Presenters at the inaugural GridWise Global Forum (GGF) in Washington, D.C., September 21 to 23, 2010, had a lot to say about the prospects for smarter grids. This synopsis of facts and opinions shared at the event, which attracted several smart grid A-listers, looks at the major challenges ahead, especially for the U.S.
The potential (and, in some places, achieved) benefits of a smart grid touch everyone along the power generation, delivery, and usage value chain—regardless of their ideological or environmental positions or economic status. If you’re an advocate of adding more renewable generation to the supply, a smarter grid can help with the transmission and integration of those clean electrons, whether they travel long distances or are generated on local rooftops. If you’re a proponent of coal-fired generation, a smarter grid (deploying robust digital transmission and distribution line monitoring plus energy storage, for just two examples) could help coal-fired plants achieve better operating stats because they might not have to be cycled so frequently in response to variable, renewable generation sources. If you advocate for low rates, a smarter grid can help all customer classes (commercial, industrial, and residential) and residential users of all income levels lower their energy usage and bills.
So, why is it so difficult to make the grid smarter? It’s complicated. Especially in the U.S., changing technologies, energy usage habits, and even utility business models is a daunting task—but one that must be tackled.
One big reason to pursue a U.S. smart grid was hinted at by a couple of government speakers, who made comments about how a smart grid enables a nation to "do more with less." Yes, that’s government speaking. Comments by Nancy Sutley, chair of the White House Council on Environmental Quality, for example, made it sound as if we’re stuck with "our existing system" of transmission. My reading of such comments is that at least some folks in Washington are aware that building new transmission lines has become all but impossible, and the same could be said for many forms of generation. The solution, then, to providing reliable power to more electricity users over time is a smarter grid that can optimize existing generation and transmission sources.
A Global View
First, a few words about the GridWise Global Forum hosts: The GridWise Alliance and the U.S. Department of Energy (DOE). The GridWise Alliance was founded in 2003 to encourage a broad coalition of stakeholders to share perspectives and support development of a smart grid. Its members include utilities, smart grid technology vendors of all sizes, research organizations, consultants, financiers, and others. Though the group has included some international members in the past, at the start of the GGF, the GridWise Alliance announced the formation of the Global Smart Grid Federation, "an international organization to promote best practices and to help accelerate the deployment of smart grid around the world."
The DOE is a familiar entity, but less-well-known may be its efforts at partnering with other nations—most recently through the International Smart Grid Action Network—to collaborate on technologies to accelerate modernization of the electricity infrastructure around the world. Top DOE officials spoke at the conference, but just as important—given the global ambitions of the event’s coverage—was the participation of government officials from other countries.
Most sessions had at least one panelist from outside the U.S., and companies doing business globally were also well-represented. A global view is embedded in the GridWise Alliance’s DNA, and the value of that perspective was repeatedly obvious. Here are two examples.
First, smart grid companies will do business where there’s money to be made. Countries that build out full-scale smart grids (even if you’re just talking about smart metering infrastructure or just total transmission and distribution system automation, see “Which Country’s Grid Is the Smartest?”) will have first-mover advantage when it comes to influencing standards and technology choices.
Second, every country can learn something about smart grid deployment from other countries, regardless of size or regulatory and economic differences. For example, genius sometimes hides in the smallest details, like precisely how utilities communicate smart grid technology, application, and program changes to their customers.
A Smart Grid Definition Reminder
GridWise Global Forum attendees didn’t talk much about what "smart grid" means because it’s understood within the industry that building a smarter grid—anywhere in the world—entails deploying a number of interconnected technologies and applications that can communicate with each other. "An Internet of things" is the latest analogy, which several panelists used.
Those chip-containing things include generation sources, energy storage, transmission and distribution line devices (including reclosers, feeder switches, voltage regulators, and more), automated metering infrastructure, meters that can account for electrons flowing both to and from the end user’s address while enabling bidirectional communication between the customer and the electricity supplier, plus appliances and vehicles that can be programmed to operate in ways that optimize the use of grid resources while minimizing costs for the customer.
