Navigant Research Blog

G20 Seoul Summit and Smart Grid in Jeju: Korean Initiatives for the Future

— November 16, 2010

Last week’s G20 summit in Seoul was focused on solving current tensions in the global currency war. A two-day meeting may be too short to reach instant action items between twenty countries representing the global economy because they face complicated domestic economic situations. Global media outlets have different views on Seoul summit outcomes but it is undeniable that the summit ended without a real commitment to immediate action. In their final declaration, twenty leaders of most powerful economies pledged to work together and to refrain from protectionism and competitive devaluation of currencies. Preventing an additional currency war may be the hands-on outcome.

From a different perspective, the G20 summit in Seoul may be meaningful with a newly launched sub meeting: “The G20 Business Summit” (also known as B20 summit) promoting global efforts for the harmonization in Trade and Foreign Direct Investment, Finance, Green Growth and Corporate Social Responsibility. Many executives and top CEOs of multinational companies participated in discussions ahead of the G20 meeting. While the G20 summit reached broader and artificial agreement to solve global currency disputes, the B20 meeting may promote productive collaborations with a total of 96 arranged meetings with over 300 executives in actual business deals and agreements. One of the main themes in the G20 Seoul business summit was clean technology and green business, with discussions on the following:

• The working group for Creating Green Jobs agreed to set a robust price on carbon, scaling up research and development, eliminating fossil fuel subsidies as quickly as possible, and allowing free trade in environmental goods and services.

• In addition, Vestas CEO Ditlev Engel suggested creating more green jobs and more policy favorable to clean energy. He also called on G20 leaders to meet with him for an hour so he can help them leave fossil fuels behind.

• Jean-Pascal Tricoire, CEO of Schneider Electric emphasized the importance of promoting energy efficiency and announced organic investments plans in APAC. He noted the favorable market environment in Korea for the government initiative for smart grid and green growth strategy and in China for the largest market opportunities in clean industry.

The same week Korea also hosted the international seminar conference: Korea Smart Grid Week in Jeju Island at the southern end of Korea. Along with beautiful landscape and clean nature, Jeju has been paid attention from the world for Korea’s ongoing comprehensive Smart Grid demonstration project.

The event was comprised of a tour of Korea smart grid demonstration sites and a four-day seminar programs addressing smart grid standardization and smart grid test bed in Korea, the U.S., Australia, Japan, the Netherlands, etc. Hundreds of participants could visit the sites designed by Korean consortium companies for renewable energy, AMI, EV, HEMS, and power grid upgrades practices. Highlights of the conference were:

• ISGAN (International Smart Grid Action Network) started the global harmonization in smart grid in Jeju. Proposed by a Korean camp, ISGAN was established in July, 2010 to facilitate the international cooperation for development and standard suggested in the Technology Action Plan by the Major Economies Forum on Energy and Climate (MEF) announced in Copenhagen in December 2009. Smart grid interoperability over global standard framework may be time consuming and challenging to many market participants pursuing different interests, but it is a necessary foothold to accomplish the global proliferation toward low carbon and green economy via smart grid.

• Japan will be focusing on a comprehensive clean technology action plan: Smart Community. To Japan, Smart grid is a part of the action plan, and Japan will take a much wider and systematic approach to create world-leading reliable and green social systems by leveraging Japan’s existing leaderships in IT and high-end technologies. The key scope designed by Smart Community in Japan includes the implementation of large scale of renewable energy, home energy conservation and smart life environment, proliferation of electric vehicles, and more green technology business models.

• LG’s Real Life Demonstration Site: I visited several demonstration sites including SK Telecom and GS Caltex consortium for their smart place (AMI and HEMS), and smart transportation (EV and chargers). It was very valuable to understand their activities through PR videos and conceptual diagrams on the panel. LG’s test bed in a general residential home was exceptional and impressive because visitors can experience and see the energy saving results and understand how HAN environment in smart grid can play the functionalities over real networking framework in home. LG laid up seamless connections over smart appliances with ZigBee connection, IHD, smart meters, and demand response simulation with connected networks. Outside of the demo house, micro grid facilities comprised of diverse electric power generating sources (solar panel, wind turbine, sea water heating and cooling systems) were comprehensively integrated and linked with Li-ion based ESS, Fuel Cells, and Heat Pumps. I could see the meter rolling in reverse, meaning that consumers could earn money from generated electricity power from these facilities. This is the model for the electric power market place in which general consumers could sell surplus power generated by home based energy sources.

• Korea – the U.S. tie up in Smart Grid: The state of Illinois and Jeju signed an MOU for collaborative research and development partnerships in green technologies for private and public sectors and smart grid. Along with another tie-up between KATS (Korean Agency for Technology Standard) and NIST (National Institute of Standards and Technology) for creating standards for smart grid, the cooperation will strengthen the partnerships in both countries.

