NationalGrid Memo to CEO- Changing Consumption Via Information

"If you cannot measure it, you cannot improve it." — Lord Kelvin

The value chain for utilities has been fairly constant for the past several decades. Invest in capacity, meet escalating power demand through fossil fuel plants, and then take a profit, after the transmission margins are met. However, the rules of the game have changed in 2 ways: fossil fuels are now known to be toxic and convergence of the 3 driving forcing of IT are here (Moore, Metcalf, Bandwidth). In the future, power will be consumed more intelligently and with greater awareness, all facilitated by access to usage and price data. This paper is not going to focus on renewable energy, therefore, but rather how these forces will change power consumption to make it more efficient and intelligent.

Players like Google PowerMeter, EnerNOC, and Fat Spaniel all offer solutions that will dramatically empower customers to change/reduce consumption and shift to off-peak times. This means electricity demand will fall, but this is a good thing for the environment and the strained and aging power grid. The question is what does National Grid have to do to make these changes good for them too- by harnessing IT investments and the 3 laws to make their value offerings in-line with new customer demands.