Exclusive Interview: Philipp Gruner, President of KG Technologies

The smart grid has certainly proven its worth. Thanks to the grid, power can be restored quicker and faster.
Published: Tue 22 May 2012

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Following our studio interview - shown above - with Phillip Gruner, we caught up with Philipp for this interview.

Engerati: It has been said that your company's role is “...to control the last mile of utility delivery”- What is it exactly that your company does for utilities and the energy consumer and what sets your company apart from competitors?

Philipp: Our company designs and develops remote disconnect/reconnect switches used in electricity meters to allow the utility company to remotely disconnect or reconnect a home. We differentiate ourselves by offering years of experience in the industry in developing custom assemblies that help reduce the supply chain of our customers and provide a form, fit and function product for their meter. We have also worked hard to fully meet the industry standards. We understand that our switches are not only a convenience to utilities but also a safety switch which must withstand a high load and test conditions in order to fully comply with the industry. Therefore, I am happy to say that our products meet all the voltage, current, short circuit and electrical requirements of IEC Utility Class specifications.

Engerati: You say that there is a 6 month delay in smart grid development-Is this a global trend? What is causing this delay?

Philipp: It varies from region to region. In Brazil, the market has been delayed because of disagreements between the regulatory bodies while in the UK; some of the infrastructure was not yet ready for the meter installation. In France, the push out is from the utilities themselves and in other regions, the tender bid has been delayed. Some can be attributed to the economic downturn but others are just normal delays experienced when there is new technology that is still being evaluated and refined.

Engerati: You mention the “built-in switch” in the smart meter. What is being done to convince the consumer that this will be a positive addition? For power to be remotely connected and disconnected may seem to be a scary prospect for consumers. There have been a few case studies where data has been accessed by “hacking researchers”. Will this “switch” come with a level of security?

Philipp: I have browsed the web to find out what the public is saying about a switch in a meter. There are several misconceptions about the safety of our products. Our switches must withstand very stringent standard and safety requirements in order to be qualified with our customers. In Europe, a switch must withstand 30 times the normal current during a short circuit and still remain operational afterwards. This means for a 100 Amp meter we must remain functional after three successive 3000 Amp tests. I think the public can rest assured that the products being supplied to the market have undergone years of testing, both by ourselves and our customers before it hits the labs at the utility companies.

There is a concern of hacking into the grid but this goes beyond our product range. While developers will always have an uphill battle to stay ahead of hackers, much has been done in meters to help detect tampering, whether physical or cyber. I believe that this will be an aspect that will bring several of the big software developers to the table, like IBM and Cisco have already shown. They can use their experience in the PC boom to help with the software protection on the smart grid.

Engerati: Do you think utilities are taking smart meter security seriously? Is cyber security considered an afterthought by manufacturers and utilities? What is your company doing to circumnavigate these concerns?

Philipp: I think they have no other choice but to take it seriously as I know it is a vital aspect to the national security of every country. I am aware that the Department of Defense in the USA has already evaluated this situation and I am certain they are not the only country to do so. As we are a developer of an electromechanical part inside a mostly digital meter, our responsibility lies in reducing the impact of physical tampering to the meter. Our engineers are constantly at work improving our current product line and developing new ones to reduce the impact of this on our product.

Engerati: Demand for the smart grid in the EU is on the increase due to the 2020 smart meter target. Do you think the EU is on track? What problems does the EU market still face? eg. skilled labor, regulations etc.

Philipp: Overall, I think the EU is running a little behind at this point. Some countries like Spain and the UK I believe can meet the mandate. However, Germany and France will have a hard time if they do not start soon as they have the highest populated countries in the EU which means they have more meters to replace. I think the major problem is that the grid does not follow the borders like a country does and this may require investments into several regions by a single utility. It is not an easy task to get all the regulators lined up in the area the utility covers. This can unfortunately cause delays.

Engerati: Do you think utilities are doing enough to educate consumers about the benefits of the smart meter?

Philipp: Some are better than others but overall, I think there needs to be more information about the smart meter before they are installed. My utility gave me a leaflet about one month before the installation of my smart meter. It gave a broad overview of what a smart meter is but failed to highlight what benefits the public will enjoy personally. Many consumers view the smart meter as a way for the utility to make more money despite the billions of dollars they are investing in to the smart grid’s development.

