Thursday, September 22, 2011

Observations From Gridweek 2011

In his latest blog post, Gary concluded that there is no one "Killer Smart Grid App", but instead a number of apps all equally important in the efforts of creating a smarter grid. Last week, I had the privilege to attend Gridweek 2011 and this point was extremely evident as discussions on topics ranging from distribution automation to EV charging and energy storage were everywhere to be found. One area in particular that sparked my interest was home energy management. Both the exhibit hall and sessions were buzzing with topics such as energy management technology, consumer empowerment, and residential demand response programs. It is evident that stakeholders in the Smart Grid space have expanded their focus beyond the meter to include end users, a very important piece of the overall equation.

In the area of home energy management technology, the exhibit hall featured companies like Opower, who doesn’t sell physical products at all (although the company announced a partnership with Honeywell during the show) but instead offers software and analytics that help utilities (57 of them currently) better interact with customers. Tools such as home energy reports, online tools, and energy alerts (involving the ever important smart phone) help customers become more energy efficient, assist with daily and seasonal utility peak reduction programs, and are said to make consumers happier. Another company featured in the hall, Energate, offers products (such as smart thermostats, in-home displays, and wireless communication gateways) as well as software, all part of the company’s Home Energy Management Suite. The technology allows consumers to manage their energy use and reduce peak demand, and provides utilities the ability to implement demand response programs. These weren’t the only companies in the home energy management space present in the exhibit hall, with other companies present including Digi International, Comverge, and Tendril.

Behind all of the excitement of these cutting edge home energy management products and solutions, there was an underlying question that came up during multiple sessions: "How do we get customers excited about and interested in this technology?" Time and time again, the answer involved creating value for the customer without overcomplicating the matter. It is critical that the customer understands how home energy management benefits them, and not the utility. These benefits could vary by consumer, but could be anything from a few dollars saved on their monthly bill to the convenience of having automated systems in the home. One point made during the show that I thought was great is that customers can be conscious, smart, energy users without ever knowing what a kW is! With that said, another question that came up frequently was "What about those customers who are against this technology due to various concerns?" Smart phones have shown us that these concerns (such as privacy or potential health issues due to radio frequencies) seem to disappear once you are able to show value and create consumer dependency on a product or solution.

While it is evident that Smart Grid stakeholders still have quite a bit of work to do in the home energy management space, it is encouraging that this was such a hot topic at Gridweek 2011. Creating value for the consumer will be important and helping consumers to realize this value will be critical. It will be exciting to see how home energy management evolves as it becomes more of a priority in creating a smarter grid.

Friday, September 16, 2011

The Smart Grid Killer App

This week I am attending the GridWeek conference in Washington DC organized by Clasma. The theme for the conference is The Way Forward which reflects the journey that the industry has now started as we move from vision to deployments. Leading up to the event, there were some comments on the GridWeek web page that asked the question: What is the killer smart grid app? Normally a question related to smart phones, but this time the question was directed at the smart grid. So, is there a killer smart grid app?

Last year, Eric Wesoff for Greentech Media said that “demand response is the first smart grid killer app for industrial and large commercial customers. The killer residential energy application engages the energy consumer and places the consumer in a partnership with the utility. It's not easy, it's not sexy and it doesn't look like a shiny new smart meter. But it creates a value that the majority of customers understand. And we haven't quite found it yet.”

Apparently FERC Chairman Jon Wellinghoff did find his killer app last year. In an interview with Smart Grid Today, he said that “providing consumers with an economic incentive to take part in the wholesale market will drive the smart grid.” By basically placing demand response in an equal position to a power generator, Wellinghoff said “by doing that, we're creating a market for this product that is the killer app for the smart grid. DR creates a more efficient grid and allows consumers to control and, in some cases, lower their bills. When you combine those two things together you've got a very powerful engine that can make the smart grid start and sustain itself.”

