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Clean-tech Investor Summit

January 21st, 2010 by Nick Sinai - Energy and Environment Director

As we draw closer to the March 17th date for release of the plan, we’re getting more and more excited about our effort and how the plan is beginning to take shape.  I gave a glimpse of what we are thinking today with respect to energy and the environment at the Clean-Tech Investor Summit in Palm Springs  Below are my remarks; comments welcome!


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Good Morning.  I’d like to give a little background about why I’m here.  Congress recognized that this country was long overdue for a national broadband strategy, and in the Recovery Act, Congress identified three national broadband objectives, and asked the FCC for a plan to achieve these objectives. First, they asked how broadband could be made available to all Americans.  Second, they asked how broadband could be made more affordable, and how adoption could be increased. About 93 million Americans are not connected to broadband today.  Third, Congress asked how broadband and advanced communications could be used to achieve other national priorities such as health care, education, energy efficiency and energy independence. There is also explicit mandate in the Recovery Act about a national broadband plan encouraging private sector innovation and investment.

Around 50 people joined the FCC to work on this plan, from industry, academia, government, the investor community—and hundreds more within the FCC have been active in preparing the plan. This is a plan that is designed for the unique attributes of the American broadband ecosystem. It is a data-driven plan, with input from across all America.  We’ve held 44 public workshops, and field hearings, issued 31 public notices, and received tens of thousands of pages of comments.

Having invested in IT, telecom, and clean-tech companies for a number of years, I jumped at the opportunity to be a part of this historic process, and have been honored to lead a small team looking at how broadband can help with our national energy independence and energy efficiency goals.  As part of the process, we’ve been speaking with telecom carriers, electric utilities, technology vendors, federal and state energy officials, entrepreneurs, and yes, even VCs too. 

The national broadband plan will be delivered to Congress and the American people by March 17th.  It will contain a series of specific recommendations to the FCC, to the Administration, to Congress, and to the States. I want to take this opportunity to discuss with you where we are in reaching some of our important findings and conclusions.

First and foremost, broadband and advanced communications will play an important role in achieving our national goals of energy independence and efficiency, serving as a foundation of smarter electric grids, buildings, homes, and vehicles that collectively can prevent up to a gigaton of carbon emissions by 2020.  Broadband alone cannot solve the country’s energy and environmental challenges.  But it will be an important part of the solution, as a platform for new applications and new business models.

I want to focus today on where broadband and advanced communications can make the greatest impact on energy and the environment: 1) modernizing the electric grid and 2) unlocking energy data to promote innovation in the smart home and smart building.

Modernizing the grid is critical for our economic prosperity, our national security, and our commitment to reduce our greenhouse gas emissions.  The smart grid, as it’s often called, is the great enabler that will allow us to accommodate renewable power, energy storage, and distributed generation at mass scale.  A smarter grid will be necessary if we want to lead the shift towards light-duty vehicle electrification, an important step in reducing our dependency on foreign oil.  A smarter grid will speed recovery from national disasters and terrorist attacks, self-healing by re-routing power around faults, rather than allowing them to cascade and bring the grid down.

The record from the public proceedings is clear:  the smart grid needs reliable, secure, and pervasive communications, including wireless broadband.  Pervasive connectivity to sensors, substations, and switches are critical to transforming the grid into a two-way network of both electricity and information. 

The first section of our plan addresses this need, and will make specific recommendations for bringing mission critical broadband connectivity to make the grid smarter. Broadband networks that could accomplish this task include commercial networks, private utility networks, and shared networks with public safety agencies.  There is no single solution that will work for all regions, applications and types of utilities—our plan will recognize this and pursue multiple solutions.  First and foremost, we will look at how to remove impediments and disincentives to using commercial networks. We will also look at how the FCC can best work with wireless telecommunications providers to improve the ability of commercial networks to provide service during emergencies, not only to attract mission-critical smart grid traffic, but also consumers who rely on wireless networks.  Finally, we are exploring ways to encourage private networks built by utilities to operate in the same band, in order to drive down costs, and to drive open, non-proprietary standards.  There is a range of ways we can do this, but one path, for example, involves working with NTIA to look at federal spectrum bands.    

The second section of the plan will address how broadband, when combined with access to energy information, can unleash the energy innovation economy in homes and buildings.  Pervasive access to the Internet brings innovative competitors, technologies, and business models to the smart home and smart building, letting large cable companies and small web start-ups compete alongside the utilities for demand response, home automation, and energy management services.  Broadband is what lets a company like EnerNOC offer demand response services—essentially creating a virtual power plant from sophisticated software and reliable broadband.

Our review of the record suggests that to facilitate this innovation will require both interoperability standards and policies that provide customers robust access to their own digital energy information.

