First penalties from NERC... Self-healing advances... DR wars begin

NERC issues first penalties; expect more compliance products. Welcome to the era of mandatory compliance. NERC has issued its first notices of violations of its reliability standards, complete with penalties for two utilities (Baltimore Gas and Electric and MidAmerican Energy) and a slap on the wrist for nearly three dozen others. Most of the violations related to vegetation management and to failure to maintain adequate documentation.

QuickTake: We continue to assert that NERC’s regulations will drive many Smart Grid and IT purchases over the next few years. Indeed, Hewlett-Packard has already joined a slew of smaller companies in promoting hardware and software optimized for NERC compliance.

NERC press release (PDF)

S&C advances self-healing grid. Two recent developments from Chicago-based S&C Electric are moving the concept of the self-healing grid from a paper theory to on-the-ground reality. The maker of distribution automation hardware and software announced the first U.S. installation of its IntelliRupter PulseCloser. Oncor, the Texas transmission and distribution utility, put up the unit near Dallas. The device makes power restoration safer by “pulsing” the line to check for faults before it closes. In addition, S&C’s TripSaver recloser was chosen for one of this year’s R&D 100 awards. The self-powered, electronically controlled recloser can respond to temporary faults without creating a permanent outage.

QuickTake: Smart meters, demand response and NERC compliance have dominated utility thinking recently. We believe they will turn their attention to distribution automation and self-healing starting in 2009... unless a major outage makes it top of mind even sooner.

PulseCloser installation press release

TripSaver award press release

Telepathx points to an important direction for next-generation Smart Grid devices. Earlier this year, Frost & Sullivan recognized Telepathx with its Asia Pacific Industrial Technologies award. Australia-based Telepathx makes mesh networks and RFID sensors. Radio Frequency Identification Tags are tiny embeddable chips that are best known as a means for retailers to track products. Now vendors are adopting RFID for grid purposes. Telepathx, for instance, uses “self-managing sensors” to monitor cables, transformers and other equipment. Right now those sensors communicate via cellular-equipped relays. Soon, they will talk to smart meters, WiFi access points and BPL access points.

QuickTake: As Telepathx CEO James Eades said in a post to the SGN blog, “it is all about leveraging the infrastructure.” For vendors and utilities alike, winning round two of the Smart Grid fight is about finding clever ways to build on top of the equipment that is being installed in round one.

Technnology overview of Telepathx products

EnergyConnect claims DR leadership in the Northeast; let the DR wars begin. Portland, OR-based EnergyConnect says it processed more than 50% of the PJM demand response (DR) settlements during the first quarter of 2008. EnergyConnect’s FlexConnect programs pay participants to voluntarily reduce electricity usage during peak times. PJM is America’s largest regional transmission organization, operating in 13 mid-Atlantic and mid-West states.

QuickTake: EnergyConnect has been relatively quiet until recently. Now it is beginning to fight for attention with mind-share leaders Comverge and EnerNOC. Earlier this year, parent company Microfield Group sold a small subsidiary and took in venture financing to focus on growing EnergyConnect. We are in the run-up to a DR bubble in the U.S., with participants fighting for market share at all costs, even if it delays profitability. Watch for mergers as another way to get to scale. For instance, ConsumerPowerline recently acquired DR vendor Xtend Energy.

 EnergyConnect press release

Milsoft wins Trinidad and Tobago project; smaller vendors climbing onto Smart Grid bandwagon. The Trinidad Tobago Electricity Commission has selected Milsoft Utility Solutionsto deploy outage management and voice response systems. Trinidad and Tobago is a twin island republic located off the coast of Venezuela. Its Electricity Commission serves more than 384,000 customers. Abilene, TX-based Milsoft is best known for supplying engineering analysis software to coops and municipals. It has recently begun to climb the ranks of outage management suppliers.

QuickTake: This announcement provides reminders of at least two trends. First, many of the best growth opportunities are outside the U.S., where governments can act more quickly than in the U.S., which is bogged down with its quirky regulatory morass. Second, Milsoft used Smart Grid in its headline. Everywhere you look, vendors large and small are making the Smart Grid buzzword a key part of their messaging.

Metering.com article

UTC forms Smart Grid group; AMI and standards first areas of focus. The Utilities Telecom Council has created the Smart Networks Council to help utilities transition to the Smart Grid. Initial priorities are to help members a) select the best advanced metering solutions; b) lobby for favorable regulations and c) coordinate their standards activities.

QuickTake: We have been surprised that the “traditional” utility trade associations have not aggressively pursued a Smart Grid agenda, choosing instead to leave the work to pioneers such as the GridWise Alliance. This move by UTC is further evidence of the mainstreaming of the Smart Grid.

Smart Networks Council Web site

Smart grid research report focuses on environment and BPL. Research and Markets of Dublin, Ireland has released “2008 Global Utilities – Environmental Focus for Smart Grids.” The report discusses trends in broadband over powerline (BPL) and the shift in focus from BPL Internet access for consumers to BPL as the communications platform for the Smart Grid. The report also covers trends in the HomePlug standard for on-premise BPL, and developments in Australia, Latin America and Russia. The PDF version is $895.

QuickTake: Although this bills itself as a Smart Grid report, it is really a BPL report that documents BPL’s role in Smart Grid deployments. On the plus side, it reports on developments all around the world, something that is missing from many reports produced in the U.S.

Summary and ordering page

Wind power study pinpoints transmission bottlenecks. On July 15, Emerging Energy Research released “US Wind Power Markets and Strategies 2008-2020.” The study reveals that cumulative installations grew 45% in 2007 to nearly 17 GW, and projects that number will reach 100 GW by 2020. Utilities are adopting “higher-risk wind procurement strategies” by moving into project development and asset ownership. The biggest challenge to near and long-term growth remains transmission constraints. $3,375.

   QuickTake: For the grid-interested, the chief value of this report may be in its discussion of transmission constraints. We expect transmission bottlenecks to reach crisis status in the next two years as states find themselves unable to meeting ratcheting renewable portfolio standards because they cannot get wind power from where it is made to where it is needed. And remember – wind power doesn’t just require more grid, it requires a smarter grid capable of handling intermittency.

Table of contents and order form (PDF)