Making the Smart Grid Smarter Through Instant Messaging: A Talk with EnerNOC’s David Brewster

Late last month, Boston-based smart grid company EnerNOC (NASDAQ: ENOC) revealed that it’s looking to the consumer Internet for a new way of managing its “demand response” pools.

These are the groups of companies and municipalities that, in return for cash payments from EnerNOC, sign up to have their electrical consumption dialed back remotely in times of peak demand. EnerNOC markets the pools to utilities and grid operators as the equivalent of a new generating source (since utilities that tap the pools can avoid building more power plants or turning to expensive “peaking plants” just to fill in during peak hours).

The only problem with EnerNOC’s first-generation demand response network, which it’s been building since 2001, is that it can’t be activated quite as quickly as conditions can change on the electrical grid. Utilities and system operators are used to seeing how much power is available in real time—but EnerNOC’s system pulls information from its 5,000 customer sites at intervals ranging from every 20 seconds to every 5 minutes. To make the demand response pools look and behave more like a conventional supply-side resource, the company needed to get data more frequently.

So it turned to instant messaging. EnerNOC’s new “PowerTalk” networking technology, which has already been installed at more than 250 customer sites, is based on the same protocols behind common IM programs like Windows Messenger, AOL Instant Messenger, or Google Talk; data is “pushed” from the sites to the company’s network operations control center whenever there is a change to be reported, rather than pulled at rigid intervals. The company says that makes the demand response pools more suitable for wholesale electricity markets that require high-frequency data reporting, such as the PJM Interconnection organization that serves 13 eastern states.

The instant-messaging angle caught the fancy of journalists, who reported the story widely back in late April (“OMG! EnerNOC Brings Instant Messaging to the Smart Grid” was Fast Company‘s headline). So when I caught up recently with EnerNOC co-founder and president David Brewster, I wanted to ask him more about how PowerTalk improves on the company’s existing communications network, how quickly it will roll out the technology to customers, and whether EnerNOC hopes the idea will catch on more widely as utilities and the Obama Administration look for ways to make the electrical grid smarter. An edited version of our talk follows.

Xconomy: Set the stage for this PowerTalk innovation by describing how your first-generation information network functions. You had built a system that go out and “poll” the smart meters at customer sites, correct? What was deficient about that?

EnerNOC co-founder and president David BrewsterDavid Brewster: We did have the ability to poll devices, at any frequency we wanted—say, every 20 seconds. But when you’re dealing with 5,000 devices out in the field, it becomes a scheduling challenge. Our network operations center (NOC) would reach out to each of these 5,000 distributed devices and say, “Give me your info, give me your info, give me your info.” We had what we called “near-real-time” connectivity to our devices. Some markets required a 1-minute data interval, some only 5 minutes. We put those into a schedule and we’d have to literally reach out and pull the data back into the NOC.

X: And how is PowerTalk different?

DB: The big difference now is that we’re doing real-time monitoring. Through the technology in PowerTalk, the devices now have the intelligence to push data to our NOC. That makes it much more scalable. The other benefit is this concept of presence, which means that any time there is a status change on any of these devices, we know instantaneously, in seconds or less, which is the same frequency with which grid operators and monitoring and managing their centralized generation facilities. We can now operate with that same kind of data latency. So our demand response pool starts to look and feel to the grid operators and utilities like something they’re used to seeing—it looks like a traditional supply-side resource. That was a big mental barrier for them, and we think it’s going to get them much more comfortable with demand response as a resource.

X: Does using a standardized technology like instant messaging make the communication itself simpler for you?

DB: Before, when we had to poll these devices from our NOC, we had to reach out and get into the customer’s network to reach the device. We needed to set up a virtual private network with the customer’s IT department to tunnel in securely, or we’d need to set up a cellular wireless card or a dedicated DSL line, which are both expensive. With PowerTalk, we have overcome those hurdles. We literally bolt our device to the wall and plug into the customer’s local-area network, and it goes out onto the Internet and finds our NOC and self-registers and establishes a secure handshake. It’s just like an employee at that site sending an IM to one of their friends. That enables us to scale our network much faster. It means customers can get enrolled much faster and start collecting revenue much faster. That was the whole driver for us.

