The Path to Drawdown: Smart Grid
Addressing climate change and staying below 1.5ºC of global temperature increase requires a massive scaling of zero-emission energy sources. Thankfully, renewables like solar and wind are fast expanding their capacity worldwide. But to provide reliable clean energy to every household and organization in the world, we need a smart power grid.
The power grid is the dynamic network of power generation, transmission, distribution, storage, and consumption. But our power grid was designed more than a century ago, when electricity needs were simpler. It relies on a handful of (mostly fossil fuel-based) power stations, and electricity only flows one way from power stations, to transmission stations, and finally to consumers.
This centralized, one-way grid system has outlived its usefulness. It’s economically inefficient because consumers often can’t plan for the fluctuations in the price of electricity throughout the day. It’s vulnerable to blackouts when power lines break or power stations can’t generate enough power to fulfil demand. It doesn’t easily integrate renewables like solar and wind power, whose electricity generation is intermittent.
The smart grid can overcome these weaknesses. By integrating sensors and software to the existing grid, it gives utilities and consumers the data they need to understand and quickly react to changes and the supply and demand of electricity. With smart meters, consumers can plan their electricity usage according to its price, lowering the cost of electricity to households and overall demand during critical periods. Through data and automation, the smart grid can integrate and optimize solar and wind generation, even with their intermittent nature. This also means power generation becomes decentralized and adaptable, reducing the likelihood of blackouts and price fluctuations.
Digi International (stock ticker: DGII) is an industrial Internet of Things (IIoT) technology company with its headquarters in Hopkins, Minnesota. DGII sells embedded and external network communications devices, scalable USB products, radio modems and modules based on LTE (4G) platforms.
DGII's Role in Drawdown
For utilities, Digi offers sensors, meters, digital controls and analytic tools to automate, monitor and control the two-way flow of energy between power plants and consumers. Through their solutions, a power company can optimize grid performance, prevent outages, restore outages faster and allow consumers to manage energy usage at the level of individual appliances.
They also sell solutions that enhance demand response, allowing consumers to communicate real-time energy demand to utilities. This makes them more proactive in conserving energy and saving money, especially during peak demand periods (which often have the highest GHG emissions). Wirelessly enabled devices like thermostats, meters, demand response units and in-premise displays facilitate secure data communication to central utilities.
Utilities, in turn, can connect to the internet to automatically monitor control devices based on certain parameters. Web-based portals allow consumers to monitor and make changes to their networked energy devices.
Beyond these smart grid enhancements, Digi connects electric vehicles and EV charging stations, smart building systems like solar panels and optimized HVAC systems, remote industrial tanks for environmental monitoring, and renewable energy projects so that utilities and businesses can optimize the power grid and go green.
DGII: What We Like
Aggressive acquisitions (p. 3) over the last several years helped expand DGII’s market share in the IoT world, massively contributing to the 6.59% annual revenue growth between 2016 and 2020:
- Since 2015, DGII acquired four businesses that form the basis of their IoT Solutions segment
- Since 2018, they acquired two businesses that are now included in their IoT Products & Services segment