Transcript 12.05.08 Jesse Berst.. - Woods Creek Consulting

Smart Grid and the New
Electricity Economy
Jesse Berst
Managing Director
GlobalSmartEnergy
[email protected]
1
Agenda
 Electronomics
• Goods and services
in the Electricity
Economy
 Smart Grid
• Enables the
Electricity Economy
• Why
• What
• How
 Along the Way -Show Why You Are:
•
•
•
Already in favor
Already understand
Already doing
something relevant
GlobalSmartEnergy
 Publish leading site/newsletter
• SmartGridNews.com
 Advise investors
• Venture and institutional
 Consult large corporations
• Market entry, M&A strategies
 Boards
• Pacific Northwest National Laboratory
• V2Green (before their purchase by GridPoint)
• Global Smart Infrastructures
Key Financial Definitions
 Con-pounded Interest
• Criminally bad management of financial
institutions
 Rat-nership
• Merger between two criminally bad financial
institutions
 Abracad-abacus
• Primitive calculator used by Washington Mutual to
show it would magically make profits from bad
home loans
 Dow Jeans
• Denim pants that fall down no matter how much
you tighten your belt
Traditional Value Chain
Generation
Delivery
End Use
Coal
Industrial
Hydro
Commercial
Transmission
(high voltage)
Nuclear
Substation
Distribution
(medium voltage)
Residential
End Use Macro Trends
• Population
Explosion
• Expectation
Inflation
• Electrification
of Everything
The Accidental Addiction
Percentage of GDP
Dependent on Electricity
1950 – 20%
2008 – 60%
Utterly Dependent on Electricity for
Lifestyle, Prosperity, Security
The New Realities
Additional
Centralized
Plus Renewables
Plus Dist.
Generation
Plus Bulk
Power Shipments
2
CO
Plus Air Neutral
Soon Water Neutral
With the Same Old Electromechanical
Grid from the 60s and 70s
Additional
Load
Repercussions
 Problems
• Dirty coal plants
• Obsolete and overstressed grid
• Regulated monopolies with little incentive to
modernize
 Vulnerabilities
•
•
•
•
Natural disasters
Terrorist attack
Small mistakes that ripple into major outages
Falling behind
• China $170B grid stimuls
• Europe, Middle East
Smart Grid Enables Solutions
 Enables renewables
• Move from where
generated to where
needed
• Handles intermittency
 Makes the grid more
reliable and selfhealing
 Wrings out more
efficiency
• Could save up to 30% of
energy
 Saves billions
• Deferred construction
• Lower rates
 Empowers consumers
• “Calling plans” for
electricity
• You decide when, how
much
 Reduces dependence
on foreign oil
• By making electric
transportation possible
“Smart Grid” Defined
 Three Components
1. Smart devices
•
•
At a minimum: “talk” and “listen”
In some cases: “think” and “act”
2. Two-way communications
3. Advanced control
Internet
Computing
 Borrows Heavily
•
We’ve done this before
Smart
Grid
Telecomm
Electric
Power
Grid – Smart Devices
Advanced Sensors
Remote Monitoring of
Expensive Equipment
(e.g. Transformers)
Smart Meters
Grid - 2-Way Communications
Examples:
Powerline
Broadband over Powerline (BPL)
Cellular
Radio Frequency (RF)
Satellite
Etc.
Grid - Advanced Control
Biggest Single Energy-Saving Opportunity:
Real-Time Control of Massive Network
End-to-End Visibility and Control from
Generation to Appliances
Macro Trends
 Generation
= Cleaner and Closer
• Diversity of supply
• Air/Water neutral
 Delivery
= Smart
• Renew
• Digitalize
 End Use
• Population Explosion
• Expectation Inflation
• Electrification of
Everything
= More with Less
The Self-Evident Smart Grid

20-30 year rule (Toffler, Schopenhauer)
1. Ridiculed as absurd
2. Attacked as dangerous
3. Accepted as self-evident
Rates of Change
Technology
Business
Social
Political
Evidence of a Tipping Point
 Google
• Major smart grid initiative
(with GE)
 General Electric
• Reorganized to form
Smart Grid Division
• Grid-smart appliances in
2009
 Computer firms
• Oracle, SAP, Cisco, H-P,
Microsoft
• Others soon
 Cleantech investments
• Record $1.6B in Q3
• $3.3B 1st three quarters
up 71%
• Kleiner: $75M into smart
grid company
 Federal and state
legislation
• EPAct 2005
• EISA 2007
• Stimulus 2008
• Stimulus Feb. 2009
• Invest in America mid2009
Energy Policy Act of 2005
Top Five Little-Known Clauses
1.
Blackouts outlawed
2.
Reddy Kilowatt ordered out of retirement to
address crisis
3.
Rolling blackouts renamed
“Olde Tyme Nights”
4.
Some subcommittee somewhere check into
solar and wind and all that crap
5.
Control room improvements to more
efficiently route blame to Canada
Adapted from
TheOnion.com
The Larger Context
 The End of the
Petroleum Economy
 Prosperity predicated on
access to cheap oil
 Birth of the Electricity
Economy
 Prosperity predicated on
access to cheap, clean,
reliable electricity
 (And it has to be all three)
 Energy market (oil, gas,
electricity) is 100x the
tech market
 Merrill Lynch
Emerging Opportunities
 Integrating platform
 Demand as supply
 Storage gets real
 Google the grid
 Microgrids
• Community-scale energy
 Enterprise utilities
 Smart infrastructure
• Unified utility
Importance of Infrastructure
Transcontinental
Railroad
Panama
Canal
 Postal system
 Educational
system
 Original grid
Interstate Highway
System
Internet
Backbone
 Rural electrification
 Phone system
 Cell phone
network
If You Want...
 Renewables
 Electric transportation
 Consumer choice and lower rates
 Greater security against disasters and
terrorism
 American leadership and prosperity to
continue in the Electricity Economy
 An Internet-scale opportunity
...You Want a Smart Grid