The Smart Grid: A Huge Task with Huge Opportunities
TOM WILLIAMS, EDITOR-IN-CHIEF
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Could it be bigger than the Internet? That is now one of the credible predictions that are growing up around the build-out of the Smart Grid. Some time ago, Cisco was predicting a $100 billion market with some $20 billion annual opportunity over five years for the communications portion alone. Gradually but inexorably the overhaul of the nation’s energy distribution system is drawing the attention of major players such as Cisco and Intel as well as sparking the creativity of smaller entrepreneurs and start-ups. All this appears to be starting to happen without the massive government direction and subsidies that many had expected or feared. The opportunities for electronics vendors and embedded systems involvement are—as we have noted previously—enormous.
And it is happening in the face of what has the reputation of being an industry most resistant to change, the electric power industry. The emergence of a basic infrastructure can be the catalyst for the growth of countless new ventures and technologies that can work in synergy with it. We have seen this in the case of the Windows operating system and, of course, with the Internet. Such a phenomenon appears to be shaping up for the Smart Grid as well.
A recent report from IBISWorld has identified the ten fastest growing industries. First in line is VoIP providers such as Skype, which was recently acquired by Microsoft. In third place is wind power, and number ten on the list is solar power. According to IBISWorld Senior Analyst Casey Thormahlen, “Each industry on the list experienced growth as a result of one or more of four drivers: Internet growth, environmental issues, cost cutting and evolving technology.” I would suggest that the nascent growth of the Smart Grid is at least encouraging investment in wind and solar as well. Wind power, for example, had generated revenues of $12.5 billion in 2010 with revenue growth for the next five years projected at 17.4%. But wait. There’s more.
One of the promises of the Smart Grid, in addition to an advanced metering infrastructure (AMI), increased robustness and the ability to monitor and conduct the distribution of electricity, is time-of-day pricing so that users can schedule things like running washers and dryers for times when the rates are lower. This will lead to the development of smart appliances that will connect to and monitor the grid to know when to turn on. Estimates are that the market for such smart appliances will grow from a little over $3 billion today to well over $15 billion in the next four years. All of them will incorporate embedded control and connectivity. Semiconductor vendors such as Microsemi are rolling out product lines aimed specifically at solar power conversion.
There is no hard prediction as to what sources of power generation—renewable, fossil or nuclear—will dominate the future, but it will no doubt be a mix. The emerging electrical infrastructure will need to accommodate this predictable mixture as well as technologies that are still on the horizon, such as the advent of electric vehicles, their service network infrastructure, and the increased generating capacity they will require.
If electric vehicles do become a major component of transportation in the future, they will require their own network infrastructure for things like tracking and billing for charging and battery exchange. Will the Smart Grid have extra network capacity for those things it might give birth to but which are now unforeseen? Will we need some sort of highway-oriented network for the future or expanded wireless connectivity? Advances raise so many more questions.
And of course, there are still issues such as security, which is the topic of an article in this edition of RTC. The very smart meters that can be read without sending the truck around each month also allow access for things like firmware updates—and that invites hackers and cybercriminals. We currently know that control centers are targets for such attacks, but a whole country full of vulnerable meters, which are small, low-cost and do not even run an operating system, could be a major headache.
What is clear is that the gigantic task of rebuilding our electrical infrastructure while it is running is now underway. It presents huge challenges and enormous opportunities for exactly the kind of embedded intelligence that our industry has developed for so many previous applications.