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Technologies :
Communications :
News
An announcement today from SmartSynch foretells three important trends:
· The rise of distributed renewables
· The acceptance of outsourced services as a stepping stone
· The arrival of cellular as a contender
I've linked you to the press release for the details. In a nutshell, SmartSynch has been selected by the Tennessee Valley Authority as the smart metering solution for an ambitious new distributed renewables program. Here's what I noticed as I read between the lines:
The Rise of Distributed Renewables
TVA's new program is called Generation Partners. It will be available to customers of any of the 150+ electric power utilities in TVA’s territory – residential customers as well as commercial and industrial customers. Those utilities serve roughly 9,000,000 consumers in seven Southeastern states.
The program provides significant incentives for those consumers to install distributed renewable generation, whether solar PV, wind, or small hydro. TVA will purchase 100% of the energy at the full retail rate, plus a premium of 12 cents/kWh for solar and 3 cents/kWh for other renewables.
From where I sit, this is the most extensive and ambitious renewables program in the country. It should go a long ways towards convincing factories, office parks, and residences to park solar panels on their rooftops, since they are effectively creating a new revenue stream by selling power back to the utility at an above market rate. If successful, look for similar programs soon in other parts of the country.
As if utilities didn't have enough change to manage, now they may soon be grappling with dozens or hundreds of new generation sources pouring intermittent pulses of energy into their system.
Outsourced Services as a Stepping Stone
TVA (and the utilities that join the program) will outsource the metering and data management to SmartSynch. Utilities have traditionally been reluctant to outsource operations, but attitudes seem to be changing. SmartSynch CEO Stephen Johnston tells me his firm now has more than 50 utilities signed up to various outsourced services.
Most of them use it as a stepping stone – as a way to rapidly deploy a technology without the cost and time of setting up an IT infrastructure and training staff. Once a program reaches a certain size, the utility often takes it back inside. In addition to the time and training advantages, many utilities appreciate that outsourced services are typically offered on a fixed fee basis. It's easier for utilities to build a business case and get approval for a pilot if they know exactly how much they will be spending each month.
The Arrival of Cellular
SmartSynch will provide the meters that measure how much power the renewables are producing. The communications take place over a cellular network – predominantly AT&T, though Verizon and Cellular South may also be involved. Using pre-existing cellular networks means that the program can be rolled out virtually anywhere in TVA's territory, whether or not the local utility has a communications infrastructure in place yet.
Although cellular is a popular solution for backhaul, few American utilities use it for the meters themselves, preferring RF mesh networks. Over the last year, however, almost all of the major cellular providers have announced rate plans that (finally) make financial sense for utilities. They've also developed service agreements that prioritize Smart Grid traffic. Meanwhile, technology companies such as SmartSynch have developed more powerful antennas and software systems that give cellular-equipped meters better reception than the typical cell phone.
To me, these developments say that cellular will soon step up to become a bona fide contender in the communications slugfest.
SmartSynch Continues to Step Up
If we continue to read between the lines, we can also spot a lot of good news for SmartSynch, which is one of several venture-backed firms angling to go public within the next 18 months. The firm spent much of 2008 and part of 2009 in lean-and-mean mode as it sought to become cash flow positive. That left it largely on the sidelines just as competitors such as Silver Spring Networks, Trilliant and Tropos were grabbing mind share and thought leadership.
Now the firm is stepping out of its self-imposed quiet period with a series of product and partnering announcements. Not long ago they brought out their GridRouter communications hub, which could be a game changer, especially if other firms private label it for their own substation products.
Today's announcement sets the firm up nicely to showcase its turnkey services and its cellular technology. By dint of its role with TVA, SmartSynch will get to provide technology to dozens of utilities it did not know before. Those utilities include many who have not yet chosen a communications provider and others who have been working with one of SmartSynch's competitors.
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