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Kats: Smart grid is about is really allowing a dumb system to become smart

Gregory Kats

President, Capital-E clean-energy

advisory firm

Power from utility gas is one-way. We’re going to send it to you, and we’re not going to know how you use it. We’re going to send you a bill once a month, and then hopefully you’re going to pay it.

You’re moving from a kind of a dumb one-way environment to a two-way integrated environment where the utility can create financial returns for itself, for taxpayers and for end-users like homes by saying: Look, the reality is at some points, our price of power is really high, at other points, it’s really low, and we’re going to make that transparent to you. The economic incentives to do that are large. They’re in the hundreds of billions of dollars a year. What smart grid is about is really allowing a dumb system to become smart.

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