by K.T. Weaver, SkyVision Solutions
At this website we have categorized the various risks related to utility smart meters, including health, privacy invasions, cyber threats, increased risk of fires, inaccuracy in billing, and environmental impacts. In addition, we have shown that smart meters provide no net economic benefits to consumers and in fact are subject to accelerated technological obsolescence. Governments, utilities, and other members of the smart grid industry skew business case assumptions in an attempt to show them “economical.” For example, they usually assume smart meters will be used and useful for 15 to 20 years when a 5 to 10 year lifetime is more likely.
In some instances, the business case assumptions used to justify smart meters are not publicly disclosed. 
The figure at the left is symbolic of the “transparency” of the smart meter program where the UK’s Department of Energy and Climate Change (DECC), in response to a Freedom of Information type request, redacted approximately 13 of 20 pages of its document showing that smart meters are cost-effective, leaving mostly title pages and signatures. [1]
Despite the now overwhelming evidence that smart meters are a colossal waste of money and resources, smart meter deployments continue world-wide. There have been a few recent push backs as reported in Indiana, New Hampshire, and New York. In general, however, it is as if the smart meter proponents live in an alternate reality devoid of facts and rationality. Why is that? In this article I will provide rarely discussed details on why the irrational and wasteful smart meter deployments continue.
Insight is provided by a paper [2] I came across from 2012 where James Woudhuysen described smart meters as “guilt meters” and a “fraudulent” and “bogus innovation.”
Nothing New, ‘Smart,” or Innovative About Smart Meters
In the past several months the prices for oil and gasoline for our cars have dramatically dropped, maybe down as much as 50%. Is your electric bill going down also? Isn’t the price of energy going down? Not if you are paying for smart meter installations and the phase-out of fossil fueled plants and an increase in the use of expensive, yet subsidized “unsustainable” wind farms and current solar panel technology which will never have a significant impact on the reduction of carbon emissions.
The “smartness” being promoted by governments in collusion with climate alarmists and the smart grid industry has nothing to do with innovative technology, but instead, it has to do with penalizing our past behaviors and old ways of doing business as “dumb and stupid.” As stated by James Woudhuysen:
“[I]t is implied that mankind has been ‘dumb’ in its past conduct. It is suggested, however, that modern technology, in the shape of IT [Information Technology], can now compensate for humanity’s profligate ways and help it manage demand down; especially demand for energy.”
“Smart meters are not, then, smart in terms of helping consumers adjust their use of electricity and gas to take advantage of times when these two things are cheap. Nor are such meters smart in the sense of bringing about a significant reduction in energy use. According to the project leader of the Centre for Studies on Sustainable Development at the Free University of Brussels, Grégoire Wallenborn, European studies have shown that consumers using energy monitors in the home cut their use by no more than four per cent, and that, only over the first year after their meter[s] were installed.”
“Those who make and research energy need to satirise smart meters, pointing out that mendacious [and false] symbols of innovation can never amount to the real thing.”
What should be promoted is truly innovative ways to increase the supply of environmentally friendly energy rather than castigating the consumer for using too much energy and prolonging the continued wasteful investment in low-tech solutions such as smart meters, weatherization programs, and subsidies for existing energy sources. Through increased research and development over the past few years, we could have already had real and practical solutions to our future energy needs. But as stated by James Woudhuysen in a separate article [3]:
“For many today, both green activists and leading politicians, climate change is a moral and political issue rather than simply a practical problem. They see the ‘issue of climate change’ as a means to changing people’s behaviour and expectations, rather than simply as a byproduct of industrialisation that ought to be tackled by technological know-how.”
“The implication is that humans must first suffer, by cutting back on consumption and energy-use, before we can at least try to fix the problems of pollution.”
Behavioral Energy Economics and “Nudges”
Psychologists and so-called “behavioral economists” are scheming for the best way to get consumers to accept smart meters and “go with the program” of cutting back on energy use with the least possible resistance.
