I recently attended IDC Energy Insights Predictions 2012: Utilities conference call today. I look forward to the IDC Insights series of conference calls every year as it helps me understand the critical issues and trends that impact Information Technology decisions within a particular industry.
In this case, the predictions were focused on the Utilities industry with an emphasis on North American issues. There are other calls coming up that focus on Europe and Asia.
IDC Energy Insights says in 2012, the industry is entering a ‘post stimulus’ period. While funding has dried up, there are areas where investment spending is growing, such as Solar PV installations. Other investment areas include Smart Grid, Smart Buildings, Electric Vehicles, and Energy Storage.
The 2012 predictions list below was sourced from the conference call slides.
Smart Meters.“Smart meters will peak in 2012, propelling demand response, but spending tempered for now”.
Smart Grids.“Distribution automation will lead smart grid control investments with 13% CAGR”
Smart Buildings.“Smart building technology investments will gain more traction with utilities”
Electric Vehicles.“120,000 plug-in electric vehicles will be sold in North America in 2012”
Lithium Batteries.“Lithium-Ion large format batteries will reach $600 per kWh by the end of the year”
Solar PV Installations.“Despite the 1603 Treasury Grant expiring in 2011, PV installations will grow by >25% in 2012”
Commercial PV.“>60 MW of commercial PV installations will incorporate micro-inverters or DC optimizers in 2012”
Security & Risk.“Security and risk will continue to grab decision maker’s attention, leading to increased budgets”
Big Data Analytics.“Utilities will invest in analytics in anticipation of big data”
IT Spending.“IT spending by North American utilities will increase by 4.5% % over the next four years”
Community: The IDC Energy Insights Community has blogs, videos, forums, resource library, events etc. all designed for those interested in the Energy IT industry
Today is Blog Action day at water.org. It's a good time to get the word out to everyone on water management issues. Read more about water.org's blog action day at Blog Action Day - Working Together To Solve The Water Crisis. This post is my contribution to the Blog Action Day.
Most of us reading this post take our access to water for granted. However, I would imagine that we all realize that water is critical to sustaining life on our planet. Water makes up 60 to 70% by weight of all living organisms and is essential for photosynthesis. If the Earth’s water supply vanished, there would be no plants, no animals, and no people.
While the Earth’s water is not vanishing, many scientists believe that our global water supply is in crisis. We may or may not be at the crisis stage, but we definitely need to take action to solve our water management issues.
Some Quick Facts About Water
Water covers 75% of the earth's surface. Nearly 98% of the earth's water is in the oceans. Fresh water makes up less than 3% of water on earth, over two thirds of this is tied up in polar ice caps and glaciers. Fresh water lakes and rivers make up only 0.009% of water on Earth and ground water makes up 0.28%.
It takes 700 gallons of water to make a cotton T-shirt, 2,000 gallons to make one gallon of milk, and 39,000 gallons to make a car.
Global agriculture wastes an estimated 60% of the 2,500 trillion liters it uses each year.
Municipalities lose as much as 50% of their water supply through leaky infrastructure.
More than one trillion gallons of water are wasted in U.S. homes each year from easy-to-fix leaks.
1 in 5 of the word’s population still lacks access to clean, safe drinking water.
The United Nations predicts that nearly half the world’s population will experience critical water shortages by the year 2080.
There are nearly 53,000 different water agencies in the United States alone, each managing a short stretch of river or a handful of reservoirs.
In the last 100 years global water usage has increased at twice the rate of population growth.
For those of us living in developed nations, our water infrastructure is many decades old. In fact, in some places it is centuries old. As our demand for water is increasing, we need to modernize the existing infrastructure. One way to do that is to apply information technology.
Today’s water management systems are operating without enough data and insights. The planet needs new water management systems, based on smart technology that can collect and analyze real-time data. These new systems will provide water authorities with the insights they need to supply more water to more people with lower energy-use and cost.
How Can Technology Help?
What is needed are water management systems that can provide real time collection and analysis of all sources of data. This includes integrating disparate sensor technologies that produce disparate data formats along with other data from an array of partners. Information technology solutions are needed that can take data that’s coming in fast and turn it into intelligence that augments the ability to improve decision making about water distribution. These solutions need to connect the folks in the central control room with those working in the field building bridges, dams, dykes to the sensor experts and sophisticated modelers.
Technology can monitor, measure and analyze entire water ecosystems, from rivers and reservoirs to the pumps and pipes in our homes.
The latest water meters, combined with appropriate Water Management solutions can provide a single, reliable, up-to-the minute and actionable view of water use for a government, a business, or a home. These ‘smart’ water meters can provide real-time insight into water use, raising awareness, locating inefficiencies and decreasing demand.
