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Smart Grid Problem?: Smart at the Edge, Dumb In the Middle

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Too much intelligence at the edge of a network, and not enough in the middle, makes for a volatile network. That’s according to Ray Gogel, president and chief operating officer of the Current Group, quoted in a Forbes article this morning.

Gogel says a lot of the attention so far on the smart grid has been focused on “the edge” of the network — power generation and consumer energy consumption — and he’s worried that if there are too many nodes (renewable energy, smart meters) added at the edges of the network before the middle of the grid can catch up, in terms of intelligence, it will make for a volatile smart grid. The situation “scares utility people like myself,” he tells Forbes.

The point he makes is valid in terms of there being a lack of smart systems and software to control electrical functions deeper in the grid. That’s one of the reasons why utilities have been actively asking for software layers and applications that will help them manage that energy info within the network (for more on that see our GigaOM Pro article, subscription required). Warren Weiss, Managing Director of Foundation Capital, said at our smart grid event last week that these types of applications, particularly to help utilities intelligently manage renewable energy, are an untapped area for innovation. Gogel’s company Current not surprisingly makes technology to monitor and control electricity in the middle of the grid.

How “volatile” could the situation be? Electricity consumption and generation at the edges has to be tightly managed to make sure the grid doesn’t get overloaded in some areas or have blackouts in others. I remember at the Black Hat security convention, Mike Davis of security firm IOActive told me how turning on and off a large number of meters — say, 50,000 meters and 3 MW worth of electricity — could cause major problems for the stability of that section of the grid.

But in terms of the communication and computing portion of the smart grid (not the electrical control aspect, as moving and managing electrons is different than moving data) utilities and smart grid players are increasingly acknowledging that more intelligence at the edges of the network will actually be necessary. Eventually the smart grid — like broadband networks do — will have some sort of distributed model of computing “where automated decisions are made at the edge of the network but with some sort of supervisory control layer,” explained Andy Tang, senior director of the Smart Energy Web for PG&E (s PCG) at our smart grid bunker event. That distributed computing model will be quite different from the centralized mainframe model and point-to-point system that utilities largely have in place today, said Tang.

The process of adding more computing intelligence at the edges of the network will take many years. And I’m sure there will be a lot of debates amongst utilities about what their smart grid networks will look like.

The telecom and broadband industries have been debating whether intelligence of the network resides more in the edges, or in the core, for decades. In the late ’90s David Isenberg wrote a seminal article called Rise of the Stupid Network, in which he argued that intelligence is shifting to the endpoints and the data services and that the phone companies needed to evolve to that model in order to survive. Nowadays, however, the rise of cloud-computing and cheap/dumb netbooks raises new questions about where to place intelligence.

Ultimately the communications industries realized that certain levels of intelligence are needed in both areas, and there have been shifting trends for both. I think, for the data layer (not the electrical control portion), the smart grid industry will discover the same thing.

Image courtesy of Tau Zero’s photostream Flickr Creative Commons

4 Responses to “Smart Grid Problem?: Smart at the Edge, Dumb In the Middle”

  1. While I agree with the commentary, there should be references to more utilities focussing on distribution network intelligence rather than vendor companies attempting to get a foot in this space.

    It should be noted, however, that due to the structure of the grid in the US – small capacity substations (referred to more often as “transformers” as a result of their simplicity) servicing a small number of customers – the virtualisation of the end nodes to “middle” nodes becomes a real opportunity.

    Locations using the 230V/415V-3Phase low voltage tend to have much larger substations (up to 1500kVA in a kiosk and much larger in chambers, with switches, protection etc) servicing much larger customers per substation allows for the benefits of scale (enough customers to make it viable for the installation of equipment – but still at the step before the customer).