As stated in one paper by Beth Karlin [4] presented at an energy efficiency conference in 2012:
“While the advantages of smart meters are widely accepted by academics, government officials, and utility companies, several regions have experienced significant backlash and disapproval from customers when installing smart meters. It is crucial for utility customers to accept this new technology in order for smart grid development to continue. It is costly for companies to address customers concerns after installation and some utilities have even been confronted with protests and lawsuits – hindering progress toward a fully connected smart grid.”
From another paper [5] which includes the same author, Beth Karlin, from Reference [4]:
“Although a variety of energy conservation actions are technically and economically viable, widespread adoption is lagging and policy makers are increasingly looking to psychologists for guidance (Lutzenhiser, 2009; Wilson & Dowlatabadi, 2007).”
The focus on smart meters, energy efficiency, and energy conservation distracts from innovation; it doesn’t work; and, as stated by James Woudhuysen, represents “an elbow in the ribs” of the consumer and involves “the politics of fear.”
Woudhuysen provides examples of how governments, utilities and academics are practicing what is sometimes called “nudging.” Nudging based upon the 2008 book [6] Nudge: Improving Decisions about Health, Wealth, and Happiness by Thaler and Sunstein is defined as:
“A nudge, as we will use the term, is any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives.”
As Woudhuysen explains from his 2012 paper [2]:
“since 2008 the idea has grown that the state’s job is to act as a paternalistic ‘choice architect’, guiding feckless consumers to the right path. From America through France and Denmark to Britain, governments which lack vibrant interactions with normal people and are disdainful of the ‘plebs’ bother little with supply-side innovation, but much more with curbing what they regard as personal excess in the realm of consumption. Moreover, Thaler and Sunstein give energy this treatment very explicitly.”
Quoting from the 2008 Nudge book by Thaler and Sunstein [6]:
“Energy conservation is now receiving a lot of attention, so consider the following information campaigns: (a) If you use energy conservation methods, you will save $ 350 per year; (b) If you do not use energy conservation methods, you will lose $ 350 per year. It turns out that information campaign (b), framed in terms of losses, is far more effective than information campaign (a). If the government wants to encourage energy conservation, option (b) is a stronger nudge.”
Thus, the desired governmental message is to threaten you with a loss of money for failing to reduce consumption.
A 2012 paper [7] called “Behavior change and energy use: is a ‘nudge’ enough?,” describes the use of emoticons (smiley and sad faces) to influence consumer energy usage behavior. It is important to note the climate change connection as the underlying motivation for inducing consumer-related behavioral modifications:
“As recognition of the consequences of the rising trends in energy consumption increases among policymakers and the public, calls to rally international efforts to tackle the issue grow louder. While international organizations work on a global strategy, it remains the case that residential electricity accounts for 40% of global energy-related CO2 emissions and is expected to grow globally by 58% by 2030 unless new policy measures are introduced. In this article, we ask what can be done to induce changes in households’ energy consumption.
Recently, utilities companies have stepped up information-led campaigns that seek to provide feedback to consumers to positively influence how households think about and use energy. Evidence of the effectiveness of such strategies has been mixed. Fischer found that of the dozen studies she reviewed, none could identify an effect of normative statements on energy use. She suggests this failure stems from the ‘boomerang’ effect, where descriptive norms can have the unintended consequence of inducing individuals below the norm to up their usage so that they conform to typical peer behavior.
I
n response to this limitation, normative feedback is often combined with messages to buffer against any boomerang behavior. In a field experiment exploring the extent of this counterbalance, it was found that adding an injunctive message – a smiley face emoticon for consuming less than average – had eliminated the boomerang 8.6% increase in consumption of households who only received descriptive norms.”
In personally reviewing the results of the above study and many similar ones, I find them hyped up in terms of conclusions. Many of the results are not statistically significant, and they are silent on the fact that studies using feedback from smart meters or other mechanisms suffer from the novelty effect (where the effects wear off with time) and what is called the Hawthorne effect, where participants who know they are in a study may change their behavior based on the additional attention they receive during the course of the study.
