IDC Energy Insights Predictions for 2012 Utilities Industry

I recently attended IDC Energy Insights Predictions 2012:  Utilities conference call today.  I look forward to the IDC Insights series of conference calls every year as it helps me understand the critical issues and trends that impact Information Technology decisions within a particular industry. 

In this case, the predictions were focused on the Utilities industry with an emphasis on North American issues.  There are other calls coming up that focus on Europe and Asia.   

Leading the conference call was the IDC Energy Insights team of Jill Feblowitz, Jay Holman, Sam Jaffe, Usman Sindhu, Casey Talon and Marcus Torchia

Summary and Key Themes

IDC Energy Insights says in 2012, the industry is entering a ‘post stimulus’ period.  While funding has dried up, there are areas where investment spending is growing, such as Solar PV installations.   Other investment areas include Smart Grid, Smart Buildings, Electric Vehicles, and Energy Storage.

The 2012 predictions list below was sourced from the conference call slides.

  1. Smart Meters. “Smart meters will peak in 2012, propelling demand response, but spending tempered for now”.
  2. Smart Grids. “Distribution automation will lead smart grid control investments with 13% CAGR”
  3. Smart Buildings. “Smart building technology investments will gain more traction with utilities”
  4. Electric Vehicles. “120,000 plug-in electric vehicles will be sold in North America in 2012”
  5. Lithium Batteries. “Lithium-Ion large format batteries will reach $600 per kWh by the end of the year”
  6. Solar PV Installations. “Despite the 1603 Treasury Grant expiring in 2011, PV installations will grow by >25% in 2012”
  7. Commercial PV. “>60 MW of commercial PV installations will incorporate micro-inverters or DC optimizers in 2012”
  8. Security & Risk. “Security and risk will continue to grab decision maker’s attention, leading to increased budgets”
  9. Big Data Analytics. “Utilities will invest in analytics in anticipation of big data”
  10. IT Spending. “IT spending by North American utilities will increase by 4.5% % over the next four years”

For More Information

IBM Relaunches Smarter City Initiative With An Innovative Portal

IBM has relaunched it's Smarter City initiative and the website portal is something you should visit to experience.  It is truly an immersive, interactive experience designed to show how cities all over the world are using advanced technology to help address some of the biggest problems facing our planet.  

 Smarter City Portal
It is a fact…our cities are getting larger and larger.  With that growth comes significant challenges for city leaders.  Increasingly, city operations are being digitized, creating brand new data points.  With the greater digitization of its core systems and the use of advanced analytic capabilities, cities can enhance decision-making and improve urban planning.

The Smarter City portal allows you to explore and experience how Smarter Technology can have an impact on making a city more sustainable, more intelligent, and simply better places to live and work.  At the portal, you have options to learn more about how technology can impact all areas of a Smarter City, including Transportation (all forms of transportation), Public Safety, Communications, Energy & Utilities, Healthcare, Social Services, Education,  Retail, Economic Development and other critical operations that make up a large urban city today. 

I suggest you give it a visit and explore this innovative portal at www.thesmartercity.com

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 Insights: 10 Predictions for the North American Utilities industry

 IDC Energy 2010 PredicitonsIDC Energy Insights held its webinar “Top Ten Predictions for the North American Utilities Industry” today.   Rick Nicholson, Vice President of Research at IDC led the call.

During the call the analysts reviewed the important driving forces impacting impacting technology investment within the Utilities Industry for 2010.   Driving forces include energy efficiency and demand response programs, smart metering and the smart grid, renewable and distributed energy and other relevant technologies.

IDC mentioned that energy usage is expected to rebound in 2010 after a down year in 2009 which had an impact on industry-wide revenues.  Also, investments in cleantech is expected to rebound as access to credit improves in 2010.  A big factor in that will be the American Recovery and Reinvestment Act of 2009.

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

  1. Energy Efficiency and Demand Response:  will continue to be the “first fuel” choice for electric utilities
  2. Renewable Energy:  Renewable capacity additions will exceed natural gas plant additions
  3. Energy Storage:  Utility-scale stationary energy storage will have its coming out party
  4. Intelligent Grid:  North American intelligent grid ICT spending reaches $18 billion by 2013
  5. Electric Vehicles:  First wave of electric vehicles and accompanying charging infrastructure will emerge
  6. Energy Commodity Trading:  Trading of energy commodities requiring IT support will recover and grow
  7. Sustainability:  Traditional generators will focus on managing their portfolio for sustainability
  8. Water Management:  Scarcity of clean water and availability of new technology will awaken the sleeping water market
  9. Smart Cities:   Smart cities will emerge as proving grounds for the intelligent economy
  10. IT Spending:  U.S. utility industry IT spending growth will accelerate dramatically

I remember back in the 90’s this industry was one of the lackluster (perhaps boring?) industries to be involved with from a technology perspective.  Nothing was really happening back then.  Today it is 180 degrees opposite.  There is so much going on right now to bring technology to this industry.  This is one exciting industry today….and I expect it will be that way for another decade or two.

