Paul De Martini provides management consulting services to technology, energy and venture capital executives worldwide. He is the MD of Newport Consulting Group and until recently was the CTO of Cisco Smart Grids.
Prior to that he was vice president of Advanced Technology at Southern California Edison leading their $2 billion smart grid strategy, policy, and research and deployment activity. Earlier, he was an executive with ICF International, Sempra Energy, Coastal Oil and PG&E Corporation in competitive energy services and electric operations. Paul holds an MBA from the University of Southern California. He also completed the technology management program at Caltech.
Newport Consulting Group’s view is that the electricity industry is at a tipping point where the accelerating pace of change is creating opportunities for disruption. This is caused by two decades of energy policy and industry structural changes combined with accelerating social and technological evolution.
The result is significant changes in the economics, operation, structure and regulation of the electricity industry. Today, industry leaders and emerging business are developing strategies and new business models to succeed in this transformation.
We spoke with Paul to learn more about these issues and his talk at CeBIT’s AusInnovate Conference “International Insights Case Study: Utilising Technology in Electric Networks – Enabling Customer Participation in Markets and Improving Efficiency and Reliability“.
He said his talk would focus on critical infrastructure and how North America is planning ahead for the evolution of the electricity system, types of supply generation, more distributed generation and increasing participation of consumers in the market eg: balancing the grid.
All this is happening simultaneously, wind, solar etc with distributed generation such as Solar PV on household rooftops/small commercial buildings being used with systems that automatically respond to price signals from the electricity utility.
However the electricity network wasn’t designed to handle this level of complexity. How much can the grid accept without fundamentally changing was seen as a 10-20 year issue by electricity utilities. The swift adoption rate of distributed generation means this has to be addressed much faster.
De Martini mentioned one North American company to keep an eye out for is Tendril, which offers in home devices that can control home electricity use based on price signals.
In an Australian first Origin Energy trialled the Tendril Energize application suite in 2011. Energize is built on Tendril Connect, an open standards-based, scalable, secure software-as-a-service platform that enables energy insight, choice and control across various communication channels to customers including web, mobile, paper, home area network (HAN) devices and advanced application development for future programs such as solar, smart appliances and electric vehicles.
Paul also discussed the issue of appliances. He said most major applicance makers are coming to market, or will be coming soon, with products at the higher end that are intelligent and can behave differently depending on price signals sent to them. Most of these appliances like fridges have 7 year lifecycle on average, so we have to wait for people to replace older non-programmable appliances.
In terms of national plans De Martini said that while Europe has 20% renewable energy by 2020 target, USA has no national policy. However over ~70+% of the US population has a renewable standard or energy efficiency objective set by 30+ states that have set their own standards.
In California there are 30 million people with 15 million electric connections for households and businesses. By 2020 there could be as many as 2 million customers that are participating automatically in some way in this market. The objective is to reduce the need for high peak load capacity available all the time, which would take a lot of the cost out of the system.
However a wildcard is whether people will override things like air-conditioning shutdown on peak summer/winter load days to maintain comfort.
Market research and tests indicate that US electricity customers respond in greater numbers to messages to ““don’t waste” rather ““save energy”. This is why behavioural economics and the wording of messages are increasingly important areas that are being examined by electricity infrastructure companies as well as technology considerations.