2010: Smart Grid or Smart Hype? - Khosla Ventures

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21 Νοε 2013 (πριν από 3 χρόνια και 4 μήνες)

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”smart grid” or “smart hype”
… an analytical perspective from a ‘grid’ neophyte
Vinod Khoslavk@khoslaventures.com
November 2010
Last year’s summary…
I’m not skeptical about investing in the grid 
Storage better than Demand response 
Let’s not get caught up in the hype of the smart grid
one successful smart grid company doesn't create a wave
networked grid = new applications 
Open = innovation
hype cannot defy economic gravity
Consumer behavior hard to change
2
Opportunity exists, hype exists
…”certain” dispatchable supply
Source: Morgan Stanley
3
Solar & Uncertain
4
Wind & Uncertain
5
UncertaintyTime Scales
Milliseconds
Seconds
Minutes
Tens of minutes
Hours
Days
Years
Decades
Faults
Markets
EV uptake
C credits
Source: Resnick Institute
PV
Wind
Backup
Gen
Demand/
Response
6
Increased renewables deployment, EVs
Increased reliance on innovation (e.g., Storage, renewables, software, etc)
Huge capital at risk & fast changing technology
Increased security requirements
Consumer response
Drivers of Uncertainty
7
Aggregating supply: wind, solar, coal, gas, nuclear…
Aggregating over geography
Aggregating over time
Information technology
Dynamic response of subsystems
Design for non-catastrophic failure
Increasing Certainty…
8
Central problem of uncertainty
demands grid infrastructure redo
… not minor issues like meter reading
…though AMI has a role
… all that DOE funding does not make for sustainable “wave”
even if it means good equity returns
9
smart meters, HAN and thermostats
Closed protocols
Real‐time pricing
most value is automating meter reading
Focus on demand response 
Increases energy security
Intelligent consumer electronics
More money in the GRID than in the HOME
OPEN protocols will win (mesh?)
Diverse, bandwidthneeds 100X larger?
Grid = smart power electronics (PE)
hard to predict  needs  (flexibility)
Architecture determines security
distribution automation, 2‐way flow, redundancy
…REAL smart grid wisdom?
10
…where’s the BEEF?
… SECURITY & CYBER WARS
… De-coupling “rigid grid”: self healing & adaptive
… Local “power quality”: locally self adjusting
… Evolvable architecture, open, predictive
… Power Electronics (control, quality, locality…)
… (modularity/flexibility & Management)
11
Source: McKinsey
Opportunity: $130B in US alone?
12
Storage and DG can play
these roles…
Storage and DG can play
these roles…
Storage and DG can play
these roles…
5-15% from consumer
behavioral change or
…efficiency could shrink
by 50%
5-15% from consumer
behavioral change or
…efficiency could shrink
by 50%
This is what many utility
commissions focus on
This is what many utility
commissions focus on
May grow…
May grow…
Issues, drivers & concerns
13
… useful (concerning)but hyped?
…. smart meters (automation, not smart device)
…. demand response (5‐15% factor?)
…. consumer engagement
…. time of day pricing
…. proprietary networks
…. fashion of the day & “deterministic need” assumption
14
… modularity and “design for the future”
“The problem here is there has been
a rush to install these fancy new hi-
tech meters and they're not energy-
saving devices; they are simply
meters. They're not going to be worth
the customer investment.”
15
Westinghouse’s Law vs. Moore’s Law
When a 70 year lifecycle collides with 18 months..
“Instead of installing meters capable of
receiving high-speed broadband Internet
signals, Southern California Edison,
San Diego Gas & Electric and Pacific
Gas & Electric have opted for cheaper,
lower-speed connections.
Yet the utilities are also laying the
groundwork for advanced "smart grid"
networks that willuse broadband
technology for managing power supplies
and distribution.
The upshot: smart grids and smart meters
that, in essence, won't speak the same
language.”
16
Eco:nomicsvs. Greco:nomics
( or the principle of economicgravity)
Avoid the hype (and the environmentalist’s solutions)
Economic gravity WILL win: with consumers, regulators and Governments
17
Consumers resistant to costs
…who decides, who pays?
18
Smart grid subsidies?
Misdirected…
$19M for networked home
appliances
Needed…
$19M for power distribution
& management
19
Smart hype    ….even your remote is smart grid
20
Zero Net‐Energy vs. Efficiency
Environmentalists dream
“pay for itself 1st
year” Efficiency
VS.
Zero energy is an irrelevant focus
21
Standby Power
efficiency vs. “smarts”
..what if everything used 80% less electricity?
22
What if we had fundamental new power electronics 
devices?
…early transistor
…Intel I7 (transistors 774million)
23
1 MW wind “converter”: huge=expensive
What if we had the perfect power electronics sub‐
system?
Reactance worries=expensive
1900’s transformers
24
What if a Russian Hackathonbrought down 
electricity to 20 million US homes?
….is a hackers “how many homes” competition improbable?
25
Managability: focus on IT to Increase Certainty?
Silos
ESB
Adapter-based
Common
Current-state
System Integration(IBM)
Approach
DoD “style”
Approach
Standards –based
Internet-style
Source: Jeff Gooding, Jeremy McDonald, SCE
…but managing (Smart) Grid
means manageable grid
elements
26
Efficiency vs. DR
Efficiency vs. conservation/insulation
Storage vs. DR
Storage vs. DG
Transmission vs. storage
Load regulations vs active devices
Command & control vs resilient networks
What if we asked …
A lot of the “wisdom” may be made obsolete by technology
27
… beefy solutions?
Active sub‐systems, manageable grid components
Ultra efficient consumption devices (80% less!)
Automated & predictive grid flow management
Ubiquitous storage
DC transmission
Beyond networking ‐fundamental device capability
Cyber security
28
Design for evolution
Design for resiliency
Design for competition
Design for open standards
…..
Suggestions from a neophyte:
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What will drive grid change?
30
Mckinsey : US mobile subscribers
Source: American Heritage Magazine ‐http://www.americanheritage.com/articles/magazine/it/2007/3/2007_3_8.shtml
forecast
actual
1986 forecast for 2000
31
yesterday’s technology, tomorrow’s forecast
1980’s phone:
year 2000 phone:
32
2010 phone:
300,000 available apps
7bn+ apps downloaded
Forecasters, Analysts, Pundits &
Astrologers
1990 Unimaginable: >480 pixel, interlaced, analog HDTV
1995 Unimaginable: IP in telco networks
2007 Unimaginable: Iphones & wireless bandwidth use
Today’s unimaginable becomes tomorrow’s conventional wisdom
33
What would change?
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vk@khoslaventures.com