Category Archives: Cleantech

Utilities Still Aren’t Ready to Get Serious with Consumers

In his Green Tech blog, Martin LaMonica of CNET News writes that utilities have acknowledged belatedly that they are poor marketers .With that realization in mind, they are said to be redoubling their efforts to explain smart-grid benefits to skeptical consumers.

Notwithstanding utility executives’ apparent contrition and ostensible commitment to institutional reform,  I remain unconvinced that they have seen the light. I still think they require further reprogramming, a service that disaffected consumers will be only too happy to provide.

As I read through LaMonica’s piece, I noticed the absence of a very important word. The utility executives, despite their recitation of anodyne platitudes, could not bring themselves to say the word, though they ventured occasionally into its outlying neighborhood.

That word? Savings.

Although the article featured many instances of utility bosses talking about getting consumers onboard, getting consumers involved, and treating ratepayers as customers, there was no specific mention of passing significant, quantifiable savings to smart-meter-equipped residential consumers.

Jim Rogers, CEO of Duke Energy, came closest to striking gold. He said consumers will want better ways to manage and reduce their energy use for economic reasons. But he should have gone further .

All the utilities should and must go further. It’s well understood how smart meters, dynamic time-of-use (TOU) pricing, and demand-response programs can help utilities reach their business objectives and regulatory mandates. What’s less clear is exactly what consumers will get from the deal.

It’s too late in game for the utilities to be using nebulous niceties and vague concepts to sell consumers on smart meters and the smart grid. Now is the time for utilities to cut consumers a pice of the action. It’s time to incentivize the consumer with hard ROI numbers and compelling savings. Don’t dance around the consumer benefits; spell them out.

Utilities say they want to treat their consumer ratepayers as customers. Well, customers don’t buy products or services unless they perceive value in doing so. Utility executives seem to realize that what they’re peddling doesn’t have the raw sex appeal of an iPhone or an iPad. Consequently, they should recognize that the value they offer to consumers must include a strong monetary dimension.

It’s long past time for utilities to get specific about the tangible benefits, including savings, that consumers can derive from smart meters. If the smart grid is to result in something more than efficiency and operational savings from upgrades to transmission lines and distribution automation (DA) facilities, consumers must have good reason to play their part in making it happen.

Cisco Announces Ruggedized Gear for Smart-Grid Substations

Until now, Cisco has done more talking than doing on the smart grid.

Yes, Cisco has made investments, including a notable stake in GridNet, and it has been involved in some prominent smart-grid projects and trials. But those efforts have been tentative, and they haven’t involved Cisco introducing new products specifically built for utility customers pursuing smart-grid deployments.

Earlier today, though, Cisco rectified that situation, announcing a hardened, ruggedized router and a similarly hardened, ruggedized switch, both of which are designed for deployment in utilities’ electricity substations. The new Cisco IP-based smart-grid products — the Cisco 2000 Series Connected Grid Router (CGR 2010) and the Cisco 2500 Series Connected Grid Switch (CGS 2520) — are adaptations of existing Cisco gear.

As reported by Network World, the CGR 2010 is based on Cisco’s Integrated Services Router (ISR), whereas the SGS 2520 is based on Cisco’s Catalyst 2000 and 3000 series products. The SGS 250 comes in two four-slot versions, with speeds and feeds similar to those of ruggedized switches from smaller players that have been active in the market well before Cisco’s arrival on the scene.

Like those competing offerings from the likes of RuggedCom and GarrettCom, Cisco’s smart-grid networking gear adheres to IEEE 1613 and IEC61850-3 standards for utility substation environments, including the capacity to withstand extreme temperatures. The devices also provide enhanced protection against electrical surges and electromagnetic interference.

Although smart meters and advanced metering infrastructure (AMI) receive a lot of media coverage because of their consumer-facing orientation, smart-grid products and technologies — such as substation networking gear — built for utilities’ distribution networks could possess a greater likelihood of achieving near-term commercial success.

