Google Power Meter

Lord Kelvin said it more than a century ago: “If you cannot measure it, you cannot improve.”

Today, it’s become a business cliche: “What you don’t measure you can’t manage.”

In that light, and against the backdrop of the UN climate negotiations unfolding here in Copenhagen, Google, GE, The Climate Group and NRDC came together to call on governments around the world to provide people with real-time information on their home energy use.

Simply getting useful and timely information (as opposed to a monthly bill) about their electricity usage drives people to curb usage and reduce their greenhouse gas emissions by 5 to 15%, the companies said and studies show. When their usage is compared to their neighbors’, they cut back even more.

“This simple but bold call to action makes common sense,” said Steve Fludder, who oversees GE’s EcoMagination efforts.

The technology to deliver real-time information about electricity consumption — essentially, a meter and software — exists today and it’s not expensive.

GE makes so-called smart meters that it sells to electric utilities.  It is also developing a wireless home energy monitor to be sold to consumers that will measure electricity usage, let consumers know which gadgets or appliances are using power, and communicate with so-called smart appliances so that dishwashers or dryers can run during times of the day when electricity is cheaper. All this is part of the smart grid and smart home you’ve probably heard about.

“We ultimately have a vision of a zero net-energy home,” Fludder said. Of course, that would require the homeowner to install solar panels, or a small-scale wind turbine, or some other form of distributed power generation.

Google’s Power Meter is free software developed by google.org, the company’s philanthropic arm. It’s being tested by about 10 utilities around the world. The software also works with a number of home energy devices. Google partners that make devices include a British company called AlertMe and a company called Energy Inc. that makes The Energy Detective.

Dan Reicher, director of climate change and energy for Google, said  devices today are “available in the range of about $200 and the word on the street is that there are several devices that are on their way that are in the $50 to $100 range.”

“A smart meter in every home” makes sense, even if it doesn’t have quite the resonance of “a chicken in every pot” or “a car in every garage.” (Thanks, by the way, to Dan for the headline on this blog.) Below is a brief video from San Diego Gas & Electric, one of Google’s utility partners.

You can think about global warming as a now-and-later problem. Governments need to take unpopular actions now to deal with a problem that will do most of its damage later. Businesses need to look beyond the next quarter to the next quarter century.

This evening in Elsinore, Denmark, top executives from such companies as Coca-Cola, Duke Energy, Goldman Sachs and Google took the long view in a fitting venue: Kronborg Castle, a 15th century castle best known as the setting for Shakespeare’s Hamlet. Sitting in a magnificent castle that’s been preserved for six centuries makes you wonder what impact the goings-on on Copenhagen this week will have on the world in 60 or even 600 years.

In that context, it seems prudent to invest now to insure against a climate catastrophe, no matter how distant–even if the short-term result is  a slight drag on short-term economic growth

As Tracy Wolstencroft, global head of environmental markets for Goldman Sachs, put it: “The economy is a wholly owed subsidiary of the environment, not the other way around.” That is, if we ruin the environment, there’s no economy left.

Or, as Muhtar Kent, the CEO of Coca-Cola said: “It is absolutely imperative that our voices be heard and our commitments to low carbon be fully understood.”

It turns out there’s a big contingent from corporate America in Copenhagen.  Among the high-profile companies here: GE, Microsoft, Cisco, DuPont, Johnson Controls, Nike and North Face. (Here’s a column by Mindy Lubber, president of Ceres, about efforts by some companies to lobby for a strong climate deal.)  Not surprisingly, most favor a global agreement to regulate carbon emissions.

A strong agreement, they said, will drive companies  to make the investments needed to usher in low-carbon economy.

As an example, Wolstencroft recalled that China’s five-year released in 2005 made a commitment to low-carbon energy. What followed, he said, was a $5.4 billion acquisition by Toshiba of Westinghouse’s nuclear energy business and capital investments  of another $5 billion in Chinese solar power companies, which have since emerged as world leaders.

“What we hope comes out of Copenhagen,” Wolstencroft said, “are even clearer rules that help give investors the confidence…to put money into clean technology.”

