The low-down on Smart Grids

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Smart grids are the digitization of the electric grid, led by electric companies and other utilities. At the moment smart grids are most noticeable in the consumer market, particularly in smart meter installations which are making it more efficient for the electric company to bill people.

But this is far from only a consumer issue. Smart grids are poised to have a hefty effect on your IT budget as well. From controlling the data center cooling costs to spurring the rise of additional ISPs and creating the ability for enterprises to sell energy created in the data center, smart grids are far more important to your IT shop than they are to your home office.

Some see the drill down in energy use to be helpful in controlling the monthly bill. Homeowners can proactively manage when they turn on appliances, for example, to avoid peak billing rates. Critics see the innovations as an invasion of privacy because police can presumably use information from smart meters to discover illegal activity in the building, insurance companies can use its data to determine rates on health and home owner policies, and criminals can discover where to find the really expensive stuff to steal.

In any case, there is no doubt that the electric utility model will be changed forever. “Power grids will change from single directional power flows – central generation out to end consumer – to operating networks, where all consumer points can also become either receivers or generators of power at any given time,” says Eric Smith, global head of Smart Grid Practice at Wipro Technologies.

“This will require utilities to develop a new generation of Distribution Management Systems (DMS) capable of managing the resulting huge volumes of real time data to remotely assess all aspects and remotely configure such all pervasive networks,” he adds.

This, of course, begs the question of how secure the new smart grids are likely to be. “This ‘digitization’ of the electrical grid is creating a tidal wave of data that many utilities are not prepared to manage, secure, and protect,” says Eric Rapisarda, director of Information Infrastructure Solutions, Energy, and Service Providers at EMC Corporation. “We are finding that the more successful utilities are taking a strategic approach to information management by looking across both operational and IT domains to glean best practices.”

The Business End of Smart Grids

But amongst all the controversy, few stop to consider what the use of smart grids mean to businesses and the workplace. It means different things in different geographies and in different industries. However, there are some common advantages to all businesses, namely in the increased predictability of energy availability and consumption. In other words, electric companies will be able to manage outages and surging power demands more effectively – even redistributing power from areas with a higher supply across country to areas experiencing a surge in demand.

“The whole smart grid concept revolves around improving automation, energy efficiency, and increasing the availability of the electric grid across generation, transmission systems, and distribution levels,” explains Farah Saeed, senior consultant in Energy and

 Power Systems at Frost & Sullivan, an analytical and consulting firm.

Recent market adoption in the U.S. has been high. IDC Energy Insights predicts adoption in Europe and China to “act as the primary catalyst for market growth for the next five to 10 years.”

"Both governments and vendors – including IT powerhouses like HP – will drive the deployment of smart meters and smart grid initiatives worldwide," said Ryan Reith, program manager of IDC Energy Insights Tracker products.

Bending and Blending Technologies

To produce smart grids requires considerable technological prowess and the development of new technologies. “In order to provide a seamless system, the market is witnessing convergence between IT/Telecom and power equipment,” Saeed notes.

HP’s role, for example, in smart grid development is primarily in automating data center energy management. Its new HP Smart Meter Intelligence solution incorporates a unified data provisioning platform, Neoview, with consulting services and partner technologies, while applying business intelligence best practices.

A big part of that solution is built-in security. Ian Mitton, HP’s utilities industry director and global lead on smart grid technology, publicly warned attendees at an Executive Energy Conference in Dubai last year that security needed to be built in and not bolted on afterwards to prevent untenable security risks.

Enterprises turn to vendors such as HP for internal automated data energy management. HP achieves this via new smart servers with a “sea of sensors” built into the cabinet. The sensors automatically adjust components to save power and alert administrators to any changes that are needed in the power and cooling facilities.

Signs of IT/Telecom convergence in the U.S. on the electric utility end of the smart grid are plentiful. Current Group and Verizon, for example, have allied to “combine intelligent distributed sensing from Current Group with an Internet Protocol-based solution from Verizon.” Under an agreement struck last year, the two companies are enabling real-time power consumption and analysis communications between electric companies and sensors deployed on their networks. In other words, they’re building an IP-enabled power grid. Their efforts are aimed at helping the utility companies. AT&T is striking a similar deal with Current Group, and plenty of other players are forming partnerships and fusing technologies pretty much at will. There are no standards yet to manage the convergence of all the involved technologies.