Advanced sensors can help us collect all sorts of new data on water usage. For example, sensors on levees can monitor changing flood conditions and respond accordingly. Sensor based systems can provide the agriculture industry with detailed information on air quality, soil moisture content and temperature to calculate optimal irrigation schedules.
Advanced computing, analytics, and simulations can help us all move beyond “real time” to prediction, supporting better-informed policy and management decisions.
Technology can also be applied to our oceans to gather data on water temperature, currents, wave strength, salinity and marine life, and applying algorithms that can forecast everything from wave patterns over 24 hours to the right time to harvest mussels.
IBM Water Management Solution Areas
IBM is taking a leadership role among technology vendors in researching, piloting and developing a whole suite of water management solutions. Taking a look at what IBM is doing can help us see the areas where technology can be applied to solve water management issues
Natural Water Resources – Provides sensor data integration, analysis and visualization to enable the measurement, modeling and management of water levels, usage and quality in natural water resources.
Water Utilities – Enables water providers to make rapid decisions regarding business processes and operational efficiency to maximize their return on investments as well as foresee and quickly respond to contamination issues and emergencies.
Water Infrastructure – Provides sensing systems for managing water infrastructure, such as levee oversight management and flood control.
Water Metering – Improves management of water supply and demand by integrating data between the dozens of stakeholders involved. Provides all stakeholders with consistent, real-time information to help them work together to make critical decisions about water supply in a geographic region.
Green Sigma for Water™ – is a business consulting service that identifies where water is being used, measures and monitors usage, and creates process improvements to reduce water use. IBM pilots have achieved reductions in water usage of 30%.
SmartBay Sensor System - Monitors wave conditions, marine life and pollution levels. Provide real-time information to stakeholders in the Irish maritime economy, runs on a cloud computing platform, and is able to predict water conditions critical to those stakeholders.
Innovative Water Management Vendors
The Artemis Project held its second annual Artemis Project Top 50 Water Companies Competition during the spring of 2010. These vendors are all coming up with some very innovative and creative solutions to Water Management issues. Check out the winners: A list of the 50 is here. View a poster show of this year’s winners here.
What Is Needed
More work is needed as we transform the water infrastructure to digital technology:
Continue to Build Awareness for Water Issues. Many in leadership positions are not aware of the critical need for water management information technology solutions.
Continue Market Testing & Solutions Platform Development. Technology vendors need to continue to build assets and test solution platforms. Stronger linkages are needed across the growing ecosystem.
Continue to Build Thought Leadership Deliverables. Tech vendors need to develop content highlighting case studies, references, demonstrations, and white papers.
For More Information
There is a bunch of more reading material available. Here some links…
In a world where increased focus is on reducing CO2 emissions, governments and energy & utility companies are looking for ways to modernize and transform their utility infrastructure in order to improve energy efficiency and reliability.
For developed economies, the traditional way power has been generated is based on a central generation model with one-way power and information flow from large, often distant generating stations, via transmission and distribution lines to end consumers. Most of these generation systems contain an aging infrastructure with some equipment dating back 60 years. This traditional infrastructure lacks sufficient technology and communications at the distribution and end-use level that would enable grid automation & monitoring capabilities. The model has been a push model, meaning that there is little to no automated information coming back to the central sites from those that use the power. So if the user suddenly has no power, the only way the utility company knows about it is if they get a call from the users. Furthermore, the user has very little information available to help them understand how much power they are using, when they are using it, and what they are using it for.
The Smart Grid (also called Intelligent Utility Network) technology is an important emerging trend within the Energy and Utility Industry. As consumers, we are increasingly aware that the way we consume and save energy can be improved. Within the energy and utility industry, energy efficiency is also on the minds of the industry leaders. And our governments are all interested in finding new sources of energy. By embedding technology into the electrical distribution network, a Smart Grid can transform the way power is distributed and used. Intelligence throughout the grid can dramatically reduce outages and faults, improve responsiveness, handle current and future demand, increase efficiency and manage costs.
The following video from IEEE will provide some additional introduction into the concept of the Smart Grid.
Produced by IEEE and ScienCentral, Inc.
A Smart Grid can present many opportunities for consumers, businesses, and utilities to benefit from the efficient distribution of energy and availability of intelligent equipment and devices. For governments, it offers significant opportunities to wisely manage a country’s fuel resources by potentially reducing the need for additional generation sources, better integrating renewable energy sources into the grid’s operations, reducing outages and cascading problems, and enabling users of power to better manage their energy consumption.
