Six Emerging Application Trends in Smart Grid with More ICT

Smart meter deployment is in progress nationwide, and people are aware of automated meter infrastructure (AMI) as well. However, there is more to smart grid than smart meters and AMI. What about demand and response, home energy management, and electric vehicles? And what else is hot in smart grid?

Pike Research has just published Smart Grid Apps: Six Trends That Will Shape Grid Evolution, through GigaOM Pro. This timely report discusses six smart grid areas that are gaining market footholds. The report is available from here and Pike Research briefed on the report here (Video about 6 minutes).

These are the six trends:

  1. Distribution automation (DA)
  2. Data analytics
  3. Demand response (DR)
  4. Carbon management
  5. Energy information display (EID) in home energy management
  6. Electric vehicle (EV) smart charging

DA

After AMI and smart meters, DA is considered the next hot area in smart grid. DA is defined as:

[covering] technologies that sense, monitor, report, control, and/or automate the operation of the distribution network, that portion of the electrical grid that stretches from larger substations down to individual consumers.

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Allocating Data Center Energy Costs and Carbon to IT Users
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We can improve the reliability of the distribution network by:

simply adding remote control to far-flung devices, thereby significantly increasing system reliability—especially for utilities’ more troublesome feeders.

Another emerging area in DA:

[To] “operate these assets in an optimal manner” is emerging as another driving force for advanced DA projects.

In the future, the introduction of distributed generation (DG) and Plug-in EV (PEV) will pose both a challenge and an opportunity for DA. Worldwide DA revenue will increase from about $1B in 2008 to more than $10B in 2014.

Analytics

As I covered in the panel session titled “Smart Grid Data Management,” the use and analysis of the large amount of data from smart grid will produce business intelligence and opportunities.

Initially, smart grid data analytics can enable a utility to gain insights into the operation of its infrastructure, forecast load, improve reliability, and determine business risks such as revenue loss….

Instead of solely being distributors of electricity, utilities can become brokers of information, transforming basic meter-to-cash functions into energy advisory and management services aimed at a broader range of customers.

Currently, each subsystem of the utility system, such as meter data management (MDM) systems and distribution management systems (DMS), has its own analytics embedded in it. As analytics moves into the mainstream, there will be some contention and opportunities within the utility boundary. But in the end, it will be necessary for utilities to master the skill of analytics and reinvent themselves. Moreover, IT companies with analytics expertise will enter the market. Analytics revenue worldwide will exceed $4B in 2015.

Demand Response

Pike believes DR will become an application within the energy efficiency suites of many companies. The current DR market:

[is] highly fragmented and is gaining attention from a myriad of players in adjacent markets and larger energy efficiency companies. Companies in adjacent markets are capitalizing on both new and existing customer relationships due to demand for energy efficiency solutions.

The adjacent markets include curtailment service providers, building and energy management systems (BEMS/EMS), IT, and communications players. The commercial DR market will converge IT and energy management and usher telecommunications and networking companies into the energy efficiency market. This shift means:

Most influential in spurring this shift from traditional load curtailment and peak load shifting will be the entrance of BEMS, BMS, and IT players that currently do not offer curtailment as a standalone service. For example, BEMS from BuildingIQ, EnerNOC, and others will enable DR offerings to be more effective.

Examples of BMS vendors are Johnson Controls, Honeywell, and Siemens. Cisco with EnergyWise and IBM with Tivoli are examples of IT players. US DR revenue is a little more than $1B in 2010 but will exceed $8B in 2020.

Carbon Management

The current market for carbon management:

The politicized phrase “carbon and carbon management,” at least in the United States, has caused carbon management vendors to change their marketing approach.

Carbon management vendors are partnering with, or even being acquired by, larger firms. At the same time, software and enterprise management companies with an energy management offering are partnering with carbon management firms to provide end users with a complete view of the energy value chain. Carbon management will continue to be slotted into a holistic energy efficiency solution, much the same way that DR will be offered as an energy management application.