What’s "smart" about such technologies and applications is that they rely upon information technology (IT), which enables greater interconnection and coordination of electricity-using devices. They also enable the capture and analysis of vast amounts of information that hold the potential to drive analysis that can result in smarter decision-making by electricity suppliers, distributors, and users.
Many so-called smart grid technologies should be best practices throughout the industry, because they represent the state of the art and have clear benefits. However, especially in tough economic times, utilities and transmission owners may sometimes default to less-than-optimal but less-expensive options because doing so makes for easier dealings with public utility commissions. Others replace system components only when they fail—a surefire way to create a hodgepodge of patches rather than an intelligent, coherent, modernized grid.
One thing GridWise Global Forum attendees agreed on is that the average person (in the U.S. at least) doesn’t know much about what the smart grid is or could do. The same goes for most politicians and some utilities.
In opening comments—co-presented with Kristina Johnson, under secretary of energy—GridWise Alliance Chairman Guido Bartels noted that there’s still not a “strong enough understanding of how important modernization of the grid is.” He added that he sometimes doesn’t like the “smart grid” term. However, as a power systems professor told me a couple of days later, this "marketing term" is necessary precisely because awareness of the need for grid modernization is so low.
Standard Operating Procedures for Standards
"Interoperability" is the big buzzword where smart grid technology standards are concerned. And though there was passing reference to developments in standards setting—particularly the current work by the National Institute of Standards and Technology (NIST)—I didn’t hear anyone worry a lot about standards. That’s probably because the standards-setting process is the easiest section of the smart grid puzzle to put together. Organizations like NIST and IEEE have well-established procedures for sorting through such issues.
And progress is being made. For example, shortly after the GGF, in early October, NIST announced that it had "advised the Federal Energy Regulatory Commission (FERC) that it has identified five ‘foundational’ sets of standards for Smart Grid interoperability and cyber security that are ready for consideration by federal and state energy regulators."
Does this mean we will one day have a global set of smart grid standards? Maybe not. Existing grid standards vary throughout the world, and regional interests can be powerful policy shapers. “Talking about international standards is like a dream,” opined Enel CEO Livio Gallo, who participated in a panel on "Understanding the Costs and Benefits." The general view of that panel’s group of speakers was that we may end up with North American, European Union, and Chinese standards rather than one international set of smart grid standards.
Security and Privacy Perspectives
Though standards come into play when we’re talking about smart grid security, the interrelated concerns of grid security and information privacy cannot be addressed with technical standards alone.
Though these two issues are related in some respects, grid security (whether we’re talking a smart grid or a dumb grid) and information privacy (with or without smart meter data) are two separate issues. The grid, whatever its state of sophistication, must be secure enough to withstand accidental and intentional attacks on both hardware and software. That’s obviously true of even the existing grid, as the recent Stuxnet worm attacks on SCADA systems have shown.
Todd Keil, assistant secretary for infrastructure protection at the Department of Homeland Security, commented in the session on "Securing the Grid" that “resilience of fuel supply for generation, resilience for replacing equipment, and resilience of professional expertise” are all required. “We can’t protect everything all the time,” he acknowledged, so the entire system has to have built-in resilience. Again, that’s true with or without a smarter grid. Keil, whose group mostly looks at physical risks to the grid, reminded the audience that "Mother Nature is probably one of the biggest risks."
Security issues run the length of the grid: from the power generator to the point of electricity usage. Privacy concerns, by contrast, tend to converge on the end user, specifically, residential customers. The panelists I heard speak about privacy focused on potential abuses of customer data (by criminals and marketers, for example). And although there are valid concerns to be thought through, the reality is that even our current, relatively dumb grid provides opportunities for malfeasance. For example, utility employees with access to back-office databases have personal information on most customers that includes Social Security Number, maybe a bank account number, and other valuable details that could be used by them or a third party to perpetrate various types of fraud.
In his address on the final day of the event, Energy Secretary Steven Chu announced the investment of more than $30 million for 10 projects that will address cybersecurity issues facing the nation’s electric grid.
"Data Wants to Be Free" vs. "Data Needs to Be Locked Up"
On the matter of how to manage energy users’ data, the two main teams might have been named Data Wants to Be Free and Data Needs to Be Locked Up.
