The Next 10 Years: Where we've come from (and how it shapes where we'll go next)
By Liz Enbysk
SGN Managing Editor
Remember what you were doing back in 2002? Jimmy Carter was getting the Nobel Peace Prize. Steve Fossett became the first person to fly solo around the world nonstop in a balloon. Kelly Clarkson won Season One of American Idol. And Jesse Berst started writing about something called the smart grid.
In its infancy, Smart Grid News was funded in part by a Department of Energy grant and subscribers received a news digest twice a month. By 2004, an ad-supported website emerged to supplement the email digest.
As we launch our Next 10 Years series, we thought it would be interesting first to take a look at where we've been. Weâ€™ve pulled together some of the most impactful news from the last decade. We hope you'll use the Talk Back comment form to add your insights.
Feb. 2005: Quick! Whatâ€™s the single most valuable thing you can do to accelerate the adoption of the Smart Grid?
Jesse's answer: Pray for more blackouts.
He explained: Now, before you call Homeland Security to put me on the No-Fly List, let me admit that Iâ€™m not seriously proposing we engineer a blackout. These days, blackouts cost billions in economic loss. These days, blackouts even cause deaths. Electricity is no longer a convenience. It has become essential to our way of life, permeating everything from health care to manufacturing to financeâ€¦ Yet improving the grid is both important and increasingly urgent. The infrastructure will take decades to renew. Every day we delay makes us more vulnerable to accident or attack. (Conservative estimates put the annual cost to the economy from service interruptions at more than $80B.) Every delay runs the risk that other regions -- the UK, Canada, Germany, Japan, even China -- will leapfrog us in the race to a next-generation system. And every delay imposes a â€œtaxâ€ on American industry in the form of higher costs and more frequent outages.
Worth noting: We didn't get another major blackout -- but we did get Superstorm Sandy, which has motivated several mayors and governors to publicly call for more grid modernization.
Aug. 2005: Why we're selling advanced metering all wrong... and how to sell it right
Passage of the Energy Bill â€“ with its metering and demand response provisions â€“ made advanced metering the topic of the day. Yet according to one of the countryâ€™s top experts, the industry was not approaching this opportunity in the right way. Consultant and former EPRI VP Mark Gabriel explained his thinking in a guest column.
The U.S. electric industry is embarking on the greatest customer revolution since the early days of electrification. Subtle changes in the industryâ€™s cash register â€“ the meter -- coupled with the empowerment of the consumer in virtually every buying decision, will result in profound changes.
But this shift is being misunderstood and sold the wrong way. In California, all the major investor owned utilities are embarking on exciting roll outs of advanced meters. These projects will cost in excess of $4B over the next five years. And yet the real message about these projects is missing. Utilities continue to talk about eliminating meter reader jobs, raising rates (to cover costs) and lessening future shortages. This position further separates utilities from their customers and stirs up consumer activists, unions and environmentalists. Selling advanced metering on the basis of job reduction, increased costs and helping the utility is like selling a computer to reduce the cost of typewriter carbon paper and ribbon, to make the room quieter and help the companyâ€™s (not the secretaryâ€™s) efficiency. Not a very compelling argument and one which ignores the real benefits.
Worth noting: What a prescient guest editorial! As Mark implied, our industry's lack of focus on customer benefits (including benefits such as reliability) came back to haunt us via consumer pushback and rate reductions.
June 2006: Four coming catastrophes (and how to make the best of them)
Jesse pointed out that at least four catastrophes face the electric power industry and predicted all four were likely to arrive within the next five years. Surprisingly, he wrote, they could be good news for the renewal of the grid. They could provide the urgency and the financial support needed to make important changes.
I am certainly not hoping for catastrophes and disasters. But it doesnâ€™t do us any good to put our heads in the sand. If these disasters do occur, then itâ€™s our job to find the silver lining. One possible benefit: they could provide the impetus and motivation to renew our electric infrastructure.
1. Global warming and carbon restrictions
2. The aging workforce and the pending manpower shortage
3. Hurricanes and other natural disasters
4. The threat of terrorist attack
Worth noting: Only #3 has hit in a big way, but all four continue to loom.
Jan. 2010: Apple eyes crowded home energy management space
Jesse's take: The home energy management field is getting pretty crowded. Big players Microsoft, Google, more recently Intel and a horde of startups have plunged into the fray. Will they all survive? Probably not. But count on Apple to make things interesting. It isn't the only company that knows how to do cool, but it knows how to do it very well.
Jan. 2010: SGN launches Lessons from the Real World webinar series
The first webinar was titled High Performance in Data Management - Moving from Overload to Insights and featured a stellar line-up of expert panelists: Randy Huston, Program Delivery Executive, SmartGridCity, Xcel Energy; Dr. Jeffrey Taft, Global Smart Grid Chief Architect, Accenture, and Peter Belknap, Director of Fusion Middleware Product Management at Oracle. Since then SGN has partnered with leading smart grid companies and utilities to produce nearly 20 webinars â€“ all archived on the site for replay.
Feb. 2010: Smart grid culture war? Power Guys vs. Netheads
The fusion of technologies that is the smart grid also represents a mixture of technical cultures. As Pike Research senior analyst Bob Gohn explains, it puts the netheads and the power guys in a culture clash that could influence the smart gridâ€™s evolution. His message to industry decision makers? Be aware.
Feb. 2010: Anti-meter fever spreads as regulator and customer mistrust grows
***image10***Dominion Virginia Power extends a smart meter field test before going all out with a $600 million rollout. Duke Energy scales back a $450 million rollout after getting slapped by Indiana regulators. And PG&E's smart meter program, which has been taking punches from fighting mad customers for months, gets audited courtesy of regulators.
