How Will Thw Smart Grid Work ?

How's it going to work with the Smart Grid, cars plugged in everywhere, and little mom and pop energy producers all over the grid, just tryin' to make a buck? There's a growing concern that it is a little more sinister than the affable scarecrow on the wires is singing it to us. An article in Business Week notes that consumers are worried that the Smart Grid, and the fluid pricing it implies, creates an opening for utilities to enrich themselves at the expense of the consumer: "they're leery of giving utilities the ability to change electricity prices on the fly, jacking rates up on hot summer days, for instance." Utilities, on the other hand, may be leery of giving up their warm, safe fixed rates, which give predictability to their business modeling and forecasting.

And yet, the Smart Grid promises to do so much: rationalize and reduce energy use, lower the overall cost of energy, foster renewables, and create the conditions to allow widespread use of the electric automobile. If the Smart Grid is worth having, but there are concerns about how it works, we are at the beginning. Why not establish rules, or ways of going about this, that make it a fair and transparent and attractive place for all participants?

Maybe there is something akin to a stock broker or mutual fund manager (call it an Energy Broker) that gets the best deal on behalf of the power consumer. Maybe the current day aggregator evolves into this energy broker, using sharpened wits and algorithms to scour the Smart Grid marketplace for the best deals in this decidedly more fluid environment. Fear not, Mr. or Mrs. Consumer, your broker is watching out for your interests, and if he isn't, you fire him and get one who is.

If the Smart Grid really can address some of our larger challenges, and at the same time drive down the cost of energy, we have an incumbent opportunity to establish a playing field that fulfills the promise of the Smart Grid and a new energy order.

Photo: Christopher Sweeney on flickr