The Smart Grid technology will enable energy customers to
manage electricity consumption to meet specific household/business goals such as cost, availability, and environmental impact
seek energy providers, information, and technologies that help them meet their goals
do business with utility companies who communicate a set of energy-related values consistent with their own
seek convenient and more personalized ways to interact with their utility to negotiate customized solutions to allow them to meet their needs
act on their own wants and needs where regulatory representation does not provide results satisfying these specific needs, primarily through execution of alternative solutions (e.g., self-generation)
Enabling active participation by consumers in demand response
Operating resiliently against physical and cyber attack
Providing power quality for 21st century needs
Accommodating all generation and storage options
Enabling new products, services, and markets
Optimizing assets and operating efficiently
The consumer of power from a future Smart Grid will see many differences as a result of adding intelligence into the network. Some examples are:
Smart electricity meters, water meters, and gas meters that collect real-time data on utility usage.
Distributed generation, such as solar panels and other micro generation. These new generators could be located at the home, in the neighborhood, or in the local community.
Dedicated energy display units and smart thermostats that provide the user with feedback on energy usage in real-time.
Smart appliances with connectivity to the intelligent utility network via the in home meters and display units.
Plug-in vehicles as a both source and consumer of energy. The vehicles, when plugged in would provide information on energy usage.
Linked connection to the in-home network and home PCs for further analysis of all the information collected.
The Smart Grid transformation is much more than installation of new technology in a piece-part fashion. The call for the transformation to a Smart Grid impacts every part of the utility infrastructure including generation, distribution, and usage. It will be a disruptive change, but a change that will provide huge rewards for the future. For the utility industry itself, changes needs to happen in four key areas:
Strategy. We need a fundamental rethink of business strategy and industry business models across the board.
Collaboration. Utility providers will need to develop a much closer collaboration with customers, regulators, financers, researchers, technology and service vendors, and other stakeholders than ever before.
People. The change will be very disruptive to utility companies. They will need a renewed focus on staff, their roles, competencies, compensation, performance and structure.
Process. Utility providers will need to re-architect business processes and applications.
There is much work to be done to transform old utility infrastructures to a Smart Grid system. The transformation will not happen overnight, but could happen over a series of decades. When complete, countries that transform their utilities infrastructure to an Intelligent Utility Network will have a modern network of sensor-based interactive technologies that will give utilities and consumers unprecedented control over managing energy use, improving energy grid operations, and significantly reducing energy costs.
There is a ton of information available on Smart Grids. Here are a few example resources for you to explore….
Scientific American published an article back in December titled “World Changing Ideas” that caught my eye. The article provides a laundry list of ideas that Scientific American says have the potential to improve our lives and our planet. The magazine has been running similar articles on an annual basis for a number of years.
The December article covers ideas in five general categories (Energy,Transportation, Environment, Electronics, and Health) that highlight the power of science and technology to improve the world.
Here’s a summary of some of the 20 ideas from this article
Energy
Pay for solar panels on your house like you pay for a house mortgage.
Biofuels from genetically engineered plants.
Innovations in Nuclear Power production that can stem nuclear proliferation
Smart meters in the home
Wind Power harvested from a fleet of high-flying giant kites or windmills
Transportation
Plug-in hybrid trucks for short-haul cargo trips
Subway-like bus lines
Environment
Someday the oceans might be regulated by a worldwide marine planning and zoning committee
Harvesting energy trapped in garbage via a technology called plasma gasification
Cement that naturally absorbs carbon dioxide as it hardens
Introducing new honeybee colonies to our farms
Developing crops that can handle saltwater
Electronics
HP’s Central Nervous System for the Earth (CeNSE) project
Smartphones that can act as real-time language translators
Advances in Personal Robotics
Health
Biomarkers can help understand the causes of complex diseases
Satellites can help track and predict the spread of diseases
Better and cheaper ways to help blood clot quicker
Performing blood tests in real time by putting a drop of blood on a computer chip
Innovations in dental care.
The 20 ideas above are all interesting and innovative trends in science and technology. Some I would say are more ‘world changing’ than other ideas. And I am sure we could all come up with another 20 trends / ideas in science that are not listed above.
There’s much more detail in the article. Scientific American articles are available to subscribers only, but at the time of the writing of this post, I found the article at Scribd here: http://www.scribd.com/doc/23475128/20-World-Changing-Ideas. Also…you can listen to a podcast where Scientific American magazine Editor in Chief Mariette DiChristina and editor Michael Moyer talk about the "World Changing Ideas" feature ( Download this podcast ).
IDC Energy Insights held its webinar “Top Ten Predictions for the North American Utilities Industry” today. Rick Nicholson, Vice President of Research at IDC led the call.
