Smart grid money not at home, says Khosla  

EETimes has an article on recent comments by Vinod Khosla deprecating the smart meter market and saying the real money in smart grids will be in transforming the infrastructure of the grid itself - Smart grid money not at home, says Khosla.

Cybersecurity will be the killer app for smart electric grids, and it will require a new generation of power electronics technology, according to Vinod Khosla.

The veteran venture capitalist said the conventional wisdom about smart grids is all wrong. It is not about smart meters delivering real-time information about electricity pricing to consumers.

Changes in consumers' use patterns could result in 5 to 15 percent reductions in electricity use. But those small gains could be cut in half with the development of more energy efficient appliances, said Khosla.

"Suddenly, demand-response applications won't have a payback," he said in a talk at the Greenbeat conference here. "If you have highly efficient systems, energy storage or distributed generation, you don’t need demand response," he added.

The real driver for smart grids is the need for a more flexible and reliable electric grid, so that a falling tree that takes out power lines in Ohio does not create a blackout in New York City, he said. "What if a Russian hack-athon brought down 20 million U.S. homes with a competition based on the winner is the one who cuts electricity to the most homes," he asked, sharpening his point.

To create a more robust, self-healing electric grid, developers need a new generation of digital, networked components, Khosla said.

"We need a whole new class of devices and systems," said Khosla."A 50 year-old transformer made of copper wire wound around a ferrite core, can't respond to a signal, so we can't control it," he said.

"If we invest in new power electronics devices, things will change radically over the next five to ten years," he said. "The design of existing systems will change based on these new components," he added.

Khosla challenged the findings of a McKinsey study that said the smart grid could reap roughly equal savings by 2019 of about $60 billion each in the home and in the back-end grid. The potential savings in the home are likely to be a fraction of that figure while the back-end network savings could be much higher, he argued.

"We have to re-do the core infrastructure of the grid that has tens and hundreds of billions of investments in it," said Khosla.