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IEEE: The expertise to make smart grid a reality

Interview with Chuck Adams

Dr. Adams served as President of the IEEE Standards Association (IEEE-SA) in 2009-2010, chaired the IEEE-SA’s Board of Governors and represented the IEEE-SA on the IEEE Board of Directors. Today he serves the IEEE Board of Directors as Chair of Public Visibility. He is also distinguished standards strategist at Huawei.

In this interview, Chuck Adams discusses the new and unprecedented business frontier that Smart Grid is poised to unleash in the coming years and he characterizes the near-term and long-term opportunities it will offer to those who seek to innovate or invest in Smart Grid technologies and services.

Question: You have said that the Smart Grid is introducing a new business frontier for entrepreneurs and investors. What do you mean by that?

Smart Grid is projected to support a multi-trillion dollar global industry during the next two decades. This substantial valuation characterizes the far-ranging influence Smart Grid will have and the exciting opportunity it presents to entrepreneurial companies and investors.

It is hard to envision a cross-industry and cross-technology program of this scope when it is in its most nascent stage of development, but we can try to characterize it based on a comparison to the mobile communications industry and the wireless Internet. We all know how vital, transformative and lucrative those industries have become; but two decades ago, and even five years ago, few imagined how these technologies would transform global lifestyles. Yet they continue to intrigue us with new capabilities, services, applications, and features.

The Smart Grid evolution promises to have significant and even greater potential. It will integrate an extended cross-section of technologies from the power, IT, and communications industries into a new, broad and complex ecosystem that has no precedent.

Smart Grid will introduce new power grid technologies and services to incorporate renewable energy, distributed resources and demand management services and it will extend transmission and delivery into the grid to improve grid energy utilization. At the same time, it will leverage integrated information and communications technologies to create innovative energy-related services for consumers and businesses. Moreover, it will connect to technologies used by the automotive, consumer, healthcare, smart home, ambient assistance and other industries. The impact of this is that intelligent homes, enterprises, and cities will be the norm in the not-too-distant future.

Question: The business possibilities seem overwhelming. How can companies identify and evaluate Smart Grid business opportunities?

The Smart Grid market potential is enormous and it is very complex. Entrepreneurs who are evaluating its business opportunities must perform their due diligence if they want to succeed.

Businesses will need to fully understand their customers' needs and requirements for participating in Smart Grid services. Some products and services will come to market faster than others and some will gain customer acceptance faster than others. And capital investment cycles will create new technological and business challenges because Smart Grid projects might need to integrate the decades-long investment cycles, associated with the power industry, with the two- to three-year cycles common to the information and communications industries.

Question: What would you say are the best near-term business opportunities for Smart Grid?

Smart Grid technologies and products that do not require significant capital investment and that are quick to manufacture and introduce will evolve extremely quickly. Digital products and services that are carried over existing IT systems and data communications networks are in this category. The near-term segments offering the most exciting opportunities will include smart meters, intelligent devices, and machine-to-machine (M2M) communications.

Question: We've been observing the smart meter rollouts. How is this segment progressing?

Smart meters are now being deployed in many regions and countries and enjoying strong growth momentum. Initial services are fairly basic, allowing customers to learn energy management techniques, but there is much room for innovation in this sector. A major step in this direction occurred recently in the United States, when the White House announced a Green Button program, supported by leading utilities, to educate consumers about their energy use and management opportunities.

In the future, home or enterprise energy management device interconnections and applications will allow us to manage energy applications that are internal and external to the home and that take advantage of power line communications as well as cloud services.

Question: How will companies introduce intelligent devices for Smart Grid applications in the near term?

Intelligent consumer devices are expected to become an important part of Smart Grid and a very sizeable near-term market opportunity. Already, consumer electronics manufacturers are embedding IP intelligence and addressability in electric appliances for introduction to the market within five years. These connected appliances will have the potential to become the initial "plug and play" interconnections for the grid. The technologies will enable manufacturers to monitor the appliances, communicate consumers about maintenance needs or remotely upgrade appliance software. Consumers will be able to use Internet applications to manage appliance energy use.

