The Viridian Design Movement

Viridian Note 00394: The Smart Energy Industry

Key concepts
smart energy, Pacific Northwest, Patrick Mazza
Attention Conservation Notice:
of primary interest to clean energy wonks. Lots of irrelevant but entertaining links.


Viridian List, proudly brought to you from Austin, Texas, the newly-proclaimed "Clean Energy Capital of the World." Christmas came early for the Texas solar biz.

This whimsical Thai elephant skyscraper is not quite what we had in mind when we were rhapsodizing about zoomorphic Tech Nouveau.

Biomimetic structures out of digitized tumbleweeds.

And other bio-structures, too, and in Barcelona, the home of Gaudi, wow.

The Artificial Life Awards in Madrid. What gives with the Spain theme lately?

This 3-D airborne computer-mouse "bat" is either really cool or just nuts. One of the things I like best about Tech Nouveau is that it's so much fun to criticize.

It's the holiday season. Let the kids play with the drumset. So what if they're a little noisy.

The Majestic Windmills of Native America.

(((I can't exult about the lavishly underwritten Austin solar industry without allowing Patrick Mazza to lay it on the line about the scale of what is going on up in the Pacific Northwest. It's a complex story, but it repays some attention to the details, because it's basically the same development that is happening here, or trying to happen. Move that wind and hydro, companeros, we sun-dazed Austinites are with you all the way.)))

Patrick Mazza,   Smart Energy Bulletin #5

Northwest Positioned to Lead Global Smart Energy Industry

(This is the final installment of the Smart Energy Bulletin series. All rights to publish and reproduce are granted. The full series is available at

By Patrick Mazza

It is a budding Northwest tech sector composed of at least 225 firms with $2 billion in yearly revenues. It is a globally significant player in a rapidly growing new industry that has now reached $15 billion annually. It counts among its ranks world leaders and a host of innovative start-ups. Within 20 years it could rival such other major Northwest sectors as aerospace and microprocessors in terms of employment and revenues. It is Smart Energy, the application of computer technology to the electrical power grid.

Over recent decades microprocessors have spread throughout economic sectors ranging from retailing to manufacturing. Electrical power is "one of the few industries yet to feel the full impact of computerization," notes Prospects for the Smart Energy Sector in the Pacific Northwest, a new report from the Athena Institute's Center for Smart Energy, developed for the Poised for Profit Partnership. But the power industry is rapidly catching up. In essence, the entire electrical network from power plants to substations to home appliances will be smart and software-driven. 

One of the strongest drivers for Smart Energy technologies is the need to modernize an aging and overstressed power grid for reliability, dramatically underscored by recent blackouts in the Northeast and in Europe. From 1988-98, electricity demand grew twice as fast as transmission capacity. The Electric Power Research Institute estimates that the power delivery piece of the grid has been running an investment deficit of $20 billion per year and will require $100 billion over the next decade to catch up. Much of this investment will involve upgrading 1950s and 60s technology with modern digital systems, spelling tremendous opportunities for the Northwest.

"The region has quietly become one of the world's leading centers of Smart Energy research, products and commercial activity," the Athena report notes. 

As Athena inventoried the Northwest Smart Energy sector, this picture emerged for the first time.

"We did not realize the magnitude of what is here until we started this study," says Jesse Berst, one of the lead researchers. 

To comprehend the region's global stature, consider these Northwest leaders:

  • Itron, an annual $600 million firm based in Spokane, is the world leader in advanced power metering and also has a strong presence in utility software.

  • ALSTOM EAI, with 400 employees at its Bellevue headquarters, creates software used by 40% of the world's major utilities, and the software programs on which 80% of the world's wholesale electric markets run. It grosses $130 million annually. 

  • Schweitzer Engineering Labs of Pullman, Washington makes compact solid-state power electronic switches that replace bulky electromechanical systems. It draws $140 million annually.

  • Xantrex, based in Burnaby, B.C. with a manufacturing plant in Arlington, Washington, makes a substantial share of the power electronics that control solar panels and other small scale power generators. It grosses $135 million a year.

That a Northwest Smart Energy sector is emerging is not surprising considering the region's assets. Smart Energy plays to existing Northwest technology strengths.

