Recently, I got caught in a traffic snarl and the minute I got home (around 7 in the evening), we had a blackout. Nothing unusual about either episodes but I couldn’t help thinking that the two situations were not unlike. Heavy loads do cause a problem, whether it’s traffic or power.
Out-of-the-blue outages are not the only power woes we face. Inflated power bills are a problem as well. And trying to get it resolved with the utility company is often like hitting a stone wall. You just can’t get through.
Now let me present another picture. Imagine a world with accurate real time meter readings, where you can manage power usage better and actually cut down on your energy bills. Sounds too good to be true? Let me tell you it isn’t, the smart meter can actually enable all this. And, I say enable because the smart meter is just one part of the picture that provides information on usage patterns and consumption analysis. The primary driver for energy management, according to me, continues to be the supplier or the marketer; never the end consumer. I think it is time to change that completely. Customers are at the heart of every utility service, so why not make them energy management drivers? For that, I believe we’ll have to move beyond smart metering and embrace smart pooling.
How do we do that? By creating communities with the support of distribution utilities and /or demand response service providers. Communities or pool owners decide the frequency and intensity of their own consumption patterns, which they may share with one or more market participants including utilities. The better the self-forecast, the better and smoother is the whole process of provision. I think this will help create an accurate picture of load inflow and outflow. The subsequent step is municipal aggregation where the municipality negotiates electricity rates for the combined supply to its residents and small businesses.
So what are the advantages of smart pooling? Single point of participation to deal with the traffic, subsidized rates and a single energy goal for the community. I also think that smart pooling allows utilities to take pre-emptive action on load shedding and real time network issues.
Alignment of these energy pools with the social platform is another aspect that could be capitalized. I already see several utilities using networking sites like Twitter and Facebook as customer touch points. Conversations are happening between customers and utilities and even among customers themselves. However, this is happening in silos. My suggestion is to break down the silos. Include consumers from other localities and also seek the expert opinion from other market participants. This will allow consumers to be informed and make proactive energy decisions.
The underlying question revolving around all this is how to form these pools. I think this should be done based on basic criteria such as usage patterns and number of people per premise. You can also include aspects like credit history, you can even consider seasonal pooling. Further, I’m of the opinion that the pools should be fluid: let customers move in or move out. Those who move out will not be part of the aggregation program and will not enjoy the advantage of the pool’s low power prices.
The world is likely to see 602.7 million smart meters in 20161. I expect smart pooling to take off in a big way by then. I’m quite excited about how these pools are likely to influence the energy space. Energy trading might become more pervasive. We may have community energy certificates, a step higher than renewable energy certificates trading.
What are your views on smart pools? Can you think of any other aspects that need to be considered when smart pooling? Please share your thoughts in the section below.