The smart metering for electricity grids is another good example of infrastructure supported by ICT in which standardisation plays a key role in attaining the envisaged energy gains. The Commission has called upon Member States to agree by 2010 on minimum functional specifications for smart metering that will enable electricity network operators, suppliers and consumers to effectively manage their energy needs and to use ICT solutions for automated energy management. To this effect, the Commission has issued a standardisation mandate to CEN, CENELEC and ETSI for the development of an open architecture for utility meters involving communication protocols enabling interoperability. The achievement of such standardisation will be a major step in the advance towards Smart Grids, which is expected to be one of the foremost contributors to ICT-enabled energy abatement.

Finally, beyond ICT technical standards themselves for interoperability of ICT products and services, ICT presents a unique potential to facilitate the standardisation of the measurement, reporting and verification of energy consumption – not only for the ICT sector itself, but also for other industries. ICT can play a key role in elaborating systemic and standard monitoring frameworks to help achieve the EU 2020 targets. The ICT industry will take the lead in this area by establishing an ICT for Energy Efficiency Forum, with the aim of delivering a common framework by 2011 for measuring its own energy consumption and exceeding the EU 2020 targets by 2015.

Copenhagen has shown in a painfully evident way that it is impossible for the international community to resolve zero-sum games. For the international community to move from discussion to action – shifting from talk the talk to walk the walk – it needs to find ways to make change into something positive. The cost of climate change needs to be shifted to the benefits of sustainability.

Two ideas have created a particular tension between developed and developing countries. The first is the idea that new green technologies should be put in the public domain or alternatively be compulsory licensed. The second is the focus on financial aid from developed to developing countries. Both ideas are neither necessary nor effective solutions to the problems they try to address.

Starting with the issue of access to technology in developing countries, it is ineffective to undermine the system of intellectual property. A much more effective alternative is to promote dissemination through the development of global technology standards in combination with regulation that permits international price differentiation and low prices in developing countries.

New green technologies need to be invented. Once invented they need to be used. And preferably on a global scale.

Being global public goods it is economically most effective to finance global technologies with Ramsey pricing, i.e. international price differentiation such that developed countries pay high fees while developing countries pay low fees. This international price differentiation needs be supported with some restriction on parallel trade that makes it profitable for holders of IPRs to offer licenses to developing countries at very low prices. This in turn reduces or eliminates the need to impose compulsory licenses.

ICT standards can play an important role by fostering innovation and technology transfers. Standards strengthen the incentives to innovate to the extent that it allows innovators to benefit from economies of scale. ICT standards can similarly contribute to fast dissemination of technology in a way that improves productivity.

Turning to the second issue of redistribution, the idea of financial aid from developed to developing countries is not effective and there is a substantial risk that it will result in a dead-lock. The proposal is particularly problematic in political perspective in a situation when several large economies, including the US, have governments with very large deficits.

A much more effective alternative is to rely on a market solution. In a global cap and trade system, i.e. a system with tradable carbon emissions permits, poorer countries can be given permits that they could sell to developed countries. This system does not only have the benefit that it would allow developing countries to get financial support, it also allocate the burden to the polluters, which is particularly attractive. Perhaps even more important a “cap and trade system” would have the benefit that innovation and productivity improvements are fostered.

In sum, the trick to turning tigers into vegetarians is to create gains from change. Innovation and technology transfers supported by standardization, IPRs and international price differentiation and transfers based on a global cap and trade system would be a good start.

-The divergence between material standards and the ethereal world of ICT

We have standards for nearly everything in this green world of ours. There are Green Building Standards (LEED, Green Globes, BREEM, Energy Star, NAHB Green and ASHRAE 189 to name a few), international standards for eco-labeling (ISO 14020 and 14024); Energy Star Standards for equipment, the EPEAT Standard for the green-ness of the manufacturing process and final product, a standard for restaurants (Green Restaurant® 4.0) and even a push by the SEIU and janitors for the “the adoption of green cleaning standards to make their jobs safer.” All of these help to improve the environment in one way or another, and they all have one thing in common:  they deal with a measurable quantity of something.

This measurement of physical output is essential; we must know how many Kcals are used heating the water, how much CO2 is pumped out by driving, or how many watts are generated by a wind turbine, and we need international agreement as to the meaning of those numbers.

