“Smart Electricity Systems”: Keep it simple, stupid

Energy policy is never so elegant.

I overheard one attendee at the “Pioneering Smart Electricity Systems” debate say he felt by the end “as confused as when he came in”.

Indeed, it often feels that way with discussions of energy policy, where laymen may feel limited by their lack of scientific expertise and public debate is obfuscated by the millions spent in PR by energy companies to support their particular industry. All are guilty of this, old industries downplaying their negative effects and economically insecure new industries touting themselves as the silver bullet to the world’s energy problems.

The result, according to one participant, was that in energy policy “clear thinking and economics are playing a backseat role”. It appears the GES’s own documentation to the session was a victim of this, its background note claiming that due to necessary reductions in the use of fossil fuels and nuclear power “severe cuts in the global use of electricity are regarded as inevitable.”

I don’t know if this could be more wrong: electricity use in the developing world is certain to continue to increase massively with general energy consumption (see past trends here) and even in the developed world the transition away from fossil fuels would likely require more electricity use (most apparent in transport).

No silver bullet

Nonetheless, electricity generation and use remains will change significantly over the coming years. “Smart electricity systems” are presented a means of meeting the challenges of these changes. They typically include some combination of smart meters, usage of electric cars to store excess capacity, allowing small decentralized power generators to feed electricity into the system (rooftop solar panels, for example) and adapting power use according to peak times.

However, for some of the panelists, smart metering was no magic bullet but simply “hyped”. Another laconically stated “There is no business model.”

For them, the solution for energy efficiency and reduced electricity use was simply higher prices and more explicit information to consumers, particularly regarding off-peak times. While the general public might know fuel prices well, made explicit at each gas station and every purchase at the pump, people have little awareness of electricity and gas prices. “The only thing they’ll say is that it’s increasing all the time,” one said.

I can’t help but think that many uncertain emerging technologies and complicated schemes are often ways for governments to obfuscate rather than address an issue. Why take the politically difficult decision to tax carbon emissions when you can come up with complex carbon trading schemes liable to millions of euros in fraud and arbitrarily distribute pollution rights? Why worry if your biofuel policy is actually increasing deforestation and emissions so long as it provides an excuse to subsidize agro-business?

This kind of obfuscation, it seems to me, is particularly common in consensus-driven bodies like the United Nations and the European Union. Energy policy ultimately, regardless of any global deals, depends essentially on national policy. In that case, we should focus more on asking simpler questions to public opinion in each country: How much are we willing to pay for energy independence? How much to reduce carbon emissions? How much in uncertain new technologies?

If, on the other hand, a solution – technological or policy – purports to be so wondrous as to avoid these hard questions and yet is too complicated for a layman to understand, I suspect what is being sold is little different from castles in the sky.