Navigant Research Blog

International Innovation Thrives in the Bay Area

— December 8, 2014

Just over 69 years ago, the United Nations (UN) Charter was signed in San Francisco.  That Charter, bringing the UN into creation, has many social, cultural, and humanitarian directives, as well as articles aimed at “international co-operation in solving international problems of an economic character.”  That spirit of cooperation is alive in San Francisco, as evidenced by many international innovation showcases that aim to spur collaboration between the United States and other countries, spread some of the startup magic found across the Bay Area, and simply showcase innovation around the globe.

For example, the German government helps sponsor the German Accelerator in both Silicon Valley and New York.  Its upcoming Captivate event is a startup pitch fest that brings German and German-American funders and entrepreneurs together with brief company pitch sessions.  The Japan Society of Northern California is sponsoring its annual Innovation Showcase in early 2015 to highlight Japanese startups and award the title of “Emerging Leader” to one Japanese and one American entrepreneur whose companies are relevant to both U.S. and Japanese innovation.  The City of San Francisco itself helps spur economic connections with China through its ChinaSF program.  ChinaSF leaders say the program has recruited over 50 companies from the Bay Area to China and created more than 300 jobs since 2008.

The Intelligent Factory

The most recent of these events was the California France Forum on Energy Efficiency Technologies, held in late November in San Francisco.  Focused on manufacturing and the smart factory concept, where IT is deeply integrated into the energy performance of industrial facilities, the forum was sponsored by Prime, a Paris-based high tech incubator, and French energy major EDF.  I spoke on a panel that examined the challenges and potential role of industrial energy management (see Navigant Research’s report, Industrial Energy Management Systems), along with Ethan Rogers of the American Council for an Energy-Efficient Economy (ACEEE), who discussed the potential energy savings in the industrial sector.

Specifically, Rogers identified ACEEE’s scenario-based modeling that determined that the U.S. industrial sector could save between $7 billion and $25 billion in annual energy costs by 2035 through energy efficiency gains.  Also on the panel was Arnaud Legrand, CEO of Energiency, a spinoff from Orange/France Telecom that aims to use big data analysis to improve industrial energy use through a software as a service-based solution, and Michel Morvan, co-founder of CoSMo Company.

CoSMo’s approach, based in the study of complex systems, is to use simulation to understand the regimes of behavior of industrial systems, accounting for supply chain, energy uses, workforce, and other inputs.  Morvan views the factory as a system of systems, and his company has developed approaches to simulate the core elements as well as the interconnections between the systems.  In this model, the goal is full energy optimization.  CoSMo is set to fully launch in mid-2015.

 

Itron Utility Week: Beyond Smart Meters

— December 1, 2014

Nearly 1,000 executives from the water, gas, and electric utility industries gathered in San Antonio between October 17 and 24 to discuss “resourcefulness” – Itron’s term for smarter grid, water, and gas utility technology and solutions – and share best practices.  The conference featured a Knowledge Center showcasing the solutions offered by both Itron and its partners, and dozens of panel sessions covering five tracks: Energy Efficiency and Conservation, Data Management & IT, Advanced Measurement & Communications, Smart Grid, and Analytics & Applications.

The opening general session featured a fascinating keynote address by Scott Klososky, principal at Future Point of View, on “Achieving Humalogy” (“digital Darwinism” and how organizations must evolve to stay relevant), and a killer poetry slam by David Bowden entitled
“Dead Leader Walking” – providing a millennial’s take on management (you can watch the keynote here, skip to 1:23:00 to view the slam).

In the Fog

Itron showcased its new grid edge intelligence solution, Itron Riva, at the meeting.  Itron Riva leverages open standards and Cisco’s IOx Fog computing platform to support Internet of Things functionality, including distributed computing power and control and analytics for automated decision-making at the network edge.  Itron Riva also delivers an integrated, hybrid radio frequency/power line communications (RF/PLC) network, which dynamically selects the best network path for the environment.  Itron Riva has been tested and debugged in a Hong Kong deployment with CKP Power.

Itron notes that the hybrid architecture means the system can flexibly switch from the RF solution (in the winter, for example, when foliage isn’t blocking the path) to PLC (in the summer).  The solution is also good for utilities with both rural and urban environments to cover.

At its Alliance Briefing, the president of Itron’s electricity group, Mark de Vere White, shared his insight on how the smart grid market is shaping up.  De Vere White noted that, while the North American market had slowdowns post-American Recovery and Reinvestment Act (ARRA) funding, the company sees that turning around now, and added that managing solar is a high priority.  Globally, Itron is “very optimistic” about 2015 and anticipates smart grid market acceleration in 2016 and 2017.  Itron’s ERDF Linky deployment in France will begin in the second half of 2015.

Spanning the Globe

In the Asia Pacific region, Itron is seeing activity in Australia, New Zealand, Singapore, Thailand, Japan, and Tonga.  De Vere White also noted growing Latin American interest in Brazil, Mexico, Columbia, Ecuador, and Chile.