While nobody seems sure whether or when consumers will want to fiddle about with smart meters and home-energy management systems to derive potentially modest savings on their electricity bills — consumers’ willingness to subject themselves to demand-response initiatives also remains unknown — utilities will have a need to upgrade and overlay their electricity-distribution systems with two-way communication networks. Those networks will provide efficiency savings by capturing and transmitting data from multiple intelligent electronic devices in the substation back to utility data centers for analysis.

By making their distribution networks smart, utilities will be able to quickly and accurately identify, isolate, diagnose, and perhaps even automatically repair network faults. They’ll also be able to reconfigure networks on the fly to circumvent trouble spots and keep electrons flowing.

For Cisco, the kingpin of Internet routing and switching, these new products represent a logical entry point into the smart-grid marketplace. Cisco already is a market leader in switching and routing. To get into the smart-grid space, all it had to do was adapt existing products to the specific requirements of substation deployment.

Cisco is hoping to benefit from the inherent conservatism of the utility sector. Utilities prize reliability — and hence risk mitigation — above all else. Utilities prefer to go with the tried and true over the conceptually interesting but unproven; and they also tend to favor established, well-known vendors over startups. Cisco is hoping its Internet market leadership, in enterprises and service providers, carries over to the utility industry, allowing it to tap an opportunity that it believes could be a hundred to a thousand times the size of the Internet, representing a $20-billion market in just five years.

The networking giant’s success isn’t assured, though. While Cisco is the top dog of enterprise networking, it’s a newcomer to the utilities. Even though its brand is known, it’s not known directly by many utility customers. It will have to build a base, as well as relationships and credibility.

In an email message to Forbes, Forrester analyst Doug Washburn discussed the challenge Cisco faces:

“It’s going to be critical for Cisco to forge partnerships with smart grid solution providers, the Accentures and ABBs of the world. Those companies] specialize in the utility industry and can engage the utilities at a business and strategic level, not just the IT and operational level.”

In talking with EE Times, Washburn elaborated further:

“I did not hear much from Cisco on this topic, and it’s an important one since these players (Accenture and ABB, and the like) help utilities determine their smart gird strategy which ultimately drives technology and vendor decisions.”

But Cisco has drawn Accenture’s support. In a press release announcing its hardened networking gear, Cisco includes a salutary quote from David M. Rouls, managing director of Accenture Smart Grid Services:

“Accenture and Cisco have a shared Smart Grid vision. We believe that the inherent value in moving toward a Smart Grid is derived from securely transporting, integrating and analyzing the vast amount of information that results in the transformation from analog to digital. Accenture is particularly excited to enable the data management, event processing, and analytics functionality delivered with the Accenture Intelligent Network Data Enterprise (INDE) and leverage the advanced networking capabilities of the Cisco CGR 2010 for our utility clients.”

Besides, when it comes to entering new markets, Cisco knows the drill, even though this challenge might be qualitatively different from those that have preceded it.

Internet historians will remember that Cisco was once new to carriers. It had to develop domain expertise, develop and acquire new skills, and build and nurture new contacts and long-term relationships. It was largely successful in that endeavor, and it will follow a similar blueprint in attacking the smart-grid opportunity in the utility sector.

The company already is following the well-worn playbook, hiring utility insiders to join and lead its smart-grid team, obtaining essential skills and valuable customer contacts in the bargain. It’s building relationships with early customers, too, including three utilities that will use its new products  in substation automation trials.

Network World reported that both Cisco products, the router and the switch, start at about $6,000, with the router available in July and the switch available in August. Meanwhile, EE Times reported that the router starts at a list price of $7,800, with the switch prices starting at $5,300.

Cisco has taken a while to make a product splash on the smart grid. This first tangible foray might not have the superficial glamor of a home-energy management play, but it’s a logical first step that allows Cisco to build a bridge from its successful past into a potentially lucrative future.

