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Notes from “Plug into the SmartGrid”

February 17, 2009
Andy Karsner

Andy Karsner - Policy Panel

Washington, DC Feb 17, 2009 –  Every seat in the auditorium at Google’s DC office was filled with people passionate about bringing about change in the way power is distributed. People even lined the back wall and the overflow room. A total of 500 people in attendance. The event format was split into two industry panels, the first discussing the technology requirements for a SmartGrid and the second focused more on the Federal and State policy initiatives required to properly implement such a sweeping technological plan.

Tomorrow afternoon, the ~2-1/2 hour video footage of the panels will be available on both Google’s DotOrg channel as well as GE’s YouTube channel. If you don’t have time to watch, here are my notes from the event. I’m sure I missed some details, so please correct me or submit your comments.

Technology

It was very clear the panelists have been thinking about evolving the technology landscape in this industry for a long time. Ron Binz, of the Colorado Public Utilities Commission, highlighted the fact that they are deploying 35,000 GE smart meters in Boulder, and George Bjelovuk, of American Electric Power, did the same for 10,000 meters deployed in South Bend, IN. Adrian Tuck, CEO at Tendril, also described his company’s software and wireless mesh platform for monitoring energy use within the home. And, of course, Ed Lu talked briefly about the Google PowerMeter that was recently announced.

I was encouraged by the discussion and the fact that there appeared to be real agents of change present, both on the panel and in the audience. There are several major points that I took away from the conversations.

  • Open standards – The panelists agreed that one of the primary reasons the internet has succeeded as well as it has was that it was built upon an open platform. Third-party developers were free to create applications and hardware to interact. Any viable solution for a SmartGrid should be an open platform instead of a variety of proprietary platforms controlled by the utilities or government. Systems can be considered Open and still be secure.
  • Incentives – To foster the growth of SmartGrid components, the government may have to create incentives for the utilities, the consumers, and the businesses that will develop the technology. This is not cheap technology. It requires a data transmission backbone available to all, possibly fiber optic depending on the data volume, and a lot of hardware. Once kick-started to a minimum scale, the benefits will start to outweigh the costs and the system will be free to grow. There are a few factors already in favor:
    • Pilot programs have shown that consumers will cut their electricity payments by at least 10% just by being able to use the price of electricity to influence their decisions. Given better tools to either automatically or manually control their use of electricity, that number is likely to improve.
    • Utilities have been using Smart Meters for years on their own to provide faster data collection of their network as well as decrease the number of meter-readers required.
  • Marketing – There is a lack of understanding in the public about how the power industry works, how “clean energy” works. To gain traction, the public, the utilities, and the legislators need to be sufficiently informed about the environmental, social, economic, and technological benefits a SmartGrid system would provide.
  • Reducing use versus shifting use – Instead of aiming to simply save money by shifting the loads from On-Peak to Off-Peak times, SmartGrid technology should also encourage the reduction of overall energy usage. This may be as short-term as showing consumers how much energy is wasted by leaving a computer on all day or as long-term as reminding the user of their daily energy usage when they shop for a new dryer or refrigerator.
    • Plug-in hybrids – Pilot programs have shown plug-in hybrids to be quite a significant load on the home electrical system. With broader acceptance on the road, that power draw at home will significantly tax the power grid since commuters are likely to get home about the same time in the evening and immediately plug in their cars. By allowing users to automatically delay their recharge until the off-peak hours overnight, the car will still be ready for the morning commute, the Utilities are spared, and the consumers save the extra cost of On-Peak rates.
  • Control of information – Some fundamental rules will have to be worked out early.
    • Who will own the data that has been collected?
    • Who will have access to that data?
    • How will the price of electricity fluctuate throughout the day, week, year?

As with the internet and home video, technology formats are likely to zig and zag a little before winners are declared. There are definitely experts trying to minimize that uncertainty, and the conversations held today are a good start to hashing out the details early. However, also like the internet, the future of a SmartGrid is largely unknown.

Policy

The Obama Administration has shown numerous indications that revolutionizing the energy sector is a primary goal. Chris Miller, from the Office of Senate Majority Leader Harry Reid, also expressed Senator Reid’s dedication to that goal, as well. So, now might be the time to strike, but must policy be structured to affect that change?

  • Approximately $10 billion has been appropriated in the Congressional stimulus package for Clean Energy projects. This money will be distributed by the Department of Energy (DoE). However, the panelists expressed serious concerns that the money will be effectively and efficiently distributed in a timely manner based on the DoE’s insufficient management of the loan guarantee program it has overseen since 2005. This could end up a significant roadblock to the stimulus package as well as the development of a SmartGrid as the Technology panel agreed that incentives will be important for any system to gain traction.
  • Andy Karsner, former Ass. Sec. Of Energy Efficiency and Renewable Energy and formerly of the U.S. DoE, spoke eloquently and passionately about the role of government in this initiative. Instead of wanting consumers to shoulder the cost of understanding the cost of electricity, he vehemently proclaimed it a mandate that the utilities provide every consumer with a Smart Meter in their home. He believes it is incredible that the utilities charge the consumer without making them aware of the price of electricity. Furthermore, he feels electricity should be nationalized, as the natural gas pipeline is, to ensure the liquidity of electrons as we have with BTU’s. This is not something that should be left to 50 different states.
  • The goal of any SmartGrid implementations should be held to the standard of measurable, reportable, and verifiable. The system shall provide metrics for analysis, not just claims of improvement.
  • One of the growing challenges, from both a technical perspective and a regulatory one, is the growth of distributed power generation. Individuals, communities, and businesses are all beginning to find ways to generate enough power to push it into the Power grid. The Utilities are working to accommodate that growth with their current technology, but it is a challenge. Chris Miller expressed his Office’s interest in discussing the topic of distributed generation with anyone concerned.
  • Related to the marketing challenge of educating the public to the technological systems of a SmartGrid, consumers need a better way to compare the energy use and efficiency of products. Although the current EnergyStar program provides data to compare one flat-screen Plasma television to another, it does not compare it to an old tube-television that might use 1/3 the energy. Therefore, the EnergyStar program will have to be restructured to account for the variety of technology that has been developed since it was conceived, and it will have to be constantly updated. 

The discussions were quite interesting, and I encourage anyone to take a look at the videos once they’re available. I am optimistic that this is only the first of many collaborative efforts, and we will start to see energy conservation transition from a niche market to a unified global effort.

Plus, it was pretty exciting to sample hors d’oeuvres from the Google cafeteria. Do employees always eat so well? 

Light fare in the Google Cafeteria

Light fare in the Google Cafeteria

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