Here’s one example from the panel on "Securing the Grid." As concerns sharing data with third parties, in Keil’s view, "data sharing can be very risky.” He called for narrowly defining the data that will be shared.
FERC Commissioner John Norris had a different perspective: The whole smart grid idea, he said, “depends on data sharing,” but you have to take precautions, he acknowledged.
Part of the problem is that panelists and moderators didn’t always distinguish between data sharing that is essential to optimizing the functioning of the transmission and distribution grid and sharing data about customer usage patterns. In general, when panelists addressed data and privacy, they were talking about residential customer data.
Why the obsession with residential customers rather than commercial and industrial ones? Here’s one reason: Virtually every person in every industrialized country is a customer of an electric utility. That means the utility has access to the whole consumer universe, which opens up enormous opportunities and risks. As Ed Davalos, director, product management for utility/smart grid at AT&T advised, “proceed with extreme caution. . . . It’s the last great database that hasn’t been mined.”
The person who might well be considered the captain of the opposing team was Jules Polonetsky, co-chair and director of the Future of Privacy Forum. Polonetsky advocated for openness, which, he said, is required for innovation. He worked on both consumer and corporate sides of the privacy issue before joining a think tank. “Boy, this is just such a great area for media interest!” he exclaimed. “Privacy policies have nothing to do with this.” In a remark that was echoed by a vendor during a media roundtable, he claimed, “You can have their data if you make them happy with what you’re doing with their data.” Polonetsky seemed to speak for a generation that’s comfortable with revealing quite a lot of personal information on Facebook and elsewhere.
(In the end, there shouldn’t be irreconcilable differences on this issue. Data could be used by non-utility entities as long as consent is given, and that seems to be the direction in which the DOE is moving. In early October, the department issued two smart grid–related reports. The first, Data Access and Privacy Issues Related to Smart Grid Technologies, "found that to protect privacy, consumers should be able to choose whether to affirmatively opt in to any non-utility, third-party use of their energy-usage data through a secure and trustworthy process.")
Polonetsky also noted that the point of the smart grid is interconnectedness of devices, so it doesn’t make sense to try to completely “silo” utilities and third parties, which could include various home energy management service providers, vendors of “smart” appliances, and service providers we can’t even imagine yet.
The marketing of consumer products and services isn’t the only potential use of smart grid user data, as the moderator pointed out. Law enforcement and the tax man might want access to energy usage data.
On the plus side, as Anders Eldrup, CEO of DONG Energy, noted in a different session, one side benefit of a smart grid it that “It won’t be very clever to steal a car,” because you will know where a car is charging or discharging to the grid.
I would point out that government agencies already have in some cases been provided with near-total access to personal data from every conceivable digital and nondigital area of our lives, from banking information to telephone calls to Internet traffic. And then there’s global positioning system (GPS) data: Anyone whose cell phone is on (or who is driving in certain rental cars) can be physically tracked via GPS. The distinction would be that when you use a mobile phone, you presumably know that your whereabouts can be tracked and you can choose to turn the phone off—or not own one. Electricity, on the other hand, is a necessity, and in many places there is only one provider with one set of customer data-sharing rules.
To the point of who has access to what personal information, someone from beyond North America provided a different way of framing the issue. Nancy Kabalt is the chief customer officer for Alliander, the energy distribution company in the Netherlands. Dutch citizens, she said, have fewer privacy rights than Americans, and the government has a lot of access to personal data. But the country also has a banking standard of security for digital utility data and, regarding the use of smart grid data, each customer has to provide a signed letter saying that their data can be used in a particular way.
Though some scoffed at the notion of requiring hand-signed authorizations, the reality is that not everyone is wirelessly attached to the Internet 24/7. In fact, it was utility CEOs who most often reminded conference attendees and fellow panelists that they have to serve all customers, including the poor and the elderly—two groups that are less likely to be savvy about smart grid options and to be more apprehensive about them. That’s not to say that those customers can’t benefit from a smarter grid.
Smart Grid Benefits for Customers and Companies
Smart grid projects clearly can benefit the companies supplying new devices. They also benefit employees who build, install, monitor, and maintain smart devices. To the extent that smart grid devices enable the deployment of hardware, software, and services in related industries—such as programmable appliances and electric vehicles, for example—they create new markets. All together, smart grid efforts, when wisely pursued, can grow economies. But benefits also accrue to existing components of the industry, including utilities and grid operators.
