Every smart grid project needs a blueprint to get built, and a roadmap to know what it’s supposed to do once it’s turned on. UISOL -- the Santa Clara, Calif.-based smart grid software startup that was snapped up by French grid giant Alstom in March -- says it can build both as a service, and on Monday it announced its first customer.
That’s Glendale Water & Power -- a pretty high-end customer, with a $56 million smart grid plan involving smart meters, home energy management and grid optimization. But UISOL is working with four other smaller municipal utilities and rural cooperatives on their own wide-ranging smart grid architecture needs as well, all with varying budgets and internal IT expertise, according to John Wambaugh, UISOL senior vice president.
In short, it sounds like UISOL-Alstom is going after the same small municipal utility and rural cooperative market that giants like General Electric, Lockheed Martin and others are going after.
Sure, revenues for smart grid planning may represent a tiny piece of overall smart grid project budgets, but doing it well can spell the difference between a grid that works and one that faces constant repair and replacement, Wambaugh warned. UISOL’s architecture services are meant to prevent that, both for utilities still planning their smart grid, and those like Glendale that are already well underway.
Glendale’s smart grid project is pretty interesting. First, it’s a citywide project, which means the Tropos Networks Wi-Fi communications installed to support smart power and water meters for its 120,000 customers can also connect police, fire, public works and other city employees.
It was also the first utility in the country to win a Department of Energy stimulus grant for $20 million, one it’s matching with $34.9 million of its own money. It’s doing a host of pilots -- 35 this year alone -- including a home energy social networking pilot with Opower and Facebook
Of course, the majority of that $55.9 million in combined smart grid money is going to smart meters -- 84,500 electric and 33,400 water -- and the communications that connects them to the utility. The costs of UISOL’s architecture work are a “rounding error” in that overall $55.9 million budget, Wambaugh said.
Indeed, Glendale city documents (PDF) show Glendale had paid UISOL about $360,000 as of September, when utility staff went back to the city council to ask permission to give it a contract for about $480,000 more in professional IT services work.
That contract included data warehousing, outage and distribution management systems and enterprise service bus work -- a laundry list of smart grid IT services to plan out. Wambaugh stressed that UISOL’s job doesn’t include vendor selection, however, and specifically denied the idea that a UISOL plan would ask utilities to install lots of Alstom equipment.
“In working with utilities, we are their trusted advisor, to help identify and get them what they need. We’re not there to sell them products,” he said. Indeed, this kind of architecture work should be an integral part of every multi-party smart grid project, he said.
Unfortunately, too many smart grid projects are getting underway without being thought through, he said. Utilities have been fast to roll out smart meter networks, for instance, but slower to turn on functions like outage detection, remote disconnect and meter-to-home communications. That’s sometimes because they aren’t on the schedule yet -- but sometimes the cause may be that the system wasn’t architected to handle the tasks, Wambaugh said.
“Nobody’s going to wholesale replace their smart meters, but you’ll see people redoing pieces of their architecture, because they didn’t see the big picture first,” said Wambaugh, who previously served as eMeter’s chief solutions architect and as CTO of Cellnet Data Systems (part of Landis+Gyr, now part of Toshiba).
Indeed, the idea that today’s smart grid needs an overhaul has been getting some notice lately. Gary Bloom, who is leaving his post as CEO of eMeter after guiding the meter data management startup to a purchase by Siemens last week, told Xconomy that he’s expecting a lot of failures to emerge in the coming years.
“if you look down the road two to three years, the vast majority of U.S. utilities will finally be admitting that their projects aren’t working, and they will start changing their strategies,” Bloom said.
While that’s a dire prognosis that I doubt you could find a utility or a smart meter vendor willing to back up, the industry has seen its fair share of snags and snafus amidst its smart meter boom. As utilities add distribution grid systems, demand response, home area networks, plug-in cars and rooftop solar panels to the list of devices to hook up, there will no doubt be more.
Selling the whole complicated structure of smart grid as a service might well make sense for smaller utilities, since they don't have the IT staff and expertise to manage it all themselves. At the same time, that can make them more nimble to adopt new technologies, Wambaugh said.
Can architecting such projects yield sufficient revenues to keep UISOL interested in the market? Presumably the company can take its time to find out under the sheltering wing of Alstom.
In any case, UISOL also makes the software that runs demand response and market programs for big U.S. grid operators PJM, Midwest ISO and California ISO, and provides demand response software for a half-dozen utilities including Las Vegas-based NV Energy, so it has other moneymaking lines of business to pursue. The company had sales of $11 million last year.
Indeed, CEO Ali Vojdani noted that UISOL’s DRBizNet software helps run demand response programs in roughly half the United States, with more than 10 gigawatts of DR load represented in PJM alone. That could help UISOL match its utility-facing systems to the ones it makes for grid operators to run power markets -- though, once again, Vojdani stressed that UISOL wasn’t looking to spur sales of its software through its architecture work.