Itron, the global vendor of utility meters and associated software and services, recently announced a strategic alliance with C3, the enterprise energy management software company launched in 2008 by Tom Siebel and Pat House, the team behind Siebel Systems, which was acquired by Oracle for $5.8 billion in 2005.  The purpose of the alliance is to jointly develop and offer an energy management solution for North American utilities.

From Itron’s perspective, C3 represents the latest in a long list of partners that expand the reach of its metering and data management solutions.  It already works with firms such as Comverge, a demand response company, and Tendril Networks, a provider of home energy management technology, to provide additional software-enabled dimensions to its consumer metering offerings.  The partnership will strengthen three of Itron’s products: its Demand Response program management system, its Enterprise Edition Curtailment Manager, and its Smart Grid offering, on which it already partners with other smart grid networking and communications giants.

For its part, C3 views Itron as yet another channel to market its enterprise energy management software.  While C3’s current customer base focuses on large enterprises (including Dow and Pella) and even a number of utilities (such as PG&E and Constellation Energy), working in direct partnership with Itron allows C3 to go even deeper into facility- and meter-level visibility and control on behalf of utilities.

The company seems to make a bold move in the energy management software world every few months.  In May, C3 acquired Efficiency 2.0, a residential energy management software company à la OPOWER, as I wrote about in this blog.  This most recent deal builds on the previous ones by demonstrating C3’s commitment to addressing utilities’ growing needs around energy efficiency and customer engagement.  It also helps cement the company’s ability to play not only in energy efficiency but also demand response and smart grid.

Energy management companies have been trying to figure out how to expand their potential customer base beyond major enterprises and organizations.  Utilities have proven to be one of the best alternatives, due to the large building portfolios made up by their ratepayers as well as an increase in regulatory pressure demanding that they reduce their customers’ energy consumption.

By tying a meter data management offering with an enterprise energy management offering, though, Itron and C3 are aiming to create a platform that does far more than help customers visualize and reduce their energy consumption.  It allows utilities to make use of that data, too, enabling them to analyze meter data with a specialized analytics tools designed to help them dynamically manage loads and model the economic benefits for customers and utilities.  In doing so, it also allows utilities to squeeze more value out of their expensive smart meter installations.

I consider the success of this partnership a critical litmus test for the broader challenge of transforming buildings into dynamic nodes within the smart grid.

According to our recent report, Smart Meters in Europe, by 2020 around 237 million smart meters will have been deployed across Europe and almost 90% of electricity meters in Western Europe will be smart.  However, it is not just a question of big numbers.  I see five key areas where Europe will have a significant impact on the smart metering market:

Mass PLC deployment: More than 130 million power line communications (PLC) smart meters will be deployed across Europe between 2011 and 2012.  PLC is already well established in Italy and other parts of Europe as the default communication model for smart metering.  However, the scale of the standardized deployments planned by Iberdrola and Endesa in Spain and ERDF in France will put greater pressure on meter suppliers to develop price competitive solutions with limited scope for differentiation in the metering systems themselves.  This will have an impact beyond these national markets.   Iberdrola, for example, has been working with other utilities to develop the PRIME standard, and the PRIME architecture is likely to be adopted by a number of utilities in Eastern Europe.  Utilities in Latin America and Asia are also taking a strong interest in the standard.  As well as driving down prices, the level of investment in PLC technologies is making Europe a center for innovation in other aspects of the smart grid including the use of PLC architectures for distribution automation.

Large-scale public RF adoption: By 2020, around one third of smart meter deployments will be based on public radio-frequency (RF) technologies, including GPRS, 3G, and 4G solutions.  Public RF will have a role in most countries that decide not to go for a universal PLC solution.  GPRS, for example, is already being used for early deployments in Great Britain and is likely to play a major role in the eventual rollout to 30 million consumers.  Such large scale deployments will help address lingering issues about quality of service, cost, and performance and make public RF solutions attractive to many more utilities around the world.

Home energy management and advanced metering: In general, there has been much less discussion in Europe on the role of smart meters in home energy management (HEM) than in the United States, but this is likely to change with the increased focus on energy efficiency.   The supplier-led rollout of smart meters in Great Britain will provide an important test case on the levels of consumer interest in advanced services associated with smart meters.   Germany is also likely to have an extensive specification for multi-utility billing focus on energy efficiency improvements.   Markets like the United Kingdom and Germany will provide scope for metering manufacturers to provide high-end solutions meeting extensive technical requirements including consumer features such as in-home displays.

Data brokering services: The deregulated nature of much of the European market and the real or notional split between distribution network operations and energy suppliers means that a need exists for secure and effective data exchange between different players in the smart meter market.  Such data exchanges have the potential to support a wide range of additional services that can utilize smart metering data.  The central data and communications company DCC in Great Britain is the most ambitious example, but similar issues will need to be addressed in other countries, even if the technical and commercial details of how data will be shared have yet to be agreed in most cases.

Putting privacy first: There is a particularly strong focus on data privacy in Europe, and extensive privacy controls are being included in the smart meter specifications for the Netherlands, Germany, and the United Kingdom, among others.  Such requirements will drive further innovation from metering suppliers and service companies as they seek to ensure adaptability to a range of EU and nationally specified privacy requirements.

