Posted by: nialljmcshane | May 21, 2010

Highlights from the Networked Grid Conference in Palm Springs, May 18-19 2010

May 16, 2010

The Networked Grid conference in Palm Springs exceeded all of my expectations in terms of providing a forum to learn more about the Smart Grid and an opportunity for networking.  The event was very professionally organized and was neither so big that it was impossible to connect with people nor so small that the major players were not in attendance.  I was able to interact with people from many firms in different segments of the industry including utilities, meter manufacturers, AMI networking companies, regulators, data management firms, security providers, transmission and distribution equipment manufacturers and the analysts from Greentech Media who hosted the conference.

In the opening keynote address, Rick Thompson, President of Greentech Media and David Leeds, Smart Grid Analyst at Greentech Media presented what they see as the top 5 trends in the industry at present.

Rather than diving into detail in this posting, I would like to highlight a couple of particularly notable observations that were made over the course of the conference:

  • It was reported that Duke Energy canvassed 70,000 customers for adoption of a new variable rate pricing plan and only 20 signed up.  In a later panel, the 70,000 number was challenged and an alternative number of 10,000 was suggested.  Either way, the uptake was statistically insignificant and this tells us something about customer engagement in Smart Grid.
  • Another interesting statistic that was quoted was that at least 80% of the US public has no idea what the Smart Grid is.  Certainly among people that I talk to, that number doesn’t seem out of line with my experience.
  • It was encouraging to hear Andy Tang, an executive at the PG&E utility in California, state that the Smart Grid is not a thing or a specific project. It is about how the utilities leverage technology to enhance their entire portfolio of business processes.  In fact there were numerous comments about the need for a system-of-systems approach to implementing the Smart Grid and making sure that all the integration points that will enable the maximum integration of intelligence across the enterprise are being realized.
  • On the other hand, Another utility executive expressed concern that the emergence of distributed generation technologies that are affordable at the upper echelon of the homeowners marketplace could lead to more affluent homeowners and communities separating from the grid and leaving the utilities to service only the less affluent, creating a differentiation between the haves and the have-nots in energy.
  • Terry Vardell of Duke Energy Company made a statement to the effect that demand response was a temporary solution to manage peak demand for a couple of years until the utilities got their generation portfolios to a more sustainable level.  Frankly I think this idea is very far fetched.  With demand continuing to increase, issues with permitting for new generation plants and transmission lines and the reality that nobody is about to go through a wholesale decommissioning of the coal and gas fired plants that we have today, I believe that demand response in some form is a critical technology for the long term.  I should note that other utility execs viewed demand response as the cheapest solution for peak demand issues so the view expressed above appears to be an outlier even within the utility community.
  • A discussion on the Smart Grid’s killer app was notable for its failure to identify any new ideas about what that killer app might be.  There was some discussion of demand response and electric vehicle charging as the killer apps but these are known potential applications of Smart Grid technology already and each has some issues around consumer uptake which would be necessary for them to be truly killer apps.  This shouldn’t be a surprise however.  The killer apps will emerge only when the infrastructure is in place and innovators can begin to see the possibilities to create those applications.
  • Stephen Johnston, CEO of Smartsynch, an AMI solutions provider who partner with commercial cellular operators raised some debate with a bold prediction that commercial cellular was going to be the technology of choice for all utilities going forward due to new and more competitive pricing now being offered by the major cellular operators at the rate of pennies per meter per month compared to $15 per meter per month 10 years ago.  He makes a strong case but the underlying issue is that utilities, at least in the US, are regulated in such a way that they can get a return on investment for the capital costs of building private networks but not for the operating cost of paying a cellular provider to use their public network.  Of course, if the operational cost is low enough, it can undercut the operational cost of running the private network so there is clearly a tipping point.  The exact price at which that tipping point occurs will vary based on the size of the utility and the commercial cellular approach may be especially attractive to the small and mid-sized utilities.
  • Erich Gunther, CTO of Enernex gave a wonderful workshop that presented an overview of the Smart Grid based on the NIST Smart Grid Conceptual Model.  I highly recommend this model to anybody seeking to learn more about the scope of the Smart Grid.
  • Richard Lowenthal is CEO of Coulomb technologies who manufacture EV charging stations which include Vehicle to grid (V2G) technology that would allow EV’s to act as a distributed storage asset for the grid.  Despite this, he stated unequivocally that in his opinion, he does not believe that V2G will ever become a reality because the consumer will not want to come back to find their vehicle battery having less charge than when they left it and because of concerns related to additional charge/discharge cycles on the battery life and hence the manufacturers’ warranty obligations.

