Monday, November 17, 2008

Google Smart Grid

Jérôme Flipo is a student living in London, presently doing a research on mobile web marketing.

Last week, Google has taken an additional step to enter the energy industry by joining the DRSG Coalition, a team of leading providers of demand response technologies and services.

Most of Google’s initiatives on electricity issues have been carried out by the company’s philanthropic arm Google.org. The charitable organization addresses climate change, poverty and emerging disease, and has launch five major initiatives in January 2008:

• RE<C, to develop renewable energy cheaper than coal
• RechargeIT, to accelerate the commercialization of plug-in vehicles
• Predict and Prevent, to identify hot spots and enable rapid response to emerging threats
• Inform and Empower, to improve public services
• SMEs, to fuel the growth of small and medium-sized businesses with risk capital

Besides, Google.org has committed over $100 million in grants and investments as of September 2008. In the energy area, those investments target renewable energies, like high-altitude wind extraction, solar power, and geothermal systems, but also plug-in vehicles.

On September 17, Google has teamed up with GE to help build the Smart Grid, an electricity network using two-way communications, advanced sensors, and distributed computers. The goal of the smart grid is to enable decentralized power generation while improving the network safety, reliability and efficiency. Ultimately, the Grid would empower consumers and allow homes and businesses to act as energy clients and suppliers via intelligent appliances and private generators.

Building a smart grid might make a lot of sense for Google. All of Google’s investments, initiatives and grants would have new opportunities: plug-in vehicles and renewable energy generators are much more interesting when you can sell your power surplus to utilities. To help developing and marketing solar panels is good, but to make them financially profitable for everyone is far better.

By joining the DRSG Coalition, Google launched its second initiative in the energy domain that does not go through Google.org. For the Internet Giant, the smart grid is probably more than a charity, and may be its next big business.

Google’s proclaimed mission is “to organize the world’s information and make it universally accessible and useful”. To do so, Google provides to everyone:

1. technologies to publish information (“communicate, show and share”)
2. tools to monitor this information (“search”)
3. solutions to monetize it (“advertising programs”).

Now, what if Google’s mission was extended to “broader energy management"?

Its new mission could be “to organize clean energy production and make it efficient, universally accessible and cheap”. Google.org demonstrates the relevance of the new mission, saying on its website overview that “there are ways for each of us and for corporations to generate electricity through renewable resources and store electricity that can be sold to a power company”.

To do so, Google could provide:

1. technologies to produce clean and cheap electricity
2. tools to track and optimize energy use and production
3. help us sell our home-produced power

In Google’s own words: “We have gained expertise in designing and building large-scale, energy-intensive facilities by building efficient data centers. We want to apply the same creativity and innovation to the challenge of generating renewable electricity at globally significant scale”.

Let’s take a closer look at those three actions to see how Google could participate in this sector, aiming for profit.

First, Google would need to empower individuals and companies to produce energy and allow them to connect their generators to the grid. Google’s past investments and grants aimed at leading researches in solar, wind, geothermal and other renewable sources of energy (including alternative fusion energy). Google wouldn’t produce electricity but enable user-generated power. Similarly, Google mostly doesn’t produce content but empowers people to create and share theirs (YouTube, Blogger, Picasa, Google Docs, Knol...).

Then, Google has to help consumers to understand and manage their electricity consumption and production, the same way they help Internet user to explore and manage information. The New York Times wrote on October 27 that “engineers at Google are hoping to unveil soon tools that could help consumers make better decisions about their energy use”. Its partnership with GE also states that Google will “explore enabling technologies including software, controls and services that help utilities enhance grid stability”. Google’s fleet of plug-in vehicles and its solar panels installation certainly contribute to increase their knowledge and help them develop those solutions. A DRMG (Dynamic Pricing, Advanced Metering) document shows that future metering systems for residential, commercial and industrial customers will have web-based data displays. Google considers it is part of its mission to “store and manage all of your health information in one central place”, and so they might think about your energy information and management system. Ast Technica has a very interesting post about how Google’s partner GE plan to manage communications between home appliances and the grid. The article also deals with BPL (Broadband over Power Lines) as a critical component of smartening up power grids.

Finally, Google could monetize the intelligent grid. By stating that they “want to make money” and want “to have impact”, Dan W. Reicher, director for climate change and energy initiatives, shows that money comes literally before philanthropy. This money could come from net metering.

Indeed, the smart grid relies on advanced metering systems which, according to the DRMG Coalition, “collect time-differentiated energy usage from advanced meters (...). The system is capable of providing usage information to electricity customers, utilities and other parties on at least a daily basis and enables them to participate in and/or provide demand response products, services and programs. The system also supports additional features and functionality related to system operation and customer service (...)”.

Assuming that advanced meters are provided by GE, Google could co-assure energy pricing, earn a commission and provide a web-based energy account to users. Google could implement a control panel for energy use and production that, for instance, would interconnect appliances, geothermal power generators and plug-in vehicle – as the Google Health service links medical records from hospitals and pharmacies with medication treatments, while tracking drug interactions. What resources do Google have to price energy? Google Adwords evaluates ads in function of variables like historical keyword CTR, user’s account history, keyword relevance, account’s performance in the targetted geographical region. Presently, dynamic energy pricing takes only time into account (via time-of-use, critical peak and real-time computation). But what if Google add factors such as cleanness of the energy source, geographical location or user’s account history?

Google Smart Grid by Jerome Flipo | Comments (16)

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