It is no secret the innovation around smart grid is changing the way that consumers, businesses, and utilities interact with the electric grid. Traditional building systems suppliers are extending their offerings to focus on energy reductions education. Other technology firms are developing hardware and software that integrate with existing building systems and allow businesses to perform machine-to-machine energy reduction without large capital investments in their building systems. Hardware firms like Motorola are developing solutions for consumers to manage their home energy and security. Other software firms like Consert and Earth Networks are helping residential properties participate in demand response at a greater level.

One thing these solutions all have in common is that they create networks of systems that have traditionally been standalone devices. This “Internet of Things,” to which Katie Fehrenbacher refers in her summary of DistribuTECH, gives consumers and businesses great insight into – and greater control over – these devices than ever before. It also opens the door for a host of new applications and business models for hardware and software firms, integrators, utilities, and the carriers who bring these devices together.

Energy management is just the beginning; the technology groundwork can be extended to include more functions within the building. As we have discussed these applications with our customers, we found one retailer interested in leveraging this type of control infrastructure to enable video applications. A retail bank is interested in networking their security systems to eliminate keys and ensure security systems are active. Another client is looking to integrate with occupancy sensors to help ensure unoccupied areas are not being heated or cooled. At Verizon, we have been testing smart energy solutions within our own footprint and are excited about the potential applications and about bringing smart energy to our clients, building upon the robust, secure network our clients rely upon.

For starters, Smart Grid represents a bold, new world, full of lots of opportunity and potential.  Countless companies have placed their bets, the government has helped spur innovation through grants, customers have piloted solutions, and we’ve seen the market react through acquisitions and divestitures.   This is healthy and unsurprising.

We’ve long believed, and research has supported, that success in Smart Grid requires an ecosystem of partners, a spirit and willingness to innovate quickly and adapt, and a focus on integrating systems and finding value in data.  We’ve also seen that a lot of the growth in this space comes from smaller firms, who are able to rapidly develop, deploy, and change solutions during these pilots.  And to that end, we have enlisted several to help with our pilots in building energy management and smart grid.

Despite these market moves, energy management remains the “killer app” of the smart grid. 

Traditional Building Management Systems (BMSs) are becoming obsolete and are being replaced with energy management systems.  A host of new types of sensors are available that are wireless and cheap, allowing companies to deploy them quickly and monitor power usage of their lighting, heating, cooling, and other systems.  Vendors are developing applications that integrate with these sensors and with the BMSs (which are becoming IP-enabled).  These applications are moving toward the enterprise level, giving the Real Estate and Procurement departments, not to mention the CFO, visibility into a previously undermanaged commodity across their portfolio of properties.  We believe this represents another great opportunity for our cloud infrastructure, and we are developing a cloud-based solution for our customers.

These solutions are also evolving toward integration with the Smart Grid.  It would be a shame to collect all this data, create elegant dashboards, develop great insights into how to improve energy efficiency – then not be able to act on it immediately.  Plus, once you’re armed with the knowledge of which pieces of equipment are using power at specific times, wouldn’t it be great to tell your utility that you could turn off non-essential equipment or raise the temperature, and bid that power back to them during peak periods?  That type of solution already exists, and we are working with our partners to improve upon what is already there – giving our customers a way to reduce energy consumption, participate in the energy markets, and create new revenue streams, while maintaining business processes and employee productivity.

This is the promise of energy management.  The best is yet to come.

On Saturday, March 27, 2010, an estimated one billion people from more than 120 countries on seven continents took part in the largest Earth Hour event yet. Starting in New Zealand and following the sun around the world to reach Hawaii 24 hours later, people turned off their lights for 60 minutes at 8:30 p.m. local time. This was largely a symbolic event to raise awareness of our impact on the environment and the actions we all can take to reduce carbon footprint, but what impact does turning your lights off really have, and what is being done to improve this area?

Reaching over and turning your lights off while you read this blog will do little to help the environment. That is because utilities have to continuously generate enough power to run your lights just in case you turn them on – after all, you don’t want to cause a brown-out in your city just so you can light up your room. Granted, if everyone continually uses less power, overall demand levels may fall to levels where less generation is needed – but a limiting factor is that most utility companies do not have a means in place to know what you’re using right now. Most of us have older, analog meters at home that are read once a month, so our utilities do not know how much we use each day or throughout the day. As a result, they create and must rely on usage profiles to estimate how much power you’re going to use.

That’s changing under Smart Grid. Utilities across the world are replacing those meters with the digital sort that can communicate back and forth to the utility, and monitor your usage in near real-time. That way, if you turn your dishwasher on now, the utility will soon see that you’re using more power – and they can adjust generation accordingly. More importantly, they’ll have greater insight into usage levels within our homes at frequent intervals (approximately 15 minutes) which they’ll be able to use to refine their models and use analytics to predict usage patterns – which means they can plan generation more efficiently. That way, if you start unplugging your cell phone charger and turning off your computer when you’re not using it, the utilities will have a stronger ability to see those changes and lower generation – ultimately helping to reduce our use of fossil fuels.

