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Summary:

In any nascent technology industry, the players that stand to gain and lose the most battle over standards that, done right, will drive innovation for decades to come. But imagine a standards-making process that’s 10 times more complex than that of the computing industry, with a […]

In any nascent technology industry, the players that stand to gain and lose the most battle over standards that, done right, will drive innovation for decades to come. But imagine a standards-making process that’s 10 times more complex than that of the computing industry, with a deadline for delivering those game-changing decisions of mere months, and you’ll understand what’s happening with the smart grid right now.

When President Obama signed the stimulus package into law in February, which included more than $4 billion for the buildout of the smart grid, he set a fledgling industry, which had been tinkering on the sidelines for years, into motion. As Steve Widergren, the Smart Grid Interoperabilty & Standards Coordinator for the Department of Energy, who’s been working on the smart-grid standards process since 2001, said, “There’s a level of complexity to this problem that means we need to be rational about what can be done in such a short amount of time.” The condensed timeline, the difficulty of the task, and the diverse set of players will lead to some major standards battles over the coming month, particularly when it comes to openness and the influence of proprietary technologies. Let the fun begin.

So Much To Do, So Little Time

The National Institute of Standards, which started working on smart grid standards in 2007, when it was tasked to do so by the Energy Independence and Security Act, is aiming to have the first phase of the Interim SmartGrid Roadmap available next month, with publication in September. NIST will be looking to other standards bodies to help with the endless technical details. In the first week of June, the IEEE (Institute of Electrical and Electronics Engineers) will be holding a conference to work on the interoperability standards for the smart grid, held at chip maker Intel’s campus.

Widergren compared the smart grid standards process to a blind man touching an elephant: Every piece looks vastly different than the whole. And there are more moving pieces than what’s involved in developing standards for, say, a wireless technology or a broadband connection. “The smart grid is very heterogenous, and anyone acting like it’s homogeneous is vastly oversimplifying it,” Widergren said.

The IEEE is just one of dozens of groups that will be submitting information and looking to play a role in the process. The North American Energy Standards Board is looking to work on demand response standards for the wholesale electricity market with the Federal Energy Regulatory Commission, while Lawrence Berkeley National Lab’s Demand Response Research Center is developing standards for demand response for buildings. Then there’s the International Electrotechnical Commission, the International Organization for Standardization, American National Standards Institute, the Society of Automotive Engineers — for plug-in vehicles — and a dozen other standards bodies that will focus on pieces of the expansive grid, like substations, devices, renewable energy production and where it will connect to buildings.

Standards Battles

Like any standards-making process that could deliver riches to some companies while leaving others out in the cold, expect the smart grid standards debate to become very heated. Utilities, which buy network gear in 10- to 20-year deployment life cycles, want open standards so that they won’t get locked into buying from any one equipment provider. In addition, if they’re planning on upgrading their hardware after a decade, they won’t want to get stuck with non-standards-based hardware that can become quickly outdated or will need to be entirely replaced. Proprietary smart grid gear makes the vendors the most money, however, so expect companies to try to wedge their proprietary technology into the standards-making process.

Establishing standards for the smart grid might be an even bigger challenge than doing so for the computing industry, but there are valuable lessons to be learned from that process, notably that open standards are the best thing for innovation. Just look at the cable industry back in the mid-1990s, says smart grid analyst Jesse Berst. Cisco came in and helped establish CableLabs and the DOCSIS standard, and “companies that did not adapt and adopt quickly — companies that clung too long to the proprietary approach — quickly lost share and many of them disappeared. There is a similar come-to-Jesus moment pending in the smart grid and smart metering space,” he said.

There’s the risk that the time crunch and complexity of the smart grid standards process could result in wrong choices. More likely, given the condensed timeline, is that standards bodies could set such broad guidelines that they’ll have little teeth. That’s probably a good thing, as companies, utilities and policymakers are just starting to discover what the real value of the smart grid is and will need market competition (not policy, standards or technology) to help shape its future.

This article also appeared on BusinessWeek.com.

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