SPECIAL ADVERTISING SECTIONRECHARGING A NATION Building a smart grid will help the U.S.   get networked for the Digital Ag...
SPECIAL ADVERTISING SECTION                                                  A REVOLUTION IN ENERGY IS                    ...
ADVERTISEMENTLEADING A REVOLUTIONThe IEEE is mobilizing technology changes around the worldto help communities adopt the s...
SPECIAL ADVERTISING SECTION                                            ELECTRIFYING                                       ...
SPECIAL ADVERTISING SECTIONstartups. And that is just the beginning. Between 2008 and 2015,           metering technology ...
SPECIAL ADVERTISING SECTIONwhether automated meter reading, video surveillance of sub-              executive, Accenture S...
SPECIAL ADVERTISING SECTIONrates that can get as low as 10 cents per meter per month.           million smart meters to So...
SPECIAL ADVERTISING SECTION                                                                               here, too. Trimb...
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Fortune Smart Grid Final

  1. 1. SPECIAL ADVERTISING SECTIONRECHARGING A NATION Building a smart grid will help the U.S. get networked for the Digital Age. IN PARTNERSHIP WITH:
  2. 2. SPECIAL ADVERTISING SECTION A REVOLUTION IN ENERGY IS UPON US. IT IS SO MONUMENTAL THAT IT WILL TRANSFORM SOCIETY AND CHANGE THE WAY ALL OF US IN AMERICA LIVE AND WORK. It has been triggered by large-scale efforts to modern- and the majority of power is generated at large, centralizedize the U.S. electric grid, adding high-speed communications fossil-burning power plants, tomorrow’s grid will allow forand morphing the infrastructure into a “networked grid,” or greater amounts of distributed generation and storage, givingan “Internet for energy.” This so-called smart grid will not consumers the opportunity to produce their own clean energyonly bring new communication capabilities to mission-critical and sell any excess back to the grid. While today’s distributiongrid devices and end-user appliances to optimize energy ef- grids, lacking real-time visibility and control, are largely run-ficiency, reliability, and security. It will also serve as the en- ning blind and costing the nation approximately $100 billionabling platform to plug in the next generation of clean en- to $150 billion each year in power outages, tomorrow’s grid,ergy technologies, such as rooftop solar systems, wind farms, much like the human body’s own nervous system, will haveand electric vehicles. sensory intelligence embedded throughout, giving the grid the Surprisingly, the Digital Age has yet to reinvent the $350 ability to anticipate disruptions and even self-heal.billion electric power business, arguably one of the farthest- Last, and perhaps most welcomed, is the manner in whichreaching and most extensive networks in existence. It’s no won- the smart grid will completely reengineer end users’ relation-der. The amount of capital it will take to upgrade an industry ship to their energy use, empowering consumers with real-timethat has lagged in both R&D and IT investment is substantial. data and analytics through in-home energy management sys- Despite a general lack of public awareness of the grid’s tems and web portals, taking us closer to the age of The Jet-central role in enabling our nation’s economy, the Obama sons. Over the next five years, consumers will interact with theadministration has been increasingly advocating and funding first wave of smart appliances, lighting systems, and manage-investments in this area to drive GDP and give the U.S. a com- ment systems, using “set it and forget it” technologies to auto-petitive advantage. These epic infrastructure investments are mate their homes and businesses for energy savings and otheranalogous to the ones made under the direction of President preferences, such as increased levels of green energy.Eisenhower in creating the interstate highway system—the In phase two, over the upcoming 10 to 20 years, the nexteconomic benefits of which are still realized to this day. How- wave of home energy apps will be introduced, such as com-ever, the U.S. is hardly alone in promoting the smart grid as munity microgrids able to generate 100% of their own poweran economic growth engine; virtually every major economy is over certain periods, while trading energy for profit at othernow either piloting or deploying smart grid technologies. It’s periods. In other apps, electric vehicles will be able to deter-understood that you cannot run a digital 21st-century econ- mine the most affordable hour of the day to charge their bat-omy on a 20th-century grid. teries. In this new automated world, we will finally have con- While today’s grid remains largely based on the architecture trol over our energy usage and will gain independence.invented by its forefathers—Edison, Tesla, and Westinghouse— —David J. Leeds, GTM Research S2 www.fortune.com/adsections
