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CCBJ Vol V No 04-05: The Future of the Grid - Part II, Smart Grids and Energy Management

As automated metering infrastructure (AMI) brings new visibility and control to electric distribution grids, the electric power industry is undergoing the most profound change in its 130-year history. Consultants and vendors are leveraging expertise, technology and track records to help utilities integrate and wrest value from their new smart grids, often joining forces in "co-opetition." New business models and industries are emerging, yet key challenges loom over the smart grid, foremost among them the consumer engagement puzzle.

Overview Sketches Industry in Profound Transformation
The spread of automated metering infrastructure (AMI) is described from early adopters like Italy and Norway to emerging markets like Brazil and India. Growth scenarios from CCBJ and leading researchers. Analysis of the profound challenges presented to North American electric power distribution utilities that rapidly shifting from dumb to smart. For many utilities, the transformation is just getting underway and strategic blunders have been common. "We're talking enterprise-scale transformations, changing business processes, changing organizations and cleaning up a lot of [existing] technology and data," said David Shepheard with top electric power consultancy Structure. "Imagine trying to run a modern air traffic control system with a bunch of paper maps, some little plastic planes, a long ruler, and a sharp number-two pencil."

Demand Response Industry Broadens Product Mix as Capacity Markets Mature
The demand response (DR) market has grown dramatically since it was born less than 10 years ago. But it will take more innovation by DR aggregators and more bold action by state regulators to extend DR beyond its core value-mitigating grid stress during times of peak loads by curtailing consumption at commercial and industrial (C&I) sites-and to expand the markets in states like California and Texas, where DR has yet to play a major role.

HEM/HAN Market Still Taking Shape
The emerging home energy management/home area network industry is still nascent and almost entirely mediated by electric utilities. Some major players have exited, but many more are joining, including strategic partnerships between appliance manufacturers, cable TV providers, app developers and HEM/HAN technology companies.

Texas On the Cutting Edge, But Consumer Value Proposition Still Emerging
With only low-capacity links to the Eastern or Western interconnections, Texas is a grid unto itself. The state, which radically restructured its markets for competition, has made enormous strides in AMI deployment and financing of new transmission to tie remote wind resources to grid centers. Retail electricity providers compete fiercely and many are revamping product lines to take advantage of new data streams and capabilities from the smart grid, but some industry watchers question whether their business models are a good fit for home energy management.

Other feature stories
Building Automation Attracts Big Players as the Market Ramps Up; Microgrids Move Beyond Specialty Apps to Full Scale Market; ENBALA Pioneers Market for Frequency Regulation with Networked DR.

Chevron Energy Solutions; Computer Sciences Corp.; IBM; Itron; Sacramento Municipal Utility District; and SAIC.

Other firms and organizations cited or quoted
ABB, AES, Bloomberg New Energy Finance, The Brattle Group, California Independent System Operator, Canaccord Genuity, CenterPoint Energy, Cisco Systems, Constellation Energy, Cox Enterprises, Distributed Energy Financial Group, DNV KEMA Energy & Sustainability, Dong Energy, Echelon, EnerNex, Environmental Defense Fund, Greentech Media, Groom Energy Solutions Honeywell, Johnson Controls, Landis+Gyr, Menlo Energy Consulting, Mott MacDonald, New York Independent System Operator, Oncor, Pike Research, Schneider Electric, Smart Grid Consumer Collaborative, Reliant Energy, Telvent and others.



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