U.S. Energy Transformation Begins with Smart Grid and Energy Internet Advancement

Four years ago we heard about a sweeping change to our energy future than has yet to materialize but still can in our view. The transportation transformation many of us have been waiting for can go a long way in lowering our nation’s dependence on foreign sources of oil. In fact, the call for EV Smart Grid Citizens or Energy Internet Supporters (EIS) to further embrace tomorrow’s technologies today can be the ultimate demise of tailpipe emissions and the sword in the heart of crude oil. That sounds so nice, especially with President Obama addressing the nation earlier this week in his State of the Union address. However, consumer behavior as it relates to the adoption of electric vehicles (EVs) still requires much education, advancement and of course technological improvements.

It is our belief at Blue Phoenix Inc. (BPI) there could be a strong correlation with smart technology and the evolution of EVs. To that point, with the interoperability of communication devices and the connectivity of smart technology growing by leaps and bounds, consumers may now benefit from new initiatives by OEMs to move away from a one-size fits all technology application process in favor of making driving a vehicle a fully personalized smart technology content experience. It’s pretty obvious that OEMs are listening (or at least they should be) and that can be the disruptive technology that consumers and corporations need to embrace EVs and access data via smartphones, web portals and email.

So what is behind our bullish view on advanced metering infrastructure (AMI) as it relates to EVs? For one thing, a majority of EV charging is expected to take place at home. Secondly, the worst economic recession since the Great Depression has consumers and businesses alike more aware of spending habits and more open to embrace change since every penny counts in today’s economic landscape. With more and more EVs hitting showrooms around the country, we believe lower battery prices will ultimately result in lower sticker prices for EV consumers.

The computer helped our business and government but the evolution of the internet has changed our lives and we believe energy internet will completely revolutionize our energy management and greatly lower our dependence on foreign oil while marrying renewable energy, technology and EVs. “In 2009, the US smart grid industry was valued at about $21.4 billion – by 2014, it will exceed at least $42.8 billion. Given the success of the smart grids in the U.S., the world market is expected to grow at a faster rate, surging from $69.3 billion in 2009 to $171.4 billion by 2014″.[1]

Now if you put an EV based vehicle side by side with a fuel consumption vehicle, there is really nothing other than a “cool” factor to purchase the EV. But what if you could mathematically prove you could save more money by driving an EV. Now you will perk up buying interest in EVs since cost and convenience, the two biggest disruptions to EV growth thus far, can be reversed.

What if you can tell your AMI device, “I need 70 miles by 7am”-find me the most affordable time to charge off-peak…” that would certainly help your earnings bottom line. If AMI devices can tell you that you are spending “X” dollars to run your washing machine, cool your home and charge your EV simultaneously, you can program your AMI device to delay operating certain products/devices until power prices get lower at night. Likewise, if there is a power outage, remote sensors could expedite the problem and dispatch the repair crew to isolate/correct the problem much more quickly. While lowering carbon footprints is a noble idea and the Prius Effect (competition to lower fuel consumption and be seen being “green”) is intriguing, more consumers will likely flock more quickly to EVs if they can save money and not risk range or luxury standards in the process. This means relationships across industries are crucial for EV growth (something we discussed in detail in our January 12th research piece titled 2012: The Year EVs Hit Puberty).

1.1. Market drivers

The move behind smart EV technology is to help lower our dependence on foreign sources of oil while also giving OEMs tools to bypass more stringent CAFÉ standards post 2017. Also, by embracing more energy efficient transportation, the US can go a long way to President Obama’s commitment to our nation cutting greenhouse pollution by 17% from 2005 levels meeting carbon goals. Without serious efforts by US government to implement immediate changes to our energy consumption, meeting the 2020 carbon target will be as difficult as the New York Jets winning the 2012 Super Bowl (for those not into sports, the New York Jets are not even in the Super Bowl, the New York Giants are).

1.2. Challenges

Let’s be real – the U.S. has yet to put forth a nationally energy policy. The failure to adopt change when it comes to our energy consumption is frightful. It is one thing to not have the technology to advance our energy independence but it is another to choose not use the technology when advancements are being made by industry.

This leads us to mention that our environment won’t clean itself. Rather we need to take measurable steps to keep Mother Earth thriving, not just surviving or we will be extremely challenged to meet carbon emissions goals for 2020 (see section 1.1.).

To us, no matter what technology or policy comes into fruition in coming years related to energy initiatives to move away from our addition to foreign oil and a cleaner environment would only be powerful if consumers understood how these new changes impacted their lives, including their wallets. Therefore, slow consumer adoption to embrace energy change is the real threat for advancement of smart EV technology and the energy internet.

[1] Smart Grid News

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