For more information, IDC Insights has a bunch of resources for you.

From old to new, and a smarter planet

via www.youtube.com

Found this interesting video on the IBM developerworks site. The title, "From old to new, and a smarter planet" describes not only the scene we see, but what we don't see.

developerWorks' Scott Laningham is our host for the less than 2 minute video which plays out on the roads of West Texas. He just couldn't pass up the symbolism of the setting — old oil wells rimmed by miles of wind turbines.

This past weekend, I was driving from St. Louis to Chicago and also saw miles and miles of wind turbines off in the distance. To some these are an eyesore, but to me they represent our future.

At the end of the video, Scott makes a plug for the Smarter Planet demo series on developerWorks. www.ibm.com/developerworks/

How Electric Utility Companies Are Adapting to Climate Change

I caught some news that the IBM Electric Utilities team is having a web-launch of an IBM sponsored report that reveals how electric utility companies around the world are adapting to climate change, based on their responses to the Carbon Disclosure Project 2008 questionnaire.   Sounds like an interesting report.  Find out how to attend the web-launch below.

The launch event explores the actions taken by electric utilities to assess and manage the risks brought about by climate change, whilst also identifying the opportunities that a changing climate will have on their business models.   It analyzes the current energy challenges, specific drivers for adaptation and provides senior executive level guidance on the actions needed to adapt and build business resilience to the impacts of climate change.   The report also recognizes that adaptation is an increasingly critical issue for governments, regulators, investors and the financial markets.

This unique event will also give the audience an opportunity to ask key questions to our expert panel. The report will address:

  • The Energy Revolution: this century will see unprecedented urbanization and intense competition for scarce resources, driven by population growth and economic development. A changing climate will exacerbate these challenges.
  • These climate impacts add up to significant changes in the demand for electricity against a backdrop of supply challenges, ageing assets, new technology, prescriptive regulation and impacts on asset performance and efficiency.
  • What will a successful electricity company of the future look like? Companies need to act upon the clear signals that climate change is already underway.
  • Consumer preferences and needs will also change; markets will open up in new locations and for new products and services. Those businesses that do not react fast enough will lose out to their competitors, whilst those that recognize the opportunities will gain competitive advantage and become electricity sector leaders.

As each year goes by and action is delayed, the direct and indirect costs arising from changing climatic conditions will increase, threatening the sustainability of those companies that are slow to react.

THE LAUNCH
: At the launch event, the authors of the report will highlight the key points from the report and in the final session will form a panel to take questions from the audience.

  • Welcome address – Graham Butler, Executive Partner, Energy and Utilities Industry Leader, IBM UKISA
  • CDP context – James Howard, Project Director, The Carbon Disclosure Project
  • Introduction to the report – Michael Valocchi, Partner, Global Energy & Utilities Industry Leader, IBM
  • Building business resilience – John Firth, Chief Executive Officer, Acclimatise
  • IBM viewpoint – Graham Butler
  • Question and Answer session – Panel

TO REGISTER :  You can register to attend the launch by clicking at this link
http://w.on24.com/r.htm?e=155271&s=1&k=C39B0A3708CFB38958232062CDA14807
Those not attending should register to access the replay easily.

Thoughts on Water Management

Though it's a worldwide entity, water is treated as a regional issue.  There is no global market and very little international  exchange.

Addressing environmental challenges will require public-private partnerships.  Consider water, a poorly understood and often wasted and mismanaged resource.  Our global agriculture system wastes an estimated 60% of the 2,500 trillion liters it uses each year. Municipalities lose as much as 50% of their water supply through leaky infrastructure.  And there are nearly 53,000 different water agencies in the U.S. alone, each managing a short stretch of river or a handful of reservoirs.  Despite the fact that water is a shared resource, there’s no coordination of data among these agencies and no holistic view of the entire water ecosystem, or its impact of human activity.  – Source:  Thoughts on Water Management from the Western Governor’s Association.WLDRN069

Water flows through everything – from the air, the land and our own bodies to the global economy.  In fact, every time a good or service is bought or sold, there is a virtual exchange of water.  It takes 700 gallons of water to make a cotton T-shirt; 2,000 gallons to make one gallon of milk; and 10,500 gallons to make a car.  Though the total amount of water on this planet has never changed, the nature of that water is changing.  Everything from where rain falls to the chemical makeup of the oceans is in flux.   And these changes are forcing us to ask some very difficult questions about how and where we live and do business.

As water management issues continue to mount and costs continue to increase, information technology and collaborative innovation will play an instrumental role helping communities, businesses, and governments deal with the tremendous complexity ahead. The combination of volumes of data, the need for mining across different and new data types and the demand for real-time responses requires a new kind of water management intelligence and models that encompasses scalable, statistical algorithms, and massively parallel approaches.

Some links for those of you interested in water management