Grid Week: DOE Secretary Chu on fighting consumer smart-grid resistance

WASHINGTON, D.C. – Expediting deployments of smart grids, through stimulus money and the creation of standards, is one of the Obama administration’s top priorities. To move the process along, the National Institute of Standards plans to release its smart grid standards roadmap at this week’s Grid Week conference in D.C., but it will take more than interoperability assurance to convince consumers it’s the smartest move, according to Department of Energy Secretary Steven Chu in a keynote address today.

Advanced meter infrastructure (AMI) is being rolled out today with demand response as the ultimate goal. The idea is that consumers can adjust their energy usage in real time to save money and lessen their carbon footprint. The utility can also exercise this control for the customer, turning down electricity at peak periods and encouraging consumers to run their dishwashers, for example, at off-peak times.

If utilities use the demand response and load shifting tools available to them, they can eventually shift 20% of the load off-peak, Chu said, noting that a substantial part of generated capacity and distributed capacity is used less than 5% of the time. If the utility can shift 1%, 5% or maybe 10% off the peak load into other times, it can get a better return on investment, he said, potentially saving them hundreds of billions of dollars per year. Chu noted that while demand response and dynamic pricing will hopefully alter consumer habits in the long term, initially it won’t. It will do the opposite and create angry consumers, he admitted.

“No one will be opposed to driving down energy costs, because you get a better return on investment,” he said. In order to achieve this ROI, however, it most likely means higher initial prices for consumers, Chu said. This is also opposed by those customer advocate groups that view their sole duty as keeping the prices as low as possible. These groups will have to fold in real-time rates, but Chu said it will involve a cultural shift to move from the pricing mindset to one of energy savings.

To assuage consumers who are resistant to changing their habits, energy savings in the home has to be incredibly simple, he stressed. Much like a point-and-shoot camera that lets consumers simply push a button to take a picture, but possess the ability to do much more embedded in the device, the in-home device for energy management must no more complex than a button – one that says “saver, super saver and guilty as charged; this is how I want to live my life,” he joked. Real-time pricing will lead to demand response and, if done right – meaning consumers are given the right tools, like this “magic button” – energy costs will be driven down, Chu said.

On a personal note, he said he has reduced his own energy bill by $100 per month and is hoping to gain more savings, but he noted that most people don’t have the appetite to do the hours of research he did to figure out how to do so. Utilities have to make it very easy to save energy, he said, and they are beginning to realize the need to educate their consumers. GE, for example, today introduced a new Web site, itsyoursmartgrid.com aimed at providing consumer education. The DOE is also considering developing pilot programs to stimulate better use of electricity, he added.

Chu also used his keynote address to announce $144 million in Recovery Act funding to transition to the smart grid. Of the funding, $44 million will go towards state public utility commissions and $100 million towards funding smart grid workforce training programs.