May 2010: The 6 most important smart grid trends
Simply by measuring which articles SGN readers are clicking on, we can get the pulse of what matters most to them at a given time. In May of 2010, Jesse listed four topics that were currently at the top of the charts and, as a bonus, two coming smart grid trends he predicted would get hot in the months ahead:
1) customer engagement, 2) data management 3) disruptive technologies and approaches, 4) picking winners and losers, 5) grid optimization, 6) where buildings meet the grid. Note: In a quick poll accompanying the piece, readers ranked consumer engagement at the top of the list.
July 2010: Are we building the grid @$$ backwards?
The issue covered here: Have we been too focused on smart meters as the best place to start smart grid initiatives? Should we be looking at grid applications instead (distribution automation, grid optimization, command & control, asset management, etc.)
Worth noting: This one hit a nerve, with readers offering lots of input in the Talk Back section at the bottom of the article.
Aug 2010: SmartGridCity meltdown: How bad is it?
As Jesse explained:
When reports of cost overruns at Xcel Energyâ€™s SmartGridCity emerged earlier this year, we asked the question: How bad are the problems with SmartGridCity? Now, after slogging through a series of documents filed recently with the Colorado Public Utility Commission, I can tell you this: Whatever the reality, it doesnâ€™t look good.
Worth noting: Again, this story garnered lots of Talk Back from readers.
Feb. 2011: The sneak attack utilities are not prepared for
Utilities are starting to understand the term "disintermediation." They see how Amazon disintermediated booksellers. They realize companies such as Google or Wal-Mart could someday do the same to utilities. (Prepaid electricity cards, anyone? You did know that Wal-Mart is the world's largest reseller of prepaid cellular minutes, right?)
March 2011: Where the big money will be in smart grid (no, it's not meters)
Bottom line: We're going to need a lot of sensors and monitors. And somebody is going to make billions selling them.
March 2011: PG&E files game-changing smart meter opt out plan. But will it work?
Jesse's take on this one:
At last â€“ although only at the insistence of a judge â€“ PG&E has done something right with its smart metering program. As you will read below, it has offered up an opt-out program for customers who do not want smart meters (typically because they fear the health effects of the RF radio inside).
How do I know they got it right? Because neither side is happyâ€¦ the sign of a good compromise. PG&E is charging to recoup the extra costs involved in manual meter reading. Some consumers are upset at the fees. Meanwhile, many in the utility camp are terrified of the long-term effects of allowing customer choice.
April 2011: Who? The surprise #1 smart meter company
Jesse admitted he nearly fell out of his chair when he read that IDC Energy Insights had named Landis+Gyr as the leader in smart metering rather than a heavyweight like Itron, Sensus or Silver Spring Networks.
L+G? Really? I never hear from them or of them, and I talk all day long to utilities, consultants, suppliers and other electric power experts. From where I sit, the company has been late to every party, whether to new technology or to support standards or to join important industry consortia. But IDC is a serious research company with a rigorous process, so I can only assume they know something my colleagues and I do not.
Worth noting: A Quick Poll accompanying the article revealed readers overwhelmingly agreed with L+G as No. 1.
And a month later: Japanese electronics company Toshiba Corp. announced it would buy Switzerland-based meter maker Landis+Gyr for $2.3 billion.
May 2011: Will Google destroy ZigBee?
The ZigBee home area network standard already has lots of challengers (Z-Wave, Wi-Fi and HomePlug to name just three). Now it faces, as Jesse put it, an assault from the biggest, baddest billion-dollar bully of them all â€“ Google.
July 2011: Who is dumber about home energy, Microsoft or Google?
Last week we learned that both Microsoft and Google were dropping their home energy management efforts (Microsoft Hohm and Google Powermeter). So now the postmortem from Jesse:
If we were making an electric power version of the film Dumb and Dumber, which company would play Dumb? And which one would be Dumber? Both companies were blindingly stupid about what consumers want. Consumers do NOT want to stare at a home energy monitor. What they do want is a smart system that does the watching for them, then makes recommendations. They also want "cruise control." They want to set the parameters confident that the system will make the small adjustments along the way to keep things in bounds.
Sept. 2011: Ouch! Illinois governor dumps smart grid bill
Jesse's quick take:
We saw PG&E struggle to sell smart meters to consumers. And Xcel struggle to prove the value of smart grid to the citizens of Boulder. Now ComEd is struggling to prove the value of smart grid to regulators and policymakers. Maybe what the smart grid needs most is a good PR agent.
Sept. 2011: Smart grid communications game changer? Consumers Energy selects cellular for 1.8M meter rollout
For years, private radio frequency (RF) networks have ruled the North American smart grid communications market. Cracks began to appear in the dike in the summer of 2010 when Texas New Mexico Power announced it would use a public cellular network for its 230,000 meters. But now cellular advocates have the big win they have been seeking for so long. Consumers Energy has selected SmartSynch to provide smart meters to its 1.8 million customers in Michigan. (Neither the meter manufacturer nor the cellular carrier had been announced as of this writing.)
Oct. 2011: 6 truths about EVs that turn out to be false (utilities take note)
Hereâ€™s another piece from Jesse that generated a lot of Talk Back:
Electric vehicles are a big worry for many utilities. Over the last few months, I've had several interesting conversations with Europeans responsible for electric vehicle pilots in places such as Denmark, Germany and Portugal. Based on the results of their research and their real-world pilots, I learned of six frequent fears that turn out to be false.
Dec. 2011: Top 9 predictions for 2012
You can read this one and see how Jesse did.
Which brings us to 2012â€¦ Tomorrow we begin our look ahead to the Next 10 Years with commentary from Eric Dresselhuys, co-founder and EVP of Global Development for Silver Spring Networks, which is also celebrating its 10th year this year. He provides a 10 for 10 list of what he expects to see in the coming decade. Don't miss it.