A Primer on the Smart Grid and Intelligent Utility Network Trend

Smart Grid2 In a world where increased focus is on reducing CO2 emissions, governments and energy & utility companies are looking for ways to modernize and transform their utility infrastructure in order to improve energy efficiency and reliability. 

For developed economies, the traditional way power has been generated is based on a central generation model with one-way power and information flow from large, often distant generating stations, via transmission and distribution lines to end consumers.   Most of these generation systems contain an aging infrastructure with some equipment dating back 60 years.  This traditional infrastructure lacks sufficient technology and communications at the distribution and end-use level that would enable grid automation & monitoring capabilities.   The model has been a push model, meaning that there is little to no automated information coming back to the central sites from those that use the power.  So if the user suddenly has no power, the only way the utility company knows about it is if they get a call from the users.  Furthermore, the user has very little information available to help them understand how much power they are using, when they are using it, and what they are using it for.

The Smart Grid (also called Intelligent Utility Network) technology is an important emerging trend within the Energy and Utility Industry.  As consumers, we are increasingly aware that the way we consume and save energy can be improved.  Within the energy and utility industry, energy efficiency is also on the minds of the industry leaders.  And our governments are all interested in finding new sources of energy.   By embedding technology into the electrical distribution network, a Smart Grid can transform the way power is distributed and used.  Intelligence throughout the grid can dramatically reduce outages and faults, improve responsiveness, handle current and future demand, increase efficiency and manage costs.

The following video from IEEE will provide some additional introduction into the concept of the Smart Grid.

Produced by IEEE and ScienCentral, Inc.

A Smart Grid can present many opportunities for consumers, businesses, and utilities to benefit from the efficient distribution of energy and availability of intelligent equipment and devices.  For governments, it offers significant opportunities to wisely manage a country’s fuel resources by potentially reducing the need for additional generation sources, better integrating renewable energy sources into the grid’s operations, reducing outages and cascading problems, and enabling users of power to better manage their energy consumption.

The Smart Grid technology will enable energy customers to

  • manage electricity consumption to meet specific household/business goals such as cost, availability, and environmental impact
  • seek energy providers, information, and technologies that help them meet their goals
  • do business with utility companies who communicate a set of energy-related values consistent with their own
  • seek convenient and more personalized ways to interact with their utility to negotiate customized solutions to allow them to meet their needs
  • act on their own wants and needs where regulatory representation does not provide results satisfying these specific needs, primarily through execution of alternative solutions (e.g., self-generation)

So what exactly are the characteristics of a Smart Grid?  The US Department of Energy has characterized a smart grid as having the following attributes:

  • Self-healing from power disturbance events
  • Enabling active participation by consumers in demand response
  • Operating resiliently against physical and cyber attack
  • Providing power quality for 21st century needs
  • Accommodating all generation and storage options
  • Enabling new products, services, and markets
  • Optimizing assets and operating efficiently

The consumer of power from a future Smart Grid will see many differences as a result of adding intelligence into the network.   Some examples are:

  • Smart electricity meters, water meters, and gas meters that collect real-time data on utility usage.
  • Distributed generation, such as solar panels and other micro generation.  These new generators could be located at the home, in the neighborhood, or in the local community.
  • Dedicated energy display units and smart thermostats that provide the user with feedback on energy usage in real-time.
  • Smart appliances with connectivity to the intelligent utility network via the in home meters and display units.
  • Plug-in vehicles as a both source and consumer of energy.  The vehicles, when plugged in would provide information on energy usage.
  • Linked connection to the in-home network and home PCs for further analysis of all the information collected.

The Smart Grid transformation is much more than installation of new technology in a piece-part fashion.  The call for the transformation to a Smart Grid impacts every part of the utility infrastructure including generation, distribution, and usage.  It will be a disruptive change, but a change that will provide huge rewards for the future.  For the utility industry itself, changes needs to happen in four key areas:

  1. Strategy.  We need a  fundamental rethink of business strategy and industry business models across the board.
  2. Collaboration.  Utility providers will need to develop a much closer collaboration with customers, regulators, financers, researchers, technology and service vendors, and other stakeholders than ever before.
  3. People.  The change will be very disruptive to utility companies.  They will need a renewed focus on staff, their roles, competencies, compensation, performance and structure.
  4. Process.  Utility providers will need to re-architect business processes and applications.

There is much work to be done to transform old utility infrastructures to a Smart Grid system.  The transformation will not happen overnight, but could happen over a series of decades.  When complete, countries that transform their utilities infrastructure to an Intelligent Utility Network will have a modern network of sensor-based interactive technologies that will give utilities and consumers unprecedented control over managing energy use, improving energy grid operations, and significantly reducing energy costs. 

There is a ton of information available on Smart Grids.  Here are a few example resources for you to explore….