What I learned from two events in Seoul and Jeju is that more global cooperation is required. The efforts from world leaders will be essential in the stabilized and sustainable progress for the global economy. Thus, the role of the global cooperation will be more emphasized, and the efforts toward low carbon society could be the first cornerstone for such harmonized cooperation for “Our” future.

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IT to Drive Vehicle Energy Efficiency

— November 16, 2010

We can thank the arrival of the Toyota Prius, Al Gore, and a few summers of flirting with $4 gas prices for the current rise in consumer interest in vehicle efficiency and reducing emissions. While every year the vehicles – hybrids and ICEs alike – get more efficient, the 2010 crop of plug-in vehicles will be accompanied by new tools that help drivers to further shrink their consumption and footprint to ballerina size.

Intelligence built into the vehicles and charging equipment as well as web and mobile applications will enable EV owners to stretch their electric miles, enhance driving comfort, and minimize their cost of driving. Nissan recently announced that its Leaf EV will include an information system powered by software from Microsoft. (In a move that may not be surprising to the IT community, Microsoft has already announced a newer version of its Windows Embedded Automotive software, so it’s already outdated.)

In the vehicle and through their mobile phones, drivers will be able to view nearby charging stations, see their remaining miles, pre-warm or cool the car, and start or stop charging on demand. As part of its Information and Communication Technology system, Nissan has developed web applications for tracking charging history, estimating carbon reductions, planning routes to optimize electric miles, and electricity costs. This new field of green telematics will offer a significant benefit to fleets looking to slash fuel consumption.

Nissan is the second EV customer for Microsoft, which began working with Ford on its Focus EV. GM, Mitsubishi, and all of the other auto makers that will be releasing plug-in vehicles will provide similar tools for drivers to extend the range of their vehicles and maximize their efficiency, like the hybrid “hypermilers.”

Canadian company CrossChasm has developed a hardware/software combination that tracks the real world driving data of individual vehicles and drivers to estimate savings if the driver were to switch to hybrids or EVs. This sensitivity to efficiency and emissions has reached the proverbial “tipping point” and will only grow more important as fuel prices go higher.

Plug-in vehicles will send data about charging to servers hosted by their automotive companies, which are likely to share the aggregated data with utilities to help them adapt to the increased energy demand.

Established IT companies like Microsoft, SAP, IBM and Oracle are likely to be among the winners as data from vehicles and charging equipment begins pouring in. While utilities aren’t expecting their ability to meet the increased demand from plug-in vehicles to be impacted in the next 18-24 months, when significant numbers of plug-in vehicles are on the roads, they will be looking to manage EV charging to prevent increases in peak demand.

Pike Research’s recent report Electric Vehicle Information Technology Systems projects that investments in EV IT (spanning utilities, automakers, and charging equipment, and everything in between) in the U.S. will reach $371.9 million in 2015.

Just as IT revolutionized commerce and banking, they will be driving the change in the automotive and utility industries (via smart grid upgrades). It’s about time.


Reactions to Smart Grid “10 Trends to Watch”

— November 12, 2010

We recently published our free (!) white paper Smart Grid: 10 Trends to Watch in 2011 and Beyond and have received some interesting feedback. Since most of this has been expressed privately, I thought would aggregate comments on each trend and share it here.

#1 – Security Will Become the Top Smart Grid Concern. There was universal agreement here, with a few saying “uh-oh, I better learn more about this”. Awareness is growing, as are some potentially game-changing solutions for securing embedded computing and communications environments.

#2 – Distribution Automation Will Rival AMI as the Most Visible Smart Grid Application. Judging by the high interest in a recent webinar on this subject, the benefits of emerging distribution automation technologies is not a big secret. Stimulus-assisted demonstration projects, both in the U.S. and Europe, will provide some useful metrics.

#3 – The “Bakersfield Effect” Will Continue, but Some Consumers Will Actually LIKE the Smart Grid. I had no idea there were already so many Bakersfield jokes, thanks mostly to Johnny Carson. Already famous for Coccidioidomycosism (aka “Valley Fever”), Bakersfield is also home to “smart-meter-itis”. Sorry folks, I’m sure Bakersfield is a lovely place….

#4 – Smart Meter and AMI Focus Will Shift Toward Europe and China. A minor correction: I mentioned that ERDF in France is running three pilots, of 100K meters each, using different vendors. In fact, they’re running 2 pilots, one of 200K meters (Lyon) and one of 100K meters (Tours). Three suppliers, Iskaemeco, Itron, and Landis+Gyr, are each supplying ~100K meters, which are fully mixed throughout each pilot. I was also remiss in not mentioning the leading role of Atos Origin, the international consulting and system integration firm, in the development of this project. However, all this only reinforces my major point highlighting the uniqueness and importance of the successful multi-vendor interoperability demonstrated by this project.

