) spoke at the first Smart Grid Summit
, and the company continues to demonstrate growth and market leadership. With stimulus funding dominating so much of the current focus on smart grids, I reached out to Trilliant for a perspective from the vendor community.
What follows is an interview with Eric Miller, Senior Vice President of Solutions at Trilliant.
Jon Arnold (News – Alert): There is strong momentum in smart grids now, not just for your company, but the space as a whole. Trilliant is in the middle of most of these things, and I’d like to touch on a few themes in this interview. Let’s start at the top with the stimulus funding, which is now being disbursed. How important is this initiative and where do you see it having the most immediate impact on utilities?
Eric Miller: From an awareness perspective, the stimulus package and overall government support for smart grid initiatives has been unprecedented. The smart grid has gone from a relatively arcane technology category to a mainstream issue in only about 18 months. If awareness of the problem is step one, then the government has done everything right. With respect to impact, the stimulus package was a double-edged sword.
On the one hand, many utilities were already planning to deploy smart grid programs, but then decided to postpone those proposals and try to get federal dollars to augment their own funds. That created a short-term delay in programs getting up and running. In the long run, however, the impact is substantial. While the dollar amounts allocated won’t solve U.S. energy grid problems overnight, it does represent a true stimulus; one that will pay substantial dividends down the road as a direct result of the initiatives getting underway now.
JA: From what you’re seeing with customers, do you feel utilities have a clear vision about smart grids – not just in terms of how this funding is to be spent, but their broader roadmap?
EM: The real implications for energy consumers are going to take time. Frankly, too much attention on short-term consumer programs will only lead to impatience and backlash. Smart grid initiatives are measured in years, not months, so if there isn’t enough short-term benefit to energy consumers today, it’s because the groundwork is being put in place for that to be more possible and more productive down the road. Today, there’s so much focus on smart meters it’s clouding the additional benefits for when washers, dryers and other white goods are also connected to and managed by a smart grid. Manufacturers are stepping up to the plate with respect to these types of appliances, but no consumer is going to go out and replace their refrigerator because a newer model has the capability to communicate wirelessly with a home energy management system. That’s why I think the government’s actions to date have been measured and appropriate.
That being said, in my 20+ years in the energy industry I have never seen utility executives as excited and motivated about a technological innovation as I’ve seen the past few years. Nearly every utility executive I’ve spoken with is going to do something with respect to the smart grid. It’s really a question of what they want to accomplish, how it is funded, what’s the lay of the land from a regulatory perspective, and how long the implementation will take.
JA: Building on that, how do you see your role as a vendor evolving with utilities? As with telecom, utilities are moving from buying point solutions to more integrated solutions or platforms. What is the trend here, and who is really driving this?
There are both challenges and opportunities here. On the one hand, utilities are learning new systems, collecting new information and developing new relationships with their consumers. For an industry not used to rapid change, they are responding pretty well. Their expertise is delivering energy at a reasonable cost in a reliable fashion. I don’t see them opening up additional lines of business that are much outside of that core proposition. On the other hand, companies like IBM, Capgemini,Accenture ( News
), and others are now in a position to help manage and provide a level of intelligence on the amount of information that is now flowing into the utility. That’s a unique opportunity.
Similarly, companies like ours are in a position to advise utilities on best practices with respect to deployment, information management and other issues. The driver, however, is a simple one. The United States relies too much on foreign oil for our energy needs. It’s an untenable situation from environmental, economic and public safety perspectives. The awareness of this is what’s truly driving the smart grid forward.
JA: Trilliant has a global customer base with British Gas being a recent win. How do smart grid initiatives compare in these markets to North America? Are there some universal challenges you’re seeing across the board? What is most distinct about the U.S. market?
EM: A big difference is policy. The European Union has a 2020 mandate in place that is driving smart grid efforts throughout the continent. We’ve seen what intelligent policy has done in Ontario, Canada with Hydro One to catalyze adoption. They are at least 5 years ahead of anything being done in the United States because they adopted policies a long time ago to reduce their dependence on coal. What’s most distinct about the U.S. market is that the utilities haven’t had government support to move ahead with smart grid deployments until recently. All of that is changing now for the better.
JA: Your company has been partnering with majors like IBM (News – Alert) and ABB, and that’s a key trend in this market. We’ve seen the same pattern in telecom, and I think there’s more to come in smart grids. I also think we’ll soon see partnering extend from infrastructure vendors to communications-based vendors, especially around enabling the Smart Home. What are your views on that, and what type of future partnerships could you envision Trilliant making along these lines?
EM: The Internet turned 40 in 2009 and think about how many years and how many companies were involved in getting it from where it was in 1969 to where it is today. As much as computing touches almost every part of our lives, the energy market is even bigger. It will take many, many partnerships to make the smart grid a success, and some of those partnerships are with companies and applications that haven’t even been created yet.
JA: How would you gauge the overall progress utilities are making with their smart grid deployments? Do you feel they’re focusing on the right things, and they getting the most out of their vendor relationships?
EM: U.S. utilities are a bit behind those in other parts of the world, but the efforts they’ve wanted to make have been hampered by regulatory and governmental roadblocks. With those roadblocks being removed, U.S. utilities are now moving quickly.
Energy is a local market, so different utilities focus on different issues. Because smart grid deployments take so long, any first step is a good step. Some utilities will see the meter as stage one, others will be focusing on a more holistic energy delivery and management profile.
JA: What are you seeing for 2010? Do you anticipate a continuation of the current track utilities are on, or do you see them being ready to take bolder steps in broadening their smart grid visions?
EM: I expect Washington D.C. will continue to play a large role in the growth of the smart grid. Many, many standards are still being put in place, from the strategic to the arcane. The words ‘bold’ and ‘utility’ don’t usually appear in the same sentence for the primary reason that utilities are charged with being fiscally prudent. There is a problem of expectations when it comes to the smart grid because consumers are expecting these solutions in broad, bold strokes. That’s simply not the way utilities operate. Expect 2010 to see steady, measured smart grid deployments with some setbacks but many more successes. 2009 was a breakthrough year with respect to public awareness and economic stimulus. Trilliant, like many companies and nearly every utility are now preparing for a very busy 2010 where the rubber starts to hit the road.
Learn more about smart grid technology at the Smart Grid Summit, an event collocated with ITEXPO East 2010, to be held Jan. 20 to 22 in Miami. This is the event you need to attend if you want to understand the role that IP communications technologies will play in how the smart grid evolves – not just for making utilities more efficient, but also for enabling the Smart Home and a new generation of communications innovations. Register now.
Jon Arnold is co-founder of Intelligent Communications Partners (News – Alert) (ICP), a strategic advisory consultancy focused on the emerging Smart Grid opportunity. To read more of his Smart Grid articles, please visit his columnist page.