Question: What is the role for M2M communications?

M2M will play a big role in Smart Grid because it will make it possible to connect just about any grid component or energy-related consumer product to another device. Smart Grid components and products will become a significant contributor to the Internet of Things phenomenon, offering entrepreneurs another immense opportunity for innovation and investment.

M2M-enabled sensors, activators, and processors will be located throughout power grids to monitor grid conditions and help automate grid operations to improve energy efficiency and reliability. This market is already gaining traction and will evolve very quickly.

M2M technologies will also be used to enable the development and use of many consumer-oriented Smart Grid products and services. M2M-enabled home health devices are already on the market. Retail businesses, financial services firms, insurance companies and others will also develop M2M technologies for grid-related customer applications.

Over the next decade, M2M will be used to interconnect the automobile to business and grid environments, creating new paradigm for inventive automotive services and applications, including a wide variety of intelligent transportation applications. The IEEE, for example, is working to advance the WAVE (Wireless Access in Vehicular Environments) communications technology for auto crash prevention and auto black box monitoring. And integrated automotive data bus designs developed through the international AUTOSAR community will be used to connect automotive systems to grid applications.

Question: How do you characterize long-term business opportunities in Smart Grid?

The Smart Grid technologies that take longer to develop and commercialize are those that will involve developing or using new infrastructure. These endeavors require long-term implementation strategies and substantial capital investments. It also takes a longer period of time to get a return on these investments. Two good examples of long-term opportunities are EV charging technologies and communications over power lines. We can also expect service-related business opportunities to emerge as utilities experiment with new service-based business models.

Question: What types of EV charging technologies are needed?

Half of automobiles sold globally should be electric or hybrid vehicles by the year 2020. Most of those vehicles will be plugged into the grid during evening hours for battery charging and utilities need to have infrastructure in place to manage this constant demand for power. The infrastructure will involve technologies from the power grid, data communications, IT systems and new software and services. The IEEE is working on techniques for auto battery charging and storage, including the use of grid intelligence to enable remote charging and power exchange when the grid encounters heavy load conditions. Technology to wirelessly charge batteries is also being seriously pursued, although this is a longer-term prospect.

Question: What type of innovation opportunity will communications over power lines offer?

Smart Grid has potential to employ alternative communications networks: it can employ traditional telecommunications networks for access to Internet and cloud services, and it can employ a utility's power lines for communications functions. But communications over power lines is still at an early stage and near-term services will use traditional networks. Eventually, utility grids will likely incorporate more than one of these approaches. Significant innovation is needed for industry to integrate functions that operate over the various domains.

Question: What types of service-related opportunities do you expect to emerge?

As power companies begin deploying new infrastructure, I believe we will see the development of a service delivery concept in the industry. Power companies will leverage the smart meters they own, combined with communications infrastructure they have over the grid, to provide services that have added value.

It is too early to say how these services will be structured, but they could be very transformative. For example, as consumer electronics manufacturers embed IP addresses in electric appliances to facilitate communicating with the products, power companies could pursue revenues for the use of communications infrastructure that supports these services.

For commercial and industrial customers that are significant users of electricity, power companies could manage power flow and end-use loads for an added fee. Service agreements to manage energy consumption for commercial lighting and data centers represent two likely uses of this concept.

Question: How important are standards to the successful development of businesses based on these technologies?

Technology standards are now focusing on the application layer, which is where a lot of these new technologies will be enabled. These standards will help ensure that end users are better served by technology and they will also open up new arenas for business and product development. Standards organizations, such as the IEEE, will become the mechanisms businesses rely on to translate technology to the global marketplace. These programs will all evolve in an open manner, which benefits innovation, and it is incumbent upon innovators to stay abreast of these trends.

Dr. Adams served as President of the IEEE Standards Association (IEEE-SA) in 2009-2010, chaired the SA's Board of Governors and represented the SA on the IEEE Board of Directors. Today he serves the IEEE Board of Directors as Chair of Public Visibility. He is also a distinguished standards strategist at Huawei.