"This sector has enormous synergies with software, semiconductors and wireless telecommunications," points out Berst, a veteran technology analyst and Internet pioneer.

The Northwest also has a heritage of power engineering expertise rooted in the development of the hydroelectric system and a transmission network that exports hydropower all over the west. One particular piece of that heritage is the presence of two of the nation's finest power engineering programs at University of Washington and Washington State University, and a noted electrical engineering program at Oregon State University. 

"We're expanding here because of the base of expertise and two great universities," ALSTOM EAI CEO J.D. Hammerly notes. "Washington is one of the few states with flourishing power engineering schools." 

Those schools are part of a regional power technology research and development base that also gives the Northwest a significant edge. Schweitzer, for instance, began with technology developed at WSU. Powertech Labs in Surrey, BC maintains one of the few high voltage research facilities on the continent. PNNL in Richland, Washington is a national and global center for developing the energy systems of the future, working on everything from smart appliances to intelligent systems that make it possible to manage networks of small-scale distributed generators.

"You have to have the intelligent grid for the full benefits of distributed generation to take hold," says Mike Lawrence, who heads up energy research at PNNL. 

One of those benefits is cleaner air, since distributed generation includes low pollution energy generators including fuel cells, and zero-pollution technologies such as wind turbines and solar panels. Generating power close to where it is used improves efficiency as well since it eliminates the standard 10% loss of electricity when it is transmitted long distances.

The Athena report represents a milestone. Not only is it the first identification of a substantial regional technology opportunity == It also signifies powerful support for fully catalyzing that opportunity. The report is the product of the Poised for Profit II partnership joining Bonneville Power Administration, City of Portland, Leading Edge British Columbia, NW Energy Technology Collaborative, PNNL, Oregon Institute of Technology, Portland Development Commission, Portland Business Alliance, Portland General Electric, Seattle Office of Economic Development, and Washington Office of Trade and Economic Development. The partnership was initiated and is administered by Climate Solutions, a nonprofit that seeks to make the Northwest a global warming solutions leader.

"As recent blackouts have shown us, there are economic, safety and environmental reasons driving us to upgrade our power generation, transmission, distribution and end use systems," says Climate Solutions Co-Director Rhys Roth. "Smart Energy offers a double dividend: cost- effective solutions for the electrical grid and a major job creation opportunity." 

The partnership is the follow-on to the Poised for Profit I effort in 2001 that overviewed Northwest prospects to develop globally competitive clean energy technology industries over the next 20 years. That study concluded the region could create 32,000 jobs in this sector over that timeframe if it plays its policy and economic development cards right. The new partnership aimed to identify the hottest growth prospects over the next 3-5 years and concluded that Smart Energy represents the greatest near-term opportunity for the region. 

The report recommends a series of steps the region should take to build its Smart Energy sector. Among them:

  • Give utilities regulatory incentives to use Smart Energy technologies. For example, Smart Energy dramatically improves efficiency, thus reducing the gross amount of power delivered to customers. But that penalizes utilities, whose earnings are tied to power deliveries. Rules need to be changed to give utilities incentives to deliver efficiency services to customers.

  • Create testbeds to prove Smart Energy technologies. Most utilities do not view themselves as early adopters of new technology. Technology testbeds provide proven track records that help build markets. The Northwest's leading- edge Smart Energy companies, innovative utilities and world-class energy research centers are capable of mounting globally significant testbed efforts.

  • Pull together regional Smart Energy research and development efforts. Coordinate the region's research centers to avoid duplication, and join in initiatives to draw new funding to the region. 

  • Build regional markets for Smart Energy technologies. Public agencies should incorporate them into their buildings and operations. Individual consumers should be financially assisted to buy regional Smart Energy products in order to build the marketplace.

"The Northwest already has the beginnings of a Smart Energy cluster," the report concludes. By supporting it through concerted regional action "we can add fuel to the flame." (((Fuel to the flame? What's with the combustion metaphor? You really had me goin' there!)))

Prospects for the Smart Energy Sector in the Pacific Northwestcan be downloaded from

Patrick Mazza is a Climate Solutions researcher. He can be reached at 206-920-6393 or

Rhys Roth
Climate Solutions
610 4th Avenue E
Olympia, WA 98501
ph 360-352-1763, x101

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