Apr 01, 2019

The Role of Home Technologies in a Clean and Smart Grid

Smarter and more affordable technologies are leading more and more utilities to rethink the traditional electric grid

-by Stephanie Hsiung (F&ES '19)

Smarter and more affordable technologies are leading more and more utilities to rethink the traditional electric grid from the supply side to the demand side, and everywhere in between. With the lines blurring between supply and demand, producer and consumer, utilities are beginning to reimagine their relationships to the participants – both old and new – of a modern, smart grid. At the Smart Energy Summit in Austin on Feb. 18-19, energy professionals came together to explore the ways in which emerging technologies can and will impact the utility-customer relationship.

I attended the conference to find out how the energy industry is thinking about and planning for the proliferation of Internet of Things (IoT) devices in homes, the continued growth of distributed energy resources (DERs), and the rise of the prosumer. Excitement about new opportunities and solutions enabled by smart homes has been gaining momentum for several years now. Numerous pilots, demonstration projects, and full-scale programs have been testing the potential grid services provided by smart appliances, solar inverters, batteries, and EV chargers, as well as by the integration of several smart technologies.

Although the sessions reinforced the value proposition of increasing connectivity for improved customer engagement and grid management, they also revealed concerns within the industry about the challenges and slow pace of moving from pilot project to full-scale deployment to wider customer adoption. This tension gave rise to divergent visions of the future for utilities and their customers. By the end of the conference, it became clear to me that the different trajectories utilities would follow will depend on whether they seize the transformative opportunities of emerging technologies or risk losing them to disruptors.

Here are three defining opportunities for utilities in the near term:

Developing customer-centric services, products, and programs

The consensus among attendees was that without effective customer engagement, utilities will be unable to capture the full value of smart homes. Changes in customer preferences, expectations, and participation when it comes to energy services will require new approaches to building utility-customer relationships. For example, many saw the role of utilities evolving from energy provider to trusted energy advisor - helping customers to make purchasing decisions and optimally manage their connected homes.

Multiple speakers pointed out that the customer value proposition of an integrated smart home lies more in the non-energy benefits than in the energy ones. Thus, partnerships with third-party technology companies will be essential if utilities want to drive adoption of IoT devices and utilize them as grid assets. Drawing on the specialized knowledge and competencies of external firms can help utilities unlock the potential of behind-the-meter resources while delivering better customer experiences.

Translating data into actionable insights

Many utilities are already struggling to efficiently manage and process Advanced Metering Infrastructure (AMI) data to extract decision-useful information. Now add in the overwhelming amount of data that is increasingly available to utilities and third-party providers through smart devices, load disaggregation, marketing platforms, customer service interactions, and demand management monitoring.

There is agreement that plenty of untapped value remains hidden in these mountains of data, but considerable uncertainty remains about the exchange of data both within utilities and with third-parties. Nevertheless, utilities that are prepared for more - and more granular - data will be able to convert advanced analytics into more reliable and flexible grid operations, as well as more personalized customer service and bill savings, with the help of machine learning, artificial intelligence, and automation.

Building smart ecosystems with voice assist

For the past decade, utilities and their partners have been working to get smart thermostats into homes but only about 15% of U.S. households have adopted this technology to date. Meanwhile, by some estimates, smart speakers have already entered approximately 40% of households in just the last few years.

The promise of smart voice assistants in facilitating utilities’ pursuit of frictionless, easy, and positive customer interactions was mentioned throughout the conference. Collaborations between forward-looking utilities, voice assistant device companies, and third-party home energy management firms (for example, AEP + Google + Tendril) have so far focused on customer engagement opportunities. However, voice assistants just might be the linchpin that brings together and automates all the IoT devices in the smart home, and ushers in the next generation of residential demand management (what some are calling virtual power plants or VPPs).

The question is will it be utilities delivering these services to our smart homes?