The American Recovery and Reinvestment Act (ARRA) just loves the smart grid. Having already doled out $3.4 billion in investment grants for technology development last month, U.S. Energy Secretary Steven Chu just added another $620 million for 32 smart grid projects.
This should be taken as great news for the smart grid industry as a whole, and for all those looking to the smart grid as fertile ground for deployment of communications technologies, network security solutions, next-generation batteries, and a whole raft of new intelligent energy applications floating on top of this new infrastructure.
This latest round, bringing the total smart grid stimulus to $4 billion this year, puts its focus on projects, rather than point technologies, and gives the whole industry a needed boost toward demonstrating that the smart grid is a real infrastructure that can modernize our aging electricity grid.
Instead of just tech companies and startups, now the big utilities are “stimulated” as well: ConEd will test interoperability and security in a smart grid in New York and New Jersey; Southern California Edison will test lithium-ion batteries for storage of wind power; PG&E will try out compressed air energy storage in a “saline porous rock formation located near Bakersfield, CA”; and Kansas City Power & Light will demo an end-to-end smart grid with “in-home customer systems and digital technologies, and innovative rate structures.” Combined, all these beneficiaries of this latest stimulus are expected to contribute $1 billion of their own private capital to bring these projects forward.
Within this round of stimulus, the variety shows just how much ground there is to cover. Half of the projects focus on energy management, harnessing sensors and software to monitor and control energy delivery and usage. This sets the stage for consumers, not just big industry, to start monitoring their energy usage in real time.
This is where Internet companies jump to attention. Google (Nasdaq: GOOG) is stepping into the fray with PowerMeter, an app that takes data from a Powermeter-enabled smart meter and displays it on a Webpage or iGoogle.
Pure-play companies like Tendril Networks , Gridpoint Systems Inc. , Control4, and others are attacking this space and will play within the utility grid, or inside the consumer's home or both, making energy consumption a real-time interaction.
The other half of the projects focus on energy storage, which is often overlooked but immensely important in moving utilities away from coal and fossil fuels. Because renewable energy sources like wind and solar don’t reliably generate power on demand or during peak usage times, their value can be greatly increased if their output can be stored and used when needed most.
There is no clear technology leader in the utility-scale storage market today, so it’s critical that utilities spend the time testing all the options, from batteries to compressed air to large-scale rechargeable flow-batteries.
While the smart grid has conceptually been around for at least 20 years, if not longer, depending on your definition, it plodded along because utilities never really had the proper incentives to actually sell less power to their customers or invest in modernization that offered difficult-to-quantify benefits of efficient operation or brownout reduction.
It’s a new world now, and the stars have aligned for the smart grid: Blackouts and brownouts have become a major public safety issue; climate change has forced policy makers to look hard at fossil-fueled furnaces within most utilities and mandate adoption of renewable energy; and technology has matured enough to offer utilities smart grid solutions that don’t cost a fortune and have at least a chance at interoperability and security.
Four billion dollars may sound like a lot of money, but when you consider the electricity grid is more ubiquitous than the telephone network and as digital as a rotary phone, then you see the opportunities ahead for companies offering solutions to what is essentially a whole new 'Net.
Fundamentally there are two very telling things about security. First is that in the article itself, I have to assume that if Google is creating an application to make checking smart grid meters through a web app available, then there is connectivity to the Internet. That is not very comforting.
Then there is the ineptness demonstrated by Scott's comment, saying that NIST is now working on security standards. Given that there is about $5B invested in implementing the smart grid, with no standards in place, I have little confidence in the security of the smart grid.
Great post, Scott. Carol's observations are entirely correct. The legacy power systems only carry what they can carry. Smart Grid should level off the spikes over time, keeping the black and brownouts to a distant memory, we hope.
Maybe this will give the power companies time to convince the Federal Government for funds to rebuild and refurbish their transmission systems. Ultimately, that must happen, too. Bobby Vassallo http://CityWirelessConsulting.com
There have been a few examples of this starting to happen in other countries and in limited areas in the US, and the continually falling price of solar power will make distributed generation even easier to deploy quickly in states that encourage it with subsidies. I think the big issue will be the pace at which this transformation can happen. The telecom network moved very quickly because of immediate threats of competition and the emergence of new apps to drive new revenue streams. The utilities don't have much of either, and instead still live a highly regulated environment that will encourage this, but not force it to happen in a short period of time. The only real new customer-facing "apps" to speak of here are electric vehicles and home energy management, both of which won't happen nearly as fast as broadband Internet did, but they are real and will eventually keep pressuring the utilities to move beyond talking to really deploying.
