Engaging consumers for a low-carbon future: A comparative study on the diffusion of smart grids in Japan and China

Climate change concerns, rising energy costs, and the risks of nuclear power have heightened the urgency of a transition to a low-carbon future. Smart grids represent one of the most revolutionary developments in energy management systems. They are increasingly being adopted and implemented in developed and developing economies (e.g. the US, South Korea, Japan, and China). By applying advanced information technology to modernise existing electricity networks, smart grids provide opportunities to integrate more decentralised electricity supply systems (e.g. renewable energy), and allow electricity consumers to substantially reduce energy consumption.

Household consumers and demand-side energy management, although capable of making a significant contribution to the transition to a low-carbon future, have traditionally been overlooked in energy management systems while policy makers have given overriding attention to nuclear and other supply-side measures. One of the greatest challenges for smart grid diffusion is therefore the creation of a favourable environment for consumer engagement. Although the technological dimensions of smart grids are relatively well understood, institutional, market, and social barriers that include disincentives, the absence of financially viable business models, and public opposition also need to be overcome to foster engagement.

This project aims to identify the essential elements of and the barriers to effective consumer engagement in smart grid diffusion from an Asian perspective. This investigation will focus on three policy themes that may foster consumer engagement: pricing (how to use market signals to incentivise consumers), business models (how to develop business strategies to achieve scale, cost effectiveness, and risk sharing), and consumer education (e.g. how to manage public acceptability through providing information, facilitating a better understanding of the trade-offs involved, and customising programmes to experience the benefits of smart grid systems). We will give particular attention to how and to what extent government action (e.g. regulating electricity markets) and market mechanisms (e.g. creating pricing signals) interact and complement each other in ways that would encourage consumer engagement.

This study will be a comparative case study of Japan and China. The geographical focus of this project is unique and increasingly important. Asian countries have played a pivotal role in global climate change impacts and responses. Japan and China have been pioneering the green-technology movement as an alternative approach to low-carbon growth. They also share similarities such as the presence of partial electricity market reforms. However, Japan’s community-oriented approach and China’s vision for super-grids show that these countries are experiencing different development pathways for smart grids.

This is an innovative project which will integrate qualitative (in-depth interviews with key stakeholder groups) and quantitative methodologies (Deliberative Pollings (DP) - an innovative public opinion research method which can strengthen conventional polls by integrating deliberative practices). We will look at key social science theories concerning energy governance and technological innovation, and develop an integrated analytical framework.

Our output will include theoretical development with regard to energy governance for technological innovation. We will also offer policy recommendations and pragmatic guidelines on developing consumer engagement tactics for governments and businesses in the region. This project will build on the PI’s existing work, and will develop an international and interdisciplinary research partnership that will sustain the team’s high-impact long-term research in this emerging field.