The Smart Grid Summit is coming to ITEXPO East next week and in anticipation of this event, TMCnet’s CEO, Rich Tehrani (News - Alert), recently spoke with Charles O’Donnell, vice president of Liebert AC Power for Emerson Network Power.

O’Donnell was asked his opinion on the most significant smart grid development in 2010, and he pointed to the evolving convergence of standards for Smart Grid implementation. As for the impact the continuing trend of rising energy costs will have on the smart grid in the coming year, O’Donnell highlighted that customers are taking steps to improve efficiency in the data center and examining alternative energy sources. As for the big winners in electric cars, O’Donnell believes if they are accepted, there are significant opportunities for manufacturers.

When asked about the impact of communication technologies on the smart grid in 2011, O’Donnell pointed to the generation, transmission and processing of huge amounts of data. Asked about hot areas of utility investments, O’Donnell pointed to the deployment of automated metering infrastructure, smart grid functions and renewable energy portfolios.

He believes the smart grid can change the world for the better by providing clean, uninterrupted, alternative energy resources that reduce our dependence on fossil fuels. As for the impact of end users on the deployment of the smart grid, O’Donnell is advocating a proactive stance, although some customers are still taking a “wait and see” approach.

Some of the best opportunities for smart grid vendors are found in understanding customer needs in detail to provide and support equipment that meets their energy needs. As for stimulus funding, O’Donnell believes it will take time to consume all funds pumped into the program and the benefits will continue into 2011 and beyond. He also believes renewable energies will have a banner year.

Those operating in the data center space won’t want to miss his session at the Smart Grid Summit and expect to see the gap between IT and facilities management bridged with Emerson’s (News - Alert) Trellis data center infrastructure management platform from in 2011.

Their entire conversation follows:

What was the most significant smart grid development in 2010, and what impact will it have in 2011?

We’re starting to see convergence around standards for Smart Grid implementation. For example, the Smart Grid Interoperability Panel (SGIP) has announced approval of the first three sets of standards recommendations related to the Smart Grid Priority Action Plans (PAPs). From the standpoint of the equipment manufacturer, having clear, detailed standards is a key prerequisite for defining and developing new functionality for our products that leverage Smart Grid capabilities. The specific standards approved are not all directly related to Emerson’s current products, but as more PAPs are addressed, we anticipate a much clearer path to adding value to our products for our customers.

What impact will the continuing trend of rising energy costs have on smart grid in 2011?

Our customers, consisting primarily of data center operators, are especially sensitive to energy costs, which, for many, represent the largest single operating expense. All critical infrastructure equipment suppliers are taking steps to improve efficiency in the data center, and any integration with the Smart Grid that can support energy cost management will drive demand for such features. Another impact of rising energy costs is the increasing attractiveness of alternative energy sources, particularly as the cost of these alternatives, such as photovoltaic solar power, continues to decline. This will drive increase penetration of alternatives, putting pressure on the utilities to maintain grid stability, and increase the need for Smart Grid capabilities.

Who will be the big winners in 2011 as electric vehicles make their way to market?

I can only speculate, but that has never prevented me from offering an opinion. Clearly, if electric vehicles gain acceptance, automobile manufacturers could benefit from a lucrative new market segment. Two of the standards recommendations from the SGIP, which I mentioned previously, have to do with electric vehicles, so that should say something about the priority that is given to electric vehicles among the Smart Grid standards groups. So it seems probable that we will see increased visibility of electric vehicle developments, and possibly significant penetration in 2011.

For the utilities, this could be a two-edged sword. Electric vehicles will add demand for electric power, and it’s even likely that the added demand will coincide with off-peak generation periods. Utilities could see increased revenue with no additional capital investment. On the down side, the presence of a large number of energy storage systems tied to a single distribution grid every night could introduce problems that are as yet unanticipated.

What impact will communications technologies have on smart grid in 2011, and what specific ones will we hear the most about?

It seems clear that the realization of the Smart Grid will involve the generation, transmission, and processing of a huge amount of data. The selection of specific protocols and physical media will affect the suitability of the communications infrastructure for supporting Smart Grid, and also the ease with which the infrastructure can be deployed. In addition, the experience with some demonstration projects confirms that security is a prime consideration. For these reasons we’re likely to hear a lot about wireless broadband media on which existing protocols, such as the Internet protocols, can be utilized. Further down the road, I expect that the shortcomings of existing protocols will be exposed as Smart Grid functions become more sophisticated, and extensions and derivations of these protocols will gain attention.

Where are the hot areas where utilities will be investing the most this year?

