Most media coverage has highlighted the growth in laptops, mobile devices, servers and routers, but more eye-opening is the coming wave of “smart” grid devices that will need to have their own IP addresses. Thermostats, smart meters, dish washers, laundry machines/dryers, intelligent lighting (in homes and buildings), electric cars — really any appliances or devices or machine that will be controlled remotely through the Internet. Here’s a question I honestly have no answer to: Are energy management and smart grid/appliance companies — General Electric, for example — aware of this coming shortage of IP addresses, and have they taken the necessary measures to avoid the crisis?

Network World had an informative article on this issue in October.

Apparently it’s not difficult to migrate from IPv4 to IPv6, but it does require a lot of investment in software and hardware upgrades. Will the energy sector be caught off guard by this? I’d love to open this up for discussion from some more knowledgeable people… please enlighten us.

Are we being paranoid? Maybe — but then again, the privacy erosion that came rapidly with the Internet caught many consumers and businesses off guard. Certainly, it’s worth learning from past mistakes and thinking about these privacy issues before, rather than after, the infrastructure and supporting applications for the smart grid are rolled out. Cavoukian co-authored the paper with Jules Polonetsky and Christopher Wolf, who are co-chairs of the Washington-based Future of Privacy Forum. Polonetsky, it should be pointed out, is former chief privacy officer of AOL and, before that, online-advertising pioneer DoubleClick, which was acquired by Google in 2007 for $3.1 billion (U.S.).

Disclosure: I co-authored a consumer privacy book with Cavoukian back in 2002 called The Privacy Payoff.

My column today was a snapshot of some energy management projects going on in Ontario, a sign that local utilities are getting energized about the possibilities of energy conservation, given the right technologies in the hands of homeowners and businesses.

I mentioned Milton Hydro’s 200-plus household project in Ontario, but I’d like to provide some context because the results only tell half the story. Here’s what I wrote in the column:

The pilot project, conducted between July 2007 and Sept. 2008, was a collaboration between Milton Hydro, Direct Energy and Bell Canada. Households were given the ability to monitor their energy use through the Internet, as well as through BlackBerry-like devices, and to remotely control the lighting and operation of appliances in their homes.

An easy-to-use Web interface, designed by Toronto-based Lixar SRS, gave them a detailed view of how much electricity individual appliances were using at any point in time. The results showed that one in 10 participating households, when handed this control, used 16 per cent less electricity over 12 months and 18 per cent less during peak periods.

I say only half the story because the Milton project was a bit of a mish-mash of different technologies, some of which worked and some that didn’t work so well. The fact that only 10 per cent achieved savings above 15 per cent per cent is a bit misleading because, as I understand it, different homes were tested with different technologies and protocols. The only common thread was the Lixar SRS energy management software, which Direct Energy hailed as the best part of the project. I’d like to emphasize this because Toronto-based Lixar is another Ontario cleantech company making waves beyond provincial borders. “The most impressive was the Lixar interface,” said David Dollihite, vice-president of product development at Direct Energy. “Lixar has got a leading edge customer user interface for the presentment of energy usage information, and the ability to turn that information into something that’s actionable.”

An example? Some participants in the project were given the capability of participating in provincial demand-response programs. During DR periods, participants saw savings of 44 per cent. Pretty damn good. I’ve taken the Lixar software for a spin, and have to say it lives up to expectations and is super user-friendly. Not only can you monitor overall home electricity use, but you can see what individual devices are using, you can look at historical usage trends, and you can control all of this remotely through an Internet connection or a mobile device. As entire neighbourhoods or cities adopt this technology, one could eventually get the ability to compare your usage to your neighbours or your city average, as well as compare your city to other cities.

There still exists, however, some skepticism in the market. A handful of utility executives have downplayed the new high-tech tools that give homeowners more control. All the bells and whistles are overkill, they argue, adding that most people don’t have the time to monitor their energy use or participate in demand-response programs.

Sure, there’s an element of truth there, but only for those stuck in the past. A retiring boomer couple might not be so enthusiastic, but what about the next-generation of homebuyers who grew up text-messaging their friends, frequenting Facebook and Twitter, and doing their banking exclusively online? I would embrace this technology in a flash if it was available.

It wasn’t long ago that some people dismissed the idea of banking online, or failed to see the value of carrying around a BlackBerry device all day. But my children, for example, will grow up managing their household energy just like they manage their finances, sell stuff on Craigslist, and keep track of friends and family on social networking sites. It will become second nature, and the fact that energy prices will be much higher than they are today will be strong enough incentive.

Don’t believe it? Then ask yourself why Internet giant Google announced in February that it was entering the residential energy-management market with prototype software called PowerMeter? The software, which is expected to be distributed for free, offers similar though less detailed feedback on power use that homeowners got from the Milton Hydro trial using Lixar SRS’s technology.

Google, pretty good so far at spotting trends, has also teamed up with General Electric on smart grid development. GE and other appliance manufactures are readying next-generation washing machines, dryers, dishwashers, air conditioners, and other appliances embedded with switches that can be turned on and off remotely.

If Google’s interest in the market isn’t enough, then maybe the involvement of broadband giants like Bell Canada, AT&T, and Comcast will convince you. Several major telecom companies have announced partnerships with utilities and smart-grid providers because they see the trend taking shape, and they know communications infrastructure will play a crucial role.

