The dumb grid

HUNTINGTON BEACH, California Sep 13, 2015 Allen Greenberg

 

It doesn't take a crystal ball to see that the future of electric utilities is in digitalization and renewables.

What's far more difficult is sussing out the type and level of investment and speed at which utilities should proceed while continuing to deliver power with minimal interruption to a public increasingly turned off by fossil fuels.

Honestly, you almost have to take pity on the poor utility executive having to make these decisions. The very health of the planet is at stake, let alone P&L statements.

Believe in global warming or not, the grid needs upgrading, and, as I'm sure you've heard repeatedly, any failure on your part to do the disrupting means someone else will disrupt you.  

Last week, I spent a couple of days in Boston at a Siemens energy industry analyst conference where the discussion included testimonials from utilities executives on how Siemens smart-grid technology was helping them cut costs and improve reliability.

If you run a big utility, there's not a lot that's new about that; I think we can go so far as to admit that even the phrase "smart grid" has gotten a bit shopworn. But what large and small utilities are still very much trying to figure out is what really works and, at the same time, how to minimize the pain for ratepayers, who are often left to shoulder the burden of keeping the grid humming.

The huge challenge of succeeding in that endeavor was made clear in a recently completed five-year public-private test project designed to build and test a regional smart grid in the Pacific Northwest. 

Costing $178 million, the Pacific Northwest Smart Grid Demonstration Project was one of 16 such projects initiated and co-funded by the Department of Energy as part of its push to accelerate development of smart-grid tech.  

As reported by EnergyBiz this summer, the project partners ran into a host of problems that included poorly performing equipment and issues related to device and system responsiveness and data quality.

The fact of the matter is that the reality of the smart grid has not kept pace with the promise, as Christopher Guo, an economist at RAND, noted in a recent study. "The effort to modernize the grid has been slow and piecemeal, held back by regulatory hurdles and the hobble of unmet expectations," RAND said in reporting on the study. 

The Pacific Northwest project report authors made a few key recommendations in their report to Congress. Among them:  

  • Better tools are needed to ensure smart-grid data is of a higher quality and the equipment generating that data is working correctly. Many participants were not prepared to deal with the onslaught of data and sometimes mislabeled data with incorrect units or times.
  • Smart-grid technologies should be designed to work together and smart-grid standards should be further developed.

Still, there's no doubt some progress has been made and, according to a recent report from Navigant Research, the global market for smart-grid IT software and services is expected to total $142 billion from 2014 through 2024.

Siemens, of course, is grabbing a slice of that pie, as are plenty of others - including the host of another industry conference this month, SAP.

In Huntington Beach on Sunday, Peter Maier, the general manager of energy and natural resources industries at SAP, spoke of the emerging "digital energy network."

Leading energy companies, he said, are re-imagining their business models, processes and work based on the digitalization of everything.

SAP and Siemens and all of their rivals are all trying their best to help utilities in their transformation to a digital world.

The point is a) the grid has been mostly dumb for most of its life and, in fact, continues to be, and b) standing still is just not an option.

He didn't bring any crystal balls along but another conference speaker, analyst and sometimes futurist Tom Raftery, might have uttered the best line of the day.

In a presentation that lasted nearly an hour and during which he mentioned wanna-be disrupter Tesla Energy repeatedly, Raftery summed up by asking who might become the next Uber in energy.

"It should be you guys," he told a room filled with utility officials.

Well, yeah. 

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