Metering & Smart Energy International spoke on the phone with Miguel Sanchez Fornie, who was until recently global director of smart grid for Iberdrola, the Spanish utility, in the third of a series of interviews entitled The Leadership Insight Series. The interviews will include leaders of some of the world’s biggest companies: examining their leadership style, and giving them a chance to share their specific thoughts on the development of the utility sector globally.
What do you consider as the top attributes of a successful leader?
In these days, a successful leader in the utility sector should have a deep knowledge of the technology. Of course, to this you have to add the attributes of leadership such as building good relationships et cetera but I would say that technical knowledge is still one of the most important attributes. This is quite important in my opinion. There are many people that are good with staff, they are good with managing spreadsheets and have great management skills, they are very good at managing the P&L and identifying risks to the business but they lack the technical knowledge that is important.
Of course, it is important to know the financials and it is important to understand risk management and a basic level of leadership skills is obviously needed, including the ability to form good relationships with staff. But when I look back over my career I realise that it is absolutely vital that the leader knows the technology.
How often is that combination of technical and managerial skill found in our sector?
Very, very seldom. It’s not just a case of having a good university degree, but it’s about having a leader who is constantly updating his knowledge, someone who is constantly keeping pace with technology and who is aware of the trends that are likely to develop within the sector. Of course, all of this cannot rest purely on the leaders’ shoulders and they have to be surrounded by a support structure that is equally technologically educated.
Your team, and their knowledge are really very valuable and if as a leader you are able to pull these two together that is a really good position to be in.
Which of these values do you feel that you demonstrate?
I am a very humble person but what I can say is that I have had success and the luck of being surrounded by a very good team. My team has taught me many things, because it is important that you have a network of people, not just inside your company but outside your company too.
You need to be realistic as well and have good management skills.
What do you consider your greatest strengths and weaknesses?
My greatest strength is that when I wake up every morning I know that I have to learn something new. An open mind and the understanding that nothing is ever completely finalised means that you approach things with flexibility every day. In my opinion, this is a clear strength.
Every day I look toward the future and in this time of change and digitisation and revolution that we are involved in, you need to be forward-looking.
Weakness… Every man has his weaknesses. In my specific case, I have to be very careful in the assignment of priorities. At times, I don’t assign the proper priorities to people management or communication and I would say that that could be a weakness. To be honest I’m also not all that keen to be involved in financial discussions or financial engineering as I think I’m much more technology orientated than economically focused.
That is a very important question because it is vital to keep your team motivated, particularly the younger people. We need to motivate new people to join the utilities sector. Utilities generally are not very attractive employment opportunities for young people, as they prefer to work at places like Google or Yahoo. But we need to understand that there are good ways to serve our society, which is an important point to take into account, and utility services are going to be needed for the future, this is clear.
For people that are technology orientated and that like to improve and innovate and who want to put their own grain into this harvest, the utility sector could be a good choice.
Has technology changed this sector?
Yes. It is clear that this sector has to be focused absolutely on the customers and despite the fact that we were taking care of customers through general services, we now have to change and treat each customer according to his or her own situation and this is going to be a fundamental change in the utility activities.
If you take this into account, you will understand that the digitisation of our networks is an absolute must. We cannot keep our networks without enough knowledge in real-time.
There are many companies that have smart metering planned but if they have not started already, they are going to be left behind. You need smart metering, not by itself, but as one of the elements that is needed to give proper service to the customers. This proper service is the new world.
Telecommunications is a very good example. They understand exactly what is happening in real time on the networks and in their relationship with customers. Traditional utilities – gas, water or electric – are far away from that point and we need to accelerate our progress, otherwise, someone else will take our place.
What are your top three predictions for the sector?
If I had to select an answer to that I would say that utilities need to overcome their risk aversion. This is mainly because utilities are used to working in a very regulated environment with very little investment risk. They are accustomed to knowing what and where to invest and very often receiving the funds from the regulator before they proceed.
However, utilities need to become less risk averse because there are very many advantages to increased investment into the grid and some utilities are behind on the utilisation of the technology.
As I said previously we have to proceed to properly utilise the network. There are some that feel we have already utilised it to its capacity; however, this is not true. You just need to look at the low-voltage networks – they are very far away from being digitised.
And to fully utilize the network means to take advantage of information technology and telecommunications in a wise way; to encourage the convergence of telecommunications technology for the utilisation of the network.
If you consider the proliferation of electric vehicles and the proposed increases in EVs and the number of stations to be connected to the car, then obviously wireless technologies are needed. However, the number of stations that are going to be needed for this coverage will be a tremendous increase.
The point is that I have learnt that electric infrastructure is well complemented by telecommunications infrastructure. It is clear to me that if we can use digital infrastructure to really help the development of 5G telecoms then we could arrive at our destination far faster than anyone thought possible.
Of course, the thing with the future is that it is always difficult to predict.
From a strategic perspective, where do you think the sector is headed?
It is difficult to generalise and there are companies that are first movers but as I have attention to customers. We have to be more customer focused and accept that there will be lots of competition – we cannot benefit from networks that have been built up in a regulated environment in order to keep competition at bay. The unbundling that was done in the telecommunications sector is an example of what the utility sector could achieve.
Everything will be focused on providing a better service to the customer. And of course customers will make their own decisions and will hopefully understand that we have climate change challenges; we will have to introduce more renewables on the grid; and accept that most of these renewable resources will be distributed. To my mind this is clearly going to happen; they just need to happen on a digitalised grid.
Any last thoughts?
Politicians and regulators have to understand the markets, understand the industry and they have to avoid the introduction of incentives that might sound good at the beginning but that in the end will distort the market and technology. If they feel that the best way to proceed against climate change and the development of renewable energies is with an incentive that is paid by everybody, this will result in a distortion of the markets and is something I would urge them to avoid. While this kind of action may be socially accepted in the beginning, in the end the reality is that only a few people are enriched and the majority of society carries the impact for incentive schemes.
To that end, I believe something like net metering to be a bad solution because of the variability of supply and demand and tariffs across the course of the day.
A continued concern is cyber security and we need to make sure that we are constantly building our security knowledge and putting in place the countermeasures that are needed because cyber threats will become even more real as we digitalise the network. MI
About the author
Miguel was until recently global director of smart grid for Iberdrola, the Spanish utility.
He is a member of the Utility Telecomms Council Board of Directors and President of its European division. He is member of the Advisory Committee of the European technological platform ‘SMART GRIDS’, officially supported by the E.C., member of the Advisory Committee of the Smart Grids Task Force (DG Energy), and co-chairman of the EG1 within the European Network Information Security (NIS) platform. He was a member of the Advisory Committee of the M.I.T. (U.S.) Future of the Electric Grid Study. He is chairing the Management Board of the PRIME Alliance. He is currently professor of the postgraduate course of energy in the University of Comillas.
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