Components Shortages Affecting Vendors Worldwide

At the moment, components shortages seem to be pervasive in the technology industry. Vendors large and small, throughout most of the world, have been affected by them to greater or lesser degrees.

The problem appears to be with us for a while. To be best of my knowledge — and I will concede at the outset that my research hasn’t been definitive — vendors everywhere in the world are having difficulty sourcing adequate numbers of many types of components. The only exception is China, where vendors in telecommunications, cleantech, and other fields have not reported that same component-sourcing difficulties that have hobbled their counterparts in Europe, North America, and other parts of Asia.

That doesn’t necessarily mean that Chinese companies aren’t affected by components shortages. All it means is that they haven’t reported them, at least in the English-speaking media I’ve perused. Still, it’s a development that bears watching. In that China does not ascribe to the tenets of unfettered capitalism, it sometimes operates according to a unique set of rules.

Today’s component shortages span various semiconductor types, including but not limited to DSPs, FETs, diodes, and amplifiers. Vendors of solar inverters, particularly those based in Europe, also have been affected.

Meanwhile, Reuters reports that a shortage of basic electrical components could last into the second half of 2011, limiting the ability of telecommunications-equipment manufacturers to respond to improving market demand.

Reuters reports that memory chips and other fundamental components such as resistors and capacitors are in short supply after their makers slashed output, fired staff, put equipment purchases on hold or went out of business during the recession.
The shortages already have been blamed for weaker-than-expected results last quarter at telecommunications-equipement vendors Alcatel-Lucent and Ericsson, which really don’t need the added grief.

Alcatel-Lucent blamed components shortages for a large loss that it posted in its first fiscal quarter. Alcatel-Lucent’s CEO Ben Verwaayen said the said the shortages involved “everyday” low-cost components. He explained that most components come from China, where the manufacturing industry hasn’t been revamped since major cuts that followed the severe global downturn. 

We already know that the supply-chain issues that afflicted Cisco’s channel partners and customers were blamed partly on component shortages.
What’s more, Dell partly blamed shortages and higher costs of components, including memory, for its inability to maintain gross margins during its just-reported quarter.

And AU Optronics, Taiwan’s second-ranked LCD manufacturer and a supplier to Dell and Sony, reported that an LCD panel shortage is likely to last into the second half of this year.

By no means are those the only vendors affected. You only have read the recent 10-Qs or conference-call transcripts of companies involved in computer networking, telecommunications gear, personal computers, smartphones, displays, or cleantech hardware to understand that components shortages are nearly everywhere.

I just wonder — and I make no accusation in doing so — whether Chinese manufacturers are as affected by the shortages as are their competitors in other parts of the world.

As Belkin Ramps Home-Energy Management, Where’s Linksys?

As Belkin ramps up its smart-grid activities in electric-vehicle charging and home-energy management, an obvious question arises: Where’s Cisco?

Specifically, where’s Cisco’s Linksys unit, the business that competes against Belkin in the home-nettworking market with a portfolio of wireless routers and other access gear?

Linksys would be a natural player in home-energy management. In fact, it wouldn’t be a stretch to imagine Linksys offering home-energy management or vehicle-to-grid (V2G) applications in residential and commercial environments.

True, Linksys already has powerline products, which were reportedly involved in Cisco’s smart-grid, home-energy management initiative with Duke Power. Nearly a year ago, speculation mounted regarding the imminent arrival of Linksys-branded, home-energy solutions.

Those products have yet to arrive on the market, though. Here are some scenarios that attempt to explain the Linksys no-show.

1) Patience — they’re still coming.

For all I know, Cisco could be on the veritable cusp of making a major Linksys home-energy-management announcement. Such an announcement might have been planned for months, and it might be made within the next few weeks.

