Smart Grid technology can enable substantial savings of energy, decrease cost and increase reliability. ZigBee Alliance technology currently has a momentum and is being selected as the interoperability standard on several continents.
Utility companies, with products’ life cycle deployment ranging 10-20 years are among the strongest proponents of open standards. They argue that if proprietary standards are introduced at an early stage there is a risk of lock-in, forcing companies to buy equipment from a specific vendor. On the other hand, if non-standard based products are released on the market they risk becoming outdated quickly as new technology emerges, thus impeding interoperability (see article here).
Further opposition to proprietary standards is based on the view that clinging to “closed” technology will slow down innovation and seriously hurt companies which do so. Smart Grid analyst Jesse Berst draws a parallel to the 1990-ies cable industry where Cisco contributed in establishing the CableLabs and DOCSIS standard. As a result many companies that held on the proprietary approach quickly lost significant market shares (see article here).
An immature market without sufficient financial incentives for risk-taking and innovation could easily stay in its infancy. Many important steps taken this far are due to the very fact that ICT industry actors are struggling to gain a competitive advantage over rivals.
Even at this early stage, some actors are pulling ahead. It was recently made public that ZigBee Alliance and Homeplug Alliance Smart Energy profiles were selected by the US DOE and the National Institute of Standards and Technology (NIST) as the initial interoperability standard for Home Area Network (HAN) devices. Existing wireless ZigBee Smart Energy standards have set the foundation for further Smart technologies and delivers plug-and-play interoperability with advanced metering infrastructure (AIM). ZigBee has also been chosen as the HAN standard by utilities and regulatory agencies in EU, Australia and Asia (see article).
A further push towards open standards was made when a collaboration between Smart Grid giant Cisco and Landis+Gyr was announced. The influential power held by Cisco on Smart technology ensures that all its actions are probable to have a large impact on market development.
The agreement, which was announced in July 2009 (see press release), is said to aim at a ‘holistic approach to smart grid communication infrastructure’ that will facilitate energy management for utilities and their customers. Open standards will be promoted in building a Smart Grid ecosystem that allows for the integration of a variety of solutions for optimized functionality.
So how open should the Smart Grid be? What is most important is to remember the complexity of this new technology and that it will take time to fit all the vital pieces together. The optimal Smart Grid technology should emerge sooner or later. While the technology is young and uncertainty remains some competition between technologies is likely to be healthy. For now, it is important to avoid lock-in while, at the same time, successful innovators are awarded for their work.
