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Imagining Consumer Energy Management in an IT Future
June 12th, 2012
Our editorial focus this month has explored the vast potential of information technology to enable more sustainable business practices and lifestyles. However, if we accept that a widespread shift is underway in which consumers will continue to demand greener products and services, and that consumers also are becoming ever more connected through an Internet of energy-hungry things, what market transformation could resolve these somewhat divergent trends?
The academic and industry members of the non-profit Georgia Energy Informatics Cluster (of which I am a part) are beginning to outline the theoretical requirements of an information system (see Watson and Boudreau’s contribution) that would link and manage all the future energy needs, products and machine-to-machine interactions of an individual or small business with the goal of reducing overall energy consumption.
The system, dubbed Consumer Energy Management (CEM)*, hinges on a revision of the customer service life cycle as described by D.C. Burnstine** before the advent of the Internet.
In the modern economy, nearly all aspects of the customer service life cycle have become information intensive. Customer service is no longer a series of singular steps through four stages: requirements, acquisition, stewardship and retirement. Consumers now lead digital lives in a mesh of networks that connects them, their devices, and appliances. As a result, customer service can be a dynamic set of real-time interactions that occur with or without the consumer’s need to pay attention.
We contend that a forthcoming network/grid economy combining the Internet and Retail Smart Grid (see Greg Chambers’ contribution) will create a new foundation for customer service and products, as well as a framework for recognizing opportunities to reduce society’s energy consumption. Furthermore, we want to expand the current focus from home energy management (HEM) to a consumer’s full range of energy consumption, including factors like commuting, and maybe recreational activities. A complete analysis of energy consumption is more useful than a partial view, because changes in lifestyle can move energy consumption among categories (e.g., a switch to telecommuting reduces fuel consumption but raises home electricity usage).
We discuss the proposed design of CEM in terms of five design principles:
Principle 1: A consumer-centric network
The consumer is the focus of attention because consumption decisions ultimately determine energy usage, and consumers and their devices, appliances and vehicles will be increasingly connected to a network.
Principle 2: An intermediary will manage relationships between the consumer and the various parties
Consumers have multiple energy sources (e.g. electricity, gasoline, natural gas) and multiple appliances. They will need to rely on infomediaries (information mediators) to manage connections and information flows. CEM will support information exchange between consumers, relevant entities, and their devices. By analyzing energy use across the full spectrum of behaviors, CEM might recommend replacing one of a family’s gasoline powered cars with an electric vehicle for daily commutes and base the recommendation on a complete analysis of all costs.
Principle 3: Service will be a high frequency activity
The old service model was to buy a refrigerator every decade or so and have minimal contact with the manufacturer or retailer in between. Imagine what will be possible when the fridge goes online, when it knows what it contains and where each item is stored. If a consumer opts in, the manufacturer could ping the fridge multiple times in a day, or the fridge might relay information to the manufacturer every time the door is opened. As a result, the manufacturer could suggest different ways to arrange food to prolong storage or reduce energy. It might also indicate when the coils need cleaning because accumulated dust has lowered efficiency, and so on.
Principle 4: An Internet of energy things
Much as been made of the emerging Internet of things, but we need to recognize that these things consume energy. Everything plugged into the Internet is uniquely identified by its Media Access Control (MAC) address, but we also need to know its energy characteristics and which outlet it is plugged into. Thus, we envisage the following:
- Every power outlet is uniquely identified at the household level and can transmit details of the electricity flowing through it.
- Every Internet-enabled device that is plugged in can transmit its MAC address via the electrical wiring or a wireless connection to the consumer’s selected infomediary.
- Using the MAC address, a database can be accessed to obtain details of the connected device.
If these conditions are met, and they are technically feasible, then the Internet of energy things can be managed for energy efficiency. Such information granularity is required to give exactness to energy management and to assure that the information plugged into the energy equation has the precision to make high quality automated decisions.
Principle 5: An open API set
The parties involved in CEM must have opportunities to generate value in order to ensure their ongoing participation. An open API set would support the needs of retailers, manufacturers, and recyclers as well as the requirements of those businesses servicing energy consumers directly. For example, manufacturers could gather information about consumers’ use of their products to impel both continuous and radical improvement. As a result, CEM would facilitate not only the reduction of energy consumption, but also innovation in general.
The proposed intermediary, which we have tentatively titled Consumer Energy Management Institute (CEMI), sits between the consumer and the other parties involved in CEM. It will operate a multi-sided business that mediates between energy consumers and the suppliers of energy (e.g., an electrical utility or oil company) and suppliers of appliances and devices that use energy (e.g., dishwashers and cars). All these parties are its customers, and it will be successful only if it creates value for these diverse partners. CEMI also needs to create and maintain a level of trust that will encourage consumers to opt in with their energy consumption data.
*The ideas in this article were developed mainly by Richard T. Watson of the University of Georgia.
**Burnstine, D. C. (1980). BIAIT: An emerging management discipline. Petersburg, NY: BIAIT International.