Duke Energy, a utility that has 4 million customers across the Midwest and the Carolinas, doesn’t want to be in the business of selling and making consumer electronics. The utility is not interested in helping sell iPhones, selecting the devices that consumers want to use for energy management, or rolling out trucks to neighborhoods to repair gadgets, explained Duke CTO David Mohler at the Dow Jones Alternative Energy conference this morning. Instead Duke is working on getting the smart grid network buildout right, and “opening up the end of the wire to products and new services and letting other players get into interacting around energy with our customers.” In this way, Mohler said, Duke hopes to “let a thousand flowers bloom” at the edge of the network.
In other words, Duke plans to enable its customers to choose from a variety of home devices and services that will be developed by third parties, including startups, consumer electronics makers and software developers. “This is one of the most exciting areas ,” said Mohler, adding that he doesn’t think we’ll even know what possible innovations will emerge at the edge of the network. In that way it’ll be like the early days of the Internet, said Mohler: “Who knew the Internet would produce the iPhone?”
Mohler, who became one of the first Chief Technology Officers in the utility industry three years ago, placed a strong emphasis in his talk on why the smart grid needs to be based on open platforms and interoperable standards in order for those “thousand flowers” to bloom. Duke is working with network giant Cisco (s CISCO) to build this type of network based on Internet Protocol (IP). “There’s got to be a way to get beyond building silos and proprietary products,” said Mohler. “Currently there’s a lot of products that don’t talk to each other, and require their own operating systems,” said Mohler: “[S]omeone needs to crack the code on that.”
It’s the same sea change that the mobile industry has recently gone through, as Google (s GOOG) and Apple (s AAPL) have developed their own ecosystems to develop mobile products at the edge of the cellular network. The Internet industry learned this lesson early and Internet companies like Google have been pushing that mentality into other industries like the power industry (Google has developed the energy management software PowerMeter).
Some early-adopter utilities are looking to take a similar open network approach as Duke. PG&E’s (s PCG) senior director of the Smart Energy Web Andy Tang told me that PG&E is waiting for the Open Smart Grid group to establish a single standard interface for energy management software before it starts working with third parties like Google and Microsoft (s MSFT). Tang told me: “I don’t want to pick winners. I want to work on more of a neutral ground.”
Mohler’s words were encouraging to the leaders of several energy management startups in the room (like EnergyHub and AlertMe). After Mohler’s talk I asked him how startups building innovation at the edge could work with Duke. Like his network mentality, Mohler sounds pretty open to the startup relationship: Just contact someone on my team, he said.