Building the smart grid: renewables, storage and partnerships

The smart grid is slowly rolling out. What are the successes, failures and challenges in 2011 and beyond? At the Jefferies Global Clean Technology Conference, energy experts offer their thoughts.
Written by Andrew Nusca, Contributor

NEW YORK -- As we head into the final weeks of the first quarter of 2011, what is the state of the cleantech industry as it pertains to the smart grid?

Where is interest? Growth? Difficulty? And of course, money?

That's the topic of a panel discussion at the 11th Jefferies Global Clean Technology Conference yesterday, where experts in the industry assembled to look at how renewable energy sources, storage and efficiency schemes emerge as the nation's smart grid build-out gets underway.


Landis+Gyr spokesman Stan March said his company -- the world's largest electricity meter manufacturer -- has a global outlook on smart grid deployments.

"The trends in North America are a little different than the ones in Europe," he said. "Communications protocols are different. Timelines are different. But you could say they're two peas in a pod.

"In the emerging market, you've got things like [electricity] theft. But they are still looking for infrastructure investments to minimize these losses."

March said there are two approaches early-adopting utility companies have taken to deploy smart grid technology.

"One model is when a vendor is selected for being an integrated provider -- the "one throat to choke" -- like Southern California Edison and Encore in Texas," he said. "The other model is a networks solution by one provider and meters from another. You see that at PG&E, where we're partnered with Silver Spring [Networks]."


SeriousEnergy general manager Mark Mitchell said green buildings are just as important to energy savings as a smarter grid infrastructure.

"There are dramatic opportunities to improve our energy efficiency in the world," he said, adding that his company recently completed an efficiency retrofit of the windows of the Empire State Building. "Fifty-two percent of the world's energy usage goes through the built environment."

One place to look: energy management systems.

"The kinds of savings from these kinds of systems alone are worth it -- between 10 and 30 percent savings in operational improvements," Mitchell said. "The time to act is now. Building owners need to be more intelligent about managing their buildings.

"Our buildings are almost the dumbest things that we've ever designed."

It's not just in principle, either -- there are plenty of external drivers to motiviate change, Mitchell said.

"Why now? Energy prices are going up," he said. "Read the newspaper: $100 a barrel. Our national security needs have never been greater. And businesses don't want risk. They want answers."


But what about customers -- does the nebulous topic of "smart grid" confound them, or does it become an "a-ha!" moment?

Petra Solar CEO Shihab Kuran said one clear challenge is engaging multiple verticals within a client's corporate tree.

"It's not very difficult, but it is unusual," he said. "The challenge is getting them in one room. We typically have to sell at a higher level: president or COO. It takes more time to engage multiple people."

Ice Energy CMO Joe Desmond concurred.

"Our customers are utilities, not end-users -- but we have to convince an end-user why they should allow a utility to deploy a meter," he said. "We have to be able to stand behind a cost-benefit analysis. On the approval side, we also have to talk to regulators, who are just beginning to determine the value of storage."

It's also a shift in the way an industry has traditionally approached problem-solving, March said.

"The landscape has changed significantly," he said. "In the old days, utilities couldn't find a problem that couldn't be solved by a supply that expands."

He went on:

Electromechanical meters might cost $30 apiece. But smart meters cost much more -- say, $100. You've cut the installation time by half, but increased the price by three -- you've changed the market by a factor of six.

Now you've got a fundamentally changed purchasing decision. Customer services, operations, CFO, COO…for the CEO it's a career make-or-break situation.

It's all positive. But it changes the dynamics as it pertains to the customer. You've got CEO-to-CEO [discussions] now.

In response to a question from the audience about aligning incentives and expectations, Desmond said there are two value propositions to sell: one to the utility, the other to the customer.

"We find we have to adapt," he said.

March said this gap emerges once the technology reaches the end-user.

There's a need for improved customer service from the utilities themselves. We find we're helping those folks as they empower the consumers.

That whole aspect is where utilities have been very candid, because their relationship with their customer was a bill a month. The [existing] grid doesn't have the smarts to know what's going on beyond the sub-station, so you have to call when there's a power outage.

We're not answering the phone ourselves, but we're giving them the right information they need.

"We sell our product and the product is owned by the utility. We're not naive enough to think that's where our responsibility ends," he said. "You go out and touch a lot of homes, and you're going to have a lot of questions."

Mitchell said managing expectations is also key.

"You don't need unlimited amounts of data to actually deliver a return on investment," he said. "But it does take work."

Kuran agreed.

"Hardware deployment is simple -- it takes less than 30 minutes by a lineman," he said. "That piece is easy. The harder part is the integration of that data."


Finally, panelists agreed that the next three to five years suggest partnerships, not consolidation, within the burgeoning smart grid industry.

"I expect to see more and more partnerships among technology companies and service providers," Desmond said. "The only way you're going to see things like 20 percent curtailment is through smart grid technology."

"From the metering perspective, we see many key adjacencies in terms of a smarter grid," March said. "Distributed generation, storage technologies -- they're all going to be integral pieces in improving energy efficiencies. The partnership route will be the most likely route."

"To support high-level of penetration of PV in the grid, you need the smart grid," Kuran said. "You can get up to 70 percent after that, according to studies. You need to couple them."


Kuran on permits:

"Over 90 percent of PV projects are over-run, over-cost or over-scheduled -- because of citing or permitting. Anyone who has developed a solar project, you know what I'm talking about," he said. "So we looked at places where we could put solar assets without all this citing and permitting."

Desmond on bucking current interest in "fast storage" for storage that uses energy at night to make ice during the day:

"For us, what we see is a real need to educate utilities to help them understand how to capture the benefit of our technology," he said, citing 85 percent efficiency for the system. "Thermal energy storage provides greater value at the time when you need it the most."

Kuran on "vampire power," in response to a question by former congressman John Hall (D-NY):

"There are standards in terms of standby power -- not only in terms of power consumed but in terms of quality of power from the wall," Kuran said. "The technology exists today. If there is a mandate from a regulation perspective, it's easy to meet that one."

The panel was moderated by analyst Elaine Kwei.

Photo: John Lingerfelt/Flickr

More from the 2011 Jefferies cleantech conference:

This post was originally published on Smartplanet.com

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