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Summary:

While I was edumacating attendees of our “Biggest Opportunities of the Smart Grid” webinar this morning (for subscribers to GigaOM Pro), I learned a great deal from Pike Research analyst Clint Wheelock, who gave an overview of the market on the call. Most interesting to me […]

redherringWhile I was edumacating attendees of our “Biggest Opportunities of the Smart Grid” webinar this morning (for subscribers to GigaOM Pro), I learned a great deal from Pike Research analyst Clint Wheelock, who gave an overview of the market on the call. Most interesting to me was that out of a predicted massive investment in smart grid infrastructure — estimated at $210 billion between 2010 to 2015, according to Pike Research — smart meters will actually play a pretty small part of the market: just 11 percent of the total smart grid revenue opportunity.

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“The focus on smart meters is a red herring,” explained Wheelock in the webinar this morning. Given all the attention surrounding utilities rolling out smart meters, I thought it was interesting that revenues from smart meters trailed other smart grid sectors like transmission infrastructure and distribution automation. And revenues from smart meters actually just tied the demand response market, and barely beat out the revenues from substation automation. Wheelock pointed out on the call that utilities will get a better return on their investment for those technologies like distribution automation, and additional transmission capacity compared to smart meters.

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Images courtesy of Pike Research and Flickr Creative Commons.

  1. Will Clint’s full presentation be available on GigaOm Pro?

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  2. [...] $210 billion is projected to be spent from 2010-2015 on upgrading our electrical infrastructure and making it smart. Interesting, smart meters are just a small part of it Share: [...]

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  3. I think so, Celeste (editor of GigaOm Pro) is working on this now. I’ll follow up with her and let you know shortly.

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  4. “…smart meters will actually play a pretty small part of the market: just 11 percent of the total smart grid revenue opportunity.”

    Interesting if you’re looking at the issue from the standpoint of an investor.

    But if your interest is in seeing us cut power usage and shut down coal plants then smart meters rise to the top of the heap.

    The recently released study from North Carolina demonstrated that giving people feedback on their electricity usage via smart meters (and some help on ways to cut their usage) produced a 20% average drop in electricity consumption.

    Twenty percent, across the country would allow us to shut down 40% of all coal plants now. We could meet our CO2 reduction goals a decade or two early.

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    1. Taco de Vries Friday, October 9, 2009

      Do you have a link to that report, thanks!

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      1. Sure, here you go…

        http://greeninc.blogs.nytimes.com/2009/09/21/smart-grid-project-cuts-electricity-usage/

        Sorry for forgetting to include it in my post.

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  5. The public hears more about smart meters because that is what they will be interacting with the most. 11% saving is a 100% of the public controlled savings, other than public support for the grid. Instead of calling it a red herring calling it a less significant component of the smart grid from an energy producer standpoint may be more useful.

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  6. Smart metering maybe a small part of the forecast investment, but it is the only aspect of the smart grid that a utility can implement with relatively minor changes to its operations and maintenance practices. In my view how quickly utilities undertake the migration from reactive to proactive T&D operations will dictate the size and complexity of the smart grid in 2014.

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    1. I agree with Damon and Subodh. Advanced meters are definitely the “low-hanging” fruit for the utilities…and they’re a good first step toward considering and developing a more complete Smart Grid strategy.

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  7. Yeah I agree with you guys. Anyone have any thoughts on how well the energy management tools that will bypass the smart meter (like the gadget partnership Google and Energy Inc announced) will do?

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    1. I don’t understand what Google is trying to do. Is this a device that could be purchased by someone living in an area where their utility company is going to wait a long time before installing smart meters? Sort of a fancy Kill-A-Watt?

      It seems like a poor substitute for an actual smart meter, it lacks the control features, does it not? There’s no way, for example, for grid/home owner control of appliance or EV charging which is essential for load shifting.

      Google making an issue of more rapid access to information as opposed to waiting for the “commonly slow utility network”. Viewing ones use of electricity hardly seems something that needs to update in nanoseconds.

      Anyone have a better idea of why Google has a better idea?

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      1. Taco de Vries Friday, October 9, 2009

        couple of comments:
        a meter by itself does not do much more than read the energy used. Current state of the meter market indicates that the only added innovation is that utilities roll out an infrastructure to carry that data back to their control center. NO EV charging, no load shifting, no HAN management, none of the US utilities have even begun touching that. AMI is about meter reading and getting rid of the meter readers, period.

        What Google is doing is putting its name behind a device you can install yourself that also reads your energy use. Combined with its software, it will provide you information. Pretty expensive device combined with free software, guess it is more hype than an offensive.

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  8. [...] October 8, 2009 | 10:58 AM PT | 0 comments We have a new look! What do you think? (jkOnTheRun) The focus on smart meters is a “red herring” (Earth2Tech) Groundwork announces new pricing structure, Quickstart program (OStatic) Comparing [...]

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  9. My impression was that Google PowerMeter (even the Energy Inc. version) does not in fact bypass the smart meter. The PowerMeter is a display portal for smart meter information. The newest version can use data from a consumer-purchased meter in addition to a utility-owned meter. All displays will have to rely on meter data of some sort to be successful. I’m not sure who the ultimate display portal winners will be…offering it for free has got to increase the odds, though.

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  10. [...] The Focus on Smart Meters Is A “Red Herring” Posted October 9, 2009 Filed under: Uncategorized | http://earth2tech.com/2009/10/07/the-focus-on-smart-meters-is-a-red-herring/ [...]

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