In the physical world, standards become key. For ICT companies looking to build the tools and technology to green all these homes, factories and even restaurants, defining the physical isn’t so easy.

The carbon marketplace is a good example of this dilemma.  While a robust carbon marketplace exists, the measurement of carbon output today is more of a chalk outline than a real footprint.  Companies build profiles based on simplistic modeling that looks at square footage and number of employees, and measuring improvements is often done after a change is made, rather than based on models set beforehand.

Carbonetworks and Hara Software are two companies that are attempting to provide the technological underpinnings to a real and active carbon marketplace.  Both companies are building tools to measure the entire supply chain and, most importantly, model changes in real time. In the case of Carbonetworks, they are focused on the network effects of carbon whereas Hara is a more traditional single-point analysis approach.  The companies use different technologies and methodologies to solve the problems of measuring, monitoring and managing a corporation’s carbon footprint, but both provide products that allow companies to lower emissions.  And in the case of Carbonetworks, create a direct interface to the carbon trading market.

And yet to grow that marketplace for carbon, there needs to be agreement as to what a change is worth.  In simple terms, the market needs to know that “a cup of carbon in America is the same as a cup of carbon in China.”  The interesting conundrum is that while standardizing measurements will enable competition and innovation between Hara and Carbonetworks, standardizing the technology only will prevent competition.

Finally, creating technology to analyze the carbon output for an entire supply chain is the “holy grail” of carbon, but it’s a grail that has not presented a viable business model.  Several companies that were trying to solve this riddle have failed–not because their technology lacked standardization, but because they had not found that ineffable mixture which glues money, ideas and product together.

We are still a long way from knowing the right technology to help fill the missing pieces of the entire supply chain carbon footprint. It may be Carbonetworks, it may be Hara, or it may be another player none have heard of yet.  But a government-mandated standard today could ensure that we’d never know about that potential new entrant.
Green IT is still capable of “radical innovations”; we should support standards in our material world, while letting our spirits work out the details of the ethereal one.

On December 10th, IDC released a report that detailed 17 ICT solutions that could reduce the G20 nations’ CO2 emissions by 5.8GTonnes per year by 2020. The solutions spanned four industry segments (Transport, Buildings, Industry and Energy). The report highlighted that within the Energy segment, a total of 1.7 GTonnes could be saved – with Renewable Energy Management Systems ( part of a Smart Grid deployment) being the leading solution. China and the U.S. have such a huge opportunity to reduce their emissions using this solution.

Within the Transport sector, savings in Video Conferencing-based solutions are promising with 162 MTonnes of CO2 savings being possible for the collective G20. However, for Transport, IDC suggest that Supply Chain Logistics improvements using ICT is the major opportunity. The 3rd sector, Buildings, can realize significant CO2 savings by using Energy Management Systems. We believe that this ICT solution could be used to save up to 762 MTonnes of CO2 per annum.

Our findings show that ICT based solutions do have a genuine place and role to play in reducing global CO2 emissions. The key points that can be concluded from this study indicate that digital-based Energy Management Systems (from Energy Generation and Distribution to Buildings Management) are the corner stones of any initiative. Another key point to mention is that the G20 nations do have strong ICT infrastructure support systems already in place (networks, data centers, skills to perform business-like Sustainability Intelligence, real time decision making, etc). This knowledge and best practices is a very easily transferable knowledge to nations outside the G20, and therefore should be agreed upon as national strategies. The time is right for ICT to take the lead and implement solutions that have significant impacts through massive deployment of these solutions.

ICTs have the potential to play a leading role in such emissions reduction plans and low-carbon investment strategies. An analysis by The Climate Group in partnership with the Global e-Sustainability Initiative (GeSI), and McKinsey suggests that smart solutions enabled by Information and Communications Technologies (ICT) could save 7.8 Gt CO2e in 2020, or 15% of global emissions in 2020.

However, in order to achieve their full energy conservation potential; smart building, smart appliance, smart transportation, and smart energy grid applications will need to be integrated through the convergence of telecoms, energy, transportation, and building infrastructures. Such convergence will also be necessary if we want to increase inputs from variable and intermittent sources of renewable energy to our energy grids. One of the major obstacles confronting such convergence is the different modus operandi and regulatory bodies of each industry.