Engerati: The European Data Protection Supervisor (EDPS) has warned that smart meter technology will invade customer privacy. Is this a real threat or do you think that there is sufficient regulation in place to put the customer’s mind at ease? Are privacy scares a real threat?

Philipp: Although their concern is justifiable, they are looking in to it too much. In my opinion, there is little reason to be concerned. New technology can be frightening. When the internet first appeared, a lot of people were scared but today, it provides a lot of benefits and has become an essential part of our lives. A major problem is that the press tends to highlight only the scary aspects of new technology. Security technology will grow alongside smart meter developments. Smart meter technology will always be updated and improved to make them safer to use. Companies are constantly looking at improving technology and providing better security measures. Many companies are consolidating in order to create technology which will enhance data protection.

Engerati: Are the EU’s challenges and opportunities of the smart grid the same in the US? What has been the progress or lack of progress in your view?

Philipp: The biggest benefit in the US is that meters are more standardized in shape and form. Companies have one specification to work with whereas in Europe, meters are not standardized which makes it very challenging for the industry’s role players.

In 2009, the US motivated the implementation of the meter. Although the US got off to a good start, they failed to maintain momentum.

Europe appears to be more conservative in the implementation phase. The EU appears to be waiting for a perfect scenario which may result in missed opportunities. The EU must get the ball rolling.

Engerati: What is the progress of smart home development?

Philipp: Smart home development is about 5 years behind smart grid development. The smart home industry can learn a lot from smart grid development. Although smart appliances have its benefits (and continue to show improvements), the grid must be put in place first even though the smart home is an essential part to overall energy efficiency. The smart meter will help the consumer understand how his current habits affect his energy consumption levels. Once the consumer understands this, the consumer will begin to understand how smarter technology and appliances will assist further with his home’s energy efficiency. Both must go hand in hand. For everything to be fully networked will take some time.

Engerati: Do you think consumers are being shown the importance of switching to a smart home in order to achieve true energy efficiency? Are utilities educating the public sufficiently in this regard?

Philipp: Utilities in the US give incentives to more energy efficient homes (in the form of rebates for instance). However, utilities are always asking customers to spend money in order to attain energy efficiency without first showing them how to be energy efficient without having to spend a fortune. Many consumers in the US feel that the utility is gaining more from the smart meter than the consumer. The utility needs to come alongside the customer.

Engerati: How important is it for a company like yours to meet the standards of a utility? Can it “make or break” the grid’s efficiency? Is this what sets your company apart from other smart grid technology companies?

Philipp: Standards are critical. If standards are not in place, products of a poor quality can have a negative effect on the efficiency of a grid and the safety of workers. Our company is forthcoming and clear about meeting the requirements of the standards.

Engerati: Is Brazil and China on track to meet smart meter replacement- what obstacles do these countries face in terms of smart meter deployments?

Philipp: Brazil is behind because regulatory advisors are still negotiating. The optional roll-out is also causing delays. I believe that once the benefits of the smart meter become clear to consumers, deployments will escalate.

China is on track. They have updated their standards in order to meet EU requirements. This should increase the country’s technology exports.

Engerati: With climate change causing more aggressive (and regular) weather conditions such as the most recent hurricanes in the US – have utilities realized the importance that smart grid technology plays in responding to customers quicker?

Philipp: Yes. The smart grid has certainly proven its worth. Thanks to the grid, power can be restored quicker without utilities having to send staff out as it is done remotely.

There certainly have been more investments in smart technology. Companies wanted to see the benefits of the smart grid before making an investment and now they are able to see what smart technology can do.

Engerati: What obstacles does smart grid development still face?

Philipp: Capacity and commodity prices may become an issue. Escalating costs may become too high, affecting the return on investment. The global market is also still struggling but within two years, this should be overcome. Also, the general public still needs to be convinced by the smart meter’s benefits.

Engerati: As far as smart grid development goes, has 2012 been a good year? What do you expect to see in 2013?

Philipp: I think so. Big rollouts are on the increase now which benefits our position as a component supplier. There are plenty R&D developments and new projects on the horizon and momentum is taking hold. Big and small markets are adding up. We are excited about the new year which should see a bigger increase in smart grid development. We are expecting a big increase in our sales next year. Development in the US has been pretty stagnant but the EU is beginning to open up. We are expecting to see many new projects to come on-line. There is some exciting progress being made in the EU, India, Latin America, South Africa and Russia.