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10/14/2009

If millions of small power stations are feeding the mains with a fluctuating quantity of electricity, and millions upon millions of terminal devices and home management systems are transmitting energy consumption data or receiving commands, the grid operators' systems could go haywire. The power transmission has to be continually adjusted at millisecond intervals. And it's a process that can only be achieved if it is highly automated.

That's why setting up such an intelligent power grid, that can manage this mass of data across the country, is probably the biggest challenge of the new electric age. "The deployment of all modern energy technologies will rise or fall based on the construction of a communications network that can deal with mass amounts of real-time data and transport them using Internet Protocols," said Ingo Schönberg, the head Power Plus Communications (PPC), a company that is producing such technologies. "A smart grid is the backbone of the new infrastructure."

It's also one of the most lucrative emerging business opportunities. The hitherto dominant energy giants are suddenly faced with new and formidable foes: technology groups keen on seizing control over energy supplies on the Internet. Siemens CEO Peter Löscher puts the volume of the smart grid market at €30 billion by the year 2014. In September, the company said it was planning to invest €6 billion in this area over that period.

IT giant Cisco is also eyeing the market. "We are calculating a future annual market potential of $20 billion," said Cisco SmartGrid executive Christian Feisst. He believes that within 10 years the technology will be deployable on a mass scale. And PPC's Schönberg believes that smart grids will be available in some cities in the next few years and that they will be available to the masses by the middle of the next decade. He said the first aim must be to automate as many measuring and control processes as possible in order to reduce the increasing levels of complexity. Cisco is currently conducting pilot tests of smart grids, but the company said it would like to provide an entire region with intelligent electricity by mid-2010.

As part of the government's E-Energy project, companies including Siemens, ABB and IBM are developing central system platforms that can collect all the data on decentralized energy production and consumption. The systems also calculate electricity prices based on fluctuations and pass this information back to consumers using broadband connections or by mobile radio. Together, these technologies will create an energy market place in which consumers themselves can buy and sell power.

An El Dorado for Service Providers

A market in which energy is traded according to supply and demand will provide immense opportunities for service providers and startups. Some are developing systems to predict rate fluctuations based on weather forecasts and behavioral statistics. Mobile software, e.g. iPhone-Apps, are likely to figure prominently in this sector.

Resourceful start-ups can also come up with business innovations for an energy grid 2.0, e.g. setting up social networks to help and hone ecological householding. In the US, a new generation of startups is already sounding the clarion call to an ecological revolution on the Web.

Web visionaries say the Internet has the potential to revolutionize the way we think about the environment: For one thing, it can expose waste and pollution, and pinpoint the culprits. That should give rise to a collective environmental conscience, forcing us to think more critically about how we use energy.

• Back
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• Part 1: The Coming Energy Revolution
• Part 2: Hive Intelligence Will Revolutionize Energy Production
• Part 3: How Consumers Can Take Power from Utilities
• Part 4: Tech Giants Are Building Power Grid 2.0