What is the smart grid?

Music Jesse Berst: My topic is what is the smart grid? So, I'm at the National Governors Association about 2 or 3 weeks ago to address the governors. And one of the other speakers is the CEO of a major utility who starts his speech by saying, "You know, I don't really know what a smart grid is." And I thought to myself, what kind of a moron stands up in front of 43 governors and says that he doesn't know -- you know what's his own business is. Can you imagine Eric Schmidt of Google standing up and saying I don't really know what the Internet is or a car company saying I don't really know what an electric car is, but please give me 20 billion. But, that is something you will encounter over and over again in this industry, it's this confusion. So, I'm going to tell you what the three basic components are, so in the next -- within about 4 minutes, you'll be qualified to be a utility CEO, so this will be good for your career. And here's a dirty little secret conceptually and at the technical level it's exactly what you've known and been doing in the industries you're in right now, so here's the three pieces. First, there is smart devices, then there's two-way communications and then there's advanced control systems. So, smart devices are devices that set-out on the network and they watch. They measure or they meter what's going on, so it's just basically telemetry. Then they can also talk and listen, they can send that information back to the control system, they can listen for commands. Some of them can also take first order actions like throw a switch or send another command on, so that's the smart devices. When this is played out we'll have an end-to-end telemetry all up and down the value chain from generation through delivery right on down to the customer premise and into the customer premise because we'll be talking to the individual devices. That's the first piece. Second piece is that two-way communications channels, so all those things can talk back and forth. It turns out that there's multiple communications pathways available and most utilities are choosing to use a mixed of those, so to some extent that's irrelevant. Although, there's pros and cons to each method, as long as they're talking a common protocol. And then finally we've got the advanced control systems and that's again the stuff that you already know from networking from internet from telecom, it's a network operating systems. And then it's the applications that right on top of this platform that I just described. And of course it really is not about the components. It's about how much value you can add and build on top of them.

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