2) The best smart-grid opportunities are elsewhere

Cisco might think the smart-grid market’s low-hanging fruit does not include home-energy management systems connected to smart meters. Indeed, considering all the infrastructure upgrades at utility data centers, across transmission networks, throughout distribution facilities, and spanning mesh networks that connect everything together, Cisco conceivably could have more than enough on its smart-grid plate.

What’s more, the home market might prove a tougher nut to crack than the aforementioned areas, most of which are, to varying degrees, “now” markets.

In this scenario, Cisco is treating home-energy management as a secondary consideration, a market segment to be addressed at a later date.

3) Maybe an all-Cisco-branded solution is in the works

In a way, this scenario connects to the first one, and maybe even to the second. Perhaps Cisco is putting together a utility-friendly end-to-end solution that will omit Linksys-branded products. I don’t know whether this scenario is probable — the Linksys brand has consumer cache, and it could be leveraged accordingly — but it can’t be dismissed.

4) Perhaps Cisco is asleep at the switch

Cisco is busy on multiple fronts across a growing number of technology-related markets. It’s entirely possible that Cisco’s market reflexes have slowed, and that it was beaten to the punch by a nimbler rival.

It’s possible, but I’m not buying it. John Chambers and his team waste no opportunity to cite the smart grid’s commercial potential and to emphasize Cisco’s singular suitability to address it. I don’t think Cisco has forgotten about this market.

In all probability, a hybrid of scenarios one and two explains the low profile Linksys and Cisco have projected in home-energy management.

Will Electric Cars Redeem the Smart Grid’s Reputation?

Michael Kanellos of Greentech Media has written a commentary suggesting that electric vehicles might be the silver bullet that overcomes public apathy and outright antagonism toward smart meters and the smart grid.

After explaining that utilities in the United States and Australia have discovered that consumers aren’t enamored of the concept of demand response or of the higher electricity bills that frequently accompany smart-meter rollouts, Kannellos writes the following:

Even avid greenies seem blasé. In Canada, Toronto Hydro has scrutinized the behavior of around 115,000 customers on time-of-use plans. Has cut rate power at night goosed them to shift their behavior? “No. Not really,” said Toronto’s Karen France during a meeting at eMeter’s customer event.

Matt Golden, co-founder of retrofitter/software vendor Recurve, told me recently that the company has installed some energy management dashboards in the homes of clients. After two weeks, the frequency of interaction with the dashboards drops considerably. There have been success stories — customers surveyed in a test conducted by Silver Spring Networks and Oklahoma Gas and Electric were overwhelmingly surprised to learn about their rate of energy consumption — but people seem to be dozing off on what is a very important technology.

So what’s the problem? Utilities and building management outfits are asking people to change their behavior to save pennies. PG&E’s residential rates range from 11 to 49 cents a kilowatt hour. Will you alter your laundry schedule to save 37 cents? Toronto’s spread is 9.9 cents at peak and 4.4 at night.

Indeed, Kanellos identifies the problem, in Toronto and elsewhere. But the problem runs deeper than that, and Kanellos, to his credit, addresses it.

A little later in his commentary, Kanellos writes that consumers are wary of smart meters, and of the larger smart grid, because they suspect strongly that utilities will be the only parties to benefit from them. There’s some truth to that assessment, too, especially when one considers utilities’ operational costs savings: no more truck rolls for meter reading or for shutting down or activating service, plus the capacity to shave peak demand and to avoid having to add costly electricity-generation capacity.

For the consumer? Well, the benefits aren’t so clear, and certainly not as compelling. In some jurisdictions, careful consumer ministrations to smart meters mean only the difference between small increases in electricity bills and larger hikes.

Kanellos thinks electric cars will enhance the consumer appeal of the smart grid. To his way of thinking, electric cars are destined to be a huge hit with consumers, who will come to understand that the smart grid, including charging stations at home and out in the wider community, is essential to the sustenance of their new vehicles. At that point, Kanellos believes, consumers will grasp the importance and value of the smart grid, and they’ll buy into the program the utilities are pushing.