It is expected that a holistic IT solution will be required as building technologies and services become more sophisticated:

The smart building sector as a whole is going to become a massive new driver of information and analytic needs. Carbon management software will be one of the services that IT and energy management companies will slot into their overall energy services offering.

IT will play a key role in the data and information management of carbon emissions.

As IT systems and software become more ubiquitous, they are growing to become a larger and larger part of building, energy, and carbon management systems.

This indicates ERP providers like SAP and Oracle will enter the market, after all, considering that:

The tools needed to measure, monitor, manage, analyze, and report on carbon emissions are not very different from those used to do the same with financial, inventory, and other business process data managed by enterprise solutions.

If these companies provide an end-to-end, turnkey solution for building, energy, and carbon management, end users will be able to move forward with carbon management applications more quickly than if carbon management was a standalone service.

The revenue mix of software and services will gradually change worldwide, from more than 30% of products in 2008 to less than 30% in 2017.

Home Energy Management (HEM)

There are a lot of expectations and an equal amount of skepticism for a dedicated energy information display (EID) in the HEM market because there are many other ways to display energy information, such as on PCs, tablets, mobile devices, and interactive, wireless-connected TVs.

Smart appliances are among the factors contributing to the EID market. US revenue for smart appliances is expected to exceed $9B in 2019.

In addition, the emergence of EVs will be a game changer because they require a large amount of power to recharge.

Utilities, being the major path to market for EIDs, will also provide incentives to residential end users to install an EID that both manages home energy use and provides vehicle-charging analytics. In this scenario, the car would have a ZigBee chip installed or Wi-Fi capabilities so as to connect to the home area network (HAN). Both Cisco’s Home Energy Controller unit and GE’s Nucleus platform will pivot on EV integration capabilities.

EV

In a sense, EVs are just home appliances. The major difference is that they consume much more power than other appliances. In other words, smart charging would be necessary to insure the demand/supply balance. Smart EV charging is noteworthy:

Unlike legacy appliances, they include the embedded intelligence for slowing, speeding, or delaying the flow of power that is central to making the smart grid smart. Thus, smart EV charging has been described as the “killer application” of the smart grid.

Moreover, consider these two market trends:

  1. EVSE [electric vehicle supply equipment] manufacturers have uniformly embedded smart EV charging controls into their devices as a major selling point. Most EVSE companies have formed relationships with at least one smart grid service provider to enable EVs to participate in future smart grid programs such as demand response.
  2. Establishing communications between EVSE and HAN and HEM equipment to provide a subset of smart EV charging functions from within the home.

The market forecast:

Pike Research’s analysis forecasts that global investments in the applications and hardware to enable smart EV charging will grow from $168.7 million in 2011 to $454.8 million in 2015.

The future is uncertain, but one thing is certain:

Within the next several years, EV penetration will increase within utility service territories to the point that they exacerbate or extend peak demand and in some regions possibly put grid reliability at risk. Utilities will embrace managing EVs as significant loads that can be shifted as part of DR programs.

The report concludes by giving recommendations to utilities, enterprises, and consumer product and service providers.

This is a good summary of the current smart grid market. Smart grid has been described as the intersection of power, communications, and IT. These three are not tightly integrated today. But the report indicates that some segments like DR and EV are beginning to unite technologies that until now have been applied separately. As technologies and applications come together beyond their separate domains, the real benefits of smart grid will be realized.

Zen Kishimoto

About Zen Kishimoto

Seasoned research and technology executive with various functional expertise, including roles in analyst, writer, CTO, VP Engineering, general management, sales, and marketing in diverse high-tech and cleantech industry segments, including software, mobile embedded systems, Web technologies, and networking. Current focus and expertise are in the area of the IT application to energy, such as smart grid, green IT, building/data center energy efficiency, and cloud computing.

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