During the call the analysts reviewed the important driving forces impacting impacting technology investment within the Utilities Industry for 2010. Driving forces include energy efficiency and demand response programs, smart metering and the smart grid, renewable and distributed energy and other relevant technologies.
IDC mentioned that energy usage is expected to rebound in 2010 after a down year in 2009 which had an impact on industry-wide revenues. Also, investments in cleantech is expected to rebound as access to credit improves in 2010. A big factor in that will be the American Recovery and Reinvestment Act of 2009.
Here’s my summary of the top ten predictions reviewed on the conference call:
Energy Efficiency and Demand Response: will continue to be the “first fuel” choice for electric utilities
Renewable Energy: Renewable capacity additions will exceed natural gas plant additions
Energy Storage: Utility-scale stationary energy storage will have its coming out party
Intelligent Grid: North American intelligent grid ICT spending reaches $18 billion by 2013
Electric Vehicles: First wave of electric vehicles and accompanying charging infrastructure will emerge
Energy Commodity Trading: Trading of energy commodities requiring IT support will recover and grow
Sustainability: Traditional generators will focus on managing their portfolio for sustainability
Water Management: Scarcity of clean water and availability of new technology will awaken the sleeping water market
Smart Cities: Smart cities will emerge as proving grounds for the intelligent economy
IT Spending: U.S. utility industry IT spending growth will accelerate dramatically
I remember back in the 90’s this industry was one of the lackluster (perhaps boring?) industries to be involved with from a technology perspective. Nothing was really happening back then. Today it is 180 degrees opposite. There is so much going on right now to bring technology to this industry. This is one exciting industry today….and I expect it will be that way for another decade or two.
For more information, IDC Insights has a bunch of resources for you.
Cleantech Group has been providing a list of predictions for a number of years now. Of course the predictions have to do with the Cleantech industry. In this year’s version, Chairman Nicholas Parker ‘pens’ the list of ten trends to watch for in 2010.
Here is the list.
Private capital growth will recover. The CleanTech Group believes that the amount of money from global venture capital and private equity in clean technology in 2010 will surpass that in 2009 “by a healthy margin” and could be a record year.
Clean economies become the new space race. Some countries / cities will lead the pack, others will wait and implement later. Greater protectionism surrounding the industry will be a drawback.
Electric cars take the back seat to smart mobility. The electric car trend will eventually influence urban design and planning. Governments’ tax incentives and budgets will be impacted.
Resource constraints beyond carbon rise to the fore. Watch for price spikes that impact clean technology sectors as the economy picks up. This will push companies to use resources more efficiently in order to maintain or boost their profitability.
Commodity trade-off debates intensify. Look for trade-off debates in the areas of water and energy; land and energy; land and water and carbon and water. The Cleantech Group predicts that more environmentalists will object to wind and solar projects because of how they use up swaths of land and obstruct the landscape views.
Energy efficiency eclipses solar. Innovations in information and communication technology, along with more policy support, will help create a boom in energy efficiency.
Marketing suddenly matters. Cleantech Group says that branding will become more important as clean technology goes mainstream. Marketing campaigns are likely to target more consumers instead of just businesses.
Buffett leads the super rich into cleantech. Cleantech Group points out how U.S. billionaire investor Warren Buffett has made plays in clean tech-related companies, including GE, Goldman Sachs and Chinese electric car battery maker BYD Co Ltd.
Acquisitions and consolidations accelerate. Cleantech Group looks for the pace of consolidation to accelerate in countries with overcapacity like Germany and China.
The rise of waste-to-energy, geothermal and aquaculture, as part of a shift to more sustainable agriculture and food production.
Wind energy currently makes up 2% of the total energy generation in the United States, but there is the potential for it to provide up to 20% with the right improvements in turbine technology, forecasting, energy storage, and expansion of transmission systems.
So it is great to see that the U.S. lawmakers are starting to focus on this area. Yesterday, the U.S. House of Representatives passed the Wind Energy Research and Development Act of 2009. The bill, if eventually signed into law, would authorize a comprehensive program to improve the efficiency, reliability and cost effectiveness of domestic wind energy systems.
The bill would authorize the Secretary of Energy to carry out a program of research and development to improve the energy efficiency, reliability, and capacity of wind turbines; optimize the design and adaptability of wind energy systems; and reduce the cost of construction, generation, and maintenance of wind energy systems.