Maybe Kanellos is right. Perhaps electric vehicles will rescue the smart grid from public apathy and infamy. Then again, electric cars will not become ubiquitous overnight. A year from now, even a few years from now, not everybody will have one.

In the meantime, the braintrusts at utilities, regulators, and smart-grid vendors will have to devise other means of engaging, rather than alienating, electricity consumers.

DOE Sounds Alarm on Rare-Earth Metals for Cleantech

The devil is in the details. We’ve all heard the saying, and we know what it means. It’s great to have a big picture and a bold plan, but getting the details and execution right ensures our success.

As the U.S. and other Western countries pursue a future in which clean technologies and renewable energy will play integral roles in economic growth, industrial strategy, environmental sustainability, and societal wellbeing, the details will be increasingly important.

Here’s a detail that’s been overlooked until recently: China produces more than 95 percent of the global supply of rare-earth metals. Some reports suggest that China controls, through ownership of foreign sources as well as those on its own territory, nearly 100 percent of the global market. That’s an important detail, because rare-earth metals are essential ingredients in a wide range of technology products.

Rare earths are integral to the development and manufacture of a wide range of technologies and products used in medicine, consumer electronics, mobile phones, computer networking, data storage, and — last but not least — cleantech (wind turbines, photovoltaics, HVEC batteries and engines, among others).

Without an adequate supply of rare-earth metals, or suitable substitutes for them, the future of cleantech (and many other kinds of technology, too) is compromised.

All of which explains why the U.S. Department of Energy (DOE) yesterday issued a request for information (RFI) pursuant to development of “its first-ever strategic plan for addressing the role of rare earth and other materials in energy technologies and processes.”  The purpose of the RFI is stated clearly:

The purpose of this RFI is to solicit feedback from industry, academia, research laboratories, government agencies, and other stakeholders on issues related to the demand, supply, use, and costs of rare earth metals and other materials used in the energy sector. DOE is specifically interested in information on rare earth elements (e.g., lanthanum, cerium, neodymium, terbium, europium, samarium, dysprosium and ytterbium), gallium, lithium, cobalt, indium, tellurium and platinum group metals, as well as other materials of interest identified by the respondents to this request.

During the Cold War, the U.S. pursued a strategic interest in rare-earth metals, ensuring their exploration, mining, separation, refinement, alloying, and manufacture domestically and in countries such as Brazil, South Africa, Canada, and elsewhere. Then, the Cold War ended, and the focus shifted, primarily because rare-earth metals had been strategic defense considerations in the showdown with the U.S.S.R, which no longer existed. With no need to worry about the U.S.S.R., and cleantech not yet considered strategically important, rare-earth metals were deemphasized.

In the interim, however, cleantech — and especially renewable energy — has become a top-of-mind strategic concern. During the same period, China — emerging as the global manufacturing foundry for a panoply of technology products — seized control of the market for rare-earth metals. China realizes that demand for those key ingredients outstrips supply, and it has been increasingly taking measures to restrict their export. China’s goal, it seems, is not only to control the market for rare-earth metals, but also to control the downstream markets for the products and technologies made from them.

That is why the DOE has issued an RFI and why it feels the urgent need to draft a strategic plan. In a keynote address at the Technology and Rare Earth Metals Conference 2010, David Sandalow, the DOE’s assistant secretary for policy and International affairs, said that it was imperative to globalize supply chains, to develop substitutes for rare-earth metals, and “to promote recycling, re-use and more efficient use of strategic materials.”

Fortunately, rare-earth materials aren’t especially rare. They’re widely found in the earth’s crust. The problem isn’t so much that they can’t be found, but that they’re not being mined, refined, processed, and manufactured outside China. With crisis comes opportunity, of course, and several mining companies in the U.S.A. have plans to reopen abandoned or disused mines.