During the first day’s opening panel discussion, American Electric Power Chairman, President, and CEO Michael Morris told the audience, “The value to us—on our side of the meter—is huge.” Utility benefits include, he said, reducing energy usage on the generation side.
That point was also made by Miriam Horn, director of the Environmental Defense Fund’s Smart Grid Initiative, in the session "Transforming the Utility Model." If you can reduce peak load sufficiently, she noted, you can reduce or eliminate the need for new or even existing peaking plants, thereby lowering construction, operating, and fuel costs; grid congestion; and carbon emissions.
GE Energy Vice President Bob Gilligan identified three categories of smart grid benefits:
- Utility benefits (including reduced energy losses, improved operating efficiency, improved grid situational awareness, increased asset utilization, and integrated VAR control)
- Societal benefits (enhancing reliability, reducing carbon intensity, and adding electric vehicles)
- Consumer benefits (time-of-use pricing to incentivize reduce overall energy use and bills)
Gilligan noted that in the European Union (EU) there is more popular agreement about the value of a smart grid as it relates to climate change and renewables issues than there is in the U.S.
In his luncheon address on the first day, FERC Chairman Jon Wellinghoff argued that the utility or a third party “should be helping customers” shift loads to lower peak periods to save money because that peak shaving is worth money to the utility. Refrigerators, for example, could be programmed to defrost during off-peak hours. A 2006 study by the regional transmission operator PJM found that five Mid-Atlantic states could save $200 million per year by reducing peak load by 5% via demand response.
Wellinghoff also put in a good word for electric vehicles (EVs). He gave the example of a University of Delaware professor who has five Toyota Scions that have been converted to electric operation and that are providing regulation services to the PJM Interconnection. In a study with the first EV, PJM regulators saw that the Scion, which appeared as a line item for automatic generator control, provided instantaneous response—much faster than what is typically supplied by a generator. The car can charge during the same time period as it is providing regulation power, without diminishing battery life. What’s more, the professor is paid “regulation services” tariff rates amounting to $7 to $10 per day per car.
That’s one specific example of how the smart grid—a bidirectional flow of both information and power—can benefit grid operators and, by extension, generators, who would no longer bear sole responsibility for providing such ancillary services.
After his keynote, POWER asked the FERC chairman what the smart grid has to offer power generators in particular. He offered three benefits:
- Less congestion.
- More robust markets for both conventional and renewable power.
- Markets that operate more efficiently.
Benefits May Vary. Benefits in other countries sometimes begin at a more basic level. South Africa is only 75% electrified, explained Mongezi Ntsokolo, managing director of Eskom’s transmission division. Smart grid benefits for his country include decreasing costs and changing demand patterns so that the country can add load without adding generation.
In India, five to 10 hours of load shedding per day are common in rural areas and 25% to 33% of system losses are “technical and commercial losses”—that is, theft. What’s more, because electricity for irrigation pumpsets has been free, it’s largely unmetered, even though irrigation counts for 25% to 30% of electricity usage. Dr. Rahul Tongo, an advisor to the India Smart Grid Forum, argued that instead of just asking what the return on investment is, we should be asking “What’s the societal cost benefit?” in terms of improved power quality, for example.
Consumer Benefits Beyond the Smart Meter. There was almost no discussion at GGF about smart grid technology beyond the customer meter and home energy management interface. One rare exception was a comment by Marzio Pozzuoli, president and CEO of RuggedCom, during a media roundtable. Everyone—especially the press, he noted—focuses on smart meters, but they wouldn’t have eliminated the 2003 blackout. His company’s focus is on technology beyond the meter, “but nobody cares about that; nor should they.”
Well, maybe regulators and utilities should care.
The Customer Conundrum
The most frequent refrain, complaint really, was that it’s so difficult to "educate" customers about the smart grid. Some speakers used the term "engage." IBM Chairman, President, and CEO Samuel Palmisano used the term "activate." Whatever verb is used, the end game is the same.