Other topics emphasized at Itron Utility Week included smart city technology and how smart grids and smart cities intersect (including a presentation by Amy Aussieker of Envision Charlotte), as well as Itron’s new managed services offering, Itron Total Services.

 

Eastern Approaches to Smart Grid Development

— November 20, 2014

Japan and South Korea have emerged as leaders in smart grid technology development and deployments.  On a recent trip to East Asia, I noted some similarities and some marked differences between the two countries’ approaches and styles.

At Korean Smart Grid Week in Seoul, I spoke about global demand response (DR) trends.  The Expo hall for the conference was as big as any I’ve seen, including large players like Korean Electric Company (KEPCO), Samsung, and LG exhibiting enormous booths and showing off cutting-edge technologies.  There were also a plethora of smaller companies and startups displaying their innovations to challenge the status quo and create the next-generation electric grid.

Next, I traveled to Jeju Island, the so-called “Hawaii of Korea.”  I got to enjoy the palm trees and volcanic landscape only by bus as we traveled to the Smart Grid Information Center, where KEPCO laid out its vision of the grid of the (not too distant) future.

Then we caught a quick ferry ride to tiny Gapa Island, which is only about 1 square mile in size but has an immense amount of solar, wind, and energy storage packed into a microgrid test bed, complete with a state-of-the-art operation center.

All of the Above

Next I embarked for Tokyo.  Japan is undertaking an “all of the above” energy strategy after the Fukushima Daiichi nuclear accident in 2011.  Restarting the country’s nuclear plants is still on the table, but Japanese companies and government agencies are also deregulating the retail electricity market and designing opportunities for renewables, energy efficiency, DR, and energy storage.

Both countries, and the companies within them, have a laser focus on energy storage as a key solution, which is not surprising given their level of technological advancement.  Grid-scale energy storage is still a few years away in the United States, but Japanese and South Korean vendors are intent on leapfrogging Western suppliers and exporting their expertise.

Hare and Tortoise

The two countries’ business cultures, however, are quite divergent.  South Korean companies tend to take an aggressive, American-style approach to forming a plan, executing on it, and tweaking it along the way.  For instance, the country opened its DR market in November after a relatively short design phase, and U.S. provider EnerNOC has already entered the fray.

Japan, on the other hand, has been studying DR for a few years and it will take a couple more years of pilot programs until the market is ready.  Japanese firms tend to take a much more measured approach to development, trying to perfect the model before setting it free.  In the long term, both methods may work; but in the short term, the real action is in South Korea.

These developments are outlined in the new Navigant Research report, Demand Response for Commercial & Industrial Markets.  The report was actually published while I was abroad, so it includes updates from the trip.

 

South Korea Draws an Ambitious Roadmap for Smart Grids and Smart Cities

— November 12, 2014

South Korea has ambitions to be a world leader in smart grid technology.  The smart grid test bed on Jeju Island has been the proving ground for the technologies, partnerships, and business models required to achieve this goal.  Led by Korea Electric Power Corporation (KEPCO), South Korea’s national power company, the Jeju Island demonstration project involved a wide range of South Korean and international partners.  The project ran from December 2009 until May 2013, had a total budget of around $240 million, and included two substations, four distribution lines, and 6,000 households.  The sub-projects included power grid upgrades, demand response, electric vehicles (EVs), renewable power integration, and new energy market models.

In this regard, Jeju Island mirrors many other smart grid pilots around the world looking at the integration of multiple technologies and new business models, particularly island community smart grid projects such those in Hawaii and Bornholm.

From Islands to Cities

South Korea is different in that the government has now laid out plans to move beyond its initial demonstration project into a wider series of trials and eventually a national rollout of smart grid technologies.  The next phase will involve a series of eight smart grid/smart community projects, to be run between 2015 and 2017.  More impressively, KEPCO has laid out plans to extend these projects into a series of municipal-scale smart grids by 2020.  The final stage of this grand scheme will see smart grid technologies deployed across the whole country by 2030.

The total budget for the pilot projects is $876 million, around $400 million of which will come from central and local governments and the rest from the private sector.  KEPCO alone is investing $155 million.  The government expects the private sector to take the lead in further development from 2018 onward.  As well as smart meters, an EV charging infrastructure, and energy storage, KEPCO is piloting a smart grid station that will provide sophisticated energy management and grid integration for commercial buildings, beginning with up to 220 KEPCO buildings.  It sees these smart grid stations as building blocks for community energy management systems and city-scale energy management.

Big City Vision

These are ambitious plans, and some of the South Korean experts I spoke with at Korea Smart Grid Week were skeptical about the ability of the government, KEPCO, and other stakeholders to meet the proposed timescales.  However, even if those timescales prove challenging, the vision and the roadmap are impressive.  I don’t know of any other country that has laid out a plan of this magnitude that would see smart grid technologies deployed across all of its major cities by 2020.  Such an achievement really would mark South Korea out as a world leader in both smart grid and smart city infrastructure.

 

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