A Startup Joins Google and GE in the Smart Grid Conversation

The Obama stimulus signed yesterday contains $11 billion for technological upgrades to the electric grid. Huge companies like IBM, Cisco, GE, and now Google all have initiatives and investments in the so-called "smart grid." But yesterday, a company you may not have heard of was the only startup invited to speak at a high-profile event with Google and GE: Tendril.

I spoke to Tendril's CEO, Adrian Tuck, and got his provocative views on the future of this fast-growing industry.

The smart grid can mean so many things: smart meters, utility demand-response programs, consumer energy dashboards like Google's new PowerMeter. What piece of the puzzle does Tendril work on?

We provide a software platform called TREE (Tendril Residential Energy Ecosystem) that links utility back office systems into the whole host of devices that can exist: Thermostats, in-home displays, smart plugs. What's unique is that our setup allows us not to necessarily need a special smart meter. We think the smart meter‘s a fantastic thing, but in the best case it may be 5 to 10 years before everyone has one.  About half the homes in North America have a meter we can work with today.

So who are your customers?

The utiltity is our customer, but the residential consumer is our user. We have a very consumer-focused view of this. Historically smart grid was really looked at from the utilities' side—giving the utility control over things like turning air conditioners down [to conserve energy at peak usage].  That model needs to be flipped on its head—getting consumers information about their consumption is the cornerstone to getting people to understand/control/modify their behavior.

Why were you the only startup invited to speak with Google and GE yesterday?

We all think about the problem the same way.  We have a shared vision of open standards, and getting information to customers as quickly as possible. The biggest risk in this market is timing—there are players in it that are slow to adopt. Google getting public and announcing their intent to play here will hopefully accelerate the market. We hope to be a good partner to Google in this process—although we have no formal partnership plans at the moment.

There is so much excitement about smart grids right now, with their applications to energy efficiency, demand-based pricing, and increased use of renewables. What do you see as the biggest risks going forward?

This is a highly regulated market with lots of monopoly utilities in it, who are well-meaning custodians of the status quo. What’s really needed are agents for change. My worry is that the guardians of the status quo will prevail or at least slow things down. That’s a challenge, and we all need to find ways to help utilities move more quickly.

The second risk is that there are systems integrators out there who seem to have unlearned the lessons of Enterprise Resource Planning— offering to build the utilities bespoke solutions. Twenty-five years ago that’s what systems integrators did.  Then out came standard open platforms like Oracle. There are lots of people thinking about this in the old-fashioned closed way that are making me nervous.

What’s happening now in the electricity industry has often been compared to the telecom industry.

The parallels with the Internet are strong. Before the breakup of the telephone market we had organizations like Bell Labs which controlled the evolutions of the market. They said things like, you can’t get more than 14.4 kbps down a piece of copper wire. It wasn’t until the telecom market broke up and money flowed into startup labs and universities that it started to change.  I think exactly the same is true in the energy market.

But utilities are your customers right now. Aren’t you a bit of a Trojan horse, then, posing a serious threat to their control over the electricity market?

I think it’s inevitable that consumers will demand choice. We have choice in almost every other facet of our lives. But bringing it to the grid is a non-trivial task, and the current setup has a huge role to play.  We are trying to work with utilities to help them through the change process. Whether they occupy the same place at the other end of the transition is not in my control.

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