Clearly, this future is coming and it’s encouraging to see a Toronto-based company being so far ahead in the game. Lixar, a relatively stealthy venture, is being tested by Duke Energy and Progress Energy, has partnered with HD Supply, and is working with Cisco on smart-grid projects. That’s just scratching the surface, sources tell me. More has been developing behind the scenes.

It would be a decent chunk of change, at least measured against the pittance the federal government has allocated for the entire country — that is, some unknown portion of a $1 billion “green” fund spread over five years. In the United States, a stimulus bill under discussion would devote $11 billion (U.S.)  over two years.

On an annual per capita basis, the U.S. would spend $18 (U.S.), compared to $25 (Canadian) under the recommendations proposed for Ontario and a potential $6 offered up under the federal budget. Clearly, the Ontario task force recommendations — if acted on — would signal how serious the province is about becoming a global leader in smart-grid development.

David McFadden, an energy lawyer and a member of the task force, said the province is leading the continent with smart meter deployments but shouldn’t, at this critical juncture, rest on its laurels. Smart meters, he said, are but one small — albeit significant piece — of a much larger, more powerful puzzle. “What we should be doing is moving rapidly and taking a real lead in terms of systems, technology, software, all the way through the entire electricity system,” said McFadden

Now we’re talking. Fact is, Ontario has many things it can leverage — a world-class transmission utility, a diverse power mix, a strategy to shut down coal plants, and a commitment to renewables. We also have a strong telecommunications and IT heritage that, combined with our expertise in traditional energy fields, could be used to make Ontario a clear leader in smart-grid development. All it needs now is a comprehensive plan, a vision behind it, and a commitment from both government and the private sector to come together and make it happen. It could become a significant source of job creation for the province, and a significant path to export opportunities.

For his part, Premier Dalton McGuinty — while not talking details or showing any cards (yet) — indicated in a speech today that he’s committed to this direction. In fact, the smart grid is expected to be part of McGuinty’s new Green Energy Act, which will be tabled sometime around Feb. 17. The legislation would be all about enabling renewables, by streamlining regulations and upgrading the grid. Tied to this is job creation. McGuinty said this week that he’ll leverage this legislation to help spur the creation of 50,000 “green” jobs over the next three years.

“We need a 21st century electricity grid that can better meet the changing nature of power consumption in Ontario,” said McGuinty. Again: We’ve got the commitment, which of course is just words at the moment. The details will be what matters, so we’ll have to wait a couple of weeks.

Skeptics in the crowd might question whether the Ontario government is bold enough to make the changes and invstments necessary, and that does indeed remain an open question. The province, however, really has no choice. McGuinty uses hockey analogies like “bring up our game” and “go where the puck is,” but in reality — to extend this analogy — what we’re talking about here is the need to get off the bench and start driving towards the net.

We’ve been passing the puck (the buck?) for too long while the clock it ticking and the other team is leading. It’s time to shoot! shoot! shoot! before the buzzer sounds and the game is over.

I’m encouraged by many of the end-of-year stories coming out of the greentech community. Most of them argue that the “smart grid” will be a major story in 2009, and as my own year-end musings show I couldn’t agree more. In fact, my final story of the year is about the smart grid and its inevitable coming into being. Much of my story is through the seasoned eyes of Marzio Pozzuoli, founder and CEO of Woodbridge, Ontario-based RuggedCom Inc., the leading supplier of hardened communications gear to utilities around the world. In other words, RuggedCom sells routers, switches and wireless equipments for electrical substations. As more of this gear is installed we begin to see the grid as an extensive two-way communications network, able to collect and transmit information to where it’s needed. The next step? Creating the software and setting up the systems that can organize, analyze and ultimately act on the information collected in a way that improves the efficiency, reliability and self-healing capability of our electricity system and makes integration of renewables and distributed generation much easier. No wonder the likes of IBM, Hewlett-Packard, Cisco, Oracle, Microsoft, Google and other giants of the IT sector are beginning to take notice and position themselves in what promises to be a massive market.

Anyway, check out the story. Also, here are two other recent stories about the smart grid you might enjoy: Greentech Media and Technology Review. For your further reading pleasure, check out a new report from the Electric Power Research Institute and an excellent smart-grid technology overview released in September by the U.S. Department of Energy.

UPDATE: Perhaps it’s just a coincidence that this happened with the publication of my smart grid story, but RuggedCom’s stock shot up 25 per cent today and hit a 52-week high. There are not many companies ending 2008 who can claim they’re trading at a 52-week high!

The same thinking is happening in the United States. That is, the idea of modernizing and beefing up the grid so solar power in the southwest and wind in the mid-west can be carried to other parts of the United States less rich in renewable resources. Guys like Al Gore, Barrack Obama and Vinod Khosla are big promoters of a smart-grid buildout, and rightly so.

It’s an inevitable course. If the oil and gas companies can build massive pipelines that pump petroleum from one side of the continent to the other, there’s no reason we can’t get to a stage where the abundant electrons in a nation’s solar, wind, water and geothermal “reserves” can be pumped to far-off markets in need.