Adopt smart grids to foster innovation and jobs

By Molly Webb, Head of Smart Technologies, The Climate Group.

The US believes consumers can become energy innovators. At the Building the 21st Century Grid event, it announced support for all Americans to take advantage of new tools and services to manage their energy use and save on their utility bills. This is part of a wider set of initiatives and policy framework announced to support 'smart grid' - applying digital technologies to the electric system - to enable a clean energy economy, ensure a secure and reliable grid, and foster innovation and jobs of the future. There are plans to track progress and push further on energy education programmes.

A smart grid enables a clean energy future. The Climate Group's SMART 2020 report showed that a smart grid can deliver 2 Gt CO2 equivalent savings in 2020, globally, or four times the size of the UK's carbon footprint. The Climate Group – in partnership with Google – has been advocating for a consumer goal to open up energy information since 2010.

Empowering consumers is central to smart grid rollout for at least two main reasons.

First, consumers need choices. We know very little about the energy we use on a daily basis – from how much we consume, to the cost, source and carbon content of our power. Services that help make the energy system more efficient are as good as the data on which they rely. We can't manage what we can't measure.

We are just beginning to see the potential for better energy management through better data, and the impact could be huge.

Last May, David Cameron challenged government departments to cut carbon 10% which they started to do using real time monitoring. Better information has been shown to save households up to 22% of monthly consumption, though the change is often less dramatic if behaviour incentives aren't in place.

Second, consumers drive innovation in services. Better availability of data in other sectors like transport is already making services better. In London, mobile applications help commuters use the cycle hire scheme with confidence, showing us where to find and dock bikes. In New York, newly released mobile apps help us navigate public transport to save us travelling in high-carbon vehicles.

We can do the same for innovation in energy services. Home energy (remote) control systems help consumers save energy when they aren't home; daily information in high consuming buildings helps technicians find or anticipate energy saving options. "We're just starting to see the innovation that will come," said Bob Shapard, CEO of Oncor and Chairman of Gridwise Alliance. Oncor announced a mobile application and energy saving challenge for consumers. Oncor is based in Texas, where a competitive energy market operates under the principle of giving consumers ownership of their data.

But for now, energy data is generally not open and actionable. It is available only on a monthly (or less frequent) bill, and not electronically.

Key issues remain:

1. How can we ensure an open platform where consumers have meaningful choices? Meters alone will not transform energy demand; we are just beginning to understand energy consumer behaviour, and the design of tools to help us change it. According to American Council for an Energy Efficient Economy, utilities are not providing the right mix of feedback to achieve the maximum energy savings. How do we actually get the data to consumers and third parties? How do we make it actionable?

2. How can we best protect consumer privacy and security without stifling innovation?

3. What other programmes are needed to drive adoption and ensure consumers benefit? Available data could dramatically change the way customers interact with their energy providers. What customer education programmes are needed? How can we ensure all customers, at all income levels, benefit? What stakeholder collaboration is needed at regulatory level?

4. How can we be sure the companies providing our energy are incentivised to save energy?

The White House has shown leadership and foresight. It is consumers who pay for energy now and will in future demand the new energy services that better data enables – from automated thermostats to electric vehicles. We hope our demand for these services will, in turn, unleash the innovation that also help to tackle energy and climate challenges.

See our SMART 2020 work.

Read our report, SMART 2020: Enabling the low carbon economy in the information age.

First published on Guardian Professional Network