Weekly Update

As Standards Evolve, Smart Grid Eyes IP

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

Standards for smart energy technology were all over the Green:Net conference last month, and the issues raised at our event hit the news this week, as government agencies started pushing the standards ball forward.

On Monday, the National Institute of Standards and Technology (NIST) released its roadmap for developing smart-grid interoperability standards, and on Friday the White House released info on how the $4 billion in smart-grid stimulus funding will be divvied up. As part of that announcement, Commerce Secretary Gary Locke noted that some funding would be directed toward standards development  “to ensure that all this new technology is compatible and operating at the highest cyber security standards to protect the smart grid from hackers and natural disasters.”

While nearly everyone agrees that standards, in any form, are necessary, most of the panelists at Green:Net said they felt that standards shouldn’t be mandated by government agencies; they should be chosen by the market. It’s the model that lead to the development of standards for the Internet, and many of the groups engaged with the smart-grid process see parallels. In a recent New York Times op-ed, Stephen Crocker described the community-driven approach to Internet standard practices and protocols: “Instead of authority-based decision-making, we relied on a process we called “rough consensus and running code.” Everyone was welcome to propose ideas, and if enough people liked it and used it, the design became a standard,” he writes.

Internet protocol (IP) has gained a key place in the standards discussion recently, in part thanks to the stimulus bill. While most players in the market seem to have embraced the idea of open standards, there’s some anxiety among older companies, in particular, about whether IP is the way to go. As Josie wrote at Earth2Tech, some of IP’s biggest skeptics have their own profits to protect.  That could slow the adoption of IP as the smart grid standard of choice — just ask IP-forefather Crocker. “It probably helped that in those days we avoided patents and other restrictions,” he writes of the IP standards process. “Without any financial incentive to control the protocols, it was much easier to reach agreement.”

That makes me wonder whether the market-driven approach can pick winners and losers fast enough. The basics of IP were established 40 years ago; that may not be a long time in the grand scheme of things, but it’s well-beyond the horizon of time we have for dealing with global climate change. The issues that the smart grid will tackle — such as integration of renewables and reducing the number of new coal plants — are urgent. Global warming waits for no committee’s decision.

Likewise, utilities are champing at the bit to roll out smart grid technologies, and they’re loathe to implement new technologies that might need to be replaced or retrofitted (at substantial cost) in the not-too-distant future. Without some sort of national consensus on standards, utilities may be taking a costly gamble on any technology they choose. As smart-grid analyst Jesse Berst wrote over at Smart Grid News this week, “We cannot afford to reinvent the wheel 3,300 times for each of America’s 3,300 utilities.”

With financial interests and climate change issues in play, the government may have a more critical role in setting deadlines and creating consensus. NIST hopes to get players on the same page enough to have an initial set of standards and plans for developing remaining standards by early fall. I’d place money on IP figuring prominently in those late fall announcements.

Question of the week

What are the potential pitfalls of using IP as the smart-grid standard of choice?