The high tech industry will play a significant role in the battle to reduce greenhouse gas emissions as long as the Internet remains a level playing field. The opportunities for software companies to innovate in the energy generation and energy efficiency sectors are substantial if the priority of traffic over the Internet remains neutral (i.e., the FCC adopts net neutrality rules).

The smart grid is the main prerequisite to the Internet’s involvement in energy. The Obama Administration recently announced $3.4 billion in the development of the smart grid and related technologies. Much of these funds went directly to utilities to provide smart meters in homes and businesses. Southern California Edison has already started its rollout of smart meters under a program called SmartConnect; they hope to have 5 million smart meters active by 2012.

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What is the current smart grid infrastructure? How will we deploy the smart grid? Answer these questions and more by joining some of today’s leaders in the smart grid movement, next Wednesday, November 4, 2009 at Greentech Media’s The Networked Grid conference. The morning and afternoon keynote speeches will be given by PG&E’s Andrew Tang, senior director, smart energy web, and Oracle’s Linda Jackman, vice president of product strategy and management, utilities business. Also joining them will be speakers from California’s big three utilities and its public utilities commission, PG&E, SDG&E, SCE and CPUC, as well as companies such as ABB, Cisco, Control4, Coulomb Technologies, Enernex, Google, GridPoint, GTM Research, Intel, Oracle, Siemens, Silver Spring Networks, Stanford Research Institute, Tendril, Verizon Wireless.

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The Obama administration is awarding $3.4 billion in grants to modernize the national electric grid. One-hundred companies, utilities, manufacturers, and cities will receive the grants — ranging from $400,000 to $200 million — for projects that help build a “smart” grid that cuts energy costs, reduces blackouts, and has the capacity to deliver more wind and solar energy to American homes and businesses. Calling the nation’s grid system “dilapidated,” Carol Browner, the Obama administration’s top adviser on climate and energy issues, said federal funds would be used to expand the national grid and make it work more efficiently.

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The arrival of electric vehicles onto a grid that is expanding its use of renewable power use provides many challenges for networking, communications, and resources management. Seasoned IT firms, viewing EVs as an integral part of the larger smart grid opportunity, are lining up to provide solutions that will enable renewable power and vehicles to help instead of hinder grid performance.

As referenced in my new research report for GigaOM IT and Networking Issues for the Electric Vehicle Market (subscription required), having companies like Cisco, IBM, GE and AT&T playing significant roles make sense because of their experience. Many of the challenges are strikingly similar to those faced when the Internet became a mainstream vehicle for business and commerce.

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The creation of a smart grid of energy producers, distributors and consumers will undoubtedly be at the center of a sustainable future. Similarly using information and communications technology (ICT) to extend the benefits of urban living to outlying areas will become a much larger business opportunity.

Cisco is one company envisioning that the same principles of sustainability that will reshape the power grid will also be applied to essential services including health care, education, and municipal services.

IBM, AT&T, GE and Siemens also have designs on capturing a share of this market.

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Turning the country’s vast islands of proprietary utility networks and isolated power equipment into an intelligent grid that manages the power going into homes, offices and factories will take decades and hundreds of billions of dollars. IBM is partnering with veteran energy efficiency and grid communications company Trilliant to ensure that the companies’ grid hardware and software will speak the same language.

The agreement to integrate IBM’s Websphere and Tivoli products for managing enterprise data into Trilliant’s smart grid communications system provides utilities with and end-to-end system for collecting information and administering grid operations.

Trilliant, which currently has more than 200 utility customers, provides technology that can relay information about power consumption and network performance from smart meters in homes, to utility equipment out in the field such as transformers and substations, and then on to centralized (head end) utility servers. The company will build its management system using Websphere’s application server and the Tivoli network management suite.

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Some projects are just too big to let the private sector handle them alone. Updating our aging one-way system of centralized power production to a smart grid is one of those projects. Left mostly to its own initiative, the energy industry has done very little in technology innovation during the past fifty years to make the grid more efficient and to accommodate distributed power production.

The need is so clear that even a group that supports limited government agrees that building a smart grid that conserves energy, integrates renewables, and diminishes peak power requires the guiding hand of the federal government.

The Lexington Institute has published a paper that neatly summarizes the smart grid challenges, and concludes that “Just as the grid of today required presidential initiative, the smart grid will take a high-level policy push, too.” The public policy research group, which says it “actively opposes the unnecessary intrusion of the federal government into the commerce and culture of the nation,” adds that “Smart grid will most likely require federal, state and local government incentives” and that “Policy action is worthwhile to move promising technologies closer to full adoption.”

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Imagine directing traffic in Manhattan when the power is out, no one knows how to find the bridges or tunnels, and most of the drivers are speaking different languages. That scenario is similar to what smart grid company Gridpoint is up against in building software than will enable electric vehicles, charging equipment, utilities and grid operators to all get along.

Gridpoint is developing version 3 of its Smart Charging software (due to ship to customers in September) that will schedule and monitor vehicle charging while keeping track of the grid’s health. The software includes tools that enable utilities to understand how vehicles individually and in aggregate are impacting power demand. Utilities can compare recent vehicle demand on the grid with what would have happened with no control over vehicle charging to see how well their attempts at shifting the load are doing. The Smart Charging software also provides day-ahead demand projections based on previous charging data.

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It is understandable why some utilities might be hesitant to embrace smart grid technology. It’s expensive (Repower America says implementation will cost upwards of $400 billion) and at the same time will reduce their ability to sell their core product (energy).

Getting the utilities and regulatory agencies on board requires ample amounts of carrots (financial incentives) and sticks (limiting carbon emissions), according to energy efficiency experts Portland Energy Conservation Inc (PECI).

PECI’s new report “Wiring the Smart Grid for Energy Efficiency goes into deeply depressing detail about the many formidable challenges to implementing the smart grid. Among the toughest to tackle are that buildings are ill-equipped to participate in demand response systems, and the near total lack of interoperability today between grid equipment and building energy management tools. There’s also a lack of university and professional training programs to fill the gaping hole in HVAC engineers who can maximize energy efficiency programs.

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The Smart Grid is coming, but most people around the country are not aware of what it is or what it means to them. If a key goal of the Smart Grid is ultimately energy conservation, the Grid’s very success will be dependent upon consumer awareness and support.

The Smart Grid will bring exciting improvements to our utility infrastructure such as more reliable power delivery and options for renewable power. The new Grid will provide other benefits including peak load management for utilities and energy storage capabilities. For consumers, this will also mean the installation of a Smart Meter, an improvement on traditional electric meters designed to communicate power usage between the consumer and their utility and enable consumers to reduce their bills by managing consumption, at least in the long run. Stimulus funding will help pay for some of the development, but consumers will still need to cover more than a fair share. (more…)