Thanks to my friend Ryan for this article. Having real-time information about consumption can really change behavior and encourage conservation. Someday we will all have real-time displays in our homes that will allow us to monitor our consumption and see what we are paying for it in real-time. Very cool stuff!
by Rebecca Buckman - Forbes.com
Link to article
The stock market's blowup is crippling many Silicon Valley startups that need cash. Raising funds privately is hard, going to the public markets next to impossible.
Then there's an outlier: Silver Spring Networks, an under-the-radar firm that expects $100 million-plus in revenue this year and double that in 2010. The Redwood City, Calif. company boasts big-name backers and is making a play in the politically popular business of upgrading the nation's aging, out-of-shape electric grid. (The Obama stimulus package contains money for "smart grid" projects, among other goodies.)
Silver Spring's networking gear is being deployed on a large scale by utilities such as California's Pacific Gas & Electric and Washington, D.C.'s Pepco Holdings, which together have 7 million customers. Last year the company hired Warren Jenson, who ran the books at Amazon.com and nbc, as financial chief. He presumably knows a thing or two about managing money at a public company.
"I wouldn't say we're in a recession-proof space," says Scott Lang, Silver Spring's chief executive. With utilities scrambling to draw on new sources of power like solar and wind--and desperate for ways to nudge consumers to use less electricity--Silver Spring's technology, which does both, is a hot commodity.
The company was started in Milwaukee in 2002 by a small group of entrepreneurs, including some ex-employees of Wisconsin Gas. They were intrigued by the idea of upgrading the electrical grid. But at the time, the available technology was somewhat primitive and focused mostly on remote meter-reading, say, from a van at the end of a street.
The startup's founders wanted to solve a bigger problem: Helping utilities collect up-to-the-minute data from their networks so customers could know exactly how much power they were using when. The idea was to prod consumers into conserving energy during periods of peak usage--and perhaps charge more, in some cases, for hogging power during that time. Peak periods strain power systems and often require utilities to build extra plants, even if they're only needed a dozen or so days a year.
If customers "are being told on a display in their home that energy is really expensive right now, maybe they'll decide to turn off a few lights or not do their laundry," says Raj Vaswani, Silver Spring's chief technology officer. Many consumers have no idea it costs utilities much more to stream power to their homes during peak-energy times than off-peak hours.
Some customers of Oklahoma Gas & Electric learned that lesson last summer during a Silver Spring pilot project. About 25 of them received detailed information about their home power use via a small tabletop device and the Web. Some customers also elected to turn down their air conditioners by a few degrees during the afternoon heat to see what effect it had on their power consumption.
All but one of the participants saved an average of 10% to 15% off their power bills, and OG&E got to conserve scarce power resources. OG&E is hoping to test the program with another 2,000 to 3,000 customers soon.
The utility also got green by installing 6,600 Silver Spring meters at a group of apartment complexes. Because the devices were wired to OG&E headquarters, the utility could turn them on and off remotely when residents moved in and out, instead of sending out a truck. That saved fuel and manpower, says Kenneth Grant, OG&E's managing director of marketing.
Pacific Gas & Electric in San Francisco is now seeking authorization to spend more than $2 billion to deploy 10 million Silver Spring-powered electric and gas meters by 2012. The work is carried out by installers like Tirso Ortega, who recently slogged through mud with his gear in front of a home in the tony San Francisco suburb of Hillsborough.
"These are our golden eggs," Ortega says, gently opening a box on the back of his truck to reveal four meters, nested in cardboard. They are branded with the Silver Spring name as well as that of General Electric, which manufactures the device. (Silver Spring's technology is inside.) The round, gray meters have digital screens, in contrast to the old-fashioned dials on the devices Ortega is replacing.
The meter's wireless connectivity to PG&E headquarters lets the utility read the meter remotely--meaning that in a few years PG&E hopes to eliminate about 900 meter-reader jobs, says Andrew Tang, a PG&E senior director. Most incumbents will be transferred elsewhere within the company.
The data from the meters, as well as the sensors that will be installed on other parts of the grid--each node has its own unique Internet Protocol address, just like a computer--also will help pinpoint outages. Right now most utilities find out the lights are out only when customers call, which leads to costly--and at times unnecessary--trips into the field by linemen.
Another benefit is increased data about power being generated from renewable sources, like solar panels, wind farms and even plug-in cars. More than 50% of the nation's rooftop solar panels, for instance, are in PG&E's territory, Tang says, and the existing grid simply wasn't set up to receive and smartly route such intermittent sources of power. The smart grid will handle that, Tang says. PG&E is seeking approval for a multiyear rate increase to cover part of the costs of the new meters, but the hike shouldn't exceed 1.1% in any given year, the utility insists.
By themselves the meters won't dent the country's reliance on fossil fuels or the problem of global warming. But the company says a smarter grid is a prerequisite to bringing more renewable sources of power online.