#5 – The “Year of the HAN” Will Not Arrive … Yet. I expected some vendor pushback on this assertion, but instead have received what amounts to a collective sigh of resignation. Certainly there are many interesting pilots and deployments underway. Interestingly, many are decoupled from the smart meters that had been seen as essential. The opportunity remains, but will require patience.

#6 – The Demand Response Business Transformation Will Accelerate. No arguments here, and more vendors and utilities are excited by the transformation than nervous.

#7 – The ARRA Smart Grid “Stimulus” Will Finally Have a Positive Impact. I would have thought that any assertion that the stimulus has thus far been less than stimulating would generate an argument, especially during the height of the mid-term election season. Not so.

#8 – The Standards “Horse” Will Begin to Catch the Deployment “Cart”. This generated requests for prognostication on which technology will “win”. It is climbing out on a limb to say “IP”. We do forecast over a dozen different technologies in our Smart Grid Networking and Communications report, but it is up to the reader to judge whether there are “winners” and “losers”.

#9 – Data Management Will Be the Next Bottleneck to Smart Grid Benefits. More and more vendors are promising means to obtain useful information from the mountain of data coming from the smart grid. Perhaps we should be more optimistic re: a bottleneck. However, we failed to mention how growing privacy concerns could muddy the waters for the more interesting profiling applications.

#10 – Existing Data and Telecom Vendors Will Get Serious About the Smart Grid. Several of these vendors assure me they already are serious. I guess we will have to see how many utilities agree.

My favorite comment was that the paper was “readable and mercifully concise” – which might be more than can be said about this post. Please keep the feedback coming!


PG&E Blows it Again

— November 12, 2010

For a utility often seen as one of the most progressive in the U.S., Pacific Gas & Electric (PG&E) has just endured another embarrassing black eye with its beleaguered smart grid rollout. The company won kudos from national environmental groups when it played a key role in passing the nation’s strongest climate legislation back in 2006, but the company’s allies among environmental and ratepayer groups has now sunk to an all-time low.

Where I live in Marin County, just 45 minutes away from PG&E’s corporate headquarters in San Francisco, the grassroots opposition to smart meters had led to recent protests and an online bulletin board chronicling all of the alleged dangers linked to smart meters. From corporate conspiracy theories to concerns about public health linked to the radiation associated with wireless signals, being for the “smart grid” has suddenly become totally uncool.

The resistance to PG&E has become so dramatic that roughly two dozen local government bodies in Central and Northern California have now launched similar protests, going so far as to set up blockades of installation vehicles in an effort to halt smart meter rollouts.

While the merits of the objections to smart meters may seem far-fetched, PG&E has not done itself any favors. First, there was its support of Proposition 16 on the past June ballot, which was designed to thwart a local clean energy program here in Marin County authorized by state legislation the utility once supported, albeit tepidly. The company wanted to pass a state constitutional amendment to limit local governments from entering power markets, and after investing more than $30 million, lost.

Then there was the San Bruno gas line explosion last September, which made national headlines and which revealed that the utility’s natural gas pipeline infrastructure was inherently unsound – with primitive leak detection systems in place that lagged behind its other California utility counterparts. Four people were killed, including an employee of the California Public Utility Commission (and her 13-year old daughter), and 50 other people are injured.

And now, William Devereaux, senior director of PG&E’s $2.2 million SmartMeter program has resigned after it was discovered that he used the alias “Ralph” while eavesdropping on online discussions taking place between the anti-smart meter crowd. In a bone-head move, Devereaux forgot to remove his real name at the bottom of his email messages signed “Ralph.”

The opposition to smart meters has risen to such a fevered pitch in the San Francisco Bay Area, that the Commonwealth Club – a setting that hosts major addresses by dignitaries– is hosting an event next Thursday focused on electromagnetic frequency (EMF) issues, including recent findings that raise questions about smart grid deployments in the U.S.

Interestingly enough, this anti-smart grid movement is generating interest in microgrids, especially those being promoted by companies such as Pareto Energy and ZBB Energy, which offer models that are non-synchronous to the larger AC utility grid (and which apparently have less EMF). Those still generally supportive of the smart grid point out that in Germany and other countries in Europe, smart grid deployments rely on fiber optics and other alternatives to wireless signals.

How this all will end is anybody’s guess. Opponents have now linked PG&E’s ballot measure and the fire in San Bruno to its smart grid program – a stretch, to be sure. But in the court of public opinion, fairness seldom trumps perception. PG&E has hopefully learned some important lessons. Stay tuned to what’s happening with the smart meter controversy here on the Left Coast.

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