Earlier this year, Pike Research, lead by founder and managing director Clint Wheelock, identified six smart grid applications that “will change the way people use, buy, manage, and think about electricity” in its report "Smart Grid Apps: Six Trends That Will Shape Grid Evolution". This report was released earlier this year and the six smart grid apps focus on: 1) home energy management systems, 2) electric vehicles, 3) distribution automation, 4) smart-grid analytics, 5) building energy management systems, and 6) carbon management. Now we have lots of killer apps.

And this week at GridWeek, Michael Smith from Utility Analytics Institute organized a breakfast meeting with a panel consisting of Chuck Newton from Newton-Evans, Marty Rosenberg from EnergyBiz, Kate Rowland from Intelligent Utility Magazine, and Howard Scott from Cognyst Advisors. It was an interesting panel and the discussion moved to the challenge of managing data. Michael summed up the breakfast by saying that he thinks that the killer smart grid app is intelligent asset management.

My conclusion – there is not one single killer app. Demand response, including home energy management and building management will have a growing impact. EVs will also be a game changer and managing EV charging will be a part of demand response. Reliability and efficiency are driving distribution automation. I agree that smart grid analytics, especially applied to intelligent asset management will be a killer app. The industry needs a killer app to address aging infrastructure – both the assets and the people now maintaining these assets. Carbon management may be a killer app in Europe, but does not have the same level of attention in North America. Finally, no one mentioned energy storage, the killer app I might pick if I only had one choice. Energy storage decouples power generation from consumption which completely changes the landscape.

Friday, September 9, 2011

Smart grid in Europe: what can we learn about customer engagement?

Last month, GTM Research published its latest assessment of the European smart grid market. The industry analysts expect spending to reach €3.1 billion ($4.2 billion) in 2012, and increasing to €6.8 billion ($9.2 billion) in 2016, but aside from these impressive numbers the report also makes an important observation.

“While the majority of national markets in Europe are advancing smart grid goals, few if any have meaningfully engaged the end-consumer,” according to the study’s lead author, Jan van der Zanden.

This comment points to the European focus (so far) on more utility-side applications while the smart grid enterprise in the US has largely been characterized by smart metering, home automation and other customer-facing applications. However, despite this focus, American utilities have had limited success, for example, in getting customers to sign up for demand response programs.

So, the Europeans might have a look at what their US counterparts have done, but what might be even more interesting is to see if any of them score successes that could be replicated in North America.

I’m thinking in particular of the conundrum in which the residential customers who represent the greatest potential for energy and costs savings are the ones for whom the “save money” argument is least effective. To put it more bluntly, if you live in a 5,000 square foot home, chances are the monthly electricity bill is not a major expense. Given how reluctant we humans are to change our behavior, the question becomes how to motivate these customers on the basis of something other than simple financial gain.

If our European colleagues find a solution to this one, it would be well worth importing.

Thursday, September 1, 2011

Smart Grid Update

I would like to personally welcome you to the Smart Grid Update blog that I will be writing to discuss industry issues and to share smart grid perspectives and activities from across the industry. I am counting on help from other colleagues at ABB, so you’ll see the occasional guest post from time to time..

Discussions continue on what smart grid is, what the drivers are, and how we create value. Enrique Santacana, President and CEO, ABB Inc. and ABB Region Manager of North America, recently summarized the smart grid drivers that we see in a Views from the Top article in the June 2011 issue of NEMA electroindustry. He focused on capacity, reliability, efficiency, sustainability, and customer engagement and then identified grid interoperability as the key issue underlying smart grid solutions .

Locally, we have been working to promote the regional smart grid hub that has formed in Research Triangle area and across the state of North Carolina. A ”cleantech cluster” has been formed with a strong focus on the smart grid industry. I’ll be providing more information in future blogs on this initiative. Part of our involvement is the new Distribution Automation Center of Excellence that we will open in the fall and our collaboration with the NSF FREEDM Center – we are co-located on the NC State Centennial Campus making it easy for our centers to work together.

Some upcoming events that we are supporting – I’m at the Smart Grid Road Show in Montreal this week and will be at GridWeek in Washington DC in September.
For more information about what ABB is doing in smart grid, visit our smart grid web portal at