Similar partnerships are appearing all over the world. For example, in the U.K., Cable &Wireless Worldwide and Current Group are partnering to help electric companies achieve the goals of the UK Government's Low Carbon Economy and National Smart Metering programme. The same type of deals, albeit with different industry players and in tune with each country’s regulations, are happening in Portugal, Spain, China, India, Indonesia, and other countries and regions.

How Smart Grids Will Change How Business Is Done

Inevitably, smart grids will change a lot of things about our daily lives. For one thing, many people and organizations are accustomed to a one-fee charge for energy usage regardless of the time of day. The change-over to actual costs per time of day require people (and businesses) to actively and individually manage the electric bill. “While a smart grid system should facilitate overall system-wide reduced energy costs, alignment of real or wholesale energy costs with retail will cause energy cost increases at certain times of the day,” explains Rich Huntley, energy efficiency and demand response practice leader at Vertex Business Services. “If individual customers do not act, whether manually or via automated systems, they could well find themselves spending more.”

There will be cool advantages to using a smart grid as well, primarily in the advent of the Home Area Network (HAN). The possibilities of HANs are almost endless. You will be able to “set” your entire home on settings of “home, away or sleep” to automatically adjust power use. Sensors all over the home can detect “life signs,” such as movement throughout the house, to check on the elderly or children. You’ll also be able to secure and monitor your home remotely for security reasons or simply to adjust your home settings. Using Zigbee or low power Wi-Fi, your video, personal music or photos can follow you around the house, automatically jumping from screen to screen or device to device. You’ll even be able to get broadband over electrical wiring in the house.

Now apply all those consumer advantages to your business, as well.

Changes in the workplace will also evolve as smart grids become smarter and vendors produce more features, add-ons, and tools. But here are just a few of the changes you should expect to see first on the scene.

Facility Management and IT Will Converge

Given the extremely high level of technologies involved in smart architecture in buildings and/or internal command of smart grid management, IT will assume the role of facility management out of necessity.

“The bigger the business, the greater economies of scale could be achieved, thanks to the granular data in real time that could be analyzed,” says Lee Yi, tech expert founder of Drund, a Web-based platform that recognizes a user's data consumption. “Real estate owners would be additional nodes of power input to the system and so they could also factor that into the equation of value of their location.”

Work Scheduling Based on Power Usage

It is conceivable that some industries become more flexible in scheduling for workers to significantly aid the business’ power costs. By redistributing the number of workers in each shift — based on when power rates are lower – companies can potentially meet the same productivity levels with lower overhead.

The same holds true with the company fleet of electric cars. Fueling can be scheduled for the cheaper times of the day, as will battery recharging for energy storage in vehicles or building structures.

Data Centers Morph from Cost Center to Revenue Stream

Enterprises can control data center energy and cooling costs with the smart grid, but they can also sell energy generated from the heat of the data center. The energy can be sold for cash or energy credits, either directly to the utility company or to a power aggregator.

“Certain parts of the USA have regulated to incentivize commercial ‘aggregators’ such as Enernoc, who contracts with end customers to either reduce demand taken from the grid or to make generation capacity available on signals from the Grid controller,” explains Smith. The role of such aggregators is likely to become a key part of the Smart grid supply chain with demand down to consumer level being dynamically managed in the same way, he says.

“In fact, recently it has been determined in the USA that the price paid for either reduction of demand, otherwise known as negawatts, and equivalent generation capacity should be the same,” Smith adds.

In other words, a company can make money by deliberately reducing its demand for a period of time (which could be hours or days or weeks) so that the energy can be used elsewhere. Or, the company can be paid for energy it creates and makes available to the smart grid or aggregator. The price for either item will be the same in the U.S. It is unclear how pricing will be set in other countries.