Smart Grid Transitions

This story on yahoo is the second big mainstream Smart Grid story I've seen in the last couple weeks. I was initially concerned that it had the same flavor as this Wall Street Journal article from a few weeks back, but the tone is mostly positive. The Yahoo article seemed to be sticking to the 'fair and balanced' mandate of including some negativity at the end of the piece. Interestingly, the negativity seems to have converged on the following: The utilities are going to charge us for the priveledge of charging us more. The utilities are rolling out Smart Meters, at some cost which the public will absorb. These will allow the utilities to more closely monitor consumption patterns, and charge customers more. Most experts agree that the real story is that capital investment is unavoidable, the question is where will it go? New generation or better efficiency tools like smart metering? My concern is that most of the demonstration projects I'm hearing about seem focused on residential customers. Advanced Metering is a pretty complex concept for non-technorati. It seems better targeted for professionally managed facilities. These could include residences, but I'd rather see a professionally managed apartment complex than a single-family home.

There are a couple of acquisitions behind this announcement: SPL Worldgroup was acquired in 2006 and LodeStar in 2007. SPL is described as a billing management company, and LodeStart does advanced meter data managment. So those look like the pieces: more sophisticated, context sensitive billing based on more sophisticated meter data. The actual smart meters come from somebody else. Of course, all the data gets stored in big Oracle databases. All that's lacking is a big splashy demo like GE-Cisco's Miami Smart Grid.

With an identically worded announcement from Trilliant, it appears we can expect an behemoth newcomer vs nimble insider showdown in the near future.

Sunil Sharan of GE used the term "next generation scada" as part of a surprisingly superficial discussion of the topic. It turns out that the phrase is used in the marketing literature for GE Fanuc's iFIX, the former Intellution product. Some additional research uncovered substantial smart grid applications built on this platform. I'm a pretty weak SCADA guy, so I'm still trying to determine whether a 'WebSphere SmartGrid' competes with an 'iFix smartgrid' or whether they cover different abstraction levels. It may be that SCADA is 'inside the walls' while webshpere is 'outside the wall'. It is difficult to determine the extent to which a hardware company like GE is commited to a largely software initiative like Smart Grid, especially when so much of the early value proposition centers around cost savings - ie buying fewer GE turbines. I have been associated with several companies who have tried to augment software offereing with features intended to enhance the value of the company's hardware. These have met with mixed results.

Larry Gelbien of NSTAR gave a great demand response statistic, at least for the NorthEast. In our climate 'problematic peak demand' occurs 4 to 8 days a year in 2 two four hour periods each day.  It would be very interesting to determine how this compares to hotter climates, as well as different generation mix. Larry talked about his preferred communications backbone for smart grid - the customer's broadband connection.  The idea behind this is cost savings for NSTAR, but I have to say I'm not sure how this would be implemented. Say I have DSL and NSTAR taps into my DSL for my SmartGrid. What happens when I switch to cable modem? Do I go through the same hassle I went through when my alarm system phone line stopped working? The cable company says 'that's the n-star box, I won't touch it'? I guess I'm incentivised to make sure my smartgrid box is working because I want my savings. Hmmm.

Bruce Walker of National Grid talked about the largest SmartGrid pilot in Mass, 15,000 homes in Worcester. Bruce's presentation gave me the impression that National Grid viewed modernization of electrification as a customer demand to be met rather than a new business model to be exploited. Although this was only one talk by one individual, it certainly sounded like the thinking of an entrenched player. I suspect that I was not the only outsider in the audience who saw an opportunity to respond more enthusiastically to this opening.

Bill Oates is the CIO of the City of Boston. I will take advantage of the looseness of the blog format and say I liked him best. He seemed to have a clear vision of the role technology can play in keeping his city near the top of the 'desireability index' and seemed to really understand the way SmartGrid integrates into the goal of increased energy from renewables, as well as electrifed transportation. He talked about how the city was trying to leverage its BroadBand stimulus money to achieve the dual goal of increased internet as well as smartgrid penetration. As a Cambridge resident and volunteer in my city's energy useage committee, I felt a certain parochial jealousy, that someone from my city wasn't giving this talk.

When the Wall Street Journal reports on Smart Grid, people pay attention. I've been mulling this topic for a few days, and am prepared to give it my best non-security expert shot. I think there are three basic points related to this topic:

1) Life is full of tradeoffs: want security? give up connectivity
2) Why is this a story?: This isn't even Smart Grid - this is 'regular grid'
3) What is the state of the art? People are hard at work on Smart Grid security - what are they doing?

Tradeoffs -

My experience with security comes from our Semiconductor industry data acquisition and control product.  We find that we have two very different customers, and we can almost never make them both happy. Our direct customers, who use our product, want as much interconnectivity as possible. The IT organization whose job it is to maintain security want as little as possible.  Others may achieve a better balance of security and access than we do, but the tradeoff seems ever present.  We are just one little company, but reading one of the great security evangelists, Bruce Schneier gives me confidence that we are seeing the same thing everybody experiences. There is value to be had from the greater connectivity proposed in the smart grid. This value goes well beyond the 'laziness' of not having to go on-site to throw a switch. The power of automation and large aggregated data analysis has been proven in countless fields and will be demonstrated on the smart grid as well. This power comes at a cost. More access means more vulnerabilties. Vulnerabilites get exploited, whether by nefarious agents or bored teen-agers. It hasn't stopped poople from moving ot online banking, and it won't stop this either.

Why is this in the news?

This aspect of the story is fascinating. The first thing to note is that the WSJ article says nothing about smart grid. It merely states that utility grid has been attacked. Secondary sources have augmented this story to focus on SmartGrid. The next aspect of the story is the vagueness of the article. Inteligence officials state 'Chinese' and 'Russian' 'cyberspies' have penetrated our utility grid. When? How significantly? What constitutes the electrical grid? What makes the 'cyberspies' 'Chinese' or 'Russian'? Who are these officials? A number of commentators have picked up these threads. I will try to summarize and augment. Computers get 'botted' all the time. The BBC did a story on how you could buy a 20000 computer botnet for $0.25 a machine. So given the number of computers that get hacked, what attribute of a computer is required for it to be 'part of the grid'? Is it on somebody's desk & mostly used for email & powerpoint? Could I use the 'botted machine to play Enron energy trader? A while back there was a story that NSA got hacked - the PR department! What makes the attacks 'chinese' - a chinese IP? Any hacker worth anything routs through a bunch of secondary IP's-  China is a very popular pass-through. Unnamed 'intelligence officials' can be in the disinformation business as easily as the info business. A theory is that the NSA is agitating for more control over cybersecurity. To quote Bruce Schneier twice in one post, he's convinced this story is a plant as well.

What is the state of the art?

One of my favorite podcasts, Currents, had a show on grid security. A key point that I took away is that cyberterrorism is pretty darn inefficient. Hacking the grid is hard, and almost anything you do can be undone fairly easily. By contrast, the physical infrastructure is not enormously well protected, and a very small number of very low-level people can really do some damage destroying physical switches and relays that take months to replace. Bottom line, much less sexy attacks are a much greater risk to infrastructure.  A further point is that every serious smartgrid organization has studied security intensely and has proposed detailed. This is now the point in the post where my lack of security background comes through. I can't tell you whether the proposes approach is sound, or best of breed, but security has definitely been a serious consideration in SmartGrid.

Independent of the facts, I think this story highlights the critical PR challenge that this new technology faces.  Let's hope the Smart Grid isn't Tesla to the the status quo's Edison.