Navigant Research Blog

Smart Grid Communications’ Awkward Adolescence

— March 21, 2012

While communications technology was used in the electrical grid long before we started labeling it as “smart,” integration of these communications networks into a common fabric is an essential characteristic of the smart grid.  This integration requires adapting existing standards or creating new ones to meet the specific needs of the grid applications.  That process is well underway – as documented in Pike Research’s new report, Smart Grid Networking and Communications.

There are two particular areas of progress to note: the evolution of a standards-based radio frequency (RF) mesh network for field area networks, and broader mainstream adoption of cellular communications.

The RF mesh network used for AMI networks and some distribution automation applications has historically been one of the most proprietary domains of grid communications.  Silver Spring Networks carved out a leadership position in the wave of AMI deployments starting in 2008-2009 by offering an IPv6-based system.  However, due to a lack of available standards, the radio and mesh protocols underneath the IP-layers remained proprietary.  The IEEE and IETF, with the participation of many of AMI vendors, embarked on development of the appropriate standards embodied in IEEE 802.15.4g , 6loWPAN , and RPL specifications.  Even as these were jelling, Cisco and Itron partnered (leveraging the Arch Rock technology acquired by Cisco) to develop a fully standard AMI network implementation, which was finally unveiled at the beginning of this year.  Virtually every other AMI vendor has released IP-based roadmaps and meters promising the flexibility to be “IEEE 802.15.4g ready.”

In parallel with the emerging standardization of private field networks, public cellular technology is making significant gains, supported by broader 4G technology availability, more focused (and cost-effective) offerings by carriers, and more open cellular-based systems provided by vendors.  SmartSynch won one of the largest AMI deals in the United States at Consumers Energy, and was ultimately acquired by Itron.  RF Mesh innovator Silver Spring Networks released its Gen4 lineup featuring seamless private/public network integration, which may allow greater access to markets outside North America and Australia.
Though multivendor, standards-based, interoperable RF mesh networks and bullet-proof cellular offerings may not be quite here yet, we are getting very close.  Some of the vendor solutions still have all the grace of pimply-faced teenagers, but it is clear that the trends identified in 2009 are becoming reality.

On March 27-28 I will chair the “Smart Communications for Energy Management 2012” conference, created by our friends at Smart Grid Update, in Atlanta.  A solid collection of leading vendors and utilities will gather to examine the issues around smart grid communications implementations, roadmaps, and standards.  Join us if you can.


Maturing Cleantech Sector Faces Tough Questions

— March 15, 2012

In today’s maturing cleantech marketplace, cleantech companies are going to increasingly face resistance and deeper questions about their products, and should be prepared.  By no means have cleantech companies gotten a free pass on the health, environmental, and safety side of the ledger to date – but in general, it’s fair to say that the view of the general public, led by early adopters and advocacy groups, was that cleantech installations = carbon reduction = good.  But now that cleantech has moved (in the view of the general public) from an intangible intellectual and political exercise to the public’s backyard, many are asking, “How clean is clean technology?”

There is no complete answer to this question, but the trend is clear: The more that wind farms and other cleantech installations become part of the landscape, the more of an uptick we’ll see in the number of spectacular technology failures, accidents, complaints, and research into the effects of living with these new technologies at scale.  One of the most interesting trends in the 2010 and 2011 editions of Pike Research’s Energy & Environment Consumer Survey was the eroding support among consumers for clean energy concepts.  As with any ubiquitous technology, these issues are inevitable and they will have to be adequately addressed at risk of delaying or delaying or permanently damaging an entire industry.  The issues generally fall into the following categories:

  • Feedstocks & fuel sources: Corn-based ethanol is the poster child for the importance of considering the full lifecycle of a fuel and the dangers of reallocating agricultural land.  Similarly, although plug-in electric and hybrid-electric vehicles are head and shoulders cleaner than gasoline, even when powered by coal power, in some cases plug-in electric vehicles produce more GHG emissions than hybrid electric vehicles.  Furthermore, the growing demand for lithium to make advanced batteries is resulting in a flurry of mining interest in remote parts of Bolivia that could pose serious human rights and environmental issues.
  • Manufacturing processes & labor practices: As more and more cleantech manufacturing is ramping up in China, will companies ensure their facilities maintain similar levels of worker safety as in the US or Europe? The American public briefly looked up from their iPhones to take notice of investigations into Foxconn’s poor labor practices, and workplace conditions could be damaging to many companies if similar conditions are discovered at cleantech manufacturing facilities.
  • Siting & malfunctions: The desert tortoise (and the importance of its habitat) stalled the installation of massive solar farms in the Mojave Desert, pitting former allies against each other as environmental NGOs and clean-tech developers sparred for years.  Also, several rare but catastrophic wind turbine failures have resulted in mounting opposition to new developments in many communities around the world.
  • Public health & product recycling: Companies rely on potentially toxic chemicals, including mercury for compact fluorescent light bulbs, cadmium telluride for thin film solar panels, and cadmium for batteries, to drive down costs and increase efficiencies.  Numerous independent and government studies have concluded that these technologies are safe when used correctly and company recycling programs are adequate.   But as solar becomes a commodity and we increasingly look to batteries for storing renewable energy, the potential for public health concerns mount.

None of these are close to being deal-breakers for cleantech, and the impact on the planet of NOT installing clean technologies at scale and quickly far outweigh the risks of doing so.  Still, the industry must address these critical issues if it wants to reduce costs and avoid potential pitfalls and political blowback.


The Trafik is Terrible, Let’s Go Electric

— March 15, 2012

Concerning transportation, post-Soviet Moscow has not been known for progressive policies.  Ever since the fall of the Communist Party, Moscow authorities have been content to let the free market govern the city’s transportation infrastructure.  As a result, the city has become infamous for its congestion and is believed to have the longest (in terms of duration) traffic jams in the world.

Russians have been moving to the city and buying cars in droves, increasing the number of cars per thousand residents from 60 to 350 from 1991 to 2009.  To manage the increase, authorities sought to build Russia out of congestion rather than to invest in public transportation.  (Which is unfortunate, considering that Moscow has one of the world’s legendary subway systems.)  The result: wide avenues lined with cars at standstill.  The problem has grown ever more troublesome as both government officials and wealthy oligarchs posing as government officials have subverted traffic law by mounting phony police sirens on their vehicles.   In early February debate roiled again as a cyclist nearly drowned in the Moscow River in attempt to avoid such a traffic jam.

In lock step with past policies, the latest discussion among Moscow’s authorities is whether or not to allow senior officials to travel across the city by helicopter to alleviate some of the congestion.  Another suggestion made by Mikhail Prohkorov, who ran quixotic (and unsuccessful) for the Russian presidency in this month’s elections, was that the president’s residence should be moved out of the Kremlin.  Despite any real attempts to move Moscow’s traffic jams along, several of Russia’s business guru’s are moving ahead with their own plans to make Moscow, if not less congested, more environmentally friendly by introducing plans for electrified transportation.

The first development started a little more than a year ago, with the announcement by Prokhorov that his Onexim Group and Russian truck maker Yarovit were going to introduce Russia’s first domestic hybrids.  True to the promise, Yo-Mobile announced late last week an innovative line of CNG hybrids will go into production in St. Petersburg and should be hitting Russian dealers by late 2012.  The second development began with lesser known Maxim Osorin, owner of Revolta, who recently secured an investment of 1.5 billion rubles ($49M US) from Florida-based Enerfund to build an electric vehicle charging network of 2,000 AC stations and 100 DC fast charge stations throughout Moscow and several other Russian cities.  Moscow United Electric Grid Company also announced the start of MOESK EV which will place 28 charging stations this year, and potentially several hundred over the course of the project, throughout Moscow.  If you’re going to sit in traffic you might as well do it in an EV.

The push for electric comes on the heels of the Mitsubishi iMiEV’s (it is currently the only EV model available in Russia) introduction to Moscow streets last August.  Before the end of 2011 only 41 were sold; however, it is hoped that with an increase in publicly available charging stations, sales will grow and more EV models will become available.

The developments are a few years behind what western European brethren have put into place, but the flurry of activity in the past months alone has been if nothing else, encouraging.  Though these efforts can hardly be argued to have any effect whatsoever on ameliorating the traffic woes of Moscow, they are shifting the discussion towards actual efficiency and environmental gains for Moscow’ streets and air quality.  An example being, in mid-February Moscow City Hall announced it will finally invest in public transportation through 2,000 eco-buses, and a number of high speed trams.  These plans mark a divergence from Moscow’s reticent approach to traffic mitigation, and the trend may present a future that includes both tolerable and efficient commutes for Moscow’s highways.


