Report from GridEcon Conference

by Richard T. Stuebi

My colleague Carter Williams, formerly CEO of Gridlogix, which was bought recently by Johnson Controls (NYSE: JCI), invited me to participate in a panel in last week’s GridEcon conference in Chicago. Because it had been awhile since I had plugged into (so to speak) the Smart Grid discussions, I accepted Carter’s offer so that I could get more up-to-speed.

If you are one of the seven people in the U.S. who haven’t pored over the American Recovery and Reinvestment Act of 2009 (better known as the Obama Economic Stimulus package), you may not know that a large pot of money — $4.5 billion to be exact — has been allocated to the Smart Grid, plus other pockets of money may also be accessible for Smart Grid development. The Smart Grid is thus going to be the subject of a lot more attention than it has been so far. The national TV ads about the Smart Grid products from GE (NYSE: GE) are only intensifying that interest.

What did I learn from the GridEcon conference? I was hoping to crystallize my thinking about the Smart Grid, but unfortunately I walked away with my thinking just about as muddled as it had been. Joe Miller of Horizon Energy Group did provide a fairly good primer on the Smart Grid, grouping innovations into five technological areas: (1) grid condition sensing/measurement, (2) grid controls, (3) decision-support tools (for both electricity companies and users), (4) advanced customer-sited components, and (5) communications to/from and/or between any of the first four areas.

Probably most intriguingly, I discovered that, the philanthropic arm of Google (NASDAQ: GOOG), has recently begun toying with a Google PowerMeter, which is aimed to allow just about anyone to be able to assess their electricity consumption over the web (or over their BlackBerry or iPhone) on a real-time basis. Of course, the real question is: how many people will be interested in watching their electricity use the way they text their friends or surf Facebook?

Beyond Google’s presentation (by David Bercovich), I was a little underwhelmed by the insights offered by the speakers. Candidly, many of the topics discussed — wholesale power market structures, electricity pricing — seemed to me like they were lifted straight out of the late 1990’s. And, the discussions of the carbon markets did not seem cutting-edge or particularly illuminating.

At least the second day of the conference was more energized (again, no pun intended, or maybe it was, I don’t know) than the first. No doubt, this was because of the provocative comments of Marc Levinson, an economist from JPMorgan Chase (NYSE: JPM), who had the gall of asking the uncomfortable question: does the Smart Grid really provide that much value, and if so, who really ought to be willing to pay for it? This hand-grenade punctured what had been a quiet, polite and therefore mostly dull set of sessions.

The panel on which I sat — including Carter, Jamie Wimberley of Distributed Energy Financial Group and John Moore of Acorn Energy — did our best to keep up the heat. The general perspective I offered was that the Smart Grid wasn’t going to happen anytime soon, no matter how good the intentions. This is mainly because of the complex tussle of jurisdiction between Federal and State authorities to which the grid is beholden, which is unlikely to be eliminated by fiat notwithstanding the comments of observers that ought to know better, such as Senator Harry Reid (D-NV). This is further amplified by the fact that electric utilities will remain the primary implementor of Smart Grid technologies on the grid assets that they own and control, and utilities just don’t move very fast even when all of the forces are aligned.

My overall take is that the Smart Grid community is still self-organizing and finding its footing. Now that it’s much more in the bright spotlight, I expect that leaders will emerge to help better coalesce the thinking and dissemination of information. Their mission will be to cut the Gordian knot that strangles the current not-so-smart grid.

Richard T. Stuebi is the Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc. Later in 2009, he will also become a Managing Director at Early Stage Partners.

1 reply
  1. Brennan
    Brennan says:

    I agree I think the Smart Grid is still getting its footing but it is something that is pretty exciting. My problem with the smart grid is that it will be tough to protect from hackers, not so much your sitting in their mom's basement hackers but those who can break military grade encryption from other countries governments.

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