Specifically, this program would include:
Examination of new materials and designs to make larger, lighter, less expensive, and more reliable motor blades
Technologies to improve gearbox performance and reliability
Technologies to improve transmission from remotely located renewable resource rich areas
Low-cost transportable towers greater than 100 meters in height
Advanced computational modeling tools, control systems, blade sensors and advanced generators
Wind technology for offshore applications
Automation, materials, and assembly of large-scale components
Methods to assess and mitigate the effects of wind energy systems on radar and electromagnetic fields
Wind turbines with a maximum electric power production capacity of 100 kilowatts or less
The bill authorizes $200 million dollars per year from 2010 through 2014 for these programs.
Let’s hope this bill, or something like it, makes it way into law.
Earlier in the year, I blogged about Climate change, so the G8 meeting last week in Italy gives me an opportunity for some updates, but I should add that these remain rather disappointing.
Last week, G8 leaders made an agreement that sounds great – by 2050, they’ll cut the number of worldwide greenhouse gas emissions by half. It’s an improvement to Kyoto Protocol, at least, but it does not set short term objectives which limits its impact.The statement on climate change approved by summit participants also includes a promise of an 80 percent reduction in carbon emissions by the world's richest countries, however, developing nations, including China and India, were quick to criticize the accord, insisting that the G8 cut their emissions by more.The G8 declaration leaves it to individual nations to decide their emission baseline and the G8 countries also could not agree on a pledge to help fund poorer countries moves toward cleaner energy.
G8 leaders also agreed to restrict global temperature rises to no more than 2 degrees (Celsius) above pre-industrial levels - which had long been resisted by the US. But the G8’s consensus is hardly airtight – it’s not yet legally binding, and no one has thought of a good way for rich and poor nations to share the burden.
The world leaders said they were determined to reach a comprehensive deal at a United Nations summit in Copenhagen this December, to reach agreement on a successor treaty to the Kyoto protocol, which expires in 2012. Despite promises from G8 leaders on climate change, concerns were raised that other countries invited to attend the summit would not commit to some of the provisions.
A couple weeks ago, I discussed some trends in VC investments regarding Cleantech.For the G20 summit early April, the Postdam Institute for Climate Impact Research and the Grantham Institute on Climate Change and the Environment published a very interesting document about the potential for a green recovery from the current recession. (Towards a global Green Recovery)
The report shows that “Public spending aimed at stimulating private investments that help reducing greenhouse gas emissions can perform very well against criteria for an effective stimulus while providing the additional benefits of lower energy costs and increased energy security. By focusing on correcting well known market failures in energy use and R&D, it can avoid crowding out private sector activity.In fact, green recovery programs have the potential to stimulate private investment in low carbon technologies, thereby developing new opportunities for employment, innovation, and wealth creation.”The report also highlighted key measures that the G20 could take, including physical infrastructure upgrades, energy efficiency increases, and potential flagship project investments.
So what happened? The G20 communique included $1.1B in plan pledges – $750B for the IMF, $250B for trade and financing – as well as motions for stricter regulations on hedge funds and banks. While many groups are arguing that a larger GDP share should go towards green initiatives, others are satisfied that those notions have become mainstream. Personally, I think that the economic situation is such that priorities will focus on the fastest way to accelerate the recovery, possibly at the expense, at least initially, of green.
Well, this is my first time on this blog. I have worked with Bill for 10 years in IBM where he writes one of the most successful internal blogs and I was really excited when he authorized me to participate in this blog. Among emerging trends and opportunities, I am thinking of focusing on Cleantech for a couple reasons. Beyond my personal interest, this is an opportunity that I can discuss in any job interviews I hope to get over the next few months... Whether it is hype or reality, people and companies always show interest and understand at least some aspects of it. VC investments are a good benchmark to measure the potential of emerging technologies.
According to PWCC / Reuters / National Venture Capital Association data, VC investment cuts were notable in 2008 (-8% in volume, -4% in deal volume) - this was the first year since 2003 that total investments slowed. The brightest spot was investment in clean energy technologies which increased 52% to $4.1B. Seven of the 10 largest deals for the year were in this area. By contrast investments in Software companies fell 10% and life sciences startups 15%, even though biotech and medical device startups were the top investment sector for 2008.
Cleantech investment focus is on solar energy and photovoltaic companies which received $1.8B in 2008. Startups that make energy from other sources, including ethanol and nuclear energy were next, getting $561M or 14% of the total. Other major investments benefitted companies that recycle chemicals and battery startups.
A little European pride to finish -- Deloitte 2008 Global VC Survey shows that Europe is emerging as a new leader behind the US for Life Sciences and Cleantech -- led by Germany and the UK. Will have to find out where France stands...
I recently attended IDC Energy Insights Predictions 2012: Utilities conference call today. I look forward to the IDC Insights series of conference calls every year as it helps me understand the critical issues and trends that impact Information Technology decisions within a particular industry. 