Smart Grid standards, as many of you know, is the focus of an effort at NIST.  Of particular interest for many of you, NIST is coordinating the development of data formats for how energy information can be communicated into a home, either via a smart meter or over the Internet.  These open standards are necessary to build a secure and interoperable Smart Grid, and they are critical to help ensure the smart home is plug’n’ play, increasing the ease of use and energy savings for all Americans.

But the record suggests interoperable standards are not sufficient, if we want to unlock the innovation potential of the smart home and smart building.  It appears that we also need policies that result in utilities providing their customers and their customers’ authorized third parties access to their own digital energy information, in open machine readable formats.  Some states have been out in front here – with the California Public Utility Commission recently announcing a decision to mandate its large investor owned utilities to provide digital energy information to consumers, including real-time energy information by 2011. Pennsylvania is another state that is aggressively pursuing these policies.  But other states are moving slowly.  We are reviewing how best to urge them to move fast with providing real-time information from smart meters, as well as past bill information over the Internet. For example, the federal government could help speed this effort by rewarding states and utilities with strong data access policies in its grants and loan programs. If such efforts don’t work, there are other options such as national energy data accessibility legislation.  Our energy and environment challenges are great and speed in providing such data is an urgent matter.

I think we can all agree real-time information and communication is the way people and systems work today.  You can check your frequent flyer miles, get real-time traffic alerts, or check your bank balances, all from your iPhone.  I don’t need to preach to this audience about the power of real-time information – if you listen carefully, you can hear the quiet peck of blackberries in the back row.   And maybe the front row as well. . Real-time feedback is what lets people make better energy decisions. Perhaps more importantly, real-time feedback in standard digital formats will allow companies to innovate new products and services that will help customers “set it and forget it,” saving energy and money on electric bills with a minimum of fuss.

The record tells us that most people get paper bills for energy, or at best, electronic PDFs.  We have 8 million smart meters today, going to 80 million by the end of the decade, according to FERC.  But most of the smart meters today, and even many of the ones planned for the coming years, will not provide real-time data to consumers, much less authorized third parties.  This raises the obvious question: It’s your energy use, and your dollars going to pay for the infrastructure – why can’t you have your own digital energy information?  And if you want to release your energy consumption information to someone who wants to sell you ads, or wants to analyze your energy usage and suggest energy efficiency investments, why should the utility hold you back?  What about generation mix information—maybe a company would like to measure its carbon footprint in real-time? Or consumers might want to charge their vehicles with green power? What about all the demand side applications we can’t think of right now?

It’s not the government’s role, any more than the utility company, to pick the winners and losers in thermostats, appliances, energy displays, and building technologies.  As we think about the plan, we believe we must aspire for policies that facilitate the ferocious competition that drives innovation.  Companies, technologies, and business models will compete for your investment capital and compete to deliver value for customers.  Many companies will fail, yes, even those in your top-quartile portfolios.  The ones that succeed will build new industries, create new jobs, and also help our country achieve its important national energy goals.

Thank you for the opportunity to speak to you today, and I look forwarding to working with you.

2 Responses to “Clean-tech Investor Summit”

  1. Guest says:

    It seems that not enough marketing is going on to let consumers know how renewable energy, such as solar and wind power can really benefit them as far as saving money and helping our environment. Many people know we have pollution and such but how many realizes the incentives that are available from the government and the grid. People will use their broadband and if they are able to see at any given time what their energy stats are and how much or less energy is being used, more and more people will be aware of what's really going on. And too, they would probably be more pronged to seek out even more information about how to save money by decreasing the usage or changing their energy sources. After all, knowledge is the key. Why don't we start with our government buildings in implementing solar and wind power?
    www.makingenergy.info

  2. Guest says:

    As usual, too much tech jargon from politicians who don't understand the practical impact (higher costs to all Americans). For example, what does real-time mean? The difference between immediate (sub-millisecond), near-real time (a few seconds), and quick (same-day) could all be debated by politicians and lawyers without getting to a definition that is technically feasible to achieve, at any cost. Also, if the intent is to create a national plan, which includes both the rural and the urban areas, so won't this work out just like the "No Child Left Behind" challenge? If you mandate a minimum broadband coverage (note, broadband is a technical term relative to baseband and not directly related to upload/download speed), the costs will be spread by the providers to those who already have it, straining the backbone (that would be the avenues of where data traffic is aggregated for its transportation between geographically disparate locations) which would increase the cost to existing "broadband" consumers and reduce the actual performance (upload/download) speeds, since broadband, the technology, loses performance as it gains users (i.e. it has limited scalability). If instead of meaning the technology of broadband you mean "high-speed Internet access," then some minimum acceptable definition of that minimum speed (and maximum latency for those who understand the implications, especially for voice and video applications). Even under the latter definition, the interconnecting backbone networks have capacity limitations that must be addressed (costs passed onto the consumer, if the mandate driving these costs is unfunded this effectively becomes a tax on all consumers which lacks a vote).

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