In an ominous statement from the previously mentioned 2008 Nudge book [6], we can see the sort of actions that technocrats will consider against the “plebs” if they do not respond to the supposedly more subtle nature of nudging:
“It’s not clear how many people would actually want to make their energy use public, and we don’t think that we’re at a stage when public officials should require people to do so. … The most straightforward point is that if we can find ways to make energy use visible, we’ll nudge people toward reducing their energy use without mandating any such reductions.”
So we are not yet at the point of mandating public disclosure of your energy records or the rationing of energy, but we can’t rule it out. And your smart meter will be right there to help make those actions possible should they become necessary.
Where I disagree with the James Woudhuysen paper [2] highlighted in this article is that he considers the most common “objections” to smart meters, such as “wellness”, privacy, and security as “wrongheaded.” I attribute this to him probably not studying those issues in detail like I have. But Woudhuysen’s concerns are still worthy of publication. He considers the true threat of smart meters and behavioral economics as a form of state sponsored political intervention into the private lives of the consumers. It is an intervention that will have little impact on carbon emissions and detracts from true technical innovation. As he summarizes:
“Clearly behavioural energy economics is not much about economics, and not at all about technological innovation. But it is very much to do with political intervention.”
“While the state may be as unable as companies to deal with reams of data on residential energy use, its tendency toward getting every neighbourhood to engage in ‘peer comparison’ around behaviour and the environment is far from innocent. The fact that, in America, it is companies that are ahead of the state in going down this road should not be allowed to obscure the fact that the state fully sanctions those companies, and provides the ideological atmosphere in which they are free to engage in quite physical invasions of privacy.”
“The sooner behavioural energy economics is subjected to the derision it so richly deserves, the sooner the revival of energy innovation can take place.”
Woudhuysen further mentions that the hopes of behavioral economists (and the policy makers who are taking their advice) currently lie in smart meters and emoticons. “These are the breakthrough, ultra-rational innovations that a [declared stupid and] irrational populace can look forward to in the 21st century.” One estimate using “optimistic arithmetic” concludes that these measures could cut CO2 emissions by “nearly one percent.” Woudhuysen says the math calculation included an error and the actual estimate was 0.53 per cent.
As the title of this article indicates, the current strategy behind smart meters in terms of “consumer engagement” relies on the guilt of the consumer in using “too much” energy and convincing you to cut back. One of the reasons this strategy is doomed to fail is that even if a consumer today “saves” money through acting on a feedback mechanism, the person will later use that money for something else that further consumes energy. The simplistic concept of energy conservation as described by behavioral economists is actually quite naïve for the long-term … which is what we should be concerned about.
Instead, policy makers should be working on developing new energy sources where no ‘smart’ metering or metering of any kind is required. Similar to phone and cable bills, electric utility service should be a fixed monthly (and cheap) cost. That would be true innovation.
References for this Article
[1] “UK Smart Meters Delayed. Again.,” at http://www.nickhunn.com/uk-smart-meters-delayed-again/
[2] “Innovation in Energy: Expressions of a Crisis, and Some Ways Forward,” by James Woudhuysen, 2012, available for review at http://wp.me/a3nav9-3wt
[3] “Why greens don’t want to ‘solve’ climate change,” at http://www.woudhuysen.com/why-greens-dont-want-to-solve-climate-change/
[4] “Public Acceptance of Smart Meters: Integrating Psychology and Practice,” by Beth Karlin, 2012, available for review at http://wp.me/a3nav9-3wp
[5] “Dimensions of Conservation: Exploring Differences among Energy Behaviors,” by Beth Karlin, et.al., 2012, available for review at http://wp.me/a3nav9-3wq
[6] “Nudge: Improving Decisions About Health, Wealth, and Happiness,” by Thaler, Richard H.; Sunstein, Cass R. (2009-02-24); Penguin Publishing Group; Kindle Edition, available at http://www.amazon.com/Nudge-Improving-Decisions-Health-Happiness-ebook/dp/B00A5DCALY/
[7] “Behavior change and energy use: is a ‘nudge’ enough?,” by Rasul and Hollywood, 2012, available for review at http://wp.me/a3nav9-3ww
Smart Grid Awareness 