IBM helped Malta build the world’s first national smart utility grid, replacing 250,000 analog electric meters with smarter meters that track usage in real-time, identify sources of loss, set variable rates, and is being integrated with a new smart water metering system.
Energy consumers worldwide want to conserve and take advantage of smarter technologies but lack a basic understanding of how to do so. Consumers surveyed by the "2011 IBM Global Utility Consumer Survey" say they need smarter ways of making their energy decisions.
"We surveyed over 10,000 people in 17 different countries in nine different languages, and really focused on their expectations and perceptions as to where they see energy fitting into their lives," said Michael Valocchi, vice president, Global Energy & Utilities Industry Leader for IBM Global Business Services. "We found a really startling lack of knowledge."
IBM helped Malta build the world’s first national smart utility grid, replacing 250,000 analog electric meters with smarter meters that track usage in real-time, identify sources of loss, set variable rates, and is being integrated with a new smart water metering system. (Source: IBM)
According to Valocchi, "30 percent didn't understand the basics of their energy bill" leading to decision-making processes that depended on the evaluations of trusted advisers, rather than on understanding the clear choices being made available to them by the smart grid and smart meters. Younger consumers, in particular, were much more inclined to just depend on the consensual decisions of their social networks rather than on the traditional financial motivations being hawked by energy providers.
"Younger consumers under 25 are three times more likely to make their energy decisions based on family or friends advise," said Valocchi. "That’s information that is outside the control of the energy provider itself."
IBM's survey revealed that 60 percent of consumers still do not even understand the terms "smart grid" and "smart meter," but that understanding was key to their acceptance. For instance, 61 percent approved of smarter energy efforts when they finally understood them, but that only 43 percent, without a basic understanding of smart energy efforts, approved of them.
"People want to conserve energy," said Valocchi. "We just need to get better at showing them how."
IBM is recommending that instead of trying to educate consumers in the language and metrics of electrical energy--such as "dollars per kwh"—utilities instead should create consumer-oriented portals that compare a consumer's energy consumption with that of their neighbors, presenting clear visual evidence of the results of conservation and describing simple, effective methods of improving their standing among their peers.
"We are providing energy providers with a new way of engaging their consumers in a way that allows them to see the choices they can make in terms that they understand," said Valocchi. "It’s going to allow a whole new way of customer engagement that we have never seen in the industry."
As an example of progress already made, IBM described on-going efforts with the government of Malta (a small central Mediterranean archipelago) where research has revealed that deploying smart meters needs to be coupled with new presentations in billing that focus on the concrete steps that need to be taken to improve conservation with the new technology. The five-year effort, now in its fourth year, is a harbinger of how to make smart energy deployments successful and avoid consumer backlash during initial deployments.
"Smart metering needs to go hand in hand with the larger transformation," said Jean-Christophe Samin, project manager for IBM’s smart grid deployment for electricity and water in Malta.
According to Samin, the entire information chain needs to enhance consumer awareness, from the smart meter and the information it provides to the billing system.
IBM's pilot efforts with the Malta-government-owned Enemalta Corporation and Water Services Corporation include creating an online smart energy portal that explains conservation in easy-to-understand terms that offer just a few simple concrete choices, then provide the tools for measuring their progress in comparison to the efforts of their peers that IBM calls "social proof."