  3. 3. ADVERTISEMENTLEADING A REVOLUTIONThe IEEE is mobilizing technology changes around the worldto help communities adopt the smart grid.THERE ARE MANY WORDS to are, renewable energy will be adescribe the smart grid: innova- part of your daily life.”tive, revolutionary, empowering. IEEE fosters cross-industry col-It will change the way we use laboration and knowledge shar-and deliver energy profoundly. ing. Around the world, IEEE isOnce we build it, that is. helping government officials or- Realizing the promise of ganize working groups to deter-electricity’s next-generation mine national energy prioritiesnetworked future requires team- and employ new technologies.work and leadership. We need To disseminate ideas about theto develop standards so any de- grid, IEEE has published 2,500vice from any manufacturer can journal papers—and continuesplug into the grid—smart me- to publish new research. To keepters, hybrid or electric vehicles, its members and the public up tosmart appliances, etc. Creating these resulted in the IEEE 802 standards, a date on the latest news and IEEE eventsnew technologies calls for individuals and series of technical specifications for related to the grid, it has created a weborganizations to collaborate. the world’s most important wired and portal, ieeesmartgrid.org. “Converting the grid to a digital sys- wireless networks: Ethernet, Wi-Fi, and In January, IEEE held the first IEEEtem—integrating power, electronics, Bluetooth, to name a few. With these Innovative Smart Grid Technologies con-batteries, sensors, communications—re- standards, manufacturers know exactly ference near Washington, D.C., bringingquires people with different professional how to design their equipment to work together participants from 32 countriesbackgrounds to work together,” says seamlessly with these networks. It’s the representing the electric utility, regu-Wanda Reder, chair of smart grid efforts reason we can check e-mail on a phone latory, research, and manufacturingat IEEE, the world’s largest professional or laptop any place that offers wireless. industries to discuss the key grid issuesassociation dedicated to advancing tech- IEEE is providing this same thought of cybersecurity, advanced metering, re-nological innovation. “Often, it’s like ev- leadership in creating standards for newable integration, and home automa-eryone is speaking a different language.” smart grid. To foster interoperability tion. A second conference was held in That’s where the IEEE comes in. For on the grid, IEEE working groups are Sweden in October and many more aremore than 125 years IEEE has built an developing or updating nearly 100 planned, including the December kick-unmatched reputation as a trusted, un- global standards, including specifica- off in Brussels of the IEEE Smart Gridbiased, and proven force for inspiring tions for integrating renewable energy. World Forum, an ongoing series of con-technical collaboration, strategy, and “Future grids will expand their transi- ferences enabling those working on gridconsensus. It includes 395,000 members tion to renewable energy sources,” says technologies to exchange best practices.from a range of disciplines in industry, Charlton Adams Jr., president of the Indeed, with IEEE’s leadership, soongovernment, academia, research, and IEEE Standards Association. “Reducing there will be another way to describesmall business. dependence upon carbon fuels requires smart grid: a reality. Three decades ago, it was IEEE that technologies to integrate, manage, andbrought together engineers and re- store renewable energy. The IEEE is at For more information on smart gridsearchers with a vision for connecting the forefront of addressing these tech- developments, public policy, or how tocomputers in a network. Their work nologies, to ensure that wherever you get involved, go to ieeesmartgrid.org.www.fortune.com/adsections S3
