevalent in the U.K. and many operate by with a dual flash setup. A car traveling at excessive speeds will trigger an initial flash. A second flash is used to calculate your exact speed based on where your car appears in the second frame. A rather ingenious colleague of his, with a fast and fancy car to match, calculated that if you pass through the camera in excess of 130mph you could elude the 2nd frame altogether, and escape the ticket in the process.

I’m afraid I’ve made far too much light of running red lights and driving at excessive speeds. Nevertheless, it’s time to start learning the new rules of the electrical super-highway.

Incident in Bakersfield

The complaints from Bakersfield, CA residents have put some of the challenges with Smart Grid deployments into sharper focus. The Utility Reform Network (TURN) is promoting a petition demanding more accountability from the local utility (PG&E) and a moratorium on the installation of some 10 million smart meters across its entire customer base.

As a consumer-centric organization, Smart Grid Citizen is a big supporter of consumer advocacy groups. In fact, we find value in the demands that TURN is seeking, and sympathize with Bakersfield residents in particular. However, we also want to distinguish our endorsements from any movements that seeks to fight the efforts to modernize our nation’s electrical grid. We believe that the long term outlook does require change. We require positive change in our consumption habits, shifts towards cleaner energy production, greater capabilities and efficiency in the distribution of energy, and the integration of intelligence across the entire value chain.

The problem in Bakersfield was an execution problem. The folks in Bakersfield saw their bills go up and rightly pointed their fingers at their newly installed smart meters. No doubt, this was a reasonable conclusion. Unfortunately, PG&E did not do enough to educate their customers before the smart meters were installed. They also did not do enough to manage the complaints. The utility concluded that the higher bills were due to residents’ increased consumption of energy during an unusually hot and prolonged summer. There may be more to it. Even today, PG&E is rolling out over 12,000 meters every day and still doing very little to educate its consumers about the Smart Grid technologies that it’s deploying.

The benefits of installing smart meters and home energy management tools agreeably seem elusive today. This is particularly true considering that consumers will ultimately bare the cost. However, a simple supply and demand curve will clearly indicate that the price of energy can only increase in the years ahead. Cost-benefit analysis must be conducted using forward looking pricing, not today's cost of electricity. In order to maintain access to reliable electrical energy at affordable prices, a multi-faceted investment approach is required.

Consumer advocacy groups such as TURN should also be pressing utilities to employ more effective and prolonged educational programs in conjunction with their Smart Grid deployments. Included in the multi-faceted approach are communities such as Smart Grid Citizen that allow citizens to help one another. Your input can also help shape more effective education programs that utilities can use to prevent more incidents like the one in Bakersfield.

As a parent, I’m not afraid of a few hard lessons learned. Bakersfield residents may too have learned a hard lesson, but that does not mean the education and learning process is over.

High Five Times

Today, President Obama announced the award winners of $3.4 billion in stimulus grants for the modernization of our nation's grid. The grants will support 100 projects taken up predominantly by utility companies in 42 states and the District of Columbia. The awards are not guaranteed done deals. Each grant winner must do a bit more work to substantiate the merits of their initial proposal requests. And, while there are definitely some losers in the allocation of grant money, collectively, all stakeholder bodies should be looking at this announcement as a positive step forward and throwing up a high five.

The Department of Energy has assembled some useful documents that detail exactly where the money is going and what it should cover:

Grant awards by category, click here.
Grant awards by by state, click here.

More interesting is the 'Smart Grid Leading Players' diagram produced by Greentech Media Research. It is not difficult to notice that every major technology company is looking to participate in this movement. The Smart Grid represents a financially material opportunity for nearly every supplier, provided that they can prove their worth.

Over the next several years, the grants combined with matching private investment will go towards outfitting more than 40 million homes and businesses with smart meters, over 1 million in-home displays, 170,000 smart thermostats, and 175,000 other energy management devices that will allow Smart Grid Citizens to reduce their energy usage. The funding will also help expand the market for "smart appliances", home energy conservation retrofits, and allow us to get more of our energy from renewable sources.

With all this good news, it's easy to overlook the fundamental question: Does the potential environmental and consumer benefit from smart grid investments exceed the costs?

Time to get back to work...

Who Will Get the Cheese?

While utilities of all sizes anxiously await the Department of Energy's announcements of who will receive stimulus funds for smart grid related investments, a lot of uncertainty is bubbling...

Utilities that do get their grants approved are sure to put many halted smart grid initiatives back on the fast track, but what about the utilities that don't make the cut? Will they continue to limit investments until the government and/or investment community finds more reasons to contribute to the modernization of the grid, or is there a Plan B?

One important condition in the distribution of stimulus funds under the 2009 American Recovery and Reinvestment Act is that utilities must match the funding dollar for dollar. In other words, if a utility receives $35 million of stimulus cash, the utility must match the investment with its own $35 million for a total $70 million investment.

Whatever happens, we can expect to see many exciting developments in key areas around the country, and more refined standards, best practices, and case studies from a fairly well-aligned group of stakeholders.

Stay tuned...

New Whirlpool Appliances Not Required

This recent post from a WSJ Blog elicited at least one particularly relevant response as it relates to the educational challenge utility companies and their technology partners face in the evolution of the smart grid:
http://blogs.wsj.com/environmentalcapital/2009/10/20/smart-phone-will-clean-energy-be-apples-killer-app/

One commenter wrote: The infrastructure needed for these applications to actually be useful doesn’t exist yet and won’t exist for decades, if ever. In my home, I’ve got a lot of appliances that use electricity. None of them are capable of communicating with anything, including an iPhone. They all work fine and I’m in no hurry to replace any of them so that I can save $0.33 a year on my electric bill.

A true smart grid may take 20 - 30 years to fully realize, and most people will certainly not be rushing out to replace their appliances just so that they can communicate their respective energy usage to the meter. However, we can expect significant and numerous steps to occur over the next several years in an effort to simply make our grid “smarter”. One of the key success criteria for these initial advancements will be to demonstrate cost benefits to the consumer (without requiring investments in new smart appliances).

Additionally, many would be surprised at the infrastructure investments that utilities have already made in the modernization of our electrical grid. NStar and United Illumniating utility companies in New England, for example, have been investing in real-time grid monitoring technologies for years to ensure that they're properly positioned for the future (which is now).

With $4.5 billion in stimulus funds (2009 Recovery Act) being doled out in Q409 into 2010, I think we can expect to see some worthwhile energy conservation opportunities for residents in smart grid pilots unfolding across the country in the near future.