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Cisco launches router , switch for smart grids

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The networking giant plans to release two pieces of equipment–a router and a network switch–aimed at helping utilities create better communication systems designed not only to help automate electrical substations, but someday connect “smart meters” in homes and variable sources … Continue reading

Smart Grid will be bigger than the Internet?

There a number of strong parallels between the arc of information technology and the current trajectory of the smart grid.  While cause and effect are debatable, the fact is that a lot of the people driving changes in the clean tech world have IT backgrounds. It may be true that to the man with a hammer, the entire world looks like a nail.

Disclosure: This is what we are trying to do at EcoFactor. We use the Internet to help consumers automatically manage their home energy use through a SaaS (software as a service) platform.  Our industry experience has given us a front-row seat for both the historical revolution in IT and the impending one in the smart grid, and we see some specific parallels between the two. We’re not alone, but many trends in clean tech really do look a lot like the IT revolution.

Trend #1: The Internet changes everything

Remember CompuServe? Prodigy? AOL? At the dawn of what became the Internet, their “walled gardens” defined the online experience for millions of users. Today, the idea that your service provider told you what you could do with your connection seems quaint.

We see a number of efforts now to fence in the smart grid — to define and limit what can be done and who can do it. But just as the World Wide Web made such finger-in-the-dyke efforts futile last time, the Internet ‘s furious pace of innovation will again overwhelm those kinds of defenses.

The smart grid will enable automated energy management, automated dynamic price response, and a host of innovations we can’t yet imagine. It will reward companies that find innovative ways of leveraging diverse data sources, devices and technologies. And if those applications aren’t welcomed inside the walled gardens, the applications will simply route around them.

Ironically, these Internet-based products won’t just benefit consumers, they will benefit utilities, energy retailers, and home service providers, too. Terabytes of new data will offer grid managers greatly increased visibility into demand — and not just yesterday’s, but tomorrow’s — all the way down to the individual home level.

Trend #2: Consumer value and ease-of-use will drive the market

At the beginning of the PC revolution, early adopters bought Osbornes and KayPros and Apple IIs because they were innovative and cool. But those users had to put up with awkward interfaces and the need for considerable effort and expertise to keep them running. As long as even basic word processing required a mastery of command line syntax, there could be no mainstream consumer adoption of PCs. Getting past that barrier required both improved technology and a shift in philosophy: market growth means insulating consumers from the bits and bytes. It also means offering new applications (like browsers) that effectively leverage the connected world.

Many consumer-facing smart grid offerings today are, in effect, all about the bits and bytes. Home energy dashboards and reporting tools ask customers to know, care about and pay attention to the details of their energy consumption, but provide no easy way for consumers to take action and benefit from them. DR solutions ask consumers to accept discomfort in order to address grid-level problems like peak demand.

Today, new solutions allow consumers to maintain complete control over the temperature in their homes and achieve significant cost savings without ever thinking about therms or kilowatt hours or setback schedules — from any device, or automatically, and with no device at all. Just as the iPod and iTunes let users focus on the music, the winning smart grid applications will let users focus on the results, not the process.

Trend #3: The entrance of big tech speeds market maturation

Most early PC makers — Kaypro, Osborne, Apple — were just PC makers. As long as it looked like a not-ready-for-prime-time niche market, the giants in adjacent industries stayed on the sidelines. Just as IBM’s entrance into the PC market took that industry to the next phase of its evolution, today’s IT giants like Microsoft, Google, and Cisco are indicating their own perception that the smart grid market is ready to sustain the behemoths. In a sense, they have brought us to the end of the beginning of the smart grid.

As with the PC revolution, the presence of these blue chip companies legitimizes the industry for potential customers, and that legitimacy benefits not just the blue chip players, but competitors large and small. That said, the fact that the grid gains from Google’s entrance does not necessarily mean that the opposite is also true.  Mainframe giant IBM could not translate that strength into long-term dominance of the PC market; there is no guarantee that the IT giants will dominate the smart grid. But their presence will almost certainly propel it forward.

What does it all mean?

The Internet, the growing importance of the user experience, and the entrance of large tech companies should all be seen as good omens for the future of the smart grid.  These trends will lead to better products and services, which will in turn drive consumer adoption. And consumer adoption will be the key to fulfilling the environmental and economic potential of the smart grid.

The other face of Smart Grid

The “smart” electric grid may be just a little too smart. Once a smart meter is attached to a home, it can gather a lot more data than just how much electricity a family uses.

It can tell how many people live in the house, when they get up, when they go to sleep and when they aren’t home.

It can tell how many showers they take and loads of laundry they do. How often they use the microwave. How much television they watch and what kind of TV they watch it on.

Almost 200,000 smart meters are now being installed between Fort Collins and Pueblo, and across the country 52 million smart meters will be installed by 2015, according to a Federal Energy Regulatory Commission estimate.

“This is technology that can pierce the blinds,” said Elias Quinn, author of a smart grid privacy study for the Colorado Public Utilities Commission.

“Insufficient oversight could lead to an unprecedented invasion of consumer privacy,” Quinn warned in his report to the PUC.

Law enforcement, government agencies and corporations, such as Microsoft and Google, already are eyeing all that data.

The transformation of the electric grid into a smart, sophisticated two-way energy and communication system is seen as a way to better manage power and improve efficiency.

The federal government has put up $3.4 billion to help speed smart-grid development.

The technology, however, poses new questions for consumer and privacy advocates, state regulators and federal officials.

How do you protect the information? Who should have access, and what happens if it falls into the wrong hands?

“Privacy and cybersecurity are among the greatest challenges in implementing the smart grid,” said Nick Sinai, energy and environment director at the Federal Communications Commission.

Tackling privacy issues

Federal agencies and some states — including Colorado and California — are now moving to deal with privacy and security risks posed by the smart grid.

The Colorado PUC opened a docket in August to gather comments on whether the state rules governing privacy are sufficient.

The commission is reviewing the testimony to decide whether further action is necessary, said PUC spokesman Terry Bote.

New rules are needed, said Bill Levis, director of the Colorado Office of Consumer Counsel.

“The Fourth Amendment guards against unreasonable search,” Levis said. “. . . But I don’t think the founding fathers could ever have thought of this kind of stuff.”

Sinai said one lesson from the Internet is that it is cheaper and more effective to build in privacy and security protections at the start.

In the meantime, utilities continue to install smart meters. Xcel is installing 23,000 smart meters in Boulder as part of its SmartGridCity pilot, according to company officials.

By the end of this year, all 96,000 Colorado homes and businesses served by Black Hills Energy will have smart meters, with the help of a $6.1 million federal grant.

Fort Collins has plans to install 79,000 smart meters with the help of $18.1 million in federal funds.

Colorado utilities, executives say, have been collecting and protecting customer data for years.

“The level of data we receive with the smart grid may change, but the privacy principle remains very much the same — specific data stays between us and the customer,” said Megan Hertzler, director of data privacy for Xcel Energy.

Still, Xcel is “getting a lot more requests for customer usage information now that it is seen as more desirable,” Hertzler said.

Most of the inquiries are from companies that want the information for marketing. Xcel has not released any of the data, executives said, and declined to name the companies making the requests.

The key differences between the meter on the side of most houses now and the smart meter deal with time and communication.

Meters are currently read once a month; smart meters take readings every 15 minutes. Future models may take readings every six to eight seconds.

And all that information doesn’t wait for a meter reader. It is instantaneously communicated to the utility by fiber-optic cable, broadband or Wi-Fi.