Q&A: IBM’s Energy Chief on the Future of Smart Grid

Guido Bartels heads up IBM’s (s IBM) energy and utility businesses and is also the chair of what’s looking to be the largest smart grid event of the year: the GridWise Global Forum, which takes place in Washington DC this week. If anyone could predict the future of the smart grid, it’s Bartels. Given some of the recent activity in the smart grid industry (go Internet Protocol) and in light of the GridWise event this week, we sat down with Bartels to hear about what he thinks has been the biggest trends, and the largest hurdles for the smart grid. Here’s a lightly edited interview:

Q). What are some of the big things that will happen this week at GridWise?

A). This may sound strange, but the most important thing we’re doing here is to help the industry move along. The industry is regulated around the world and it needs help to reform and IBM is trying to be a very active player there. We have more smart grid projects than probably anyone else in the world and that’s because we entered the space very early on. At the event we’ll talk more about our projects and progress and partners and some of our work in new areas like electric vehicles and distributed generation.

Q). It seems like there’s been more progress on the front of the smart grid moving to Internet Protocol and open standards. Would you agree?

A). Yes, in a certain way it’s not surprising. Over the last couple of years as IBM and other companies have started to look for new growth in the smart grid.

But it’s important that we work for a global standard, and it will be interesting to see what China is going to do. That’s one of the reasons why last year at GridWeek we had the CEO of State Grid, and this year we have Professor Wu Jiandong. I was very keen to have the Chinese at this event, because they are big enough that they can go their own way if they want, or they can play a part of the global market. Of course I hope the latter is the case. But that only happens if we engage, if we are open and offer open collaboration. If that happens, there will be a global standard. Open standards are deeply rooted in the DNA of IBM.

Q) On the flip side what do you see as being the biggest barriers to progress in the smart grid industry?

A). Standards are one, but we’re starting to make progress there. There’s also the issue of regulation and policy. For the smart grid, it’s almost like someone goes to the CEO of an IT company and someone says ‘if you invest in this area, you’ll sell less product.’ Right? The CEO would kick that person out of the office, like the guy has gone mad. That’s sometimes what we expect from the utility industry, so we need rules in place so there is an incentive for them to drive energy efficiency and conservation. Policy and regulation is key.

Also think about another industry where the customer is called a rate payer, or where the customer is so passive. I think that will absolutely change and it will not just change what we do on a regulatory side or as an ecosystem, it will be driven by the consumers themselves.

Q). In terms of the consumer angle, have you been concerned by some of the media reports of smart meter back lashes?

A). On one hand I would say yes, but on the other hand, I would say perhaps it has stimulated at least the discussion that we should have had as an ecosystem a long time ago. As long as we have the right discussion, then perhaps in a few years, we’ll be saying it was a blessing in disguise. There are lessons for all the stakeholders in this ecosystem.

Q). Were you happy with the DOE smart grid stimulus grants?

A). I think in general it’s positive. Out of the 120 projects they won’t probably be all glowing successes, but I think that it has created a short kind of stimulus in terms of accelerating some of those projects. And it’s now up to us in the ecosystem to leverage some of those projects and make sure there is real sharing among those projects. If all those projects work as advertised, then it will be extremely good for accelerated smart grid transformation. If however we screw up on some of those projects, then it can fly in our face.

Q). What have been some of the biggest market shifts you’ve seen over the past year?

A). I think there’s been a lot of activity on the consumer side and home automation. It doesn’t always necessarily translate into tangible business but there’s been a lot of activity there. Distributed generation is getting more in focus. Electric vehicles – the jury is still out on how quickly that will drive business, but we at IBM think it’s a hot topic. We always try to stay ahead.

Q). I’m surprised that IBM hasn’t made more acquisitions in the smart grid space. Why is that?

A). I think it’s an interesting question. IBM was really early in this space, when none of our competitors were. In that time frame, IBM was buying companies but no one was considering them smart grid companies. We inserted them into the smart grid but almost in stellar mode. A couple years ago IBM was in the stage of buying a company a week and a bunch of those were in the smart grid space.

For more research on the smart grid check out GigaOM Pro (subscription required):

Moving Into Substation Networking, Cisco Seizes Smart Grid’s Low-Hanging Fruit

Google’s latest smart grid play: white space

Smart algorithms, the future of the energy industry

Image courtesy of Amplified 2010.