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April - 2009 - issue > Entrepreneur
Energy Internet
Gunjan Sinha
Wednesday, April 1, 2009
A lot of venture activities are emerging in green and renewable energy fields, with the advent of solar, wind, and the biofuel alternatives of conventional energy sources. It is often a challenge for us, the IT entrepreneurs, to figure out the possible areas to explore within this new wave of future. A lot of venture capital money and corporate funding is chasing the ideas within this emerging area of innovation. Many entrepreneurs and corporate executives are trying to figure out how to play effectively in this domain, by leveraging their own expertise within the world of IT, Internet, and software. I share with you my own thoughts on this very important domain of next generation energy management here. I envision a new class of business infrastructure in the future, which essentially builds an ‘energy-Internet’ within the enterprise, helping organizations build an IT infrastructure, helping them to drive a collaborative environment with utilities, grids, regulators, and alternative energy sources, allowing them to reduce and regulate their overall carbon footprint, costs, and thereby creating more sustainable enterprises.

Enterprise Energy Management

Most energy management systems today are focused only on the operation of the building. This includes functions such as demand limiting, scheduling, and system optimization. I foresee that buildings of the future will evolve into more ‘Intelligent’ data sources, connecting themselves as data points on this energy-Internet, allowing enterprises to take things one step further by incorporating real-time utility rate information and making energy management decisions not just for a single building but for groups of buildings. Enterprise buildings and utilities are going to collaborate through an ‘energy-Internet’ architecture, with the goal of dynamically optimizing the energy usage in real-time. By managing energy in concert with the utility, there is the ability not only to reduce energy consumption but more importantly, to dramatically decrease energy expenditure, and reduce overall green house gas and carbon emissions.

Today, buildings are the largest single consumers of energy in North America, accounting for almost 40 percent of the total energy usage, and this is fairly evenly split between the residential and commercial buildings. Many of these buildings are not designed to meet the latest standards in energy efficiency and thus result in significant wastage of electricity. Some common examples of wastage are: lights left on when there are no occupants, heating kept on when the temperature is high, or cooling switched on when temperature is low. However, today, suitable technology exists to make these buildings ‘intelligent’. The buildings of the future will optimize for energy efficiency without impairing the building’s functionality for its occupants.

Intelligent Demand Response

Demand response is the policy and business area whereby the electricity customers reduce or shift their peak demand usage in response to price signals or other types of incentives. At present, the vast majority of electricity customers are on flat average rates that do not vary by time of day or season, no matter how much the cost to generate or deliver electricity fluctuates as demands on the system rise and fall. That, combined with the growth in the use of air conditioning – one of the highest demands during peak periods – has led to peak power demand growing faster than overall growth in electricity consumption. Rising peak demand is straining the electricity supply system everywhere and threatening the reliability of the power grid. It also is adding costs that all customers pay one way or the other, while leading to increased emissions. The Smart Grid is the concept of having all supply and demand resources dynamically managed via a combination of data, communications, and controls, whereby the operation of the grid for reasons of economics, security, reliability, emissions, and so on can be optimized in real-time. Key to making the grid ‘smarter’ is fully and dynamically integrating customers, their loads, and information about their usage into the operation of the grid. Thus, demand response is one of the primary components of the Smart grid. As such, the technologies that enable demand response, such as smart meters, communication and control systems, storage systems, and other demand control technologies, are foundational elements that allow a Smart Grid to take shape.

Evolution of Smart Grids

Intelligent buildings have the ability to anticipate electricity prices and adjust consumption accordingly. This, however, requires a Smart Grid that provides real-time information about electricity prices based on live monitoring of demand. Smart meters are a key component in the Smart Grid system that can help utilities balance demand, reduce expensive peak power usage, and provide a better deal to consumers by allowing them to see and respond to real-time pricing information through in-home displays, smart thermostats, and appliances. With today’s grid that has little or no intelligence to balance loads and monitor power flows, so much of electricity is wasted each year that would be enough to power India, Germany, and Canada put together. Future Smart Grids will use sensors, meters, digital controls, and analytic tools to automate, monitor, and control the two-way flow of energy across operations, from power plant to plug. A power company can optimize grid performance, prevent outages, rectify outages faster, and allow consumers to manage energy usage right down to the individual networked appliance.

Energy Internet – a Vision

Today, the Internet connects servers, desktops, and mobile devices through intelligent networking, connecting people with information, applications, and more importantly with each other. In the future, elements from the physical building infrastructure, like HVACs (air-conditioners), power meters, lawn sprinklers, building security systems, temperature sensors, utility grids, solar panels, and local energy generators will also become data and application sources on the Internet. These significant energy-consuming devices will transmit their energy usage, demands, status, etc. onto the Internet, creating a whole new vision of ‘energy-Internet’. This platform will enable a new class of business and consumer applications that will help dramatically optimize how we consume, regulate, and control energy usage within enterprises and households. Concepts like smart meters, smart grids, energy demand response systems, and intelligent building designs will enable the proliferation of energy Internet, which will put us all in control of how we globally optimize the energy usage. This presents a significant business opportunity to the IT and software entrepreneurs as not much has been done in this arena so far. We are at the beginning stages of innovation and thought leadership here in this new and important field of energy Internet. All we need is the imagination and dream of entrepreneurs, corporate executives, and VCs to realize how this new energy Internet gets wired up and how the range of applications that emerges over the next decade.

The possibilities are boundless, and so are the opportunities for global impact!

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