The deployment of automated metering infrastructure (AMI) will continue, of course, and this will be of interest to our customers, especially with respect to the degree we can integrate AMI functions into our data center management products. Investment in Smart Grid functions supporting real-time pricing will likely accelerate, as independent system operators (ISOs) proliferate, particularly those based on renewable energy sources. The implementation of renewable energy portfolio standards among the states will drive this investment and with it the need for a real-time energy trading market. If that same market-based pricing capability can be extended to individual large consumers, our customers will have an additional lever they can pull to manage their energy expenses.

How can a smart grid change the world for the better?

As our dependence on clean, uninterrupted energy increases, a reliable and secure energy infrastructure becomes all the more critical. Our customers suffer huge financial losses for even short interruptions in power, and their customers suffer the loss of valuable services. Large consumers of electric energy are becoming ever more mindful of the cost and look for more options to manage it. To an ever greater degree, a reliable, cost-effective energy source is a key element of a thriving market that supports innovation and an improving quality of life. One specific benefit is the accommodation of alternative energy sources, which promise to reduce our dependence on fossil fuels and limit additional damage to the environment.

 What impact are end users – consumers and businesses – having on how utilities deploy a smart grid? Are utilities able to measure its effectiveness yet?

Some of our customers are taking a “wait and see” position on Smart Grid. We advocate a more proactive stance. We urge our customers to begin a dialog with their utility to understand the scope and timeline of their provider’s plans for Smart Grid deployment. In parallel, we suggest that our customers look at their data center and facilities management systems and begin to plan how they will mesh their current and planned systems with utility-provided information. The fact that many of our enterprise customers are large energy consumers suggests that this dialog will be beneficial for both parties. As far as effectiveness goes, I think it’s too early to tell just what the potential of the integration of data center management systems with Smart Grid services.

Where do you see the best opportunities for smart grid vendors to partner with vendors from the telecom/IT world?

In our world, telecom and IT equipment are the load our products and services manage and protect. If our customers are going to realize benefits from Smart Grid, in the form of lower costs or more reliable operation, they’ll need to manage their IT and telecom equipment in ways that change their energy consumption. This is a hard trick to pull off if your number one concern is availability. Smart Grid vendors who hope to sell to this sector will need to understand their customers’ needs in detail. What better place to start than with the companies that provide the equipment? IT and telecom providers will certainly be adding more power management functions to their products. Smart Grid suppliers will need to know how to make the most of them.

Stimulus funding has been a key driver of the smart grid in the U.S. to date. Do you see the trend continuing in 2011? What other policies or public programs can be of most help in advancing the smart grid this year?

The American Recovery and Reinvestment Act of 2009 included significant funding, about $48 billion in all, for energy infrastructure investment, energy efficiency and alternative energy. This will take some time to consume, so the impact of that investment will continue to be a factor in 2011 and beyond. That said, the political climate has turned sour on government spending and the likelihood of additional stimulus funding at the federal or state level seems remote. But I am hopeful that we are near a tipping point at which the market will drive demand, and from there, innovation.

What segment of the energy sector will have the most success with smart grid in 2011?  Why?

I think that renewable energy providers will have a banner year in 2011. The installed cost of photovoltaic arrays, for example, has dropped dramatically over the past few years and will likely continue this trend. As conventional energy sources maintain their current cost levels or become more expensive, these alternatives will become increasingly attractive and drive investment.

Why is your session a must-attend at the Smart Grid Summit?

The needs of the typical data center operator are instructive for any large consumer of energy, and for the product and service providers who market to them. The specific solutions that are appropriate for data center operators may offer insights into solutions in adjacent, or perhaps even unrelated energy markets.

What other topics should be at the top of summit attendee lists?

I plan to get to as many sessions as I can, but security and technology are at the top of my list.

What new and exciting products/solutions can we expect to see from your company in 2011?

Emerson’s Trellis™ data center infrastructure management platform promises to bridge the gap between IT and facilities management. Trellis™ will provide a holistic management capability allowing data center managers to make intelligent tradeoffs among efficiency, availability, and capacity utilization. We expect to release our core modules in 2011 and additional modules the following year.

Please make one surprising smart grid prediction for 2011.

Renewable energy sources will reach a penetration level that will begin to introduce stability problems in some distribution networks. This news will add new urgency to Smart Grid capabilities to manage renewable sources.

Susan J. Campbell is a contributing editor for TMCnet and has also written for eastbiz.com. To read more of Susan’s articles, please visit her columnist page.

Edited by Janice McDuffee