ICT standards will be instrumental to overcoming such obstacles and allowing disparate smart applications emerging from each industry to interact enabling a sum impact greater than its parts. Standardizing information sharing protocols for tracking energy consumption will enable industries to collaborate on energy conservation strategies, the monitoring of direct and quantification of equivalent emissions, and the buying and selling of renewable sources of energy.

Standards will also be an important first step towards ICT enabled smart system initiatives to capitalize on emerging carbon market opportunities, particularly as more flexible arrangements are being considered to replace the Clean Development Mechanism (CDM) under the Kyoto Protocol. Rigorous, internationally agreed standards and methodologies need to be applied to qualify GHG emissions measurements and savings calculations. ICT standards for integrated smart systems developed to meet to these requirements would position the information gathered by these systems for immediate consideration in carbon market mechanisms. This holds the potential for consideration of further emission reduction incentives, beyond the direct economic benefits of achieving energy efficiencies, which could help accelerate innovation and adoption of smart system applications.

In order to meet our goals of increasing the amount of sustainable energy and increasing energy efficiency, a transformation towards smart grids, including smart meters, is essential. It makes information on energy consumption available to the user in real time, which allows him to adapt his consumption patterns. Besides this, smart grids make large scale infusion of sustainable energy from various local renewable sources into the grids possible.

This transformation will necessitate smart investments in new technologies and changes in the value chain. Investments that will likely only render a sufficient return if they are monopolized and the costs for users are increased, or when there are sufficient possibilities of value added services. Value added services in particular could open up possibilities for new services and better deals for consumers and businesses. Consider for instance how domotica-services or the uptake of electric cars can be expanded in combination with smart metering systems.

In order for a broad array of services to be offered standardization is critical. It is up to the Energy and ICT industries to come up with these standards. And soon. In March of this year the European Commission mandated CEN/CENELEC and ETSI to come up with a standard for smart meters. It goes without saying that this standard should be open, needs to be as secure as possible, and sufficiently protect the privacy of consumers. We need to hurry because quite a large number of countries are already, or will soon be, investing in smart metering systems. Open standards for other parts of the smart grids infrastructure need to follow as soon as possible, but given the early stages of development, may need some more research.

Apart from the smart grids systems, it goes (almost) without saying that the ICT industry should lead by example and continue to develop ever more energy efficient applications, hardware and software. If needed regulation could help these developments along. Regulation in fact also needs open standards, although of a different kind. Standard methods for measuring and monitoring energy efficiency are needed in order to make claims of efficiency transparent.

Conservation is the largest single opportunity for short-run improvements in energy efficiency. In both the US and Europe, “Smart Grids” are touted as a promising conservation tool. The basic idea is to add some digital intelligence to electricity meters and household appliances, so that usage can be more easily, measured, monitored and controlled. Smart Grid technology will also allow some consumers to become energy producers, by selling the excess capacity from their own solar or wind generators back to the electrical grid. In addition to providing basic tools for inter-operability and security, Smart Grid standards must be designed for usability. Experience shows that consumers are unlikely to invest in conservation unless it is extremely easy (or prices increase substantially, bringing some of the long-run savings forward into the immediate future). Andrew Updegrove provides a nice overview of Smart Grid standardization, and the US Smart Grid standards initiative has an easily accessible home page.

Environmental labeling and certification programs are another case of standardization in support of the environment. Many consumers will pay a bit more for environmentally friendly products, but cannot distinguish among options at the point of purchase. This has given rise to a number of eco-certification programs, such as Energy Star for appliances, LEED for buildings, Forest Stewardship Council certification for paper and lumber or a host of different organic food designations. For an overview of eco-labeling, see here. In some cases, such as organic food, the number of labels has grown so quickly that it may be adding to customer confusion, leading to calls for government certified labels such as USDA organic. Assessing the costs and benefits of competing certification schemes is an interesting area for standards-related research.

Finally, since this blog is primarily devoted to ICT standards, we should consider the growing problem of electronic waste. Computers and electronics contain a variety of toxic materials (which are also sometimes quite valuable). Short product life-cycles and poor systems for reclamation cause much of this material to end up in landfills. However, there is growing pressure from groups such as the Electronics Take-back Coalition to push some of the costs and logistics of reclamation back onto electronics manufacturers. This is an area where governments are becoming involved. For example, the EU recently passed the Waste Electrical and Electronic Equipment (WEEE) Directive and the U.S. Environmental Protection Agency has endorsed a set of principles for called Responsible Recycling (R2) for accreditation of electronics recyclers. If electronics manufacturers want a voice in these regulatory efforts, they will have to begin developing and adopting new standards for Green designs and more comprehensive take-back policies to facilitate recycling and component re-use.