Clean tech, he said, is “one of the largest emerging markets the world has seen.”

Duke Energy’s CEO, Jim Rogers, also said that China has the ability to both plan long-term and act rapidly. “They lead in the production of solar panels and wind turbines,” he said. “They’re building 13 nuclear panels with more on the drawing board. They’re ahead in battery technology.”

Duke has a joint venture with a Chinese firm to build a coal plant that, if all goes according to plan, will capture and store carbon emissions.

“The Chinese can scale and deploy this faster than in the U.S.,” Rogers said. Duke’s investment in so-called clean coal won’t pay off in the short run, he said, “but we need a full-court press to make that a reality.”

Google, too, is investing in energy and climate projects with long-term horizons, said Dan Reicher, the firm’s climate guru. Its engineers have reconfigured Toyota Priuses into plug-in electric cars, and they are deploying Google Earth software to track deforestation.

Google’s Power Meter, which is being tested with utilities around the world, gives consumers real-time information about their electricity use, to incentivize them to conserve energy. Waving his cell phone, Reicher said: “I can get information about electricity use at my home in California on this smart phone.”

Several of the execs noted that many low-carbon technologies are available today, albeit at a price. Denmark gets 20% of its electricity from wind turbines, but wind-powered electricity costs more than coal-fired power. Denmark also has big plans for electric cars, but they require just-as-big government subsidies.

In theory, at least, there’s a future payback for those current outlays. Anders Eldrup, president and CEO of Copenhaven-based Dong Energy, which has 1 million customers in northern Europe and is shutting down many of its coal plants, says clean energy technology has surpassed agriculture as Denmark’s leading export.

While there’s no way to know for sure, my sense is that the companies here in Copenhagen don’t reflect the mainstream of corporate America, where big lobbies like the U.S. Chamber of Commerce and the National Association of Manufacturers oppose the climate bills pending in Congress. They’d rather pay later than pay now.

That’s a big a gamble, of course. It’s been a long time since I studied Hamlet but, to the best of my recollection, at the end of the play, just about everybody dies.

Let's hope the Copenhagen climate talks are not much ado about nothing

Google: making consumers smarter about energy

Imagine if you walked into a grocery store, chose the food you want (no price tags), took it home and then, at the end of the month, got the bill in the mail. “That’s essentially what we are doing with electricity and natural gas right now,” says Dan Reicher, who heads energy and climate policy at Google, which is aiming to change that.

Instead giving energy consumers a monthly bill that arrives after the fact and is hard for even a geek to decipher, Google wants to give them a way to track their electricity use in real time, or close to, through a free, open-protocol piece of software called Google’s Power Meter. The Power Meter being rolled out in cooperation with eight utility companies, six in the U.S., one in Canada and one in India; they feed the software data through smart meters or other devices.

“Just the simple act of getting people information can really change the way they use energy,” Reicher says. The software tracks electricity use for now, but there’s no reason it can’t be adapted to meter natural gas or water in the future. The software can be installed on a Google home page (alongside stock prices or sports scores) or on a mobile device. “You get data, numbers, graphics, all kinds of interesting things,” Reicher said.

Making consumers smarter about energy will change habits, especially when combined with time-of-day pricing. If utilities can induce people to use less electricity during summer days when it is expensive and more during off peak hours, they won’t have to build as many new power plants to meet peak loads and everyone will save money.

Google employees have been testing the Power Meter for some time, with amusing results. One tenant in a San Francisco apartment saw unusual spikes in his usage and learned that he was paying for the washer and dryer for his entire building. Another found that her her swimming pool pump never turned off. A third replaced old refrigerators in the kitchen and garage and cut his utility bill by 45%.

The scope of Google’s work around energy and climate is quite remarkable. (Reicher, who’s been to FORTUNE’s Brainstorm Green, is a typically smart Google exec, a former energy investor and a policymaker during the Clinton administration.) Google is investing in geothermal energy, doing its own research on solar thermal power, pushing hard for plug-in hybrids and “greening” its data centers. I’m hoping to dig deeper into Google’s energy initiatives in a future post.

