Energy Transition

Is it time to bring smart energy home?

Colin Calder

People think that in a world of rising energy costs, you have to choose between being comfortable and saving money. Smart meters, which bill you more when energy is expensive, encourage this view. Furthermore, they leave it up to homeowners to check the meter, make a spending decision, and adjust their appliances accordingly.

Most people will not do this. They will live as their personal commitments and preferences demand, regardless of the daily price of energy. Watched over by their smart meter, their energy prices are likely to go up.

History is littered with examples of business models that continued to burden the consumer with cost and inconvenience after technology moved on. Budget airlines stripped out cost and offered value back to the consumer in return for advance, online purchases.

Amazon stripped out supply-chain costs and built a profile of each user to suggest products, building scale that meant lower retail prices. The internet transformed much of the old telecoms industry itself with cheap online communications.

In every case, technology removed power from incumbents and placed it with consumers. Energy is the latest sector to be hit by this seismic shift. Smart homes manage energy not according to the priorities of utility companies, but those of consumers; namely cost-reduction, comfort and convenience.

Non-invasive, wireless hardware married to smart control algorithms – accounting for user occupancy, building efficiency and external temperature – cut out waste by up to 40% without having a negative impact on comfort.

Such effective cost cutting may seem like a threat to the energy industry, but smart homes are also its greatest resource for grid flexibility. From Germany to India, supply-demand imbalance on power grids is one of the greatest economic and social threats of our time. Residential properties are the single greatest burden on the grid and the cause of energy peaks. Yet no attempt has been made to incentivise home owners to reduce grid peaks since the night-time storage tariffs of the 1960s.

Smart homes can offer planned demand reduction if three conditions are met. First, such ‘demand-response’ must be guaranteed via automated, real-time controls. Second, it must not impact upon consumers’ lives, which means engineering homes around energy storage. Third, consumers must receive a fair deal for using their capital to resolve an expensive grid problem.

Smart homes are therefore essential if we are to move from leaky, centralised grids towards efficient, decentralised grids built around flexible generation, use and storage of power.

By sharing value between consumers, energy utilities and governments – the latter, via facilitating an improved energy mix and better energy security – such grids offer a win-win-win situation that will be central to continued growth and efficiency.

About the author: Colin Calder is founder and chief executive officer of PassivSystems Ltd, a UK-based provider of smart home energy management platforms, selected as a World Economic Forum Technology Pioneer 2013.

Photo: Reuters/Steve Marcus

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Stay up to date:

Innovation

Share:
The Big Picture
Explore and monitor how Innovation is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

Meeting global climate goals requires a step change in nuclear investment

Rafael Mariano Grossi

November 8, 2024

How the US election result could affect the energy transition, and other top energy stories

About us

Engage with us

  • Sign in
  • Partner with us
  • Become a member
  • Sign up for our press releases
  • Subscribe to our newsletters
  • Contact us

Quick links

Language editions

Privacy Policy & Terms of Service

Sitemap

© 2024 World Economic Forum