On Emissions Limits, California Goes its Own Way

— March 14, 2012

Earlier this year, the California Air Resources Board (CARB) completely revamped its passenger vehicle emissions control regulations. The new Advanced Clean Cars program, which covers model years 2017–2025, combines several regulatory schemes into the new program: the Low Emission Vehicle (LEV) program, which governs tailpipe regulations for light duty vehicles; the Clean Fuels Outlet regulation, a largely dormant effort to promote alternative fuel availability; and the most famous, or infamous, component, the ZEV mandate requiring automakers to produce vehicles with no tailpipe emissions.

California already has a reputation for marching to a different drummer, and this new program confirms that stereotype.

First, while it is now practically verboten to talk about carbon reduction at the national levels of U.S. government, California is openly embracing the idea.  Previously, the LEV and ZEV programs only addressed criteria pollutants.  The Advanced Clean Cars program expands the regulations to cover greenhouse gases (GHG) emissions.  By 2025, under the new regulations, passenger cars’ CO2 emissions will drop 34% from that of 2016 models.  The program is intended to help reduce GHG emissions in the state to 80% below 1990 levels by 2050.  In its scope and ambition, the new program resembles the carbon reduction goals and strategies being enacted in Europe more than anything happening elsewhere in the United States right now.

Second, the ZEV mandate remains a top-down, “technology forcing” regulation, contra a general preference for policies that simply allow new technologies to flourish.  While opponents of the ZEV mandate have painted it as an inflexible government “stick,” the Air Resources Board has always been open to modifying the mandate in response to changes in the technology landscape.  This flexibility helps explain the mandate’s remarkable resilience.  Consider that it was enacted in 1990, when the Soviet Union was intact, Tim Berners-Lee had just proposed something called the World Wide Web, and the Toyota Prius was just a gleam in an engineer’s eye.

The Air Resources Board has reconfigured the mandate to support the state’s 2050 GHG emissions target. CARB claims that the only way to meet the target is if ZEVs make up around 87% of the passenger vehicle fleet in California by 2050, as shown in the graphic below.

To get there, sales of ZEVs must ramp up dramatically from 2018 to 2025.  The mandate essentially requires that 500,000 ZEVs be produced cumulatively as of 2025, reaching 15.4% of new car sales as of 2025.  CARB’s scenario for the ramp-up projects that around 70,000 plug-in vehicles will be sold in California as of 2018.  This figure is close to Pike’s own forecasts for California.  We projected annual PEV sales to reach over 300,000 in the U.S. by 2017, and California will constitute almost 25% of those sales, as projected in last year’s Electric Vehicle Geographic Forecasts report.

Finally, CARB is practically the lone holdout among U.S. policymaking bodies in continuing to support fuel cell technology.  The ruling keeps fuel cells cars on equal footing with battery cars for earning ZEV credits.  More importantly, the board has revamped the Clean Fuels Outlet (CFO) program to support hydrogen fuelling deployment.  The lack of hydrogen infrastructure, and lack of incentives to deploy it absent large numbers of FCVs on the roads, is one of the key barriers to the fuel cell car market.  CARB is using the CFO to address that problem.  The new rule mandates that major refiners or importers of gasoline provide hydrogen fuelling when just 10,000 fuel cell vehicles are on the roads in a particular air basin.  Not surprisingly, this rule is receiving major pushback from the oil companies.

The new program faces a number of challenges.  First, there is controversy over a provision that lets automakers reduce the number of ZEVs they make if they “over-comply” with the overall GHG fleet standard. Second, the ambitions of this new program may come into conflict with the realities of the California state budget.  Third, it’s impossible to predict how the technology mix will really look in 2050.  The California plan essentially requires most of the fleet to be battery- or fuel cell-powered, with all hybrids and conventional gas cars basically obsolete by 2050.  2050 is a long way off and there are all sorts of things that could derail such a prediction, not the least of which is the actual progress of fuel cell and battery technology. But give CARB credit for thinking big.


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