Thursday, January 26, 2012

Final Thoughts from a Smart Grid Conference

Spent a good two days in the Alamo City at DistribuTECH - the utility industry's annual smart grid conference. In addition to a renewed appreciation for Tex-Mex food that can only be found in South Texas, I left with a few main takeaways:

1) "America is Back"
That was President Obama's (somewhat criticized) proclamation in his State of the Union earlier this week. When it comes to the economy, I have to agree. We have seen corporate profits rising for quite some time and based on Apple's recent quarter, it's abundantly clear that people have enough money and confidence to buy iPhones and iPads like crazy, but what struck me walking the floor of the conference was the optimism and positive anecdotes I was hearing from smaller, less "techie" type of companies. One such company that manufactures custom thermoplastic enclosures out of Ohio was telling me they have never had a better year than 2011, across every industry - energy, grid, healthcare, etc - and that 2012 will be even better. Let's hope.

2) Big Data will be....well, big
Big Data is a major buzz word these days, but it is even more clear to me now that it will be increasingly important in making the business case for the Smart Grid. Hearing from utilities, it seems most have been underwhelmed with the value they are getting from their smart meter deployments. Other than enabling automated meter reading, smart meters have been somewhat of a bust. What these meters are doing, however, is collecting a lot of data. The question is: what can utilities do with that data to truly enable demand response, distribution management, and other higher order smart grid applications? Today, most utilities don't have an answer for that, but a number of companies are trying to figure it out for them. Anyone that can help utilities extract value from these existing data streams will do the industry and themselves are great service.

3) Too many vendors are trying to do too many things
Walking around the booths, I got the impression that a lot of companies (particularly startups) were trying to offer too many things across the spectrum of Smart Grid. It's almost like they're not sure what the best value added service/technology offering is, so they try to have a capability in all of them (meter networking, demand management, distribution automation, meter data....i could go on...etc.) to see what sticks. Meanwhile, they are all partnered with one another, despite having overlapping offerings. Makes me wonder if they know who their customers are and who their competitors are. This is somewhat the nature of a nascent industry, but it creates market confusion and is simply inefficient. I would expect this approach will not be sustainable and companies will have to rationalize what they do.

4) Customer engagement is top of mind for utilities
I was quite surprised by the emphasis on social media and customer engagement in talking to utilities, particularly considering that most are in a regulated industry where customers don't really have a choice of who their electricity provider is. Perhaps a big reason is that utilities are realizing that branding and marketing are a big driver in the effectiveness of energy efficiency programs. This has been one of the reasons a company like OPower has been so successful - because they can help utilities do something they never had to think about before - engage with their customers. Look for a lot more opportunities in that realm.