Several threads ran through the event which I will expand on in future postings.  These include:

  • The battle over technology choices, standards and the reality that, in the end, multiple technologies will be successful as the networks segment into tiers based on different latency, bandwidth, availability and coverage requirements.
  • The impact of the anticipated arrival of affordable electric vehicles not only on demand but also on grid reliability and regulatory policy.
  • The trend towards de-centralization of generation with the emergence of distributed generation and increased demand for microgrids.  These are self contained entities ranging from small rural installations to large campus facilities that contain generation, distribution and possibly storage assets and the intelligence to be able to function independently of the main grid either at the behest of the utility or at the desire of the owner of that infrastructure.
  • The impact of regulation on the emergence of the Smart Grid and the various technologies that surround it and the steps that regulators are taking to move the industry towards a smarter, cleaner, more sustainable future.
  • Issues around customer engagement including market segmentation, the value of data vs information vs a managed service that provides real intelligence and guidance to consumers, concerns about privacy and security and the role of technology in driving higher ROI for consumers.
  • The expected surge in data volumes that are produced by the Smart Grid, the technical and business challenges this presents in terms of managing those data and the potential value that can be unlocked from integrating the data across the business processes and developing analytics around the resulting information.

Finally, an irony that was not lost on me was the fact that we were in Palm Springs where the daytime high temperature on Wednesday was 97°F (About 36 C), talking about the importance of reducing peak electricity demand, but the conference center was so over-air conditioned that many people were shivering in their seats.  When we stop and think about how many of the world’s 6 Billion people have limited or no access to electricity and contrast that with the perception of electric power as a basic right and expectation, not only in the US but in the western world in general, it really helps to put the importance of the Smart Grid in perspective.  Think for a moment about the cost of fuel and the impact on the environment if the emerging nations and third world countries were to emulate the western world in their consumption patterns for electric power with the same mix of generating technologies.  And why shouldn’t they seek to emulate what they see in the developed world.  Electric power and all the electronic gadgets that demand more and more of it every year have added enormously to our productivity, comfort and quality of life.  With a few exceptions, the conference focused on the impact that the Smart Grid will have in the US and, to a lesser extent, other developed nations.  But, as with so many other technologies, what we develop to tackle problems that are a by-product of our affluence can also be used to help address problems that result from the poverty that we see around the world.  In the US and other developed nations, we built large scale transmission and distribution grids because that was what was required to transport power from large centralized generating stations to the demand centers where that power would be consumed in an era where localized generation and particularly renewable generation were not viable options.  The capital cost of building transmission and distribution in rural parts of India or Africa is overwhelming but microgrids offer an alternative.  Just as many rural areas in India and Africa have completely bypassed landline telephone systems and gone directly to cellular, so too, they will bypass the centralized generation, transmission and distribution model and leverage new, lower cost,  wind and solar generating technologies together with storage to offset intermittency in order to provide electric power to their communities.



  1. Hi Niall,

    Thank you very much for a valuable witness report on what evolved as the state of the art at The Networked Grid (TNG) conference. You have done a real Smart Grid Seeking job, mainly from the telecom networks perspective.

    Using you report, and my virtual participation in TNG conference, I wrote the article “Power Industry State of the Art that Emerged from The Network Grid (TNG) Conference,” which can be read at

    • Jose,

      I think we need to be careful of two temptations in your article.

