Protecting Consumer Freedoms: Why Implicit Demand Flexibility
Matt Roderick
It’s dumb without data - ?? join the real energy revolution - flatpeak.com ??
As the energy sector undergoes a radical transformation, regulators have a crucial role to play in protecting and empowering consumers. However, many are falling short, prioritising utility-driven solutions over approaches that preserve consumer freedoms. This failure to champion consumer-focused strategies has led to an overreliance on explicit control mechanisms, which come with significant risks, while neglecting the potential of implicit control.
Explicit control allows utilities to directly manage devices such as thermostats and water heaters, adjusting settings or turning them off during periods of high demand. While this approach offers immediate grid stability, it undermines consumer autonomy, raises privacy concerns, and creates cybersecurity vulnerabilities. It can also deepen inequalities, as wealthier households are better positioned to invest in technology or services that offer greater control.
Implicit control, by contrast, provides a smarter, fairer solution. By using dynamic pricing signals to incentivise voluntary adjustments in energy use—such as running appliances during off-peak times or charging electric vehicles when renewable energy is abundant—this approach empowers consumers to make their own choices while supporting grid stability.
However, despite the availability of time-of-use tariffs for decades, little has been done to establish digital standards that would allow devices to automatically respond to these pricing signals. Such standards could enable smart appliances and systems to optimise energy use seamlessly, reducing consumer effort while maximising efficiency. This lack of progress highlights a missed opportunity to make implicit control more accessible and effective.
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Markets have instead heavily invested in systems for explicit control, often favouring centralised, utility-driven solutions. Regulators, too, have been slow to mandate or incentivise the development of pricing-based programmes or the digital infrastructure needed to support them.
Countries that have embraced pricing signals, such as time-of-use tariffs, have shown how effective implicit control can be. These strategies reduce grid strain, promote renewable energy integration, and enhance efficiency—all while respecting individual freedoms. But for implicit control to reach its full potential, regulators must establish the digital standards and infrastructure needed to automate these processes.
The choice is clear: empowering consumers through implicit control not only addresses grid challenges but also upholds the principles of fairness, autonomy, and market efficiency. To secure a sustainable and equitable energy future, regulators must prioritise implicit control and the standards needed to make it work. The time to act is now.
Market Strategy Manager
3 个月Spot on Matt Roderick. The command and control nature of grid engineers is to blame here. Price signals work we just need to trust them.
Assistant Mayor, City of Lebanon, New Hampshire; Chair, Community Power Coalition of New Hampshire; & General Partner, One Court Street Associates.
3 个月Great way to frame the need to allow permissionless innovation by enabling local retail & wholesale markets for DERs to access dynamic price signals through competitive suppliers and community power aggregations.
Hi Matt Roderick, the European Code of Conduct for Energy Smart appliances may be of interest to you in this context and worth to be mentioned here. Here you have a combination of both concepts. A hard power limitation by the DSO only for concrete grid emergencies and an incentive table-based power consumption management for regular operation (price-based optimization). Already standardized i.a. In EN 50631, see also EEBUS Initiative e.V.
Passionate about Innovation, technology, strategy and policy, energy flexibility. Helping clients develop future ready, customer focused, products and services. Independent Member of BSI PAS1878 Advisory panel.
3 个月Hi Matt, I know we’ve had this debate before but there are a lot of assumptions in your statement that could do with some evidence to back them. For example that having appliances that respond automatically to implicit signals is any more accessible to the less wealthy than devices that respond to explicit signals. All the research I’ve done overwhelmingly shows we need both implicit, explicit and a lot more like heat networks to truly become flexible. It’s not a zero sum game.
Very interesting. Two thoughts/questions: 1) Do you think aggregators, rather than utilities, directly controlling devices addresses the freedom issue? Aggregators provide more choices (including the freedom to not participate at all). I'm similarly skeptical of utility-run DSR (we call it DR here), but it seems like if a utility procured a certain amount of DSR in an arms-length transaction from aggregators, the aggregator can then figure out how to deliver based on consumer preferences. 2) How does utility direct control raise privacy concerns? Everyone agrees utilities must maintain privacy of consumer data such as billing/account info. I don't see how the addition of device control meaningfully changes the picture. (This assumes that law enforcement must get a warrant from a judge for any searches involving your energy info. Sadly a warrant is not obtained 100% of the time in America.)