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Smart grid predictions for 2012

The new year is a good time to look ahead and back. I’ve been doing a lot of deep thinking about how the smart grid is developing. Here’s what I expect we’ll see happen in 2012…

1. Emerging markets will see significant smart meter growth. I expect that this will happen in South America, Eastern Europe and elsewhere. The leading countries include Brazil, Poland, and Singapore. There will be a $50 billion smart meter and smart grid opportunity by 2020.

2. Prepaid electricity service will be a major topic of discussion. Smart meters make it possible to implement prepayment at no extra cost. This could solve a national scandal: each year we cut off power to over 6 million poor U.S. households. This is over 1,000 times as many disconnections as the U.K. — which, at one-fifth the U.S. population, sees fewer than 5,000 disconnections per year.

3. Smart Grid 2.0 will become a reality. This will happen in places where smart meters have been fully deployed, such as Ontario, Texas, California, Scandinavia, and Italy. Consumers will see pricing options, new and interesting data applications (such as the Green Button) and more automation — especially smart thermostats such as those offered by Nest Labs, Tendril, EnergyHub, Control4, and other companies. They’ll be able to buy these from utilities and retailers (such as Best Buy).

4. Leading utilities will start deploying data analytics. These applications will help utilities gain insights from the rivers of data now arriving from smart meters and smart grid devices. This will help them operate more efficiently and reliably.

5. Renewable energy waste will become a significant problem. Around the world, utilities are paying millions of dollars to curtail wind power and, for the first time, solar power. The solutions — more transmission lines, and time-based pricing to encourage load shifting to match consumption to production — will take longer to implement.

6. Electric vehicles will reach critical mass. By the end of 2012, I expect that over a quarter million plug-in vehicles will be sold worldwide. This means that there will be enough EVs around to support charging infrastructure in numerous major metropolitan areas, from Los Angeles to Berlin. Toward this end, in the U.S. the Electrification Leadership Council (a new coalition of executives from the transportation and utility industries) recently announced they’re designing a large scale electric vehicle demonstration project to serve as a national model for EV deployment.

7. More progress on smart grid standards. These efforts include data exchange standards for providing data to third parties authorized by consumers, and for sending data from meters to Home Area Network devices in homes and businesses.

8. Policymakers will stay focused on energy data privacy and security. These issues will remain top of mind for policymakers, ensuring that the energy industry delivers on its commitments to provide strong protections for both. I expect that several states and countries will adopt smart meter data privacy and security policies, beginning this year.

9. Demand side market participation opportunities will grow. Policymakers will continue to expand opportunities for energy consumers to participate more actively in the electricity market. This will increase reliability and cut costs. National regulators in the U.S., U.K., France, Germany, and elsewhere will take concrete regulatory steps such as creating capacity markets and defining market rules that allow demand response companies to play in them.

10. Smart grid knowledge base will become more compelling. The industry’s body of literature and experience continues to expand. Watch for more reports, conferences and other information on issues such as:

  • The kinds of energy information, pricing choices, and automation that consumers desire.
  • Utility reliability and operating savings related to smart meters.
  • Positive business cases for smart meters.
  • Why the vast majority of consumers have a favorable impression of smart meters, despite the small number of highly vocal opponents.
  • How smart meters and smart grids can help solve problems related to implementation of renewable resources.

As an industry, let’s fill 2012 with a passel of success stories.