      The first is an oversimplification of the smart grid. One of the key points that was being made in connection with the system of systems approach is that the smart grid is about transforming utility business processes and, as such, it touches not only the business for generation, transmission, distribution, consumption of electricity but also every aspect of customer management from establishing and managing customer accounts, to billing, handling customer complaints etc etc. There is a danger in thinking that we can adequately architect a single system view that encompasses all aspects of this within a single model, especially given the extensive impact of different regulatory environments that will be encountered around the world.

      The second temptation that we need to avoid is imagining that we can know what the future holds. Twenty years ago when the telecom industry was beginning to go through its own digital revolution and the introduction of cellular telephone services, who could have envisioned smart phones or the many data services that are available today? Even if these services could have been envisioned, their actual realization today is much richer than what might have been conceived back then simply because of the advancements that have occurred in many fields including hardware, software and air interfaces since that time. If you believe in the power of innovation then you must allow for the emergence of products and services that are beyond our current understanding.

  2. Thank you very much Niall.

    I have been exceedingly careful. In fact, the EWPC-AF is the result of the integration of the insights of the best minds in the power industry and of a process of wide open discussions that started in 2005 in There are no temptations under the EWPC-AF. The temptations have already occurred with the series of incremental extensions of the IOUs-AF by keeping the status quo with an a priori system-of-system approach.

    All true architecture should start with a single emerging whole system (which I named as the smart power service) and the system-of-systems should be the result of the architecting process. In the EWPC-AF, the primary power delivery system and the secondary power commercial system is the highest level system-of-systems is the most simple (not simplistic) separation and thus the best to reduce the complexity. Both systems are highly cohesive and loosely coupled among them.

    The separation under the EWPC-AF is based on the architecting imperative of ultraquality in which the integrated transportation is key. It supports having a power system with high performance at operating time, with all commercial activity being done before or after.

    In the IOUs-AF, the transmission system and the distribution system are highly coupled systems. For that simple reason the separation initiated under the IOUs-AF by Open Transmission Access is now a huge architecting mistake, because of the regulatory, commercial, contractual, etc, arrangements that followed the separation of transmission and distribution.

  3. If “smart grid” extends to the residential users via “smart meters”, the “killer/key” applications are time of use billing and prepaid electricity (low or deposit-less accounts with auto shutoff and auto reconnect).

  4. Hello Niall,
    Thank you for sharing your thoughts from Networked Grid Conference. Really like the way you have summarized the various topics.

    I do agree that V2G has a slim chance of happening because of the various reasons that you have pointed. I am not so sure about distributed generation in the true sense happening in India though. First the technology is still not affordable, and there is a problem of theft in India. Solar panels do disappear overnight in India. But Microgrids as a solution in India is definitely workable.

    Thank you once again for sharing your thoughts. Looking forward to your future posts.

    • Jagan, thanks for these additional insights. Microgrids do require distributed generation but that generation can be based on renewable sources such as solar and wind or non-renewable sources such as gas powered generators. My next post will look at microgrids in more detail.

      You comment about solar panels disappearing overnight in India certainly indicates that this market has some additional challenges that may not be apparent to those who are not familiar with the local situation.

  5. […] This blog entry on the Networked Grid Conference finally crystalized the issue for me. Here are two key paragraphs: It was reported that Duke Energy canvassed 70,000 customers for adoption of a new variable rate pricing plan and only 20 signed up. In a later panel, the 70,000 number was challenged and an alternative number of 10,000 was suggested. Either way, the uptake was statistically insignificant and this tells us something about customer engagement in Smart Grid. … […]

  6. […] my last posting, I summarized the highlights and key themes of the Networked Grid conference that was held in Palm […]

  7. […] I reported in my summary of the conference, Andy Tang of PG&E stated that the Smart Grid was not a specific thing or project but rather it […]

  8. […] This blog entry on the Networked Grid Conference finally crystalized the issue for me. Here are two key paragraphs: It was reported that Duke Energy canvassed 70,000 customers for adoption of a new variable rate pricing plan and only 20 signed up. In a later panel, the 70,000 number was challenged and an alternative number of 10,000 was suggested. Either way, the uptake was statistically insignificant and this tells us something about customer engagement in Smart Grid. … […]

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