Standards are a disruptive force that can turn an industry upside down. We saw this 20 years ago when the IBM PC standard turned former market leaders (such as the Radio Shack TRS-80) into market losers. And then when the VHS vs. Betamax standards struggle stranded millions of early Betamax purchasers. And then when Postscript arrived for desktop publishing. And again when Windows arrived for desktop computing.
to generation upstream, including intermittent renewables. And to transmission operators and power marketers. And to substations and sensors along the way. And to control rooms at distribution utilities. And to meters everywhere. And to devices inside factories, offices and homes. And soon to millions of electric vehicles.
Our industry will soon be faced with dozens of new specifications. And those standards will show up much faster than normal. As Earth2Tech’s Katie Fehrenbacher puts it: “Imagine a standards-making process that’s 10 times more complex than … the computer industry, with a deadline for delivering those game-changing decisions of mere months.”
Like any standards-making process that could deliver riches to some companies while leaving others out in the cold, expect the smart grid standards debate to become very heated. Utilities, which buy network gear in 10- to 20-year deployment life cycles, want open standards so that they won’t get locked into buying from any one equipment provider. In addition, if they’re planning on upgrading their hardware after a decade, they won’t want to get stuck with non-standards-based hardware that can become quickly outdated or will need to be entirely replaced. Proprietary smart grid gear makes the vendors the most money, however, so expect companies to try to wedge their proprietary technology into the standards-making process.
Establishing standards for the smart grid might be an even bigger challenge than doing so for the computing industry, but there are valuable lessons to be learned from that process, notably that open standards are the best thing for innovation. Just look at the cable industry back in the mid-1990s, says smart grid analyst Jesse Berst. Cisco came in and helped establish CableLabs and the DOCSIS standard, and “companies that did not adapt and adopt quickly — companies that clung too long to the proprietary approach — quickly lost share and many of them disappeared. There is a similar come-to-Jesus moment pending in the smart grid and smart metering space,” he said.
There’s the risk that the time crunch and complexity of the smart grid standards process could result in wrong choices. More likely, given the condensed timeline, is that standards bodies could set such broad guidelines that they’ll have little teeth. That’s probably a good thing, as companies, utilities and policymakers are just starting to discover what the real value of the smart grid is and will need market competition (not policy, standards or technology) to help shape its future.