Utilities have realized they can manage their assets a lot better if consumers would use power more prudently, and organizations, including Tennessee Valley Authority, are putting those ideas into action, according to research by Frost & Sullivan.
Utilities have already got commercial and industrial customers on programs restricting power usage during peak times to balance the load over the course of a day in exchange for lower power rates, but residential customers account for about 20 percent of US energy usage and, as such are a key target, according to Frost & Sullivan.
The Tennessee Valley Authority is demonstrating the benefits of deploying smarter systems to all end-user tiers. It works with 155 municipalities and cooperative utilities, which resell its power to residential and commercial and industrial customers. These utilities are recognizing the value in implementing smarter energy offering solutions such as programmable thermostats that switch on demand-enabled appliances and save enough energy to bring rates down, Frost & Sullivan says.
TVA and its local utility partners are spreading awareness of these solutions through initiatives such as the Tennessee Valley Smart Energy Communities project. This is a project to build a smart community that incorporates the most innovative energy-efficient technologies and is smart grid-enabled. TVA also aims to provide extreme energy makeovers such as demonstration projects in older homes in low to moderate income areas that will benefit from deep energy retrofits.
Utilities have only traditionally sold solutions to energy-intensive commercial and industrial participants; and are now realizing that selling to residential consumers is a whole new ball game, according to Frost & Sullivan. As cost saving is a huge motivation in the commercial and industrial sectors, the participants do not back down while offering utilities control over lighting or a compressor switch in exchange for significant cost savings. However, residential users are not likely to be swayed by cost savings if it means relinquishing blind control over various home systems to utilities. They are more likely to be persuaded by the “coolness” of controlling the HVAC through a smart phone.
Utilities have faced several challenges in the rollout of smart meters in their bid to comply with energy mandates. While smart meters greatly help manage energy by adjusting the time of use, pricing, and alerting utilities to power outages or unusual usage patterns, their installations have also invited lawsuits from private citizens over the perceived intrusiveness of utilities collecting up-to-the-minute data on their power usage.
According to Frost & Sullivan, constructing positive and powerful messages around the solution’s smartness and ease of use will go a long way in increasing its appeal among residential consumers.
Since February, Austin Energy has been conducting an automated demand response pilot for about 60 residential customers. The ADR program is unusual because it also combines electric vehicle charging stations and different types of thermostats. Although the program is still small, if it’s successful, Austin Energy plans to roll it out to business customers in the next phase of adoption, according to a spokesperson with AutoGrid.