In a smarter grid world, what new software applications will resonate with consumers?  Tendril, a Boulder, Colo.-based software platform provider for energy markets, has made a move in Europe that will help answer the question.  Tendril has partnered with Dutch retail utility Essent to create a unique energy application crowdsourcing project.

Here are details of how the project is expected to unfold:

Later this year, qualified independent software application developers will use Tendril’s Connect cloud platform to gain access to interval-usage data from smart meters.  Armed with this data, the developers are expected to create web-based and mobile applications aimed at energy efficiency in the home (see Pike Research’s latest report on Home Energy Management for our market view) – such as automation tools for switching off lights and controlling thermostats, or “dashboards” for showing real-time energy consumption and pricing.  Then these applications will be made available through a kind of energy “app store” to a small test group of Essent residential customers whose homes are equipped with smart meters; these customers will provide feedback to the developers and rate the apps.  Winning applications won’t be chosen by the utility, but rather by consumers themselves who will be choosing the ones that work best for them.

Eventually, the applications could be made available to all of Essent’s 2 million residential customers, and could go out to millions more through Essent’s parent company, RWE Group, which serves 24 million customers.

The project got a jumpstart during a “hackathon” event in Amsterdam called The Next Web Kings of Code Hack Battle, in late April, at which the project concept was presented to potential developer partners.

I like this idea of bringing software developers into the mix and letting consumers evaluate the results.  Clearly, this will help speed up the process by enabling creative people from outside the traditional energy industry to experiment in new ways.   Who knows, perhaps the Angry Birds of energy is just around the corner.

On May 24 I’ll moderate a panel at ConnectivityWeek in Santa Clara, California, called “Getting Useful Applications to Consumers.”  The panelists and I will be delving into these same types of issues: What consumers want, and what can be made available to them through new applications? And, like the “hackathon” event in Amsterdam, the ConnectivityWeek conference sponsors are holding a similar contest to see who can come up with cool new energy apps.  If you’re in the area, come and join the discussion.

Fresh off its $7.9 billion acquisition of Constellation Energy, Exelon Corp. – now the nation’s largest competitive power producer, with total generation capacity of 34 gigawatts – reported weak quarterly earnings this week due to a historically mild winter, the plunging price of natural gas, and costs associated with the merger with Constellation.  Also the largest U.S. nuclear power company, Exelon faces rough sailing ahead under new CEO Christopher Crane.  Confronted with a natural gas glut with no end in sight, plateauing demand for electricity, and forthcoming stringent regulations on greenhouse gas (GHG) emissions, particularly from aging coal plants, U.S. utilities are going through a wave of consolidation and cost cutting as they attempt to weather the stormy transition to more sustainable forms of power generation.  The Exelon-Constellation announcement was followed by Duke Energy’s purchase of Progress Energy for $13.7 billion in stock, in January.

Chicago-based Exelon is in a particularly interesting, not to say dicey, position because of the big bets that Crane’s predecessor, John Rowe, placed on nuclear power.  A blunt-spoken “lawyer and amateur historian with a fascination for antiquities and a love of the podium,” as Crain’s Chicago Business described him, Rowe had become a familiar figure in Washington, D.C.’s corridors of power and a leading advocate for the heralded “nuclear renaissance.” He believed that the shift away from coal and other carbon-emitting forms of power would favor nuclear power, which supplies 20% of America’s electricity and remains cheap compared to other forms of clean energy, including renewables.

“The single most disruptive technology in my 28 years as a CEO was shale-gas fracking,” Mr. Rowe told an energy conference in March. The natural gas boom represents “a huge challenge for my successors at Exelon.”

That’s not exactly a rousing vote of confidence for Crane, who never finished college and who started out as an electrician at nuclear plants in the 1970s.  Exelon’s share price has lost 18% of its value since its peak in November 2011, before the full extent of the domestic natural gas supply became evident.  That now seems like another era.  Few people foresaw the gas glut that’s now proving to be an economic boost for the United States and a huge challenge for big producers of power from coal (like American Electric Power) and nuclear, like Exelon.

Exelon is also locked in a political battle over a new 650-megawatt plant planned by Omaha-based operator Tenaska, Inc. on Exelon’s home turf of Illinois.  Tenaska had originally planned a $3 billion next-generation “clean coal” plant for its Taylorville, Ill. site.  Faced with strong opposition from state politicians and influential business figures including John Rowe, Tenaska this week said it would shift gears and build a natural gas plant instead, at a third of the cost.  How Exelon will respond remains to be seen.

The waves rippling across the energy industry represent the biggest change in the utility business since deregulation, in the 1990s.  How these new power behemoths navigate the tossing energy seas will play a major role in determining the structure of the U.S. energy industry for a generation.

C3, the energy management software firm, announced on May 1 that it is acquiring Efficiency 2.0, a software company whose software-as-a-service (SaaS) product focuses on improving the efficiency of residential and small business customers.  This move rounds out C3’s portfolio of utility energy management services, which has until now focused on large commercial and industrial customers.