Governments are playing an active role in all of the standardization efforts described above. However, the most critical policies have little to with the standardization process itself. The value proposition for all of these efforts depends on raising the price of carbon to a level where the private and social costs of consumption are roughly equal. When these prices are in place – and let us hope that is soon – the remarkably diverse and adaptive international standards system will begin to deliver a variety of tools for change.

G B Shaw said: The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.

Much of the discussion around Smart Grids is ‘reasonable’. It is mostly oriented towards the existing infrastructure, with the assumption that the existing infrastructure will also have an important role to play in future.

This is a ‘reasonable’ perspective, but what if we were to be ‘unreasonable’? And therefore progressive and also disruptive in the words of GB Shaw?

This article explores the role of customers as creators of energy rather than mere consumers. It explores the creation of a ‘cottage’ industry of Peer to Peer energy producers. In such an ecosystem, the standard would be used to connect the peer producers and the consumers. The standard would be the unifying glue to bring together peer producers with the value being abstracted to higher levels of software and services which create the peer trading ecosystem based on small amounts of energy produced by individuals at ‘home’.

The role of customers as energy producers is a use case for Smart Grids, but it is relatively less explored. And for good reasons; it is disruptive, and it does not really benefit the incumbent providers of energy. But even so, Peer to Peer energy production may be an idea whose time has come.

George Papanikolaou explores this idea further and I summarise some of my thoughts on this discussion

a) The current approach to Smart Grids and Green initiatives is ‘top down’. It predicates infrastructure investment first and needs many players to come together especially large producers of energy.

b) While the traditional approach is beneficial, a more long reaching impact can be realised if we were to empower the customers and create a ‘bottom up’ network of cottage (home) energy producers who create and distribute energy within a social network – and not always for commercial gain. The Internet provides us such a network – but it needs a peer to peer social network to create and distribute energy

c) Producers are unified with the ‘means of production’. This means, the need for an intermediary is reduced. The motivations for the peers may be sustainability and other additional ‘soft’ benefits apart from revenue itself.

d) Energy produced by solar, wind and other means could lead to potential population realignment away from the cities if it is found that small producers are economically viable. This is not as far fetched as it first sounds. The Web has a tendency to commoditize content and services since it tends to make prices globally transparent. However, the Internet cannot commoditize physical goods and energy production will always have a commercial value. Thus, a whole class of middle income energy producers could arise if the methods of production and distribution become economically viable.

To conclude,

I have read Peter Drucker’s books for a long time. In his book the Post Capitalist Society, Peter Drucker says that productivity of nations will arise from infrastructure investments and since many people will no longer be involved in producing goods, the knowledge economy could play an increasing part. The vision of Peer to Peer production of energy brings these ideas together by the ‘ultimate; decentralising of production (to the individual) and by also adding a knowledge component in empowering the individual.

However, the promised benefits of this vision cannot be realised unless we have standards that foster the connectivity and the ecosystem to make Peer to Peer energy production economically viable.

Comments welcome. Happy holidays!

Developments in telecommunications are moving towards more eco-efficient solutions. One example is the multi-standard base station marketed early this year by Nokia Siemens.

A TMC report describes how the Flexi base station can be beneficial to the environment. First off, since operators are deploying thousands of base stations to prepare for LTE (Long Term Evolution), the fact that Flexi reduces energy consumption by 70% offers significant total effects.

Also, the light and modular design of the Flexi means that it can be carried to a roof by the installer, thus making the traditional use of  heavy-duty cranes unnecessary. Further, the fact that the Flexi servers several telecom standards results in higher energy efficiency since it can feed a complete antenna area.

As another article points out, use of the Flexi base station also reduces the need for installing new options in the future. This long term functionality strongly contributes to the Flexi’s eco-efficiency.

The Flexi offers a great chance for companies to reduce there environmental footprint by the use of more intelligent technology. It conjoins the idea of long term functionality through re-use and simply more eco-efficient technology. An excellent way for the industry to go green.