2012 to bring more smart grid, less government support

It’s that time of year for annual predictions. CNN’s doing it. The New York Times is doing it. So, why not us at POWERGRID International magazine?

Keeping the concept to our own power industry, what will be on the horizon in 2012?

The obvious choice is: more smart grid. A lot more. That’s a bit of a no-brainer. This ball is rolling, and stopping it will take, as Newton said, a “greater force.” At this time in this industry, there is no force greater than the smart grid momentum. Granted, its growth will be slower now that the government cash tap has been cut down to a trickle, but that growth will continue. Everything about power is going to get smarter, and that’s the way it is.

This leads to a second prediction: Everything’s going to get smarter, but customers are still going to gripe. In the end, humans don’t like change too much. It’s scary. We fear it. It’s one of those things we hate most in life. Heck, we don’t even like it when the grocery store moves our favorite can of creamed corn over an aisle or two. We gripe about it. We grumble. So, smart meters---which are a heck of a lot of new---will continue to be a tough sell in 2012 in a number of areas. We’re gonna gripe about it. We’re gonna grumble. Customer communication (and an open-door policy) will help, but only time will make things more accepted---more a part of the norm and less new. So, I don’t see great mobs of average consumers embracing the smart meter/smart grid concept. They haven’t gotten to that level of acceptance yet. They will, but that will take time. So, utilities will have to practice a little patience.

Jumping off of the “consumers hate change” concept, here’s a third 2012 prediction that may not follow the typical industry fanfare: Electric vehicles (EVs) will be put on a backburner (yes, again). Why do I think this? Well, first, despite a whole lot of media coverage of electric cars, they aren’t selling very well. EVs are selling so poorly that analysts at investment website 24/7 Wall St. labeled the Chevy Volt one of the worst product flops of 2011. Lots of hype trumpeted the Volt’s entrance, but sales in July were a whopping 125 vehicles.

Second, it’s all about consumer acceptance. We can put up charging stations and complete studies on massive EV grid impact, but without the consumer willing to buy that EV, we’re stuck. And EVs are still too “wacky” for the average American. (And too expensive, unpredictable, scary and thought-/time-consuming.) Americans may come around to EVs eventually (as they will with smart meters), but it won’t be in 2012. Will this lag time mean a second death for the electric car? It’s possible, yes, unless the government’s willing to shore up the EVs trade until it becomes capable of standing on its own.

This leads to my fourth and final prediction for 2012, which is just basic writing on the federal wall: The government is going to take a step back in research, support and funding for anything outside of the traditional energy norm. It’s already happened with smart grid in 2011, and smart grids aren’t nearly as scary as intermittent renewable energy or cars that steer away from gas guzzling. So, with those scary areas, there’s going to be next to no movement. All actions will be gone over with a fine-tooth comb, especially after Solyndra’s messy collapse. While support from the government to help develop research and processes is a true American tradition and has brought us awesome stuff like relatively cheap air travel and cell phones, sometimes investments go wrong. In the time of a recession, however, wrong is amplified. Solyndra is now a symbol. This will make the feds a bit cautious in any approach to shore up new and unproven forms of energy from solar to EVs. They’ll be terribly skittish, especially with elections bringing in a spotlight on every penny spent. So, obviously, 2012 will be a time of investment contraction, which doesn’t bode especially well for the renewables side of the power equation since they truly need the support. But, they’re scary and new, not a sure thing. Not a definite. These days, the government is hedging bets.

So, four things in 2012: More smart grid, more cautious consumers having growing pains, more consumer growing pains means fewer EVs on the road, and more government contraction pains means less renewables investment.

What are your predictions for 2012? Send me an email at kathleend@pennwell.com and let me know. We’ll share more next week.