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Smart Grid and the New Electricity Economy

Smart Grid and the New Electricity Economy. Jesse Berst Managing Director GlobalSmartEnergy jesse.berst@GlobalSmartEnergy.com. 1. Electronomics Goods and services in the Electricity Economy Smart Grid Enables the Electricity Economy Why What How. Along the Way -- Show Why You Are:

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Smart Grid and the New Electricity Economy

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  1. Smart Grid and the New Electricity Economy Jesse BerstManaging DirectorGlobalSmartEnergy jesse.berst@GlobalSmartEnergy.com 1

  2. Electronomics Goods and services in the Electricity Economy Smart Grid Enables the Electricity Economy Why What How Along the Way --Show Why You Are: Already in favor Already understand Already doing something relevant Agenda

  3. GlobalSmartEnergy • Publish leading site/newsletter • SmartGridNews.com • Advise investors • Venture and institutional • Consult large corporations • Market entry, M&A strategies • Boards • Pacific Northwest National Laboratory • V2Green (before their purchase by GridPoint) • Global Smart Infrastructures

  4. Key Financial Definitions • Con-pounded Interest • Criminally bad management of financial institutions • Rat-nership • Merger between two criminally bad financial institutions • Abracad-abacus • Primitive calculator used by Washington Mutual to show it would magically make profits from bad home loans • Dow Jeans • Denim pants that fall down no matter how much you tighten your belt

  5. Traditional Value Chain Generation Delivery End Use Coal Industrial Hydro Commercial Distribution(medium voltage) Transmission(high voltage) Substation Residential Nuclear

  6. End Use Macro Trends • Population Explosion • Expectation Inflation • Electrification of Everything

  7. The Accidental Addiction Percentage of GDPDependent on Electricity 2008 – 60% 1950 – 20% Utterly Dependent on Electricity for Lifestyle, Prosperity, Security

  8. The New Realities Plus Renewables AdditionalCentralized AdditionalLoad Plus Dist.Generation Plus BulkPower Shipments Plus Air NeutralSoon Water Neutral CO2 With the Same Old Electromechanical Grid from the 60s and 70s

  9. Repercussions • Problems • Dirty coal plants • Obsolete and overstressed grid • Regulated monopolies with little incentive to modernize • Vulnerabilities • Natural disasters • Terrorist attack • Small mistakes that ripple into major outages • Falling behind • China $170B grid stimuls • Europe, Middle East

  10. Smart Grid Enables Solutions • Enables renewables • Move from where generated to where needed • Handles intermittency • Makes the grid more reliable and self-healing • Wrings out more efficiency • Could save up to 30% of energy • Saves billions • Deferred construction • Lower rates • Empowers consumers • “Calling plans” for electricity • You decide when, how much • Reduces dependence on foreign oil • By making electric transportation possible

  11. “Smart Grid” Defined Internet Computing SmartGrid ElectricPower Telecomm • Three Components • Smart devices • At a minimum: “talk” and “listen” • In some cases: “think” and “act” • Two-way communications • Advanced control • Borrows Heavily • We’ve done this before

  12. Grid – Smart Devices Advanced Sensors Remote Monitoring of Expensive Equipment(e.g. Transformers) Smart Meters

  13. Grid - 2-Way Communications Examples:PowerlineBroadband over Powerline (BPL) CellularRadio Frequency (RF) SatelliteEtc.

  14. Grid - Advanced Control Biggest Single Energy-Saving Opportunity: Real-Time Control of Massive Network End-to-End Visibility and Control from Generation to Appliances

  15. Macro Trends • Generation • Diversity of supply • Air/Water neutral • Delivery • Renew • Digitalize • End Use • Population Explosion • Expectation Inflation • Electrification of Everything = Cleaner and Closer = Smart = More with Less

  16. The Self-Evident Smart Grid Rates of Change Business Technology Social Political • 20-30 year rule (Toffler, Schopenhauer) • Ridiculed as absurd • Attacked as dangerous • Accepted as self-evident

  17. Evidence of a Tipping Point • Google • Major smart grid initiative (with GE) • General Electric • Reorganized to form Smart Grid Division • Grid-smart appliances in 2009 • Computer firms • Oracle, SAP, Cisco, H-P, Microsoft • Others soon • Cleantech investments • Record $1.6B in Q3 • $3.3B 1st three quarters up 71% • Kleiner: $75M into smart grid company • Federal and state legislation • EPAct 2005 • EISA 2007 • Stimulus 2008 • Stimulus Feb. 2009 • Invest in America mid-2009

  18. Energy Policy Act of 2005 • Rolling blackouts renamed “Olde Tyme Nights” • Some subcommittee somewhere check into solar and wind and all that crap • Control room improvements to more efficiently route blame to Canada Top Five Little-Known Clauses Blackouts outlawed Reddy Kilowatt ordered out of retirement to address crisis Adapted from TheOnion.com

  19. The Larger Context • The End of the Petroleum Economy • Prosperity predicated on access to cheap oil • Birth of the Electricity Economy • Prosperity predicated on access to cheap, clean, reliable electricity • (And it has to be all three) • Energy market (oil, gas, electricity) is 100x the tech market • Merrill Lynch

  20. Emerging Opportunities • Integrating platform • Demand as supply • Storage gets real • Google the grid • Microgrids • Community-scale energy • Enterprise utilities • Smart infrastructure • Unified utility

  21. Importance of Infrastructure TranscontinentalRailroad Interstate Highway System PanamaCanal Internet Backbone • Postal system • Educational system • Original grid • Rural electri-fication • Phone system • Cell phone network

  22. If You Want... • Renewables • Electric transportation • Consumer choice and lower rates • Greater security against disasters and terrorism • American leadership and prosperity to continue in the Electricity Economy • An Internet-scale opportunity ...You Want a Smart Grid

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