Cloud computing and the smart grid

• Spending on smart grid data management could touch US$10 billion by 2020
• Wide-area data management in real time will be basic need in Asian super grids

Cloud computing service offers are already targeting emerging smart grids across Asia and around the world. The sector is now the focus of hot competition among the biggest players in cloud computing and IT services. Major players as of March 2012 include Amazon, Microsoft, Google, Apple, Cisco, HP-Dell and VMware. Major areas of dispute and rivalry concern the IT standards to be utilised, compatibility and crossover from one data network for smart meters to another.

While the first four companies listed above are building cloud computing standards and services that both consumers and businesses can utilise, players like Cisco and VMware are more oriented to business users. These will certainly include smart grid and smart metering operators.

On the face of it, smart grids seem especially suited to using cloud computing. The core advantages of cloud computing are lower costs and greater flexibility than traditional data centres, reducing mainframe computing costs and technological “lock-in”, that is lack of flexibility, but already the fierce competition between powerful rivals is making this key flexibility less certain. 

After spending hundreds of millions of dollars to obtain a potential future market role, cloud computing suppliers may decide to make it difficult for companies to move their software and data onto a competing cloud service, creating a new type of lock-in. This will create problems for smart grid operators wanting to cover large area networks.

Anticipating this, and with an eye on utility companies needing to handle massive amounts of data from smart meters in the near future, the development of alternatives to the probable or possible cloud reference standards, VMware and OpenStack, is powering ahead. 

Current market volatility in the manufacturing sector is driving new interest in cloud computing as it helps companies keep costs down and enjoy shorter-term returns on investment (ROI) (photo credit: Corbis Images)

Many smaller and mid-sized computing firms, and in some cases non-profit foundations such as the US Apache Software Foundation or the US-Finnish founders of Red Hat Linux, operating in open-source software since the 1990s, are now engaged.

The list does not stop there, due to the emerging cloud computing software standard of the HP-Dell OpenStack system (originally developed in a joint operation by the US NASA and software company Rackspace) now being the focus of Rackspace’s decision to create a foundation this year to bring in more potential users and generate more flexible and efficient service offers.

Asian initiatives

Asian software developers are also rapidly entering the arena of cloud computing oriented to power utility firms’ smart metering divisions. These include India’s Infosys and Japan’s NTT DoCoMo, and several influential Chinese computer and IT firms.

What is sure is that cloud computing services are an area of intense competition driving the development of software and service offers that may face compatibility issues. For utility companies and power distribution companies using smart metering, this could present the advantage of lowering costs. But for the largest players, with sufficient resources comes the new challenge of creating electric power industry-standard data treatment and acquisition systems across Asia, and letting non-Asian buyers come to Asia for the perfected systems that are developed.

Berg Insight and Bloomberg estimate that annual spending on smart grid data management could touch US$10 billion by 2020. Making the right moves today will surely pay big dividends – to the right players.

When we move on and up to also include the potential data treatment needs for wide-area super grids transporting large amounts of power from variable and intermittent renewable energy generators like wind farms and solar PV plants, the implied total space for future cloud computing becomes immense. 

China, India, Europe and the US all intend to develop continent-sized super grids in the next 20 to 35 years. To do this, wide-area data management in real time will be a basic need.