At the Edge of the Grid, Utilities Aren't So Critical

When it comes to upgrading the U.S.’s power infrastructure, electric utilities will play an important role, but some key elements of the emerging smart grid will move ahead with or without them. That was the consensus among experts speaking yesterday at a roundtable discussion in Palo Alto, Calif., held by the nonprofit networking group SDForum.

Yes, the panel of investors and startup executives acknowledged, utilities are essential to managing the infrastructure — from power plants through distribution to buildings and homes — and will be key participants in ensuring that generation and consumption points are communicating back to controllers in real time. But many innovations, they said, will happen on the “edge of the grid,” where power is generated and consumed. Startups are forging ahead with technologies that don’t require utility companies to be part of the conversation.

“We’re seeing a lot of terrific entrepreneurial ventures moving more rapidly than the utilities,” said Laurie Yoler, a managing director of GrowthPoint Technology Partners, a Palo Alto-based investment bank. Some smart grid entrepreneurs she works with, viewing utilities as sluggish and content to wait on the sidelines, are focused on selling their products and services directly to consumers.

Roland Accra, chief executive of San Francisco-based Arch Rock, said his company is helping clients monitor and manage their energy usage using sensors connected through wireless networks. Once in place at the edge of the network, the system can help drive down electric bills, keep machinery running with fewer interruptions, and increase productivity.

San Jose-based Fat Spaniel Technologies has built a power plant management system for renewable sources like solar. The web-based system helps operators optimize performance using advanced analytics, communicate with mobile personnel, and automatically generate regulatory and environmental reports. “We spend most of our time not dealing with utilities,” said Ron Lloyd, chief operating officer of the venture-backed startup.

But that doesn’t mean companies like Fat Spaniel can ignore utilities outright. Lloyd said they want their products to meet the requirements of utilities, for example around reporting data, so that they can sell their products to utilities that operate their own renewable power plants.

The panelists agreed that utilities will probably be content to see innovative applications put in place at the edge of the grid without their involvement. Utilities, as Yoler noted, don’t want to foot the entire bill for upgrading the power infrastructure. But even when utilities do pay for next-generation gadgets like smart meters, they ultimately pass those costs onto ratepayers like you and me.


Comments have been disabled for this post