It’s worth noting that rare-earth materials differ in their commercial applicability and market value. Although not openly traded — not yet, anyway — recent valuations in China suggest “heavy” rare-earth metals are worth more than their “light” rare-earth counterparts. As mentioned in an article in The Australian, covering the recent Toronto convention of the Prospectors & Developers Association of Canada:

Among the “heavy” rare earths, europium (which gives you red on your TV or computer screen) was bringing over $US475/kg; terbium (used in magnets) was worth at least $US340/kg; and dysprosium (magnets and lasers) could bring upwards of $US107/kg.

By contrast, the “light” rare earths are in a different price bracket. Lanthanum (used in re-chargeable batteries) brought under $US6/kg, cerium (used in glass) under $US4/kg, with neodymium (magnets, lasers, glass) fetching around $US14/kg.

If the concerns of the DOE are well founded, market prices for all of the above will rise. If you’re in cleantech or information-technology hardware vendor, you’ll probably want to track these developments closely.

It’s interesting to note that China has used its rare-earth advantage as a lever to draw companies and projects onto its soil. Facing the threat of supply bottlenecks and export controls, some U.S. and European technology vendors have relocated some initiatives to China.

Understanding Implications of China’s Technology Ambitions

Today I want to expand on ideas I have presented previously. I think these concepts, relating to China’s industrial strategy for its technology sector, are important for readers to understand and internalize. Eventually, they will affect most o us, one way or another.

I’ve written often about how the Western companies seeking to sell their products in China confront a genuine dilemma. They really must choose between two outcomes that are likely to be undesirable: They can enter the Chinese market at the risk of losing intellectual property and long-term competitive advantage, or they can refrain from playing in China, perhaps retaining their IP and competitive advantage in other markets but surrendering short-term gains in China to others.

In the end, no matter what path they take, they still might find themselves threatened on the global stage by vendors from China.

Most public companies, with institutional investors breathing down their necks, will plunge headlong into China for the near-term pop. Most of these companies, facing quarterly pressures to deliver results, will not consider, or will choose to studiously ignore, the long-term implications of their decision to play in China by China’s rules. In their minds, they have no choice but to play the game. They don’t want to explain to shareholders why they aren’t chasing what is ostensibly the biggest technology growth market in the world.

Other companies, admittedly in the minority, will choose not to play in China or will limit their exposure there. In limiting their exposure, they’ll also limit their near-term gains, but they’ll also keep most of their core IP and have a better chance of holding off Chinese technology competitors when those players seek hegemony beyond their home base.

And make no mistake: China is pursuing nationalist mercantilism as industrial strategy for its technology sector. China aspirations for the technology sector aren’t limited to its current stereotype as the world’s low-cost manufacturer of consumer electronics, computers, and networking gear. For China, development of its technology sector — encompassing cleantech as well as strategic aspects of information technology and communications — is integral to its long-term economic, industrial, political, and social stability.

China goal isn’t to let Google, Cisco, HP, Applied Materials, Microsoft, Apple, and Nokia boost their stock prices on Chinese’s sales. Instead, China wishes to create its own Google, Ciscos, Applied Materials. And China has created an industrial policy, within the framework of a concept called “indigenous innovation,” to achieve that goal.

Toward that end, China not only promotes companies, such as Huawei, that it wants to grow into world leaders, but it also develops a regulatory structure that inhibits and restricts that gains that foreign companies can make on its soil. In this respect, the aim is to ensure that Chinese companies dominate China’s markets, as Baidu did against Google, and as Huawei is doing against HP and Cisco.

With is “China Out” strategy, 3Com’s H3C master plan was not dissimilar from the national technology blueprint of China itself. There are differences, of course. 3Com is but one company, and it’s less Chinese now, after being bought by HP, than it was before, as an entity that grew from 3Com’s joint venture with Huawei. What’s more, 3Com has less power and fewer resources at its disposal. It essentially wanted to win early customers with low-cost, good-quality products in China, then use economies of scale and aggressive pricing to capture market share elsewhere.