X: Instant messaging technology has been around for much longer than EnerNOC has been around—so I’m guessing that when you first started deploying your polling-based technology, there was some economic reason to do it that way?

DB: It’s not so much economics. Instant messaging technology existed, but until PowerTalk nobody had applied instant-messaging protocols to the smart grid space. It just wasn’t something that was done. It’s something we have invented and filed a patent on. It’s not even something that came to us right away; it’s an idea that came up after years of building out our network and installing at thousands of sites. Polling is quite common. You said “good enough” and most people think it is. Most of the advanced metering stuff is done by pull, as opposed to push.

X: Had the polling approach become unmanageable as you added more customer sites?

DB: It didn’t become unmanageable, it just became a scheduling pain in the neck. It’s also expensive because it requires building server after server. It’s not that polling is unmanageable, but that this path is much more efficient. People at our NOC can now sit back and fold their arms and watch the data roll in.

X: Are you going to replace all of your legacy polling technology with PowerTalk?

DB: We’re going to do that over time. Our legacy devices are still in the field and will continue to be in the field until we have some reason to change that. What we’re doing is enabling PowerTalk and rolling it out for new customers. As of a few weeks ago, only 250 of our 5,000 devices had PowerTalk. Now it’s a much larger number. We’re not going to retrofit all of the existing sites unless we have a good reason to do so. To be clear, the existing network isn’t broken: this is just a much more elegant, efficient solution.

X: If you aren’t going to retrofit your existing customers with PowerTalk, you must believe that your base is growing fast enough to make the switch to the new technology worthwhile.

DB: I sure hope so. We believe we are in the very early innings of demand response. We are nowhere near full penetration. We have a lot more growth ahead of us. Going forward, when we sign a new utility deal, all of those sites will be entirely PowerTalk-enabled. It’s not like utilities are asking for this, or that grid operators are requiring it. It’s something we’re pursuing because we want demand response to be on an equal footing with supply-side resources.

X: Does PowerTalk really draw on the standard Internet instant-messaging protocols? And do those protocols have the type of security built in that you need for smart grid applications?

DB: The standard protocol that has existed for almost a decade now is called XMPP, the Extensible Messaging and Presence Protocol. It’s a technology that is used for telepresence—stuff like what Cisco is doing—and the same technology is used in Google Talk and all of the instant messaging services. For example, you know instantly when you log in at Google Talk whether your contacts are online or offline. There are bodies that exist to keep this standard up to date, to make sure that it’s open and secure. So it’s a very established, vetted, proven communications protocol for the Internet, and what we’ve done is to apply that to our needs to solve problems that we had in the smart grid space. We’ve layered it into the software stack of PowerTalk, and have added the business logic, so that our boxes know exactly when to send a signal to our NOC. We filed a provisional patent on all that in December 2007.

X: That sounds like the kind of innovation that could be very useful for larger smart grid efforts, which are a big priority for the Obama Administration as part of the stimulus package and its larger energy policy. Are you willing to share or license the technology, or contribute it for consideration as an open standard for utilities and grid operators?

DB: We are absolutely in active discussions about that. We’ve been meeting with the Department of Energy, the Electric Power Research Institute, and the National Institute of Standards and Technology about development standards for the grid, and we think PowerTalk should be part of that dialogue. XMPP in the smart grid checks off a lot of the boxes that we need in the industry. It’s an open standard that is entirely secure and will enable interoperability between devices and IT systems. We do hope it will become the standard in the industry.

X: But are you willing to contribute the PowerTalk technology to the grid community, or license it cheaply, in order for that to happen?

DB: We don’t own XMPP, so the standard we’re talking about is already open. That should be the underlying standard that enables interoperability. In terms of PowerTalk, it would be foolish for anybody to think that there are not going to be some patents that overlap with the standards. We need to think as an industry about how we work through those. To say that there can’t be anything patented or proprietary, that it all has to be standards-based and royalty-free, is not the way it is probably going to take shape. But we are wide open to ideas about what we can do, moving forward. The most important thing to us is the advancement of demand response, and we think we’ve come up with something that advances that. We’re willing and able to work with all parties to keep that going.

Wade Roush is the producer and host of the podcast Soonish and a contributing editor at Xconomy. Follow @soonishpodcast

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