  4. 4. SPECIAL ADVERTISING SECTION ELECTRIFYING CHANGE The metaphormosis onto the smart grid will require huge infrastructure changes across America.I t’s funny how the most transformative innovations go by new grid will bring online—will also cut the carbon emissions the simplest of names: the wheel, the PC, and the web. produced by electricity generation by as much as 9% from Now add the grid. Sweeping changes are coming to the 2006 levels, according to the EPRI. way electricity is delivered and used. Imagine a world But the grid is a long-term project. It should take at least where your electric car knows the cheapest time of day five years to get the necessary communications networks builtto charge its battery and goes ahead and juices up. Picture and decades more to add a stream of innovative devices andbeing able to take the excess energy your rooftop solar cells applications. Expect the tab for this initiative to be high. EPRIproduce and sell it back to the electric grid. And forget about estimates development will cost a whopping $165 billion overwaiting hours for a utility worker to turn on power at your the next 20 years. And there are going to be significant chal-new home. With the smart grid, power companies can do that lenges beyond the funding. Top-of-mind issues: How do weremotely instead of sending out crews. foster partnerships among all the vital industrial sectors (i.e., The smart grid will enable unprecedented reliability in consumer electronics, IT, and telecommunications) that havethe way electricity is transmitted, by evolving from a largely not historically worked together? How do we create standardselectromechanical system into a digital network. Sensors will to make sure all different appliances can work on the smartalert utilities of immediate trouble; automated switches will grid? How do we install millions of smart meters efficientlyreroute power. Renewable energy sources such as solar and across the country? And how do we give consumers incentiveswind power will be integrated into the grid. Smart meters will to take advantage of all the benefits the smart grid will offer?provide a wealth of data about energy use, so we can use itmore wisely. KICK-STARTING A REVOLUTION Features such as these will cut pollution, lower consumers’ Traditionally, the biggest obstacle to big change has been fi-bills, and spare utilities costly headaches. Indeed, the Elec- nancing. The good news is that the money for this mammothtric Power Research Institute (EPRI) estimates that smart grid undertaking has started to stream in from both the private andtechnologies could reduce electricity use by more than 4% by public sector. The dazzling opportunities have captured the2030, saving consumers and businesses $20.4 billion a year. imagination of America’s entrepreneurs. Over the last five years,That efficiency—along with all the renewable sources the $1.3 billion in venture capital has been doled out to smart grid S4 www.fortune.com/adsections
  5. 5. SPECIAL ADVERTISING SECTIONstartups. And that is just the beginning. Between 2008 and 2015, metering technology for gas, water and electric utilities.smart grid investment in the U.S. is expected to total $53 billion, One of Elster’s customers, Salt River Project Agricultural Im-according to Pike Research, a market research and consulting provement and Power District (SRP), the third-largest publicfirm specializing in global clean technology markets. power utility in the nation, is making that case. Since deploying At the same time, the federal government is trying to cata- smart grid technology—namely, the Elster EnergyAxis smartlyze infrastructure development and new technologies for the grid system—it estimates that it has remotely addressed nearlysmart grid. The American Recovery and Reinvestment Act has 750,000 customer orders instead of sending out trucks. That hasallocated $3.4 billion in smart grid investment grants, which saved SRP more than 249,000 hours of labor, 1.3 million drivingwill be matched by private investment. Already, 100 utilities, miles, and 135,000 gallons of gas.technology companies, manufacturers, and other organiza-tions have received grants (up to $200 million apiece) to cover LAYING THE INFRASTRUCTUREup to 50% of their project costs for a variety of ventures— There are a host of devices and technologies that will revolu-from smart meter deployments to advanced transmission sen- tionize the grid. Some, such as smart meters, are already hit-sors to smart appliances for the home. ting the market. Others—such as storage devices that will let us Falling technology costs, particularly for wireless commu- save any excess power from renewables so that it can be usednications systems, are also spurring investment. “Ten years it later on—are yet to be commercialized. And then there is theago we wouldn’t have even tried this,” says David Leeds, an innovative hardware we haven’t even thought up yet. They’llanalyst for the smart grid sector at GTM Research, a market all have one thing in common: the need to communicate, bothresearch firm covering the energy and emerging technology with the utility running