When details of the stimulus bill emerged last month, VARs were wowed by the mammoth amount of money the government would spend on IT from networking to business process automation and storage. But modernizing the national electric grid -- which got tossed onto the list of IT opportunities -- left many solution providers scratching their heads.
Building a "smart grid" hasn't necessarily been on the radar of networking VARs in the past, even though they already offer many of the technologies used in these projects. Given that the stimulus bill includes $54 billion for modernizing the nation's energy grid, VARs will have to take a second look at these opportunities, especially since these projects will depend on integrators for networking, storage and systems.
Major consultancies and integrators like Accenture, IBM Business Services and Capgemini have already established energy grid practices and are deep into city-wide projects both abroad and in the U.S. But efforts to transform these systems nationwide will go on for the next decade or more. Even the larger integrators acknowledge there will be room for their smaller counterparts.
"I think this is an area that will develop an entire ecosystem with large and small players," said Jeffrey Taft, global architect for smart grid at Accenture. "Some companies are going to be best suited to work with really big players. But in North America, we have 3,000 small utilities, and a lot of those will turn to smaller players to get what they need."
For networking VARs, modernizing the smart grid means building IP networks (wireless and otherwise) on top of regional utility grids that will include sensors and smart meters. Those devices will depend on the networks to send out and receive information about power usage and device overload.
At the very base level, modernizing the grid will result in automation of services and improved customer care.
"The electric grid in the U.S. is relatively un-automated," said Rick Nicholson, an analyst at IDC subsidiary Energy Insights. "If my lights go off, the utility only knows if I call and tell them."
Worse, when there's a major disaster, users must call in, and then the utility must manually call out a truck to the scene. A smart grid system would monitor and report problems and then automate repair.
But these communications networks will also enable utilities to avoid outages and better meet demand.
"[With these smart grids] when demand gets too high … they can send a signal to your thermostat to set it back by X degrees for an hour, or tell [the home system] not to run the pool pump," Nicholson explained. "They are able to predict outages based on data and conditions."
Nicholson breaks down how the implementation of smart technology would go: First, "intelligent devices" such as smart meters will eliminate electromechanical meters that require human readers. Simultaneously, the utilities will add IP addressable sensors to the grid that send and receive information from IP-addressable smart devices all along the communications network. Finally, there are the back-end systems that will range from real-time monitoring and data analytics to business process automation. Generating all of this new data will also spark the need for high-performance data centers, as well as storage solutions.
Demand for smart grid devices is already huge. Utility Pacific Gas & Electric (PG&E) has plans to replace 5 million electric meters with smart readers from startup Silver Spring Networks. Silver Spring sends meter data from its devices over an Internet-based IP network and along fiber-optic cable used by telecom service providers. The company offers a network operating system, a management platform for meter reading, data management software, access points, a central hub between endpoints, a standards-based RF repeater, and network interface cards. And now the company is partnering with Cisco Systems and a host of other technology vendors to provide integrative solutions.
As for the networking, no single technology has emerged as the perfect solution.
"PG&E is doing some meters with power line carrier and some with wireless," Nicholson said. "With these networks, they are deploying IP-addressable devices. They also have implemented network monitoring and reporting."
Smart Grid City: One integrator's use of many network types
Boulder, Colo., is knee-deep in smart meters. About a year ago, Xcel Energy pledged to bring 100,000 homes and businesses onto the smart grid using about 50,000 smart meters. And that's just the beginning of the modernization.
Plans include the conversion of existing substations to enable the transfer of power from big transmission lines to smaller distribution networks. From there, power can be routed through "smart" stations capable of remote monitoring for near-real-time information on collection, distribution and performance. The project -- dubbed Smart Grid City -- will also offer business and residential customers control devices to automate energy use and integrate energy from power generators and solar panels into the main system.
Accenture, the integrator on the project, quickly realized that there are no best practices for technology implementation in modernizing grids, but that left the possibilities wide open.
"This is a custom hybrid network -- optical fiber, BPL [Broadband over Power Lines] and wireless," Taft said. "They wanted to test a lot of different functionalities. They didn't want the communication network to be a bottleneck." He added that the project will be up and completely running by June 30.
According to Taft, it's important at this point to avoid "falling in love with a particular device or system or technology." He said that business requirements predict which technologies will be used, and they could vary in every utility.
Geography and terrain, for example, predict which networking technologies should be applied to the grid, said Meir Shargal, a principal with Capgemini's global utility business.
"I don't see one ubiquitous way to communicate from the utility to the back office all the way to the meter in the house," Shargal said.
He points to Supervisory Control And Data Acquisition (SCADA) networks, which utilities use to manage the transmission part of the grid, as proof that numerous technologies need to be involved.
"If you go to the transmission grid, there are SCADA systems, and those devices are run mostly via telephony lines and modems, but they are old technologies," he said. "There's a big difference between the transmission grid and the voltage grid -- the transmission grid is more static; the distribution grid is much more dynamic."
Shargal has seen the use of wireless-meshed radio frequency networks, WiMax in the last mile, and the use of broadband over power line when it comes to smart grid networks. Mainly, he expects to see combinations of networks to address various needs.
"Some make sense in an urban area, while others make sense in more rural areas," he said.
Progressive, green and totally user dependent
The Pecan Street Project in Austin, Texas, aims to build out a smart grid with smart meters that enable an exchange of power between users and the grid. It will also depend on a host of different technologies.
The city has already deployed 200,000 smart meters and plans to install a smart meter in every home and business in the city. But IBM, which is providing back-end systems and integration services on the project, says the city and Austin Energy built a coalition of technology companies in conjunction with the Environmental Defense Fund (EDF) to create innovative applications that will integrate into the smart grid over time.
With all of the same goals as the Boulder project, Austin also hopes to create a system in which users can dump unused power they may have stored in a battery back into the system when the grid is exhausted from over-demand.
"When you introduce plug-in hybrid electric vehicles, for example, they become another source of load -- they can become battery storage," said Paul Williamson, senior engineer at IBM Software, adding that Austin is currently working on a database of electric car owners who want to be part of the effort.
"At [3 p.m.], when all the air conditioners are on, I as the utility can say: 'Tell me how many vehicles are fully charged and will allow me to drain their batteries and bring it back into the grid.' If I implement that, I can accommodate that load without buying electricity on the spot market. That's a big change," Williamson said. Later, the cars would be reimbursed by the utility.
From IBM's perspective as an integrator and developer, this project offers a multitude of opportunities.
"Our objective is to provide the most robust, scaleable middleware on which other software companies can base their applications," Williamson said.
Read Part II of this story: Networked elevators and lights? VARs network building systems to slash enterprise energy use