Stimulus Package Will Create Winners in Smart Grid Standards


By: Alex Yu Zheng

The recently enacted stimulus package, which hopes to spur unseen levels of investment in Smart Grid, may bring with it an unexpected advantage: a final answer on protocols and standards.  Specifically at odds here are communications networks, metering software, meter data management systems, wireless systems, and interoperability between all of the above.


Much of the question depends on what standards are favored by the legislation itself, and how strict regulators are in enforcing these standards.  A technical specification (also known as "picking winners”) would not be unheard of from the government, although the past few decades have brought a reduced role for these policies, giving greater leverage to the market to make decisions. 


With regards to protocols and standards for all Smart Grid projects, the bill itself specifies the following:


"(F) Open protocols and standards. - The Secretary shall require as a condition of receiving funding under this subsection that demonstration projects utilize open protocols and standards (including Internet-based protocols and standards) if available and appropriate." (P.30, Section 405 A-F).


This is intentionally vague in order to leave room for flexible enforcement later on.  This in itself may not produce clear winners, since many systems could be considered "open.”


A stronger force for standardization is the informal convergence of purchasing decisions through the bulk-buying that is about to occur by utilities.  Some vendors are likely to be overwhelmingly selected by utility customers in the coming months, giving them a market share advantage that will likely push competitors to the fringe.  Like seedlings growing in the forest, the one that grows fastest in the midst of a sudden opening of sunlight will crowd out the others, gathering most of the sunlight for itself.  These initially small advantages add up over the long term.


There is, of course, no guarantee that the winner(s) will be the most efficient, backward compatible, or easy to use. But I sincerely hope that it will be all these things.


   Smart Grid News article on Interoperability

   USA Today article on Smart Grid Standards and the Stimulus Bill

   Text of the Stimulus Act


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