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.