If you’re familiar with OPOWER, then you’ve seen the role that some energy management software firms are looking to play in helping utilities meet their demand-side management (DSM) goals for energy efficiency.  Efficiency 2.0 aims to aggregate residential and small commercial sites – some of the hardest-to-reach customers in energy efficiency programs – and document the results in a way that helps utilities comply with efficiency mandates and qualify for incentives from their state public utility commissions.

C3 has been very busy since it formally opened its doors to the public last August, as I covered on our blog, with both its utility and corporate customers.  The firm is already working with Pacific Gas & Electric, for whom it provides a white-labeled version of its software to help PG&E’s account managers identify and implement energy conservation measures with PG&E’s largest commercial and industrial customers.  The acquisition of Efficiency 2.0 rounds out C3’s offering for utilities by helping it address a full range of customer types, ranging from individual homeowners to facilities with peak loads in the hundreds of kilowatts.  Through the acquisition, C3 and Efficiency 2.0 now boast a combined customer base of fourteen utilities, in addition to many other corporate customers.

Many firms in the energy management world have been eyeing utilities as potential customers.  For example, Pulse Energy, the Vancouver-based software firm, has retooled its entire strategy to focus on utility customers rather than building owners.  The business model for energy management is considerably different for utilities, as utilities benefit less from energy cost reductions (as building owners do) and more from increased visibility into and control over customers’ energy consumption as well as from compliance with energy efficiency mandates.  Through this acquisition, C3 is one of the few (if not the only) vendors that can address a utility’s entire customer base using a single platform.

The news of yet another acquisition in the energy management space also takes the era of the energy management startup, which has been gestating over the last few years, one step closer to its natural conclusion, when virtually all startups will either be acquired or close their doors.  C3’s executives, many of whom were previously in executive roles at Siebel Systems, the software firm that Oracle acquired in 2005 for $5.8 billion, know that as well as anyone.  Demand for energy management solutions for utilities will continue to mature over the next few years, and, as it does, companies like C3 will be well-positioned to help utilities improve their customers’ energy efficiency.

Demand response programs to date have largely relied on a labor-intensive approach that has required operators in different customer sites to manually turn off lights, HVAC equipment, and other energy consuming systems to control peak demand and balance loads on the grid.  Automated demand response (Auto-DR) systems have become an important alternative to conventional DR by automating the communication and dispatch systems to respond to event and price signals from a utility, grid operator, or a curtailment services provider (CSP) – often in minutes or even seconds.  Although it has already been used by the utility industry for many years, it has not been widely deployed. However, with the upcoming launch of a non-proprietary, open communications standard for Auto-DR, referred to as OpenADR, this situation is likely to change.

Developed by the Demand Response Research Center (DRRC) of Lawrence Berkeley National Laboratory (LBNL), OpenADR is designed to be a low-cost, speedy, and reliable communications infrastructure that would allow utilities and grid operators to send DR signals directly to building automation and control systems on customers’ sites, using a common language and existing communications technology, such as the Internet.  It was successfully piloted in 2005 by Pacific Gas & Electric (PG&E), and in 2007, the California Public Utility Commission mandated its commercial use by the state’s three main investor-owned utilities (IOUs).  In 2009, OpenADR 1.0 was donated to the standards organization, Organization for the Advancement of Structured Information Standards (OASIS) to be developed into a formal specification, i.e. OpenADR 2.0.

The standard, says Lawrence Berkeley’s Girish Ghatikar, the secretary for the OASIS technical committee that finalized version 2.0, “will enable scaled deployments and interoperability within Smart Grid technologies, thus reducing the cost of DR technology enablement and customer adoption.”

OpenADR 2.0 is expected to be ready for full-scale implementation in the coming months.  It is currently the only existing open data model to bridge communications between a utility and control systems in commercial, industrial and residential facilities.  It has been used by a number of utilities and independent systems operators in the U.S.  While California has been the primary state for OpenADR implementations, it has also been adopted by other U.S. utilities to enable their Auto-DR programs.  So far, OpenADR has been either piloted or implemented by Seattle Power & Light, NV Energy in Nevada, City of Tallahassee in Florida, Bonneville Power Administration in Oregon, and most recently Hawaiian Electric Company in Hawaii, which is undertaking a pilot with Honeywell to demonstrate how DR can help integrate intermittent renewable energy into the grid.  It has also been tested by software developers in Canada and Spain, and is currently being piloted by Honeywell for utilities in China and the United Kingdom.

The introduction of a uniform standard in the Auto-DR market will help lower the cost of technology as well as the services, including maintenance, associated with these tools.  So far, more than 60 building controls vendors have developed products with OpenADR. Second, it will improve the reliability and predictability of Auto-DR because using an Internet-based interface and communication standard will eliminate the reliance on person-to-person interaction between the utility’s personnel and facility management. Third, standardizing a message format will increase the interoperability, efficiency and reliability of DR systems. As a result, both the National Institute of Standards and Technology (NIST) and the Federal Energy Regulatory Commission (FERC) have endorsed OpenADR as a key smart grid standard. And the OpenADR Alliance, a nonprofit organization, has been created to promote the development, adoption and compliance of the standard across the utility industry.  “Through this member-represented organization, the OpenADR Alliance, and significant support, OpenADR 2.0 has certainly the potential of accelerating Auto-DR adoption across the globe,” said Barry Haaser, managing director of the OpenADR Alliance.