news.com’s greentech has a post on the potential for Smart-Grid to be a Bubble.

Is smart grid the next green-tech bubble?

by Martin LaMonica

WASHINGTON--Here at a conference on the utility of the future, the starring players are Google, IBM, Cisco Systems, Intel, and smart grid start-ups. The reason? Data.

Modernizing the grid isn't just about installing more transmissions lines and smart meters. It's a giant information challenge as well, said attendees of consulting firm Kema's Utility of the Future conference here on Thursday.

The heavyweight IT companies are seeking to capitalize on initiatives around the world to upgrade the power infrastructure. The U.S. Department of Energy is expected to soon announce how billions of dollars in stimulus money for smart grid will be allocated.

Smart grid has also become one of clean-tech venture capitalists' favorite areas, spawning dozens of start-ups with ways to make the grid run more efficiently and integrate more solar and wind power.

Altogether, it's a combination that could end up creating a bubble, said Diana Propper, a clean-tech venture capitalist at Expansion Capital Partners.

"I worry that there's so much money being sloshed around, whether it's venture capital or corporate or government money, that it will be spent inefficiently," she said during a panel. "The risk of a bubble is real."

And, the vendors see the opportunity as data increases.

Koch added that the stepped-up presence of IBM, Cisco, Intel, and Google in the utility industry could stiffen competition for smaller firms.

Data overload
To understand the interest of the major IT companies in the smart grid, consider Duke Energy's program.

It has 5 million meters installed in its territory and each customer has a few major appliances, such as water heaters and refrigerators. Each one of those devices--in addition to hundreds of thousands of sensors on the distribution grid--could be networked.

To collect and make sense of the mountains of data these devices produce requires a robust network and sophisticated IT systems.

"Just the number of devices to be connected and the volume of data that needs to be processed--it's enormous," said David Mohler, the chief technology officer of Duke Energy. "We realized early on that we needed to create an information architecture. That's not a utility's sweet spot."

Instead, the utility contracted with Cisco to build that data communications network. Duke is already testing smart-grid technology and plans larger-scale deployments in Ohio and Indiana starting at the fourth quarter of this year.

Home energy management is another important piece of smart-grid programs. Microsoft and Cisco as well as telecom companies, such as Verizon, have said they expect to make energy monitoring an extension of existing home networks.

Here in the US, I am waiting for the attorneys to jump on the privacy issues monitoring people’s power consumption. Can you imagine the legal release required to give utilities permission to use your data, store it, and share it with others.