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MHT's Efrain Viscarolasaga: Preparing the smart grid for more power
Most would agree that alternative energy sources — wind, solar, hydro and others — will soon be major contributors to the world’s power grids. But what has been overlooked by many clean energy proponents over the past decade is the fact that the power grid itself is in dire need of an upgrade if it is to handle these new power sources.
The solution, say industry insiders, is a “smart grid” — a power distribution network capable of also providing two-way communications along its corridors, allowing applications to improve efficiency, integrate alternative energy and protect the grid. While the modernization of the grid won’t be cheap, it is potentially a billion-dollar opportunity for a number of local companies.
Last week, Newton-based Ambient Corp. took a large step forward in positioning itself as a player in the smart grid infrastructure business by being accepted to Verizon Wireless’ open developer platform. The deal certifies Ambient’s broadband over powerlines communications node as an approved device for connecting into Verizon’s EV-DO 3G network. The end result would be a two-way communications network that uses utility power lines within a grid’s geographic area and Verizon’s wireless network for long-haul communications.
“Leveraging the network that wireless companies have spent billions building out is a significant milestone in building out a smart grid,” said Ambient CEO John Joyce, whose company offers utilities the ability to deploy smart grid applications, such as remote meter reading, load control and equipment monitoring.
Ambient, which is traded on the over-the-counter bulletin board and employs about 30 people, is currently selling product to Duke Energy Corp. Ambient also counts Consolidated Edison Inc. as an investor and partner in a pilot test in New York.
More players on the grid
Ambient isn’t the only local company banking on the smart grid. Boston-based Zigbee wireless chip maker Ember Corp. has found a home for its low-power chips in automated meter reading and linking the home to meters, rather than meters to the utility. The company is part of two pilot tests of the technology, one in Texas and one in California, and is seeing a merger of the home automation and smart grid sectors, according to Skip Ashton, senior vice president of engineering for Ember.
“There are a lot of technologies coming to bear here, so there are a lot of opportunities,” he said.
Also in Boston, EnerNOC Inc. has built its business on a smart grid application called demand response, which helps utilities reduce power usage during peak demand, and has expanded into others, including efficiency programs. The company reported a steady increase in revenue in 2008, from $18.6 million in the first quarter to $23.7 million in the second and $44.1 million in the third, and it expects 2009 to be a banner year for the smart grid.
“When 99 percent of people think about the smart grid, they think automated meter reading and the infrastructure,” said David Brewster, president and co-founder of EnerNOC. “But it’s not just the infrastructure but the applications. It’s the applications that make a smart grid smart.”
Smart grids could also help utilities integrate alternative energy sources, such as wind and solar, that are intermittent. In addition, other applications, such as allowing home owners to track the energy efficiency of their homes online, could help lower electric bills.
“The potential applications that haven’t even been thought of yet are almost endless, especially with an IP (Internet protocol)-based technology,” said Joyce, adding that one key in the development of such an infrastructure is that it needs to be based on open standards, much like the Internet itself.
But insiders also warn it will not come cheap. According to a recent report by economic research firm the Brattle Group, power companies in the U.S. will need to spend approximately $1.4 trillion over the next 22 years to meet the growing power demand and modernize transmission. Lux Research, breaking out smart grid technologies from other grid improvements (power lines, storage), projects smart grid technology to be worth about $4.7 billion by 2013, up from $2.7 billion last year.
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