Though a smarter grid offers plenty of advantages to both utilities and energy users—even if smart meter–enabled programs aren’t part of the picture—motivating customer behavioral change holds enormous potential that nobody looking at the big picture wants to waste.
Why Better Customer Communication Matters. As Pacific Gas & Electric learned this year, if customers don’t have sufficient understanding of new meters, utilities can get pushback. In a media question and answer session, Sharon Allan, Accenture’s North American smart grid practice lead, noted that smart meters have been around since the 1970s for commercial and industrial customers, so utilities treated smart meter rollouts to residential customers as “just a meter changeout.” That was a mistake, because residential customers have a different level of engagement with their electricity bill and provider than businesses do.
“We’re an arrogant business,” Alliander’s Kabalt said, in terms of thinking that “customers should want to hear our story and need to be educated.” (That comment won my vote for the smartest thing said during the entire event.)
Most consumers need to be given a reason to change their behavior that is more self-serving than societal in scale. And behavioral change needs to be easy. As OPOWER President and Founder Alex Laskey noted, “We can’t wait for customers to download data from the Internet. We need to deliver information to customers.”
Though many panelists talked about communicating digitally with customers, Edison International President and CEO Ted Craver, Jr. pointed out that the customer band is wide, and not all customers are carrying iPhones. About one-fifth of his company’s customers are economically challenged. Sometimes the low-tech approach makes the most sense, he said, giving the example of a program that has had success for Arizona’s Salt River Project (SRP). SRP offers a phone card–type of prepaid power card: Customers buy a charge on the card—an average of $20, and it’s always in cash—and put it in their meter. SRP has found that this customer segment is the “most engaged” in terms of using electricity efficiently.
AEP’s Morris got a laugh when he noted that, in terms of top-of-mind, middle-of-mind, and back-of-mind issues, power is a “never think about” issue. But that’s no laughing matter for folks trying to get customers to think smarter about their power usage. Morris also offered this good advice: “One thing our industry is great at is complicating things," he said. "Let’s not do that. Let’s supply the customer with what they need.”
"Simplify" was also the message of Battelle’s Dr. Mani Vadari. Using the example of a power bill, he reminded utilities that consumers don’t care what charges are for generation, transmission, and distribution. Put the bills in the consumer’s terms, he urged.
If You Build It, Will They Come Around? GE Chairman and CEO Jeffrey Immelt, who was the closing day’s featured speaker, acknowledged that “The consumer is not really asking for [a smart grid].” However, if they have it, he believes, they’ll use it, just as so many of us become attached to the latest digital tools in other realms of our life.
One potential (at least partial) way to bridge the divide between utilities and their customers is to put power generation on the customer end of the value chain. While participating in the "Driving the Global Economy" panel, Eamon Ryan, Ireland’s minister for communications, energy, and natural resources, commented that microgeneration gets customers to see the grid as “their” grid.
That type of approach can be a win-win for utilities seeking to explore new business models. GE’s Gilligan pointed out that some utilities are using smart grid initiatives to redefine who they are. He gave the example of financing rooftop solar panels—a business some utilities are entering because it’s easier for them than for individuals to borrow money and because a utility can buy and deploy the modules at scale.
Policy Problems: The U.S. versus The Rest of the World
With such a wealth of potential benefits, why is it so hard to achieve substantial smart grid results? The answers vary by nation, but the successes can be traced back to policy decisions. Here are just three quick examples:
- The Australian government is backing a multisector broadband program whereby multiple services piggyback on the same broadband infrastructure (built by a national utility): energy management via a smart grid, medical information and e-health access, and e-education delivery.
- The EU has figured out that a smarter grid is essential for meeting its aggressive 2020 energy-related goals, particularly in terms of integrating a higher percentage of variable renewable generation. (DONG Energy’s Eldrup noted that 20% of Denmark’s generation portfolio is wind.) In part because of that clear policy mandate, the 42 transmission system operators in Europe, which each own their own equipment, have gotten together to do transmission planning that involves 34 countries and have identified the need for 500 transmission projects, explained Daniel Dobbeni, CEO and president of the Executive Committee of Belgium’s Elia System Operator.
