New Zealand’s electricity industry and regulators could usefully collaborate with academic researchers on randomised testing to provide insights into household impacts of the new technologies such as smart meters, says an American researcher.
“New technologies that comprise the so-called ‘Smart Grid’ offer several opportunities to leverage these insights into behavioral change,” the researcher, Professor David Rapson, of the University of California, Davis said at a Motu public policy seminar. “Translating these insights into policy is fraught with potential pitfalls”.
Professor Rapson said he was still analysing data collected in his own study of behavioural changes brought about by smart meters in households — some of which were able to see their real-time usage and expenditure, while others were able to stop appliances running when power prices were at a peak or surrendered switching of some appliances to a power company keen to shed load at peak times.
But he warned guests at a public policy seminar in Wellington today that consumers could be fickle, showing “rational inattention” if they did not consider power bills to be big enough to arouse concern.
“When it comes to electricity use, people don’t respond to price as much as many might expect,” he said. One effort to provide tree-planting as a carbon offset for electricity consumption had actually been followed by an increase in consumption because many consumers no longer felt guilty about their power use.
But Professor Rapson noted that “behavioural nudges” and technological defaults had also been shown to produce meaningful responses to demand: “Randomised field experiments are invaluable in this setting”. Some of the households in his study were faced with peak electricity prices of 200 percent to 600 percent to normal charges.
An economist who specialises in the fields of industrial organisation, energy and the environment, with a focus on how to achieve economic efficiency in energy markets, Prof Rapson said his large-scale randomised field experiment was to test the effectiveness of Home Area Network (HAN) technology — the customer-facing side of the “Smart Grid” . “It allows to charge a different price at different times of the day … it also creates a whole lot of information that can potentially be used to educate households”.
Real-time displays could show the electricity being used, and its cost, and for “smart” appliance or devices such as programmable thermostats. Even individual plugs could be monitored and the electricity supply to them cut, either by the consumer or their supplier. “This technology … has the potential to move people towards socially-beneficial usage patterns,” he said.
But there were key issues yet to be decided, such as who should own the meters, and who should control the data, which could theoretically be used to provide feedback to people on how their usage compared with the average for their neighbourhood. “The data is really very sensitive: by looking at it you know who’s home and when they’re home, you know who’s growing pot (indoors) … there’s a lot of information embedded in these data and and the question of who owns it is controversial”.
Prof Rapson answered questions from the SMC:
How important is a smart grid to managing problems such as load shifting when, say, the wind drops, or thousands of households decide to charge their electric car?
“The smart grid is potentially very useful for that .. if everyone has their car plugged in and all of a sudden the wind drops, that’s a big problem. Having a network that is intelligent, communicates, and can isolate parts of the grid or shed load in key areas, such as electric vehicles on charge, will be important.”
Do real-time read-outs of power use and cost cause people to change behaviour to cut consumption?
“Earlier research has shown meaningful drops in consumption: real-time information helped people know when prices were high and it did cause them to adjust their behaviour”.
Is yours the first study to compare people turning off appliances voluntarily, in response to real-time price signals, compared with an electricity supplier doing it for them?
“There is anecdotal evidence of demand-response programmes being popular — where the supplier provides a rebate in return for being able to shed load by remotely adjusting a thermostat on the air conditioning”.
Are universal standards needed to make “smart” appliances and meters inter-operable?
“There would be a huge benefit for standardisation here. If you have a retailer rolling out the old type of smart meter that only transmits information but can’t communicate, then when you eventually want to communicate you’re going to have to retrofit the meter at extra cost. If you want third-party software vendors to develop useful tools, then there has to be a platform”.