Smart Grid Musings

Investments in Smart Grid projects have drawn a lot of attention lately (including ongoing coverage in EETimes), mostly because of the scope and scale of investment that is being proposed for updating electricity transmission and distribution mechanisms. What is different this time around from previous investments in infrastructure, is that while the bulk of the investment is still directed towards upgrading the physical infrastructure, a substantial amount is being set aside for IT and data networks to support new devices, data collection and analysis and more efficient distribution policies based on real time monitoring of demand and supply, through the use of smart meters and other smart devices. While public utilities in the US have upgraded their technology investments over the past several years including wireless meter reading devices for example, the scope of this effort envisions an end to end data monitoring network that parallels the electricity distribution mechanism.

Devices that are proposed to be rolled out in the first phase of the new infrastructure investments are smart meters that are designed to monitor and control usage of specific appliances within a residential or commercial space. For example, PG & E, a local utility, has announced a voluntary program to install smart meters in homes to monitor the usage of air conditioning in the first stage of the rollout. In times of peak demand, the utility can remotely turn off the air conditioning system for up to 6 hours at a time. While the utility sees the benefits of being able to control demand and supply at peak times without overloading the system and causing it to shut down, there is no guarantee that the utilities’ customers see it the same way. Indeed some are already raising concerns about privacy issues. And you may be interested to know that PG &E has already committed to spending $500M for the first set of smart devices that will be rolling out soon.

From a commercial perspective, investments in smart grid technology do create opportunities for vendors up and down the supply chain. This includes opportunities for EDA and embedded software vendors primarily through relationships and partnerships they have with semiconductor vendors and device manufacturers. In countries where distribution is an issue either because of non optimal generation and/or losses during transmission, investing in smart grid technology may seem like two or three stages away from fixing more basic problems that affect the system. Nevertheless, even in such circumstances, the case can be made for more investment in smart grid devices and data centers that can monitor usage, if only from the perspective of being able to isolate areas where the grid is most inefficient and seeking methods to optimize the existing infrastructure for the lowest possible outlay.