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Smart Grid components market will jump to $40B by 2014... IBM and partners propose standard Smart Grid framework... Growing cry for policy overhaul... By SGN Staff Mar 31, 2009 - 3:25:36 PM
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Smart Grid components market will jump to $40B by 2014. Wellesley, MA-based BCC Research says the U.S. market for Smart Grid “enabling technologies” was $17.3B in 2008. Its new $4,850 report claims the sector will grow at a compound annual growth rate (CAGR) of 15.3%, increasing to $39.4 billion in 2014. BCC’s definition of “enabling technologies” includes communications; sensing, measurement and control; distributed generation; and distributed storage. Meanwhile, Morgan Stanley Research has issued a private report to its clients sizing the Smart Grid market at $20B in 2008, growing to $40B by 2013 and $100B by 2030. Morgan Stanley says the sector is composed of advanced metering infrastructure; demand response; and transmission and distribution automation. Quick Take: The problem with comparing market forecasts is that every firm has a different definition of the market. For a look at the SGN definition, click the link below and scroll to the bottom.
SGN article on defining the Smart Grid
IBM and partners propose standard Smart Grid framework. Since 2007, we’ve been talking about the need for a simple roadmap to guide utilities along the path to a Smart Grid. For at least as long, IBM has been working on a framework tool to play that role in consultation with more than 40 utilities worldwide. Now IBM is donating that tool over to the Carnegie Mellon Software Engineering Institute (SEI) and putting it into the public domain. The model "creates a road map of activities, investments, and best practices that leads to creating a smart grid," said SEI CEO Paul Nielsen. The Software Engineering Institute at Carnegie Mellon SGN article on the need for a roadmap
Growing cry for policy overhaul. More and more Smart Grid observers are calling for a major policy overhaul. Investor Tom Konrad says regulated utilities have an “incentive to be dumb” – to use as little brainpower as possible (for which they do not earn a return) and as much capital investment as possible. (His opinion piece in Seeking Alpha also sheds some light on last year’s wind-related grid problems in Texas.) Meanwhile, Forbes blogger Smarana Mitra says Smart Grid companies are all going to “bump up against this one critical resistance factor.” She wants a national incentive structure for utilities so they make as much money promoting demand-response and energy conservation as they do building power plants and selling electricity. Quick Take: This is not an indictment of utilities, who are playing by the rules. It is a realization that those rules – created 80-100 years ago against the backdrop of the Depression and the need to electrify all of America – are no longer appropriate.
Tom Konrad’s article at Seeking Alpha Sramana Mitra’s article at Forbes.com
Crucial argument under way on how to value demand response. Those of you with economics and finance backgrounds may want to monitor the ongoing discussion of how to value demand response. One concept is to compare it to supply-side options. From there, however, things get complex and contentious. Some regulatory bodies are arguing that demand-side reductions can’t really be compared to supply options. Even when there is agreement on that front, you must decide which kinds of supply and then how to value the demand-side benefits. Writing at RiskCenter.com, George Campbell warns that “common DR product definitions and their valuation methods have yet to be completed.” Quick Take: As DR takes center stage, utilities and regulators must agree on how to value it and how to account for it in rate cases. Unless we gain some clarity and consensus, DR’s progress could be stalled.
George Campbell’s RiskCenter article
Smart Grid experts convene next week. Leading lights in the fields of energy efficiency and Smart Grid will be presenting ideas and developing recommendations at the National Smart Grid Conference to be held April 6 and 7 at the Spokane Convention Center in Washington state. Speakers include U.S. Senator Maria Cantwell from Washington, Commissioner Phil Moeller from the Federal Energy Regulatory Commission, Steve Wright from the Bonneville Power Administration. SGN Founding Editor Jesse Berst will be a featured luncheon speaker and will moderate the Monday afternoon working session on making the business case for the Smart Grid.
Main conference and registration site
Vendors throw support behind new communication standard. Three prominent Smart Grid vendors – Itron, Inc., Elster, and Trilliant Incorporated – have announced support for C12.22, the newly published communications standard from the American National Standards Institute (ANSI). C12.22 is an open standard that defines how to transmit standardized tables of meter data across wired or wireless networks using various transports such as IP. The standard is expected to be useful in the handling of data from AMI (advanced metering infrastructure) projects. Quick Take: This standards effort could erode the proprietary control now enjoyed by some meter makers. You have only to look back at the lessons learned in the cable and telecom spaces to understand that meter makers must (1) quickly support this standard and (2) look for new ways to differentiate themselves as the meters evolve towards commodity status.
Korea launches Smart Grid pilot. Korea will construct a Smart Grid “pilot complex” as part of an overall plan to integrate renewable with existing energy sources. According to the announcement by the Ministry of Knowledge Economy, the location of the complex will be determined by November of this year, with construction complete by 2011. Korea plans to increase its use of green energy from current levels of 2.4 percent to 11 percent in the next 20 years. JoongAng Daily report on the pilot project
REGEN and Fat Spaniel join for demand-side management. The companies will integrate REGEN’s demand-side controllers with Fat Spaniel’s monitoring system. REGEN is a Canadian startup that builds wireless load-control devices aimed at commercial/industrial companies. Fat Spaniel, headquartered in San Jose, CA, makes dashboards that monitor solar and wind farms. It wants to expand its back-end “Insight Platform” into other areas; hence the partnership with REGEN. QuickTake: REGEN is creating buzz for its “swarm logic” technology, whereby the units in a building or neighborhood negotiate amongst themselves to level loads and reduce energy consumption.
Google invests in Silver Spring. The newly formed Goolge Ventures is investing an undisclosed amount in Smart Grid technology developed by Silver Spring Networks. The latter develops network boards for smart meters. Full disclosure: Silver Spring Networks is a co-sponsor of SmartGridNews.com.
Silver Spring Networks home page
General Electric assists in wireless Smart Grid. GE has announced that it will provide wireless communications for a Houston, TX, utility. According to the announcement, the electricity giant will supply thousands of WiMAX-based MDS Mercury 3650 radios to CenterPoint Energy to use in their Smart Grid construction. The radios will transmit data from consumer smart meters to utility data centers.
Quick Take: Up to now, General Electric’s role in Smart Grid development has been more talk than action. Getting involved in an actual Smart Grid buildout may signal a shift to a more active role.
IBM joins forces with EnergyAustralia for SmartGrid buildout. The largest electricity distribution network in Australia has signed a $2.2 million deal with IBM as part of their Smart Grid expansion. Under the terms of the arrangement, IBM will provide system IT architecture to support EnergyAustralia’s Intelligent Network upgrades.
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