the grid and all the other devices on it.sectors. “But we’re now at the point where the price of build- That makes two-way communications key. No wonder, then,ing a networked grid is affordable.” that building the telecom networks that will link everything to- That has changed the cost-benefit analysis. “Even utilities gether on the grid is the crucial first step. But a utility has to bethat didn’t get stimulus funds are mapping plans because the very careful when deploying its network, because it will be thebusiness case is so compelling,” says Mark Munday, president backbone for every application to come. The network has to beand CEO of Elster Solutions, a global leader in smart grid and flexible and powerful enough that new devices and services— THE SMART GRID MODEL MARKETS SERVICE PROVIDER OPERATIONS ENERGY GENERATION CUSTOMER TRANSMISSION AND DISTRIBUTION Source: National Institute of Standards and Technology S6 www.fortune.com/adsections
  6. 6. SPECIAL ADVERTISING SECTIONwhether automated meter reading, video surveillance of sub- executive, Accenture Smart Grid Services. Just as important,stations, washing machines that automatically turn on when she adds, is the ability to align that technology with the util-electricity rates fall during the night, or any of a hundred fea- ity’s business objectives, processes, and skills. That can meantures yet to be invented—can be added fairly painlessly. Few of broad-reaching changes, but those changes are essential ifthese applications will be running on a utility’s smart grid on utilities and consumers will truly realize the potential of theday one. But the network has to be able to integrate them into new grid. “The sensing and communications capabilities ofthe grid and have the capacity to run them without bogging the smart grid give utilities a great deal of intelligence aboutdown all the other applications sharing the bandwidth. Think their operations, but the challenge is turning that data intoabout your Internet connection 10 years ago. It was fine when insight,” says Allan. “That comes when you have integration,all you needed to do was send e-mails. But when you tried to connectivity, and collaboration throughout the enterprise.”download a video, you suddenly ran into trouble. Utilities want Utilities have a host of goals for the smart grid: bringingto avoid the smart grid equivalent. more renewable energy online, boosting grid security and reli- “That makes planning your network architecture very im- ability, and reducing carbon emissions, to name a few. Achiev-portant,” says Denise Barton, director of marketing at Tropos ing them, says Allan, will be possible only through “tight in- tegration among the data, processes, and people that span virtually every business function of the utility.” A PUBLIC OR PRIVATE OPTION The communications net- work presents one other is- sue for utilities: Should they use a private network built from scratch, or leverage existing ones, such as the cel- lular networks from major wireless providers? A case can be made for each strategy. Private net- works give utilities full con- trol over their communica- tions. There are financial considerations, too, argue proponents. “An advantageNetworks Inc., a Sunnyvale, Calif., company that develops re- of a private network is its operational costs,” says Mark Thom-liable, high-performance wireless networks for smart grids. son, vice president of strategic development and standards atTropos’ GridCom architecture enables utilities to build a distri- Aclara, which provides communications technology to morebution area network that meets requirements for today and than 500 utilities. “Public carriers aren’t going to do this foreasily scales as needs expand—new applications, expanded free, and if you’re talking about millions of devices for a util-coverage area, and capacity. ity, even a small charge for each adds up. A utility can also Helping utilities make the right long-term business and capitalize the investment it makes in a private network.”technology choices are companies like Accenture, a global Proponents for public networks, however, say the costmanagement consulting, technology services, and outsourc- equation has changed drastically in the last year. “In the pasting firm. Accenture’s 8,000-plus utility industry professionals 12 months, the prices the big wireless providers are offeringhave already assisted on more than 100 smart grid projects, utilities have come down by as much as 95%,” says Campbellhelping power companies take a hard look at their goals and McCool, chief marketing officer at SmartSynch, whose tech-build road maps for achieving them. nology enables utilities to send and receive energy-related “Operationalizing the smart grid goes far beyond selecting data over cellular networks, including those operated bythe most appropriate technology,” says Sharon Allan, senior AT&T, T-Mobile, Sprint, and Verizon. “In 2010, we are seeing S8 www.fortune.com/adsections
