There is no single “smart grid” out there today, but rather a welter of different systems that all need to be tied together. That’s the job IBM has chosen for itself in the smart grid space, and so far the IT behemoth has made some significant strides in its ambitions. In Europe, Big Blue is doing projects like networking the electric and water system of the entire island nation of Malta, in the U.S, it’s working on projects like integrating smart meters and grid sensors, and in China, IBM has launched a series of high-level smart grid projects, aiming at making a $400 million business out of helping the world’s biggest smart grid spender get its act together.
Allan Schurr, Vice President of Strategy and Development for Energy & Utilities at IBM, has his finger on the pulse of all these efforts. The former executive for smart meter leader Itron and utility Pacific Gas & Electric now leads IBM’s market strategy, regulatory policy and partnerships with global utilities. He’s also been named one of Earth2Tech’s top 15 connected car influencers, given his role with “anything EV-related” at IBM. On April 29th, Schurr will speak on a smart grid panel at our Green:Net conference in San Francisco, where he will share insights on just how IBM is getting the world’s smart grid systems to work together. We spoke to him recently to get a preview of the key issues IBM is looking at in terms of its smart grid plans and here is our edited excerpt of the interview:
Q: What is IBM’s focus when it comes to the smart grid?
A: Our focus is really on concentrating on delivering services and technology of IBMs making — plus partner components, which are of course a major element in smart grid programs — to ensure that the solutions that are promised are in fact delivered, and the value is really created. That comes from making the stuff work — making it work both in a physical sense — and then working in a technical sense of actually delivering the business value. The value comes from ensuring that the silos in the business are broken down, and the flow of information and properly contextual information is available to those decision makers.
For example, a (smart) meter is more than just a component in the cash register, you have new consumers of information off that meter – you have people in the outage management department who want to look at that as sensor that can both report outages and confirm restorations. You have customer service reps using more granular information to help resolve billing issues. You have field service groups avoiding a truck roll to shut off or turn on service. You might have asset planers using that device as a voltage sensor…. That doesn’t happen just because we wave our hand and say, it’s happening. Its because our customers are getting their business outcomes deigned in from the outset.
Q: How does IBM identify the gaps in today’s smart grid infrastructures? Can you identify the key integration challenges IBM is tackling?
A: There are many integration challenges. But the gap process we go through is to look at it through the lens of the customer, the utility clients’ eyes. What are the parts that have to be brought together? It is part of our DNA to work with our partner ecosystem to fill those gaps if IBM can’t fill them ourselves.
Q: What about your partner ecosystem? How are those relationships developing?
A: This is one of the most exciting parts of this market. There are so may interesting technologies that are being developed, both by incumbent players and new upstarts. We see ourselves as the integrator of these technologies using IBM tech and services, we have to keep close tabs on this market… It’s probably safe to say we have well over 200 firms in our energy and utilities partner ecosystem in one form or another. Utilities are looking for innovative technologies, but they sometimes aren’t sure about the integratability of some of thee new technologies. We can answer that question.
Q: What are the key policy issues facing the smart grid industry? How is IBM involved in working with governments and regulatory entities to ensure positive outcomes in that process?
A: Regulatory policy (in the utility sector) has always been focused on ensuring benefits for the customer, which is captive in a sense that it’s a (customer of a) regulated monopoly — they can’t go elsewhere. The regulator has to ensure there are customer benefits.
Throw into the mix smart grid, which is a new investment with a new potential for different benefit categories. Some are cost reductions, and the regulatory entities know how to deal with those. But there are those that are more societal in nature that are more challenging from a regulator’s perspective. Sometimes it has to do with the cost of the bills, sometimes it has to do with integrating renewables. The policy challenges are to communicate that the benefits are real, and the risks are low, so a regulator sees reasonable assurance that if they authorize an investment, the customer won’t be burned later.
Q: Where does IBM see the greatest future growth of the smart grid market in global terms? Will the US lead? Will China take over? What about Europe, or other parts of the developing world?
A: I would say that China is coming on very fast. Will the US lead in the adoption of smart grid, or will it lead in the supplying of technology? I do think that the US is ahead right now in the adoption of smart grid technologies. Europe is making investments, though not as rapidly. China is coming on the fastest, there’s no doubt about that, from a place a few years ago when they were focused on new capacity to fuel their growth, now they’re building new capacity that’s also very smart, so perhaps it’s less expensive to fuel that growth.
Will China take over? I don’t see that as an inevitability at all. The adoption of technology may be a race between a number of economies — I see U.S. companies as extremely strong in the provisioning of technologies, and where innovation is happening very rapidly. But we don’t have a monopoly on that. A number of companies in China are rapidly emerging. We need to work with them to integrate their technologies and other technologies into the market. It’s important that China is very interested in adopting standards, and is working on the NIST (National Institute of Standards and Technologies) work on that. The companies developing technology for China’s market will also have export opportunities.