-1“Every utility will have its own version of the iTunes App Store,” said Austin Energy, CIO of Austin Energy, during this morning’s utility panel at GreenBeat 2009 in San Mateo, Calif. — essentially, every major utility, in order to be at the cutting edge of the Smart Grid, will need to have a full portfolio of applications that can help their customers trim their energy use and their monthly bills. This has become vitally important, especially for utilities operating in deregulated markets, like Texas, where customers can decide which energy vendor to use based on the breadth of services they provide.

Carvallo listed the many applications — some of which will be built by the utilities of themselves, some of which will be provided by third-party companies — that will be needed in order for utilities to become more reliable, and build cleaner, more efficient electricity transmission systems. These applications include home energy management monitors (ranging from Tendril to AlertMe to Google PowerMeter and Microsoft Hohm), as well as demand response programs, and mesh networking software made by companies like Trilliant and Silver Spring Networks. Customer will be expecting these capabilities, under the banner of Smart Grid 2.0, Carvallo said — a notion also backed by Southern California Edison vice president of advanced technology, Paul De Martini (above right).

“In the U.S. the average disruption time (blackout time) is 120 minutes. In the southeast it’s as much as 400 minutes,” Carvallo said. “In Japan, it’s 3 minutes.” That’s the kind of reliability that customers are already demanding.

Even though Austin Energy and SCE were not included among the companies receiving the Department of Energy’s $3.4 billion in Smart Grid grants (SCE didn’t apply because it wouldn’t have increased the number of jobs at the company), they are perhaps the farthest ahead in this race toward applications increasing conservation and reliability.

While utilities are competing for who will be the first to create the most important Smart Grid developments, application makers are competing for utilities’ attention. Carvallo highlighted exactly how challenging of a proposition this is. With so many companies in the space offering home energy management services, or even smart metering hardware, he said whoever is able to offer open and universal standards the best and earliest will win the coveted contracts. “Get in line,” he said, while at the same time acknowledging that utilities have no choice but to depend on third-party app makers in order to succeed.

SCE’s De Martini also had some words of advice for app makers looking to land utility deals. “We have 5 million residential customers and 30,000 industrial and commercial partners,” he said. “Any app needs to be able to be applied very broadly and still create value.” Carvallo followed this up, recommending that app companies send their engineers to speak with utilities first. “Send the sales guys at the end to close,” he said.

Panelist Dan Yates (top photo to left) is the CEO of one such third-party app company, OPOWER, which provides detailed energy consumption data reporting services, as well as consumer-facing recommendations for how to save energy and money. The company has deals with 20 utility companies, including Seattle City Light, and is currently serving 2 million homes — it’s one of the recipes that’s been more widely adopted.

“Utilities have so much to worry about — peak demand, distribution, reliability,” Yates said. “OPOWER has moved so quickly into the market because it actually yields demonstrative reductions in consumption.”

VentureBeat is hosting GreenBeat, the seminal executive conference on the Smart Grid, today, featuring keynotes from Nobel Prize winner Al Gore and Kleiner Perkins’ John Doerr. Register for your ticket today at GreenBeat2009.com.

[Photo credit: David Lin]