No shortage of brainpower at DOE

Energy Secretary Steven Chu has gotten a lot of attention as s the first cabinet member with a Nobel Prize–Henry Kissinger’s doesn’t count, because he got it after leaving the government–but his deputy at DOE, Kristina Johnson, is no slouch in the smarts department, to put it mildly.

Johnson is an electrical engineer with a Stanford PhD, a winner of the John Fritz Medal (said to be the highest award in the engineering profession), the former dean of engineering at Duke, the holder of 129 US and foreign patents or patents pending, author or co-author of more than 142 peer-reviewed publications and a co-founder of several startups in the field of photonics and microdisplays. She made her first public appearance at the Energy Efficiency Forum, focusing on the “how” of bring change to the energy economy more than the “what.”

Johnson laid out three principles that will guide her work as undersecretary at DOE. “First, we have to have the best science and engineering inform our policy,” she said. Second, she said, DOE needs to “take a systems perspective” rather than looking a policy from a narrow view. Third, solving the problems will require “an open, collaborative workforce” and breaking down silos both inside the government and among government, business and academia.

Getting a bit more specific, Johnson says DOE believes that the energy use of buildings can be reduced by 60 to 70% over time and that the balance of the electricity needed can be generated by renewable sources. Lighting, which accounts for about 18% of the energy use in buildings, is an easy target. “It’s estimated that about 70% of our (energy use) for lighting is wasted,” she said. CFL and LED fixtures offer dramatic improvements over conventional fluorescent lighting.

She was also bullish about ground-source heat pumps as an energy source. This month, Chu announced that nearly $50 million in stimulus funds will be made available to advance the commercial deployment of geothermal heat pumps. “They use the stable temperature of the earth to heat homes in the winter and cool homes in the summer more efficiently,” Johnson said. “This is a very exciting opportunity for us.”

Dallas, of all places, is going green, its mayor says

To a lot of people, including yours truly, Dallas still brings to mind images of J.R. Ewing and oilmen in cowboy hats. Forget that—the current mayor of Dallas, Tom Leppert, is an environmentalist and a very savvy businessman.

He’s the former CEO of Turner Construction, one of the largest construction management companies in the United States (with a construction volume of $10.6 billion in 2008). He’s a Harvard MBA. And since being elected mayor of Dallas in 2007, Leppert, a 55-year-old Republican, is widely seen as headed for bigger things in politics.

The energy-efficiency issue has never gotten anyone elected to anything, but Leppert pushed it with the Dallas City Council. The city passed a strong new building code last year that gradually requires commercial and residential buildings to meet energy-saving and water-saving standards.

By 2011, Leppert told the forum: “All buildings will have to meet LEED or similar certification standards, if they are going to be in the city of Dallas…We’re doing it to position our city as a leader in this industry.” He said the city wants to go further, changing living and working patterns to encourage more density around rail stations and mass transit.

Greener cities will attract more business development, as well as more people, he argued. Looking out at the crowd where everyone was toting a laptop and cell phone, he said: “You get to make the decision where you live. And more of those decisions are going to be based on what environment you want to live in.”

An impressive guy, worth watching.

The paradox of energy efficiency

Some provocative talk came from Roger Cooper, the executive vice president of the American Gas Association, about Jevons paradox,
an economic theory you don’t normally hear about an energy and environment meetings. Writing about coal in the 1860s, William Stanley Jevons observed that England’s coal consumption soared after James Watt introduced his coal-fired steam engine which was more efficient that its predecessor. (But you knew that, right?) Jevons paradox which is sometimes called the “rebound effect” has been used to oppose energy conservation or government-mandated efficiency standards.

Cooper did not go that far, but he did say that policy makers should be aware that efficiency can be a double-edged sword. If energy prices stay constant, he said: “You increase energy efficiency, you make the resource cheaper and you lead to an increase in energy consumption.”

