Far too many of the presentations at Connectivity Week last month touted building efficiency. Efficiency is important to Smart Energy, but can also work to defeat Smart Energy. Resilience is ultimately more important than efficiency for meeting the goals of Smart Energy. What energy efficiency can do, is support energy resilience.

A Smart Grid is one that can work despite a growing volatility of supply. Today’s grid already has a reduced ability to support the ever-changing aggregate consumption by the end nodes. Buildings, houses, and industry, the end nodes of the grid, will be the basis for Smart Energy.

So far, today’s efficiency efforts have wrung the slack from the system. A system without slack becomes brittle because it has a smaller margin for error. The most efficient buildings are limited in how they can trim load when asked. The overall grid has reduced margins for error. An exclusive focus on efficiency drives the impulse to direct load control in the end nodes by the central systems of the energy supplier.

Resiliency is the capacity of a system to absorb disturbance and still retain essentially the same function, structure, identity, and feedbacks. At the local level, resilience is dependent on the ability to adapt and to use diverse resources to achieve the same ends. At the broader level, resilient systems are characterized by diverse participants with non-uniform responses. Homogenous collections of systems respond to a given stimulus in similar ways, resulting in “panics” or “stampedes”. Smart grids will provide many systems with a similar stimulus as power availability changes.

Smart Energy results when the end nodes are able to respond to situations announced by the Smart Grid. It is critical to note that the purposes of the end nodes are not those of the grid. The Smart Grid will present its problems with reliability and balance to the end nodes. The end nodes, whose goal is to deliver divers services to their owner / occupants will use this information to optimize their own service delivery.

Let me present two examples of systems whose proper goal is service resilience rather than energy efficiency.

Cloud computing data centers use immense amounts of power, converting it to business process and to heat. Cloud computing relies on virtual computing machines that can be started and stopped, created and destroyed as needed. Cloud data centers have a growing ability to move these virtual machines between data centers. They are using this capability to provide service resilience whether or not a given data center is operational.

Data center resilience used to be provided through physical security, redundant systems, and back-up generators. The new model provides resilience through an ability to run from the problem, moving a virtual machine from one center to the next. The cost of each data center is reduced as the redundant systems and unnecessary generators are eliminated; construction savings of more than 50% were reported. Each data center is less robust, but together the data centers gain resilience.

Resilient data centers can respond to Smart Grids by moving processes from one site to another. Cloud services are part of smart energy in ways that data centers never could be. This resilience is not built on energy efficiency; six data centers may replace one. They have achieved resilience by focusing on their own missions rather than on support of the grid.

Commercial buildings and homes can achieve resilience by focusing on the times of energy surplus. Many renewable sources on the grid are unable to find adequate markets when they are producing at their maximum. Times of energy surplus may occur every day, while energy shortages may occur a dozen times a year. When the wind is blowing, when the sun is shining, Smart Grids will let the end nodes know with low prices. It is these low prices more than peak price events that will provide the incentives for smart energy.

Periodic low prices will fund resilience in those end nodes that take advantage of them. Capturing and storing the surplus, particularly with in-process storage, makes each building better able to weather shortages. Through storage combined with efficiency, each end node will lessen the urgency to buy power now. A building that is planning around the temporary power surpluses is able to respond to shortages without loss of service. The net effect to the participant is more reliable service at a lower price than competing buildings and properties.

Over time, end-nodes that commit to on-site storage will find that their internal markets change. On-site generation will be the market for site-based energy, in preference to grid-based distribution. The better market is the internal one, wherein storage can enhance service to the building owner and occupant.

As their site-based storage grows, the technology costs will drop. With each progressive step, building resilience grows , and grid dependency is reduced. Because there are many buildings, with many owners, and many motivations, smart energy in buildings better supports the market dynamics of rapid innovation. Because the building owners are inherently diverse, and building systems naturally autonomous, building based smart energy gains resilience as a larger system of systems.

Efficiency supports this developing resilience by reducing the demands. A building that uses half as much energy need store only half as much energy. A building that uses less energy can better weather periods of limited support from grids. To the end node, the advantage of a smart grid is better situation awareness, and an improved ability to broker whatever services are needed locally for the occupants.

The largest Smart Energy opportunities are not in selling to the grid. The real opportunities are in building end-node resilience despite power whose price, quality, and availability will be more volatile. The purpose of this resilience is to better support the owner and the occupants of the end node, not to support smart grids. This focus, on the local decision maker and their needs will lead to faster adoption.