China wants to do essentially the same thing for its technology companies, but it has tremendous power, influence, and resources at its disposal. It can use regulations, policies, and prohibitions to condition the result it desires. It can make life easier for indigenous companies while making life much harder for Western firms operating on Chinese soil. It can devise and enforce rules that require Western companies to disclose intellectual property or other trade secrets as conditions of selling products or winning accounts in the country. It can, and does, establish intellectual-property laws that favor the home side.

I think it’s critical for denizens of the technology industry to fully appreciate what China is trying to achieve. This is not business as usual.

Non-Profit Group Formed to Engage Consumers on Smart Grid

Consumer backlashes to smart meters in Bakersfield, Calif., and Dallas have gotten the attention of utilities and smart-grid technology vendors in the United States.

Too many consumers associate smart meters not with energy conservation and personal-energy savings, but with higher energy bills and no discernible benefits. That’s a problem not just for disaffected consumers, but also for the entire smart-grid ecosystem — utilities, technology vendors, regulators, and governments — which ultimately depends on consumer acceptance of smart meters and other consumer-facing elements of the smart grid.

The smart-grid industry, if I might call it that, has recognized the problem. An awareness has grown that while the industry might have done well in defining its technological requirements and evolving its business practices, it hasn’t been nearly as proficient in educating and communicating with consumers, many of which don’t know much about the smart grid and don’t understand the benefits of smart meters.

To address the matter, the Smart Grid Consumer Coalition (SGCC) has been formed. A non-profit organization, the SGCC comprises a number of consumer electronics and technology companies, retailers, consumer advocacy groups, and utilities. Defining itself as a cooperative rather than a trade association, the SGCC’s mandate involves making sure that consumers understand how and why they will benefit from the adoption of smart meters and other smart-grid technologies.

Founding members of SGCC include Magnolia/Best Buy, Control4, GE, GridWise Alliance (GWA), IBM, NREL (National Renewable Energy Laboratory), Ohio Consumers’ Counsel (OCC), and Silver Spring Networks (SSN). Membership fees haven’t been specified, but the non-profit group has encouraged consumer advocacy and privacy groups to get involved.

The vendors and utilities spearheading the SGCC aren’t entirely selfless. They understand how much their own success is contingent upon consumer acceptance of what they’re selling. To quote Richard Walker, president of Control4 Energy Systems, in a column he wrote for the San Jose Mercury News:

Consumers don’t know what the Smart Grid is, or understand why they should care, and they’re suspicious that the new “smart meters” will mean higher bills, not cost savings. But here’s a certainty: If they don’t embrace, accept, and use the technologies and services the Smart Grid makes possible, none of its benefits can be realized — for consumers, or for anyone else.

Perhaps the SGCC was formed belatedly, but it also has come together with a good deal or urgency and clarity of purpose. We’ll have to see whether it fulfills its mandate.

Google Energy Open to Interpretation

Google isn’t on the cusp of entering the electricity business, but in forming Google Energy, a Delaware-based subsidiary, and requesting regulatory permission to buy and sell electricity on the wholesale market, the search giant has signaled more than a hobbyist’s interest in the energy industry.

The official story from Google headquarters is that Google Energy has sought regulatory approval from the Federal Energy Regulatory Commission (FERC), the agency with oversight over the power grid, because of the parent company’s desire to have flexibility in pursuing its corporate goal of carbon neutrality.

Quoted by Martin LaMonica of CNET News’ Green Tech, Google spokesperson Niki Fenwick explained:

“Right now, we can’t buy affordable, utility-scale, renewable energy in our markets. We want to buy the highest quality, most affordable renewable energy wherever we can and use the green credits.”

I don’t doubt this is Google’s near-term objective. In the long run, well, anything is possible, even Google as an energy purveyor.