- Dr. Kandeh Yumkella, director-general of the UN Industrial Development Organization also pointed to “stable public policy” in the EU that has enabled planning to begin on a major transmission project linking renewable energy generated by the Desertec project in Africa to Europe. (See these POWER and POWERnews stories on this project.)
Obviously, political systems and degrees of federal power vary by nation, and those with more centralized political power have some advantage in ensuring that nationwide policies and technologies can be deployed. As Immelt opined, it would be nice if the U.S. could be "China for a day"—but just a day.
Another caveat: size. During a break, as we were discussing the progress being made in other countries, a DOE staffer commented that it’s not fair to compare U.S. progress with progress being made in European countries, because those countries are so relatively small. Yes they are smaller, but consider raw meter numbers: Italy’s Enel has already installed 32 million smart meters for residential customers. In September, the Institute for Electric Efficiency (IEE) estimated—based on deployments, plans and proposals—that the U.S. would have approximately 65 million smart meters installed nationwide by 2020; that’s only 50% of U.S. households a decade from now.
Regardless of political organization or nation size, the lever that turns power on to smart grid deployment is policy—federal, regional, local, or utility policy. Whether it’s concerns about electricity theft, climate change, or economic development that primes the policy pump, other nations are pumping up their grids at much faster rates than the U.S.
There were signs that some in the U.S. regulatory community are open to change. FERC’s Wellinghoff, for example, said that “Customers need to see the value” of a smart grid. He thinks the biggest hurdle to full smart grid implementation as providing “full economic compensation to customers for adoption of smart response implementation at the customer’s site” and said that FERC is working with market players to make that easier.
On the last day, Immelt added a sharp point to the theme of the U.S. lagging in smart grid innovation, manufacturing, and deployment. First, he noted that all U.S. utilities combined are smaller than State Grid China. Then, as a business proposition, he said, you need four things: a big global market, innovation, a low-cost supply chain, and supportive public policy. China has all four and the U.S. doesn’t.
“China remains the most important new market in the world,” he pronounced. As a global company, GE can take its people and capital where the business is, though he would like to see the U.S. get a bigger piece of the action. What would it take? According to Immelt:
- “Some price for carbon—some market signal.”
- “Appropriate funding for innovation” that is “fuel-agnostic.” (“Everybody today is in love with the nuclear industry,” he said, but it only exists because the U.S. government supported it.)
- If you do the first two things, they create jobs.
In terms of a national smart grid, Immelt said, “we’ve got nothing.” Calling out “antiquated” energy regulatory systems, he said, “You’re just not going to do this in 50 states.” By contrast, he is impressed with what’s going on in Canada, where he had been the previous day. GE is involved in a smart grid system for the province of Ontario, and there are plans to roll it out for the entire country. Both the Canadians and Australians can move faster on smart grid projects because of their regulatory systems, he noted.
Later, he commented that there are “more active ideas” in healthcare and energy in Canada and Brazil than in the U.S. “The rest of the world is moving so fast.” He reiterated that, as an American, he wants to see the U.S. prosper, but “Energy is one of the places where I worry the most” because the rest of the world is moving 10 times faster.”
The other challenge: policy. “We have to have an energy policy,” Immelt said. “It’s just stupid what we have today.” He noted that part of the problem was allowing the energy discussion to “get wrapped up in green and climate.” (This comment pointed to a major point of tactical disagreement among smart grid advocates speaking at GGF. One group believes that the way to persuade policymakers and the general populace of the need for a smart grid is to highlight its role in adding renewables and, ultimately, minimizing climate change. This approach has had noticeable success in the EU, for example. The other group—some of whose members may also champion environmental goals—thinks that highlighting environmental benefits will permanently stall progress. Instead, these smart grid advocates often use more basic economic development arguments.)
DONG Energy’s Eldrup predicted that China would be first to make EVs a success, and Denmark hopes to be next. First movers, he noted, “make a lot of mistakes,” but they also start the new industries of tomorrow. Eldrup gave the example of the Saudi oil crisis giving rise to Denmark’s focus on developing wind turbines and his country’s current leadership in that industry.