Smart Grid is also going to change the way you manage your own power usage. Many regulatory bodies are requiring utilities to make usage data available to third-party companies. Google has already begun integrating data from several utilities into their iGoogle portal, allowing you to see your usage in near real-time on the web. Utilities such as TXU offer access to energy usage on the web and your cell phone so that you can view usage and even adjust the temperature in your house. Other vendors are creating home gateways so that you can network your appliances and control them remotely. Schlage allows you to remotely lock and unlock your doors with their Schlage LiNK product. Soon enough, when you venture off on a long trip to Grandma’s house, you won’t have to drive back to see if the oven is off – you’ll grab your Droid and check from the car.

Commercial carriers like Verizon are investing heavily in technologies that support Smart Grid, and we are working with utility companies and vendors to develop the secure, two-way communication networks and integrate devices into applications that allow consumers and businesses to make smarter choices about their energy usage. Placing this power into the hands of consumers allows us all to make a direct difference for the environment.

As we celebrate Earth Day on April 22 and we think about the ways we can impact the environment, keep in mind that Verizon is working with utility companies around the world to help us all reduce our carbon footprint.

Over the last several months, we’ve seen our clients become more interested in smart building solutions, partly to reduce their energy consumption but also to reduce carbon output and integrate renewable energy sources. In brief, smart buildings leverage IP networks to lower capital and operating costs by integrating building systems (e.g., energy management, lighting, HVAC). This integration allows building owners and lessees to monitor energy usage at facilities, control usage in response to changing energy prices, and monitor and reduce carbon emissions.

Common goals of smart building programs include:

1. Conserve Energy: Ability to manage and limit power usage at company facilities, and to shed load among the devices connected to the network helps improve the utilization of connected equipment. Local override is generally allowed to give managers control.
2. Curtail Usage: Systems allows customers to leverage participation in load curtailment programs. Utilities will reduce power during peak times, and systems will resort to backup generation during peak times. In exchange, they get lower rates from the utility.
3. Monitor Carbon Output: Systems can be used to monitor real-time power usage by building and circuit, and calculate carbon emissions in near real-time. Adding a live interface to the US EPA also allows companies to update their EnergyStar rating on a real-time basis.
4. Increase Energy Reliability: Adding battery storage capabilities allows customers to maintain power levels even during outages. Alarms can be configured to detect low supply and switch automatically.

Companies can benefit from smart building solutions in both new and existing facilities. Existing building control equipment and devices can be integrated into a common application through solutions such as a federated bus architecture. Our enrolment in curtailment programs has allowed us to generate revenue streams from local utilities; in exchange for allowing them to cut our power during peak times, we receive direct payments and lower energy rates. When power is cut, our system automatically transfers to backup battery stores that maintain constant power for operations. We work with a variety of vendors to test their components and systems, giving us a solution that leverages a best of breed approach to monitor and control energy usage.

Scan through any reputable publication and you are sure to hear a lot of buzz around Smart Grid and the transformation of the utility industry. While there are different ways to technically define smart grid, I see it essentially as a communications network that provides control and intelligence about the grid. And, technology service providers play a critical role. At the Smart Grid Forum on January 21, I am addressing an audience of energy and utility companies to convey exactly how service providers can help them adopt smart grid capabilities.

The term smart grid may be new, but communications networks have been around for a while thanks to public carriers. For example, every cell phone is essentially a smart meter that is connected to a communications network that not only allows users to complete a call or receive an e-mail; it also allows them to get up to the minute billing records, provides the ability for carriers to remotely update service profiles and creates a common platform for consumers and customer service representatives to view the call data record in real time. In short, carriers have deep experience in deploying and managing global communication networks and as the utility industry transforms to a smarter grid, there is a lot to gain from partnering with the telecommunications industry.

Carriers can also share some of their experiences which are very applicable to utility companies as they continue their migration to the smart grid:

• Data Explosion: First, there will be an explosion of data that comes along with smart grid as smart meters and related devices will be polled more frequently. This data explosion will require higher network bandwidth, increased storage and expanded computing capacity of the systems.
• Security: As additional newer devices come online, there will be an increased need to restrict unauthorized access and secure system and customer data.
• Customer Interaction: Technology has already altered consumers’ expectations of how they can interact with their service providers. Smart devices and the tools will enable and require utilities to provide a much richer customer experience.

Partnering with carriers makes good business sense. Just as many Fortune 500 businesses and government customers as have used technology companies for their critical infrastructure needs, utilities should also leverage a carrier’s infrastructure, knowledge and experience to help them with smart grid migration.