Google retains a longstanding interest in energy-efficient computing, particularly in its immense data centers, where savings from reduced energy consumption have the potential to deliver favorable results to the bottom line. With a 1.6-megawatt solar installation at its headquarters in Mountain View, Calif., Google already produces energy to support its operations. Clearly, as its application to FERC attests, it would like to do more, on its own and through the purchase of low-cost, utility-grade electricity on the open market.

In this context, Google’s corporate goal is carbon neutrality. If it attains that objective, though, would Google consider something more ambitious, taking it into the realm of serving the energy requirements of others?

At this point, Google says it doesn’t have “concrete plans” for its energy subsidiary, but that it wants “the ability to buy and sell electricity in case it becomes part of our portfolio.”

That could happen, as Katie Fehrenbacher writes at earth2tech. She cites a New York Times interview with Bill Weihl, Google’s energy guru (yes, that’s what he’s called), who admits to ambiguity about what the future holds for his employer.

As 90s Recede from View, VC Returns Turn Negative

We know that venture capital isn’t the business it was a decade ago. Statistics, contained in a story published in the San Jose Mercury News this past weekend, drive that point home.

As the dot-com boom of the late 90s recedes into the mists of time, we can see that the venture-capital industry has been sickly for the past decade. Quoting from the Mercury News piece:

Venture capital is a long-term investment — one reason why the 10-year return is most often cited in comparing the sector to stocks, real estate and other familiar benchmarks. As recently as June 20, the industry’s 10-year return was as high as 14.3 percent — but that was far below the 34 percent of just one year earlier.

Now the dazzling 83 percent return to investors during the last three months of 1999 — the industry’s best quarter ever — has rolled off the industry’s 10-year performance record. The next report, Ganesan predicted, will put the ten-year return well south of -5 percent.

The longterm inclusion of data from the dot-com boom, many say, served to camouflage what former venture partner Georges van Hoegarden characterizes as the “sub-prime” performance of the sector in recent years.

Just to be clear, with the late-90s surge now excluded from the frame of reference, the decade-spanning return on investment for the VC industry is now -(as in minus) 5 percent. Limited partners will take a long, hard look at that forlorn number and question whether they want to bet their money at the same table. In many cases, they’ll decide to go elsewhere.

Yes, the mainstay venture-capital firms — Sequoia Capital, Accel Partners, and Norwest Venture Partners among them — are managing to buck the trend. They’ll continue to produce results and find favor from limited partners. A lot of other venture-capital firms will go the way of the dinosaur, though, with the herd being thinned to an unprecedented degree.

Another trend is at work, too. The IPOs and acquisition-related exits of the future will come increasingly from non-IT sectors. Clean-tech companies figure to be at the forefront of the action. When the best that IT has to offer is a social-networking service as ethically conflicted and vapid as Facebook, you know the halcyon days are long gone.

The world is changing, and venture capital will have to change with it.

What Intel Capital and Cisco Have in Common

What do Intel Capital and Cisco have in common?

Well, they probably have a few things in common, but something they definitely share is an interest in promoting and profiting from proliferation of the smart grid.

It’s an obvious connection.

Intel makes microprocessors, and it’s eager to get its chips into any IP-connected device that requires, or could benefit from, an electronic brain. Meanwhile, Cisco is the world’s leading purveyor of IP-based network infrastructure, including routers, switches, and wireless networks. Once all the embedded devices and end points on the smart grid have electronic brains, they’ll need to be networked to share and disseminate data.

Talking to Fortune’s Michael V. Copeland about Intel’s investments in companies that promote ubiquitous computing, Arvind Sodhani, Intel’s head venture capitalist, said the following:

“We benefit from growth in all those areas. Take clean tech and the electric grid. As the grid becomes more intelligent, more computing will go into things like household meters. We want to get our Atom processor into meters, and there are 120 million households in the United States alone.”

It makes sense. As conventional information technology (PCs, servers, enterprise networks, service-provider infrastructure, etc.) advances further into slow-growth maturity in the developed world, vendors such as Cisco and Intel will be seeking greener pastures in cleantech adjacencies.