  7. 7. SPECIAL ADVERTISING SECTIONrates that can get as low as 10 cents per meter per month. million smart meters to Southern California Edison and mil-That’s a fraction of what it used to cost.” lions more to other utilities across the nation—also voluntarily The reason behind the price drop is simple, says McCool: The participates in third-party security testing. And in June, Itronwireless carriers see a compelling business case for Grid 2.0, too. announced a partnership with Idaho National Laboratory to“They have recognized that the smart grid represents one of share knowledge and collaborate on security issues associ-the single greatest sources of incremental revenue they will ever ated with critical infrastructure (such as the electricity grid) tosee,” he says. “Their networks are already built out; energy data identify and further reduce security vulnerabilities.requires relatively little bandwidth. They have no subsidies to Alliances like these highlight a key point: The smart grid willdeal with since we’re selling the meter. There are virtually no ad- only succeed through collaboration. “No one community, indus-ditional costs for them, but all this potential revenue.” try, or company supports all the required technology to address Add to that, McCool says, the expertise the carriers have this,” says Charlton Adams Jr., president of the IEEE Standardsin running their networks, not to mention the vast sums they Association. “We need relationships that are global and includespend improving them, and public networks make a compelling stakeholders from industry, academia, and government as wellbusiness case, too. as technology standards communities—relationships that en- able us to share technol-INDUSTRY ogy and move it into theCOLLABORATIONS THE FUTURE IS BRIGHTER marketplace.”Securing the grid is yet an- A market forecast of investments in the U.S. smart IEEE, the world’s larg-other priority and of par- grid spurred by federal stimulus funds. est professional associationticular concern since the dedicated to advancingU.S. Department of Energy technological innovation, is(DOE) warned in July that uniquely positioned to fa-vulnerabilities in some smart cilitate these partnerships.grid networks might en- Its 395,000 members repre-able cyber-wrongdoers to sent every segment—fromdisrupt power delivery and technological to economic tosteal data. The DOE’s study, political—that will play a roleconducted by Idaho National in our future grid. With itsLaboratory, follows a report conferences, journals, work-by Siemens that hackers had ing groups and councils, IEEEattacked software it designed is the technical world’s go-toto control critical infrastruc- partner for sharing ideas,ture, including power grids. Source: GMT Research pooling intellectual property,(Siemens said none of its and building a vision for thecustomers suffered damage, and the company issued a tool to future. “What we offer is a tremendous infrastructure for creat-correct the security gap.) ing best practices,” says Wanda Reder, chair of the IEEE Smart Indeed, one nice thing about an old-fashioned electric grid Grid. “We’re bringing together all of these people, with multi-is that there isn’t too much to hack into. The smart grid changes faceted backgrounds, to foster leadership and consensus forthat with connected devices everywhere, each a potential door smart grid advancement.”into the electric system.“As utilities deploy more advanced tech- The global nature of the smart grid and the varying needsnology in the grid, they must consider how to properly secure of different regions make IEEE’s worldwide reach invaluable. Inthe network and ensure reliable, consistent service,” says Share- the U.S. and in countries around the world, IEEE has brought to-lynn Moore, director of marketing and communications at Itron gether leading grid experts and government officials to map outInc., a leading provider of smart grid and smart distribution national priorities. Technology advancements, regulatory devel-solutions to utilities around the world. “Information privacy is a opments, and findings from actual system installations are oftenkey consideration, too; preventing unauthorized access to meter shared to advance smart grid learning and facilitate the realiza-data is top-of-mind for utilities.” tion of related energy efficiency and environmental benefits. Itron, for example, uses advanced hardware- and soft- Then there is the work for which IEEE is, perhaps, bestware-level encryption to secure its OpenWay smart grid known: creating technical standards that ensure interoperability,solution—making it nearly impossible to decode the device’s making sure that any device from any manufacturer can connectcommunications. The company—which is supplying 5.3 and operate on the grid. IEEE committees are now developing S10 www.fortune.com/adsections
