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Broadband Access
Commentary
CTIA 2009: Telcos enter the energy management game
Opportunity is promising, but utility cooperation will be the challenge
by Sean Buckley, Editor in Chief
As I head out to CTIA to help host our one-day Machine to Machine: Show me the Money panel series, it’s hard not to notice reports that Verizon is considering the idea of adding energy management services as one of the services it could offer over a home network connected to its FiOS FTTH service.
Other than saying they will offer videoconferencing, Verizon has not formally confirmed a plan for an energy management service.
I don’t think the idea of a telco like Verizon, or any service provider for that matter, offering energy management is far-fetched. Service providers, especially those like Verizon and their RBOC counterparts (AT&T and Qwest) are looking to find new ways to differentiate themselves and avoid having others leverage their connections into the home for applications they don’t control.
It appears that telcos are already doing this. Up north, Bell Canada has been offering a residential energy management trial service in Ontario, while BT plans to integrate “environmental management” into the Thompson home gateways it’s deploying to homes.
Not surprisingly, the smart energy opportunity is also attracting insurgent operators such as Google.
As the search site that has spent billions trying to take a chunk out of the traditional service provider’s pie, has launched a pilot trial of its Power Meter energy management service. Reports say that consumers who have trialled the PowerMeter have seen 15 percent reduction in their energy consumption.
The "smart grid" concept has been grabbing a lot of headlines lately. Consisting of a mix of smart meters, wireless technology, sensors and software, the smart grid essentially makes the utility delivery infrastructure more intelligent and provides better visibility and control to deliver energy. Utilities will get better visibility into the distribution/transmission infrastructure between the utilities generating capacity and the ultimate consumers of that electricity.
Timing for service providers and utilities to consider offering energy management services comes at a time when the Obama administration has called for the installation of 40 million smart utility meters as part of its economic stimulus package. A recent version of the package earmarks $32 billion for improving the nation's transmission grid, $4.5 billion of it dedicated to grants for smart grid-related projects.
An enhanced home experience
Regardless of when they jump into the energy management game, one asset that broadband service players can leverage is their growing home network deployments.
To complement the growth of its FTTH-based FiOS service, which currently has over 12.7 million homes passed, Verizon is moving fast on the home networking opportunity.
Last July, the RBOC deployed new home networking routers from Actiontec and Westell that effectively can deliver 175 Mbps of bandwidth throughout a home. Specifically, the routers can support up to four WiFi networks and can be remotely managed for troubleshooting.
In announcing the new set of routers, Tushar Saxena, director of home networking solutions for Verizon said that “all of these capabilities coupled with the ability to modularly expand and deliver new applications for the entire home right for the home with simple setup.
The key word here is “modularity.” Modularity, at least how I define it, means that the router can be that highway entry point to support applications as they emerge.
If and when Verizon offers an energy management system, it’s not hard to imagine that one of those Wi-Fi connections could be connected to an IP-based thermostat in the home or a smart utility meter.
Similar to the way Verizon and DirecTV allows consumers to remotely program their video viewing from a cell phone, an energy management system would allow the consumer to program when they want their air conditioner or heat to come on.
Home collision ahead
In a CNET article I saw last week titled "Verizon eyes home management with FiOS," Jesse Berst, an analyst at GlobalSmartEnergy, said “there will be a huge collision in the home, but it won’t be just utilities and telcos. Many others are converging there as well.”
Not that I want to put words in his mouth, but this collision to me will also likely include insurgent players like Google and then new energy device makers, home automation and maybe even consumer devices that include some software that allows a user to track their usage every month.
A home automation or maybe a washing/dryer company could have an IP connection that measures usage per month, per week that goes to some online portal that neither the utility nor the service provider would directly control.
What will enable the communication in the home is the ability for telcos, utilities and device makers to create an open dialogue that allows consumers to purchase IP-based devices that can be linked to either the smart meter or perhaps to a portal that shows their usage.
This collision of devices, utilities and insurgent operators won’t likely be pretty, but there are a number of benefits to every piece of the food chain in energy management.
To quell this collision in the home, industry groups are stepping up to the plate with new standards to help utilities and potentially telcos create energy management programs.
Seeing an opportunity to provide a common application layer for advanced meter infrastructure and Home Area Networks (HANs) across both powerline and wireless, HomePlug struck up a partnership with a number of utilities (PG&E, Reliance Energy, Duke Power and ENCORE) and the ZigBee Alliance. This alliance will enable utilities to measure energy consumption either wirelessly (ZigBee) or through the powerline infrastructure (HomePlug) in the home. (see Home Plug Alliance keeps plugging away).
Utility buy in
If telcos and even insurgents like Google are serious about delivering energy management, they’re going to need buy-in from the utility industry.
It does appear that Google is launching its power meter pilot, lobbying in California, while continuing to seek out partnerships with utilities.
It does appear that Google in launching the pilot of its power meter is lobbying in California to do this, while continuing to seek out partnerships with utilities.
However, the stumbling block is that the utilities aren’t the fastest moving entities especially when it comes to adopting new technology. For utilities, the move to ‘Smart Grid’ is a complete change in operational processes — processes that have changed little in decades.
Still, progress is being made.
On the telco side, AT&T Business services, which is providing utilities with M2M services on the WAN side, said convincing utilities to be smarter about how they conduct their operations is an ongoing work in progress.
Rather than trying to build every aspect itself, AT&T decided to align its wireless networking expertise with partners such as smart grid vendors like SmartSynch for smart grid networking products as well as hiring experts from the utility field itself.
“The reality is our efforts in this space are moving slowly because of the slow decision-making cycle around what is a very big initiative,” said Abhi Ingle, Vice President, AT&T Business Solutions. “It’s not an easy thing to do because you’re talking about large capital expenditures and changing processes that have remained untouched for 20-30 years.”
Recent research from both ABI Research and Parks Associates suggests that North America and Europe are the most aggressive adopters of ‘smart grid’ technology.
In the U.S., utilities such as AEP, PG&E and Southern California Edison have been aggressive movers on the smart grid and energy management front by committing resources to deploy smart meters. According to the Edison foundation statistics, AEP will deploy 5 million by 2015, while Southern Calfornia Edison and PG&E will deploy 5.1 and 5.3 million smart meters respectively by 2012. (see figure 1)
Smart grid as a concept may still be in the ramp-up mode, but it could provide potential benefits to consumers, utilities and telcos. Telcos could add more value over a broadband line that’s leveraged for services they don’t build, while the consumer can get better handle on their overall energy usage with devices that could be speaking into their home network connection.
Of course, getting there will require unprecedented cooperation between two disparate industries. It’s not like the utilities and telcos are strangers. Already, telcos and the electric utilities share the same poles that carry electricity and telecom services to every home.
While utilities and telcos will likely collide with one another in fighting for the end-users energy management dollar, they do have one thing that other startup energy management companies don’t have: brand awareness.
With that brand awareness in their pockets, a utility/telco energy management partnership could turn that collision into two travelers heading in a common direction.
Sean Buckley is OnSite at International CTIA Wireless 2009 in Las Vegas. Click here to see all our OnSite coverage from the show floor.
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