For other “Primers” here on HorizonWatching, check out http://horizonwatching.typepad.com/horizonwatching/primer/

IDC: 2010 Predictions for Infrastructure Software

IDC - System Infrastructure IDC’s System Infrastructure analyst team held its annual predictions call for System Infrastructure 2010 today.  During the call, I heard IDC’s Top 10 predictions for the worldwide system infrastructure software market (system software, virtualization, and system management software ) in 2010.  

Here’s my summary of the top ten predictions reviewed on the call:

  1. Cloud Computing:  IDC says that the hype around Cloud Computing will calm down as management tools start maturing
  2. ROI Drives Decisions:  In 2010, short-term ROI will continue to make or break system infrastructure software purchasing and investment decisions.
  3. Windows 7 Is A Key Transition Point:  IDC expects that the transition to Windows 7 will mark a sobering transition point where traditional PCs begin to loose the position of the primary access device.
  4. Say Goodbye To Unix:  Unix will become a permanent casualty of the economic downturn of 2009
  5. Client Virtualization:  IDC says that the client virtualization trend will have a breakout year, thanks to Microsoft
  6. Converged Infrastructure Platforms:  IDC says that the hypervisor wars will end in 2010 and converged (cloud) infrastructure platforms will take off
  7. End-to-End Application Performance and Visibility:   IDC expects that these objectives will become a major priority across public and private infrastructure and services
  8. License Management:  IDC says that in 2010 vendors will exploit weak software license management environments
  9. Availability Software:  Will increasingly adapt to a virtualized x86 server world
  10. Sustainability and Power Management:   Will become critical green IT differentiators across the system infrastructure software landscape

So there is a ton of activity going on in the software infrastructure marketplace.  Cloud and Virtualization are kind of the megatrends. 

I joined IBM back in the days when the Operating System was a major control point.  All vendors had a closed and proprietary OS.  Those days are gone.  Competitive differentiation in the future will be based more on the flexibility and functionality of the administrative management capabilities, how well the infrastructure platforms deliver operational savings and operational flexibility, and, I believe, how well these platforms enable collaboration.

For more information, you can register and view a recording of the webinar IDC Predictions 2010: Infrastructure Software where you can download the slides.  For even more detail, you can access the IDC document: Worldwide System Infrastructure Software 2010 Top 10 Predictions

House Passes Wind Energy Research and Development Act of 2009

Wind energy currently makes up 2% of the total energy generation in the United States, but there is the potential for it to provide up to 20% with the right improvements in turbine technology, forecasting, energy storage, and expansion of transmission systems.

So it is great to see that the U.S. lawmakers are starting to focus on this area.  Yesterday, the U.S. House of Representatives passed the Wind Energy Research and Development Act of 2009.  The bill, if eventually signed into law, would authorize a comprehensive program to improve the efficiency, reliability and cost effectiveness of domestic wind energy systems.

The bill would authorize the Secretary of Energy to carry out a program of research and development to improve the energy efficiency, reliability, and capacity of wind turbines; optimize the design and adaptability of wind energy systems; and reduce the cost of construction, generation, and maintenance of wind energy systems.

Specifically, this program would include:

  • Examination of new materials and designs to make larger, lighter, less expensive, and more reliable motor blades
  • Technologies to improve gearbox performance and reliability
  • Technologies to improve transmission from remotely located renewable resource rich areas
  • Low-cost transportable towers greater than 100 meters in height
  • Advanced computational modeling tools, control systems, blade sensors and advanced generators
  • Wind technology for offshore applications
  • Automation, materials, and assembly of large-scale components
  • Methods to assess and mitigate the effects of wind energy systems on radar and electromagnetic fields
  • Wind turbines with a maximum electric power production capacity of 100 kilowatts or less

The bill authorizes $200 million dollars per year from 2010 through 2014 for these programs.

Let’s hope this bill, or something like it, makes it way into law.

For more information

Green Recovery?

 

A couple weeks ago, I discussed some trends in VC investments regarding Cleantech.  For the G20 summit early April, the Postdam Institute for Climate Impact Research and the Grantham Institute on Climate Change and the Environment published a very interesting document about the potential for a green recovery from the current recession.  (Towards a global Green Recovery) 


The report shows that “Public spending aimed at stimulating private investments that help reducing greenhouse gas emissions can perform very well against criteria for an effective stimulus while providing the additional benefits of lower energy costs and increased energy security.  By focusing on correcting well known market failures in energy use and R&D, it can avoid crowding out private sector activity.  In fact, green recovery programs have the potential to stimulate private investment in low carbon technologies, thereby developing new opportunities for employment, innovation, and wealth creation.”  The report also highlighted key measures that the G20 could take, including physical infrastructure upgrades, energy efficiency increases, and potential flagship project investments. 


So what happened?  The G20 communique included $1.1B in plan pledges – $750B for the IMF, $250B for trade and financing – as well as motions for stricter regulations on hedge funds and banks.  While many groups are arguing that a larger GDP share should go towards green initiatives, others are satisfied that those notions have become mainstream.  Personally, I think that the economic situation is such that priorities will focus on the fastest way to accelerate the recovery, possibly at the expense, at least initially, of green.