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10 Things I've Learned About the Smart Grid

<p>The inordinately complex processes of developing a truly connected grid means that progress is happening slowly even as the technologies behind it are coming up to speed. These 10 lessons highlight the potential and challenges we face on the path to a smart grid.</p>

I first heard the term "Smart Grid" in 2005 when I was invited to a meeting of the GridWise Architecture Council in Denver to discuss possibilities for organizing a collaborative Smart Grid event.

With a background in building automation and energy management, I could easily grasp the concept of Smart Grid -- basically, connect and automate everything from generation to consuming devices to deliver greater efficiency. That's all there is to it ... right?

Oh, naiveté is such a wonderful thing. After organizing collaborative events at the center of the worldwide energy discussion for several years, here are 10 things I've learned.

1. Smart Grid is quite complex and touches almost everything.

gbx logoWith Smart Grid, nearly every electronic device will be connected. For example, the grid is connected to your home, which is going to be connected to your electric car, which will be connected to your GPS and the internet, which is connected to your email and social networks. Your car will also connect with the charging station at your office building. The building may even buy power from your car if you can offer a lower rate than the utility. So, that building will be connected to your bank account, where it will automatically deposit the amount "negotiated" by the building and your car. It doesn't end there. The car will be clever enough to know -- by looking at your schedule -- that you have a 40-mile drive to dinner so it can leave enough juice to get you home.

2. Smart Grid touches everyone.

Getting Smart Grid right is a key part of the broader clean and sustainable energy trend cutting across many key global issues, including security from oil-dominated petro-dictators, to climate change, to sustained economic growth, to the well being of people and the planet. Many have compared Smart Grid to the Apollo project, but in reality, it's broader and more important than that. It affects pretty much everything and everyone. As such, all types of peoples and organizations will play a role, and very few are excluded. As Smart Grid becomes so far-reaching, education will become more and more important.

3. People need to get smart about electricity -- education is key.

Let's face it, electricity is just there. We flick a switch, the light comes on, and that's where our understanding stops. We know very little about the energy system fueling our digital society. But unless we upgrade our 20th century infrastructure to a smarter, cleaner, and more sustainable grid, many of the electrical luxuries we've taken for granted could be stripped away -- in the form of blackouts, soaring electrical rates, and environmental consequences. With Smart Grid, it's important for customers to not only understand why it's necessary, but also to have a realistic understanding of the benefits. For the first time, consumers will start seeing their real-time consumption and billing data, while realizing the consequences of their actions. Without proactive engagement, participation could suffer, and utilities could even experience backlash (as we've seen in California) -- rendering the business case built around consumer participation essentially useless.

4. Smart Grid can be an economic driver.

If venture capitalists (VC) are any indication of economic potential, then we have a winner. VCs are swarming around Smart Grid and clean-tech start-ups like bees on honey. The US government is also investing -- $4.5 billion, to be exact. Why? Because Smart Grid will create economic growth and jobs. If we compare Smart Grid to the creation of the Internet, the potential for technology and innovation is almost unprecedented. Think: smart phones, iPods, Facebook -- all innovations enabled by the Internet. Innovation drives jobs, and if we get standards right (i.e. open), the Smart Grid playground will continue to fill with excited entrepreneurs and start-ups, and thus, jobs.

5. Standards are great; let's all each have one.

In my recent global travels, I experienced both standards "done right" and standards "done wrong." Ethernet cables and Internet -- "done right," because they're the same across the globe. Electrical outlets and plugs -- "done wrong," as different adapters are needed almost everywhere. My hope is that Smart Grid evolves like the Internet, and we can develop global standards. The concept of encouraging proprietary standards -- "let's all each have one" -- and waiting for a de-facto winner can't work here. We don't have the time for a VHS-Beta battle to take place in the market. Energy is too important.

6. We must break our "silo" way of thinking.

Today's businesses are rewarded by Wall Street for focusing their workforce. If you sell blue widgets, then nothing should detract your employees from perfecting the blue widget. But, if you consider the breadth of connected systems within the Smart Grid, there's tremendous value in breaking down silos and working across functions and even across industries. Power companies have the opportunity to eliminate redundancies and realize new efficiencies, savings, and customer service opportunities. The energy industry has the opportunity to benefit from cross-industry collaboration -- especially with IT and consumer products companies -- to avoid reinventing the wheel.

7. We need young energy.

The energy industry is broadly driven by white, middle-aged men. In the US, it's predicted that many utilities will lose 50 percent of their workforce to retirement in the next five to 10 years.

The youth are the future of energy, both as consumers and as producers, and we rely on this inspired group to ensure a pipeline of young talent going forward. Anyone who has been around "Millennials" (a.k.a. Generation Y) understands that they think differently and have a different set of expectations. They live, breath, and sleep in a virtual world and understand -- better than any other age group -- the benefits of smart, connected devices for the future of energy. We need their engagement now.

8. Smart Grid is a global problem and opportunity.

I recently spent 21 days traveling the world, and it quickly became clear that everywhere I traveled there was as much enthusiasm about Smart Grid as there is in the United States. In many cases, some of these nations are moving faster -- especially when it comes to electric vehicles. We must leverage the expertise of these countries and work collaboratively across continents -- particularly when it comes to standards. I predict we'll be seeing a lot more interaction between the US and other parts of the world -- specifically the EU, Korea, and Russia -- in the near future.

9. While the term Smart Grid is new, the concept is not.

We began increasing the IQ of our transmission infrastructure decades ago because it was too costly not to. The UK has been automating its distribution grid for years, delivering some of the best reliability in the world because its regulatory structure incents reliability. The Smart Grid is a journey and will never be "finished", but we have a lot of work ahead to bring it to the level of other modern-day technologies and conveniences. The technology and expertise exist to do it. The journey is in how we work together.

10. We've got the right stuff -- now we need the geeks, politicians, regulators, and entrepreneurs to put it all together.

My mission is to foster collaboration. After spending much of my career in building automation, I came to realize that much of the industry operated in silos. One group would be diligently working to solve a problem that had already been solved by someone else. This is when the idea was born for creating collaborative energy conferences to bring related, but disparate, groups together.

Only by bringing all the key stakeholders to the table can we realize the true vision of Smart Grid -- as an enabler of efficiency, clean energy, consumer empowerment, and energy independence. With that in mind, see you all at GridWeek in DC this October!

Anto Budiardjo is president and CEO of Clasma Events, a global event company specializing in conferences at the center of the worldwide energy discussion. Focusing on Smart Grid, connectivity, and the new energy economy, Clasma's major events include: ConnectivityWeek, GridWeek, and Grid-Interop. Anto can be reached at [email protected]. Follow him on Twitter @AntoBud.

Images CC licensed by Flickr user OiMax.

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