Wednesday, 27 August 2008

Who’ll Win ‘Smart Grid’ Gold? Keep an Eye on Duke, Ambient, eMeter, EnerNOC, GridPoint, Trilliant & More

Original Article -

Posted: August 27, 2008

Much has been written about the critical need to fix the faltering power grid, the rapid development of plug-in electric hybrid vehicles in the face of record pump prices, and corporations’ strong interest in energy efficiency to combat rising power costs. Not much has been written – yet – about what has to first be in place for all this to happen, namely: the technology for making a power grid “smart.”

The “smart” electrical power grid, parts of which are now under development by many different companies, will act like a cellular telephone network. Its computer-controlled technology will permit two-way communication between power plants and literally everything that runs on electricity. The technology will include power management chips embedded in every TV and toaster, plus sophisticated monitoring systems all along the distribution chain – in the plant, on the lines, and in your home and office, where advanced programmable thermostats will, for the first time, put at your fingertips the power to save money and limit your greenhouse gas emissions.

The smart grid will make it possible for businesses to instantly adjust the energy usage of dozens of large factories, retail establishments, and other power users at the same time. It will make it possible to plug in millions of electrically-powered cars and trucks at any given time without overloading the system. Indeed, it is expected that the electricity stored in plug-in cars’ batteries will become a vital power source in its own right since utilities will be able on command to pull that electricity out of all those batteries when extra power is needed quickly to avoid a blackout. That, plus the inherent ability of a smart grid to diagnose and repair itself before trouble develops, will go a long way toward fixing what’s wrong with today’s faltering grid.

A lot of companies are racing for smart-grid gold, and given that it’s been estimated that the smart grid may generate some $45 billion in revenue for its developers, there should be multiple gold medals handed out. So here’s a list of companies that appear to be in line to make their investors happy along with some reasons why. The list is by no means exhaustive; it’s intended only to give investors a sense of the many different money-making opportunities that exist with smart grid development. (Look for frequent updates.)

Duke Energy and XCel Energy are the two investor-owned U.S. electric utilities trailblazing smart grid applications on their systems. Both have regulators pushing them to go green so their interest is unlikely to wane. Both may wind up acquiring cutting-edge technology firms, which could result in significant licensing fees as the rest of the notoriously slow U.S. electric utility industry plays catch-up. (For more on Duke see The Electric Revolution (Part 3 of 4) – Duke Energy’s David Mohler: ‘Utility of the Future’ Arrives Next Year.)

EnerNOC Inc. appears to be on a roll as a provider of demand response (DR) systems that rely on smart-grid-like computer controls to trim customer demand on the command of a utility when the grid is in danger of overloading. Increasingly, EnerNOC is using its technology to do forensic analyses of companies’ power usage, which will be another function of smart grid technology. (For more on EnerNOC see EnerNOC CEO Healy Sees ‘Demand Response’ 10% of Power Generation Mix In Less Than 5 Years.)

Ambient Corp. is a company developing technology intended to give the smart grid two-way communication capability. Utilities are going to need to turn their “dumb” electrical wires into “smart” wires capable of Internet-based communication in order to execute all sorts of demands to optimize and minimize power usage.

Echelon Corp. and privately-held eMeter are developing advanced meters that will serve as collection points for information passed along wirelessly and by Internet-capable power lines. Advanced meters will be key to utilities providing innovative pricing plans that encourage power users to switch their consumption to times of day when demand is low – and so is the price. (For more on Echelon see The Home-Improvers: 5 That Could Do Well Improving Home Energy Efficiency — #1 Echelon.)

GridPoint Inc., which is also privately held, is developing back-up power systems for when the power is interrupted. These smart battery-based systems will automatically spring into action, helping manufacturers and others avoid power breaks which, even if they last only fractions of a second, can force a company to lose hours because it needs to reprogram its computers. (For more on GridPoint see Follow the Money: 5 Firms Grabbing Big Bucks That Belong on Investors’ Radar Screens: #5 GridPoint.)

Meanwhile, Freescale Semiconductor, Texas Instruments, Atmel Corp. and Ember Networks, the first three publicly held, are all involved in developing the power management chips that will go into the many millions of TVs, toasters and other appliances. Privately-held Trilliant Inc. wants to be the main company that puts power management chips onto circuit boards, creating a wireless mesh network for communication within a home or office as well as back to utilities. (For more on Trilliant and other smart grid development firms, see Part 1 of 2 - An Insider’s Perspective On ‘Smart Grid’ Tech Plays That May Make You A Lot Of Money and Part 2 of 2 - From Meters to Washing Machines, ‘Smart’ Grid Components May Make Investors $$.)

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