Smart Grid implementation will have the following constraints
1. The grid can't supply more power than what has been supplied to it.
2. The utilities still use big centralized power plants for densely populated areas, making it necessary to route the electricity through numerous substations, transformers and transmission lines.
3. Once the electricity reaches the substation—many steps before its final destination—the utility, many times, can no longer track or monitor it.
In the case of a problem, the utility can not pin point the problem until people start calling to complain.
Instead of building new power plants to meet higher demand, the smart grid will work to decrease demand.
Smart Grid Technologies work on both demand and supply.
On the demand side, there are companies such as Comverge (NASDAQ: COM), EnerNoc (NASDAQ: ENOC) and Echelon (NASDAQ: ELON) working to make devices that make smart thermostats and meters. Companies sign contracts with the utilities and are paid on how much they reduce demand.
On the supply side, there are companies like Fat Spaniel, GridPoint and PowerSecure International (NASDAQ: POWR) that work on remotely monitoring and diagnosing control systems that eliminate the need to send out trucks, provide early warning alerts that sign problems, and optimize performance.
My take on this is that we will start to see a more decentralized power system, maybe even a more peer-to-peer power system -- kind of an Energy 2.0 where collaborative networks will work to manage power.
Yes, that's fodder for a whole other post. The standards issue with smart grid is huge, and very important. And utilities by and large believe it's worth the time to get it right. Power is more critical than communications, so you can just rush out a few standards and let the market decide. There are standards for communications among smart meters and network nodes that can be driven by suppliers and developed outside of NIST, there is interop specs being worked out at EPRI and even CableLabs.
Another key point: NIST has created a roadmap and timeline for smart grid standardization that is two years, much faster than average. More here: http://www.greentechmedia.com/articles/read/smart-grid-interoperability-panel-who-to-call/
"A mountain of standardization work currently underway at NIST" -- now THAT's disheartening. Government plus standardization equals a snail's pace. Multiply for scaleability, and... sigh.
Scott, do you think equipment suppliers and/or utilities will take matters into their own hands to create industry standards ahead of NIST?
Yes, security is a critical aspect of the smart grid development, and even though most utilities are looking to build communications infrastructure that is separate from the Internet infrastructure, the threat of hacking is still very real, as they will use much of the same gear as any communications network would use, with a mix of wireless and terrestrial broadband, and in many cases IP. There is a mountain of standardization work currently underway now at NIST to enable a more interoperable and secure smart grid. It will take some time, for sure.
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It may seem a stretch to consider today, but car companies and utilities may have more to do with the direction of Internet technology than AT&T Inc. (NYSE: T) or Verizon Communications Inc. (NYSE: VZ).
I talked a while ago about the elusiveness of the “ Killer Amp ,” -- or the killer app that would halt climate change -- and ended, perhaps in a cop-out. I concluded by saying there isn’t one for the greentech industry; only the White House and Congress have the power to truly invigorate this market through policy, not a compelling new application at the consumer end. But maybe I was going about this the wrong way.
In the new “greentech” industry, folks are starting to talk about finding the killer app that would halt climate change. As much as we’d want it to, the market economy really doesn’t have the right ingredients to move the needle on climate change to the extent advocated by scientists.
Vinod Khosla, who is widely considered the top venture capitalist today (or ever?), made his fortunes anticipating the big moves in computing (Sun Microsystems), networking (Cerent, Juniper Networks), and plenty of others during his tenure at Kleiner Perkins Caufield & Byers . And yet, talk to him today and you rarely hear a word about the Internet. Instead, he talks about climate change, biofuels, solar power, and clean coal.
New York's Metropolitan Transit Authority is conducting a pilot test of digital kiosks to guide subway users to where they want to go more efficiently and at lower cost.
The whole Amazon.reader debate is a double-stupid. It's stupid to think that there's any e-book buyer who doesn't know Amazon's URL, and it was stupider to let ICANN launch the whole free-form TLD initiative to start with.
While NFC's original goal was to enhance mobile commerce applications, it is finding its way into a number of other uses, which is creating both opportunity as well as challenges for IT departments.
Enterprises would like to move to cloud computing but are hesitant because they are concerned about providers’ ability to secure company data. Here are some tips that help to ensure that if breaches occur, the business is not left holding the bag.
Edmunds separates customers into segments based on the info it collects on its site and from partners, and uses that to push out custom content, said Brian Baron, director of business analytics for Edmunds.com, at Predictive Analytics Innovation Summit.
The automotive website uses propensity modeling to target ads and customer registration forms, said Brian Baron, director of business analytics for Edmunds.com, at Predictive Analytics Innovation Summit.
Subsidized handsets, rather than locked handsets, should be the focus of regulators. We're not getting good deals, not fostering innovation, and weakening our power as buyers.
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