At next week’s Metering Billing/CRM event in Amsterdam, I’ll be chairing the Wednesday morning session on Consumer engagement and energy efficiency behavior.  I’m looking forward to a series of discussions on how smart metering is evolving in Europe and the chance to see additional examples of European innovation.

Old-fashioned thermostats are morphing into smart thermostats, also referred to as programmable communicating thermostats (PCTs), which enable residents to manage their energy usage more effectively and actively, and at a much more granular level than ever before.  These devices have also made it increasingly easier and more convenient for consumers to participate in utility demand response (DR) programs.  Continued software enhancements, along with connectivity to the Internet, is turning smart thermostats into mini-PCs that the utility customer can access remotely from a smart phone, iPad, or website.

Having used smart thermostats for some time already to enable DR in homes, U.S. utilities are increasingly relying on these more advanced devices as the technology of choice in supporting their direct load control as well as dynamic pricing programs.  Smart thermostats that support two-way communications allow the utility to execute load management automatically by sending a signal to the thermostat to adjust the temperature in the home by a few degrees (agreed to by the customer in advance) to reduce the use of an air-conditioning or heating system for a certain period of time during peak demand.  For their part, customers can program a smart thermostat to adjust the temperature in the home  when rates become high in order to reduce their utility bill.  Most important, this technology helps utilities engage their customers more effectively in DR programs by offering them a device that makes such involvement easy, convenient, and even fun, while at the same time be able to save money.  Some smart thermostat vendors claim that they can help consumers save at least 20% or perhaps as much as 30% to 50% on their energy bills.

A wide variety of smart thermostats is available in the market, but Honeywell’s UtilityPRO thermostat has gained attention lately because of its rich functionality and its many software features – thanks to its reliable operation and smart grid capabilities, developed in partnership with Cooper Power Systems.  A touchscreen programmable thermostat exclusively designed for residential DR, the UtilityPRO is currently one of the company’s top-selling advanced thermostats, and has so far been installed in about 600,000 homes and small businesses in North America.  The UtilityPRO can communicate via paging signals, or via wireless technology based on the ZigBee Smart Energy communication standard.  ZigBee communication enables consumers to program the thermostat online from any location at any time.  It also allows utilities to communicate with the thermostat to automatically regulate heating and cooling systems to curtail or shift peak demand.  At the same time, the utility can verify that the thermostat is able to respond when it receives a DR event or price signal.  Because UtilityPRO has a backlit display and messaging capability, utilities can also deliver near, real-time usage and billing data to residents.  Honeywell has estimated that in 2011 UtilityPRO gave utilities combined control of more than 500 megawatts of peak energy use.

In the years ahead, smart thermostats will continue to develop to offer even more advanced capabilities. It is quite possible that PCTs will become a serious competitive threat to the in-home display units that some vendors are trying, with limited success, to push in the market.  As consumers increasingly assume the role of home energy manager, they would most likely choose a device that is inexpensive and easy to install (no hard-wiring) but also offers a user-friendly web interface along with access to data and information that motivate them to take action with respect to their energy consumption.

In June PennEnergy announced that the Cisco Connected Grid Field Area Network (FAN) solution won top honors at the Utilities Telecom Council 2012 conference in the Smart Grid/Smart Meter Product & Services category.  According to Cisco, the solution is the first multiservice communications infrastructure for utility field area networks.  Using a common network platform, it can deliver advanced metering infrastructure (AMI), distribution automation (DA), and protection and control applications.

Why is this more than just an industry pat on the back?

Thought leaders focused on grid modernization have been talking about the importance of interoperability for years, and for just as long, standards bodies have been working to drive progress.  The concept is simple: As every architectural engineer knows, without a solid foundation, most structures will eventually collapse.  And as every utility stakeholder knows, no single vendor can deliver everything to the enterprise; mixed vendor environments are virtually assured, and without true interoperability the risk of stranding investments is high.  Interoperability defines the foundation upon which the smart grid must stand, avoiding rapid obsolescence of grid components, driving down costs, and providing the ability to securely leverage technological advances.

Itron and Cisco have been working since 2010 on a delivering a secure, scalable, open, interoperable architecture that can support the monitoring and control of distribution networks.  Itron announced earlier this year that it has brought this system to market with a deployment at BC Hydro, marking a move away from purpose-built systems in utility environments.  If the project is successful, BC Hydro will be able to drive down operational expenses and achieve a long-standing industry goal – a true plug-and-play smart grid.  BC Hydro is anticipating that it will be able to save customers $1.6 billion over the next 20 years, having a flexible system that can evolve with new utility applications.

Cisco’s award at UTC 2012 serves as a valuable reminder for smart grid vendors and implementers: Standards and interoperable systems delivered on open standards are still fundamentally important to the vision of the utility grid.  And it’s just getting started.  Industry partnerships that focus on the functional integration of applications that support the more efficient use of energy from the power plant to the customer, like the one between Cisco and Itron, are the key to moving beyond frameworks to reality.