U.S. cars, for example, have become far more efficient since the 1970s but we burn more gasoline today in part because people drive twice as far. When we buy an energy-efficient air conditioner, we are prone to run it more. Or, think about what’s happened in communications, as bandwidth has gotten much cheaper–we make a lot more long-distance phone calls and think nothing of talking on a cell phone.

This would suggest that pricing, more than mandates, is the way to drive down energy consumption.

Why? Because momentum is building behind the so-called smart grid, which, among other things, will make buying electricity more transparent. The $787-billion stimulus package signed into law today by President Obama includes $4.5 billion for a smart grid, along with tax incentives to promote solar and wind power.

This afternoon, an event called “Plug In to the Smart Grid” organized by General Electric and Google attracted a standing-room only crowd of more than 500 people to Google’s New York Avenue offices in Washington. Among the speakers were such power players as Carol Browner, the president’s climate czar (although she didn’t say anything), John Podesta, the head of Obama’s transition team and leader of the Center for American Progress think thank, and Chris Miller, a senior aide to Senate leader Harry Reid.

Washington’s renewable-energy crowd is downright giddy about the president’s push for clean energy.

“Look where President Obama has chosen to be today,” said Dan Reicher, a Google executive and former Clinton administration official who was co-host of the event, along with Bob Gilligan of GE. “He could be standing by a bridge or a highway. But he’s at the Denver Museum of Science, looking at a solar panel.”

Gilligan ticked off the advantages of the smart grid: “It enables higher penetration of renewables. It allows the utilities to operate in a more efficient manner. Most importantly, it empowers and enables consumers by giving them more information.”

Because a smart grid is essentially the application of information technology to the electricity business, Google (an IT company) and GE (an energy company) have joined together to push for better federal and state policy to enable the grid. This was their first outreach event in DC. Here are a few things I learned:

Information is power. Power over power, in this case. A smart grid will tell consumers how much their electricity costs at any given time of day, how much each appliance draws down from the grid, how their usage compares with their neighbor’s, perhaps even whether they are using clean or “dirty” power. So, for example, if consumers know that it’s cheaper to run the dishwasher or washing machine at night, many will do so. Can you think of a better way to promote energy efficiency in homes?

As Ed Lu, a Google executive (and former space shuttle astronaut for NASA), put it: “All of our work in this area is based on the premise that consumers ought to be able to see how much energy they are using.” Google’s working on a software, called the Google PowerMeter, to show consumers their consumption in real time.

Andy Karsner, the smart and outspoken former Bush administration energy official, said: “This is about full transparency and disclosure and empowerment of every consumer and small business in America. People ought to know how the biggest investment they make in their life performs, on the day they buy a new home.”

How that information will be delivered is no simple matter. It raises issues of privacy, intellectual property and security, among others.

The grid needs to get bigger and stronger, as well as smarter. Right now, there’s not enough transmission capacity to move wind power from the Great Plains to Chicago or solar power from the southwest to urban centers like Los Angeles.

“That’s going to require literally thousands and thousands of miles of new transmission, and we’ve seen very little (recently) in this country,” said Reicher.

To get major transmission lines built, the federal government will need more authority to site them, even over objections from state and local officials.

“Siting continues to be a problem,” Podesta said. It’s a lot easier to move oil and gas around this country than it is to move electricity, in part because the federal government exercises its power to get gas pipelines built.

Turning to Chris Miller, the Senate aide, Reicher asked: “Is the federal government going to end up with significantly more authority to site transmission lines?”

“Yes,” Miller replied. He said enhanced federal clout could be part of an energy bill that the Senate will take up this spring.

Karsner added: “This is not a question of the opportunity to bring solar from the southwest or wind from the Midwest. I would say it’s a necessity…If the planet could talk, it would say, stop choking me.”

Highlights from the Plug Into the Smart Grid event will be posted on Google’s DotOrg channel on YouTube (a Google property), where there’s also an interesting video about the Google PowerMeter gadget. We’ll also be looking at the smart grid during FORTUNE’s Brainstorm Green conference, with a panel that includes the CEOs of smart-grid firms GridPoint and Silver Spring Networks as well as venture capitalist and grid guru Chuck McDermott.