If Internet companies and some utilities have their way, the smart grid will rely on the existing infrastructure of the information superhighway in order to function. They argue that by relying on existing standards like Internet Protocol (IP), the smart grid will grow faster and more organically than if utilities adopt an assortment of proprietary methods. Issues like security become easier to address too because the Internet manages exceptionally sensitive data quite well with existing technologies. To that end, the players dominating in the Internet arena including Google, Microsoft, and Cisco are all banking on the Internet’s role in the future of electricity management.

Connecting the smart grid and the Internet is a thoughtful union of two sophisticated systems. As a result, issues like net neutrality that were previously limited to high-tech circles are now relevant in the energy arena. While these new issues add complexity to the creation of the smart grid, the benefits of this union far outweigh the costs.

The integration of the Internet and electricity management will help progress the development of renewable energy immensely. Software products that rely on the Internet can play a significant role in managing the problems associated with renewable energy on the grid including intermittency, distributed generation, and demand-response. In order to roll out these major software advances, it is important to consider what already exists. The Internet provides a stable, fast, and secure medium to transport vital energy data.

One might think a major source of opposition is from those operating the existing electricity grid. On the contrary, utilities like PG&E have pushed for existing standards to drive the development of the smart grid because they need help to reach the ambitious goals for renewable energy in California. At the Berkeley-Standford CleanTech Conference Series last week, PG&E’s Andrew Tang opined the backbone of the smart grid would operate in a similar way to the Internet.

This idea is not without its problems, however. Electricity management is outside the comfort zone of Internet companies. From 120-degree heat in Arizona to below freezing temperatures in Ohio, Cisco will need to design hardware that operates in uncontrolled weather conditions. The outrage due to outages with Gmail will be nothing compared to the response due to blackouts caused by the company’s software.

The Internet culture in Silicon Valley does not lend itself well to the boring (and reliable) products required by the utilities, but cultural shifts are not unheard of in Silicon Valley. Google has more than 10,000 employees and there can be little doubt that the company undertook changes in operations and even culture during their massive growth period.

Internet companies are poised to tackle this problem. Google aims to organize the world’s information; it is clear that organizing principles will be necessary for the smart grid. The transition of electricity from traditional to renewable sources is a transition that lines up well with Cisco’s strategy. What the Internet does above all is allow small players to shake up the market. Companies like OPOWER [view some of their current clean tech job openings on the CleanTechies Job Board] are looking to become a big player on the smart grid by using software that incorporates behavioral science. Ultimately, software that relies on the Internet is the critical component required to add renewable energy to the grid.

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• IBM and Trilliant Team to Simplify Smart Grid
• The Networked Grid — A Greentech Media Conference on the Smart Grid