The International Energy Agency’s (IEA) Deputy Executive Director Richard Jones commented: “In some ways I wish I were in a China or India." His point was that developing countries can have an easier time deploying smart grid technologies—from ultrahigh-voltage lines to smart meters—because they can build technology into the grid as they build their grid from the ground up.
Professor Wu Jiandong, director of the Chinese Smart Grid Group, didn’t answer a moderator question about how much China hopes to export smart grid technology and software to the rest of the world. But, to a question about trade tensions and multiple countries wanting to develop and export smart grid technology, the IEA’s Jones said he’s not worried about trade tensions because they tend to work themselves out, and the market is huge.
A Smart Grid Attracts Smart People
Here’s another reason smart grid work is important: Forward-looking companies and technologies attract the best and brightest employees. In the "Learning from Others" session, Tom Burns, executive vice president of Alcatel-Lucent, argued that companies that don’t use IT as a differentiator won’t be able to attract the next generation of employees.
Burns also noted that there are already dozens of energy apps for the iPhone; technology is ahead of utilities, and there could come a time when customers push utilities to “get on board” with the smart grid.
So What Are We Waiting For?
Pier Nabuurs, chairman of the board of Netherlands-based consulting company KEMA chided: “This industry is always waiting for external motivation to innovate”—like the stimulus. And that attitude blocks innovation from outside companies serving utilities, in his view.
Edison Electric Institute President Thomas Kuhn disagreed, saying that smart grid investments were being made before the stimulus. He pointed his finger at the regulatory environment, saying regulation isn’t going to disappear from the utility business. Kuhn said that even if there were no customer benefits, utilities are still getting enormous benefits in such areas as reliability.
Questions about how to move smart grid development forward faster—especially in the U.S.—elicited lots of finger-pointing, and it’s easy to argue that there’s plenty of blame to spread around. Eventually, though, some governmental, regulatory, or business entities are going to need to take greater risks, innovate, and demonstrate that smart grid development is in everyone’s interest.
Author and Global Research Director of Leading Edge Forum David Moschella pointed out that what makes Silicon Valley special is that you can get really rich very fast. Until that is true of the energy industry, he said, the culture won’t change.
IBM’s Palmisano made a couple of comments that might provide the best reason to find a faster way forward on smart grid deployment. Smarter energy is practical, he said, because it’s “not ideological,” and “making energy smarter is in everyone’s interest.” In his view, “There’s no reason to wait for government.” He noted that developing a U.S. smart grid is “going to take a very long time . . . so you have to get started.” It will take multiple administrations and “generations to make the transition.”
That bias toward action is shared by Energy Secretary Chu, who gave the luncheon keynote on the event’s last day. According to Dr. Chu, the U.S. can’t afford to wait for Congress to pass climate or energy legislation—or to do anything else constructive from a policy standpoint. That doesn’t mean that nothing can be done.
He recited a list of DOE accomplishments and smart grid grant details, promoted energy storage, and proudly noted that the International Smart Grid Action Network’s Clean Energy Ministerial in July was far more successful than last December’s meeting in Copenhagen—because nobody was pointing fingers, but "everyone was helping each other."
He also stressed that "We need to develop new technologies" and noted that much happened "in golden moments of time and space," for example, during the Manhattan Project, when scientists, engineers, and support staff at a coordinated system of national labs "worked at a pace that was unparalleled." (Few today have an appreciation for the personal effort and hardships endured to achieve success with that project; current models of sacrifice tend to be coders working long hours in hopes that their tech company’s IPO will make them rich.) Chu continued, "We have to do this for today’s energy challenges." To that end, the DOE has established what it calls Energy Innovation Hubs.
Though it’s commonplace for the media to describe Chu as "professorial," that adjective is misleading. Yes, he used PowerPoint slides (as did FERC’s Wellinghoff and others). But Chu has been a doer and a manager as well as a professor. He has seen science and technology from most angles—as an academic but also as a Nobel Prize–winning researcher, patent holder, corporate worker, and manager of a large national laboratory. Though he has a calm, professional demeanor, if you pay attention to his words, he’s more like a marketer trying to light a fire under both government and industry.
Regarding next-generation energy technologies, he put it bluntly at the end of his presentation: "We can develop these technologies—or import them."
—Gail Reitenbach, PhD is POWER’s managing editor.