The SmartGrid is the third major area of growth for the networking industry in the next decade, the other two being the previously discussed Telepresence and Mobile Internet subsectors. Like the other two sectors, the SmartGrid will disrupt many existing industries and infrastructures that have been undisturbed for several decades.
Most of the world operates on an analog power grid built in the 19th and 20th centuries. In the early 21st century, the advances in information technology can enable a comprehensive revamp of the existing electrical infrastructure. A slew of products are about to be released and deployed into the market that can increase electricity supply by 20% or more, match revenue and costs more closely, reduce capital expenditures on generators and transmission lines/poles, and manage the demand differences between mid-day and night.
Factors that will greatly change the daily cycle of electricity demand are solar power being sent into the grid during the daytime, while millions of expected plug-in hybrid and fully-electric vehicles will be withdrawing power overnight. The two key areas of growth are smart meter installation, and tranmission infrastructure upgrades.
A few fast facts :
1) $20B in government injections will be devoted to SmartGrid upgrades from 2009-2014, including over $4.5B in the US.
2) A full upgrade will cost $200-$300 per endpoint.
3) Companies that stand to benefit over the next 5 years include ESCO Technologies (ESCO), Itron (ITRI), Comverge (COMV), Silver Springs Networks, and eMeter.
4) All backbone networking technologies like Powerline, WiMax, and fiber optics will benefit from the large amount of two-way data between the home and the utility.
The arrival of the technology to form an entire SmartGrid ecosystem is timely for emerging countries, most notably India and China, in which many villages were not wired for electricity at all (40% of India's population still does not have electricity). They can leapfrog directly to the SmartGrid, even for people receiving electricity for the first time.
Of course, the old electrical grid will now be infused with devices governed by the Impact of Computing, which means that a household smart meters and control monitors will drop in cost annually, and necessitate upgrades every few years. Count this as one or more computing nodes entering into the average home.
Businessweek has a comprehensive article on the SmartGrid, with a slideshow of technologies.
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