Two Paths to Smart Energy in DC (2 of 3)
Thursday, October 8, 2009 at 07:16PM
Toby Considine in Energy, Intelligent Buildings, Smart Grid, Standards

This is the second of three planned posts on the outcome of the conference last week in Virginia. The first post dealt with semantic issues. This one addresses business model issues. The third will be my perspective on critical standards, updating my earlier musing on SGIX.

Standards can seem dry and uninteresting, but they find vital expression in the business models they support or prevent. One of the underlying issues in the initially contentious smart grid meeting last week was the conflict of business models. This can be resolved, but only by talking clearly about the purposes and motivations behind each model. A good first start would be to give them good names.

Regular readers know that I favor something looking like pure market interactions. I believe that we all use a standard abstract presentation for scarcity and value, for risk and for reliability. We call this abstraction money. As Stephanie Hamilton opined when she still worked at Southern California Edison (SCE), every brown-out is a pricing failure.

Because I come from the perspective of building integrators, I have great faith in the ability of building automation systems to manage change, They are usually poorly maintained, and poorly understood by their owners, but they keep running. They adjust naturally to the conditions around them, and to their own operations, and are getting better at autonomous action and tuning. I want to give them clear price signals, not only now, but for the future. UI want to give them clearer information about weather and environment. And then I want to leave them alone.

But such systems can cost thousands of dollars to install. In part this is because without standards, they are all custom work. Still, there must be a less expensive solution.

Early smart grid deployments are aimed at the smallest, cheapest systems that can fit easily into appliances and home thermostats. They must not change the price of appliances materially, especially as social equity concerns mandate that low income consumer have access to the benefits of smart energy. Consumers want reliable systems; it is hard to convince them to pay more for systems that can be turned off by someone else.

Utilities often refer to this group as the Residential option, When pressed, they may call it ZigBee, because that trade association is the primary technology used to install these low end systems. They may call it the OpenHAN (Home Area Network) approach, although the information and interactions are indistinguishable from those of ZigBee. Sometimes this approach is used I small commercial buildings as well.

Rather than call them the OASIS or C&I (Commercial & Industrial) approach and the ZigBee or Residential approach, I think we should name them according to their business models. I propose that we call them Collaborative Energy and Managed Energy.

There, without out of the way, I can summarize succinctly the business model agreement from the customer-oriented standards development meeting.

We agreed that we would apply the semantic models coming out of NAESB to parallel processes for Collaborative and Managed energy, and that we would keep the semantics aligned when we could.

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