  8. 8. SPECIAL ADVERTISING SECTION here, too. Trimble has integrated its expertise in po- sitioning technologies (particularly GPS) and mobile workforce management into solutions that facilitate smart grid rollouts. “How do you efficiently and cost-ef- fectively replace millions of meters?” asks Doug Merrill, general manager for Trimble’s Energy Solutions business. “An efficient process requires a complete end-to-end so- lution that includes vehicle routing, work order manage- ment, and mobile computing capabilities. To minimize costs, it’s critical to route the vehicles efficiently, oversee the smart meter inventory, manage the installation and workflow—all while minimizing your carbon footprint. It’s the smart way to work.” AN EDUCATED CONSUMER Finally, there’s the consumer’s role in all of this. Utili- ties want to empower their customers, to give them visibility into their consumption patterns so they can take action to modify them,” says Peter Mainz, chief executive officer and president of Sensus, a North Car- olina–based company that provides communications networks, smart meters, and software to utilities. “If their thermostat changes color when the cost of run- ning their air conditioner increases, they’re more likely to turn it down.” Some utilities are already providing visibility through web portals, such as the site created by one of Elster’s utility customers, Toronto Hydro. “The portal lets themor tweaking scores of specifications for the grid, including those take the data that is collected by our system and make aspects ofthat look at wireline and wireless communications; how power it available to consumers,” says Elster’s Mark Munday. “Custom-lines themselves can be used for communications; and the inter- ers see how much electricity they have used and at what time,connection of renewable sources into the grid. with everything color-coded to reflect the rate structure. Infor- And make no mistake: The smart grid is going to be hugely mation like that makes it easy to adjust your energy use. This isimportant for the future of renewable energy. The push for the wave of the future in North America.”clean sources of power is hard to miss, particularly if you run an There is, of course, still much to hash out before we getelectric plant. “States are telling utilities that they need to have our grid of tomorrow. But there is much reason to be opti-10% renewable energy in their portfolio by 2010, or 15% by mistic, too. A lot of the technology we’ll need is far up the2030, and so on,” says John Colson, chairman and CEO of Quanta development curve. For example, EnergyAxis, Elster’s com-Services Inc., which provides infrastructure solutions for the elec- prehensive Smart Grid solution, already allows smart meterstric power, natural gas and pipeline, and telecommunications on the network to communicate with each other, optimizingindustries. “An important part of our business is designing and efficiency and enhancing outage management capabilities,installing solar and wind facilities, and we’re seeing increased ac- as well as enabling personalized electric billing—a crucialtivity in the U.S. lately.” Even more investment will come if these capability if the grid is to be truly smart. “You can take yoursources can be easily linked to, and managed on, the grid. electric vehicle to a friend’s house, charge it, and the system After getting industry standards in place, the next task will understands you’re the one who should be billed, not yourbe moving customers to the new electrical platform. Consider, friend,” says Munday. Given that an electric car will drawfor example, the logistical demands of swapping the 350 mil- as much power as a home, this will be a key feature forlion analog meters in the U.S. with their digital counterparts utilities—not to mention many friendships. —Alan Cohenso that utilities can manage energy usage in real time. It ismind-boggling to imagine. To advertise in our Smart Grid sections, contact Brenden Delaney at Fortunately, some innovative companies are helping out 212.522.1942. For reprints, call PARS at 212.221.9595, ext. 437. S12 www.fortune.com/adsections