A call to action – avoiding potholes while progressing to the smart grid


By Howard Scott

The smart grid is “all the rage” worldwide. Over the past few months this author has spoken at conferences in the US, South Africa and China and the reaction was the same everywhere – all these countries want to move to the smart grid now. That’s good news, but there is a major problem – few governments or industry participants can agree on the definition of “smart grid.”

As a result, everyone seems to be asking the question “What do we do first?” In fact, that was exactly the question posed to me by the editor of one of China’s leading technical publications.

Despite all the excitement, several important problems could stymie the smart grid initiative:

  • Too many industry participants and government officials seem to be excited about the end result of this evolution, but few people talk about the process to get there.
  • Too many government officials seem to be enamoured with technology, none of which on their own can make a utility “smart”. Only operating systems can achieve that goal.
  • There is a mistaken (though uniform) consensus that standards should be defined first, but many countries are taking different approaches to standards and many vendors cannot seem to agree with each other.
  • An astounding amount of innovation is needed, yet too many governments, utilities and industry professionals are wasting valuable time debating how to move forward.
  • Almost all government and industry participants don’t realise that this is a unique time that will quickly pass. The time for action is now, while consensus exists. A changing economy, crises elsewhere, or shifting public sentiment could quickly end this period of enlightenment.

This article examines these themes and makes a specific suggestion on moving forward. The objective is simple – while “everyone” is so excited about smart grid, make something happen. Give utilities working systems that can evolve to the “ultimate” system. Let industry participants debate “optimal” approaches by being able to discuss the strengths and weaknesses of specific systems. Allow the advocates of differing approaches to be able to argue that “My working system is better than yours” instead of saying “My idea is better than yours.”

This is a Call to Action. Within a year some other industry will be more exciting. As world economies improve, there will be less willingness to spend stimulus funding to kick-start this process. The electric utility industry has only one choice – take action now or regret forever that we squandered this opportunity.

Simultaneously, the industry needs to foster the following areas of development to create smart grids:

  • Almost all utility operating systems must be integrated together. Though there are a few systems to which this does not apply (such as human resources systems that contain employee records), most other systems will play a role in an integrated, smart utility.
  • Near real-time performance measuring is needed at all points where power is delivered to the grid, at all points where power is consumed, and at most points within the grid where power is transformed, corrected, modified or switched. Some consumers may deliver power to the grid and at other times consume power, so at those locations the flow of energy both in and out of the customer’s premises must be measured.
  • Regulatory guidelines are needed to govern how power can be extracted or delivered to the grid. This affects much more than consumer prices; a different operating environment could impact the grid’s ability to successfully operate. Supply and demand are carefully managed today, but as a large number of small suppliers (such as those delivering power from solar panels) start feeding the grid, guidelines are needed to limit over-supply or under-supply. Not only must the grid be protected; as consumers deliver power, their equipment must be protected as well.
  • New software systems must be developed to monitor grid performance by extracting information from multiple utility systems and then “mining the data” to identify how the grid is operating. This will become a major new industry as researchers identify data patterns that describe specific grid performance. Feedback from these developments will impact the design of grid equipment. This process will inevitably identify new information that needs to be collected, which will necessitate gradual equipment changes or modifications over a period of many years.
  • Communication systems need to be installed that can collect data from all of the grid equipment that is being remotely monitored. These needs will likely change over time as it becomes clear whether more (or less) data needs to be gathered and stored. Also, it is unclear whether all the data must be gathered by the same communication network. For example, meter readings might be gathered by one network but transformer performance might be gathered by a different network. Then the data from both networks might be combined by software so it all can be used by the data mining systems.
  • New management systems need to be developed that simultaneously track all aspects of operating a utility. As utility operations become more automated, the slow decisions of people become a barrier to high performance. For example, financial control may be changed to merely setting budget limits within systems; large engineering projects may be initiated by low level staff members (for example reporting frayed insulation on a key piece of grid equipment, thus triggering an automatic response), etc. The methods of managing a utility may need to be dramatically changed as technology and smart systems modify how decisions are made.
  • Training becomes a key requirement in this rapidly changing industry. Everyone who touches a new or modified system will need to be trained to use the new features. This is especially true for employees who have to interact with customers, suppliers, stock holders, regulators, etc. The implications of these changes are significant – if the systems change, then what employees do daily in their jobs also changes.

It is frequently stated that smart grid is much more than smart metering. However, a smart grid cannot exist without smart metering. Also, smart metering provides the primary connection to the customer.

Furthermore, operating a smart grid requires understanding the complete flow of electricity into and out of the grid, as well as what occurs within the grid at key locations where energy is modified, transformed, etc. In the overwhelming number of these locations, the smart meter will provide the data.

The smart metering industry is currently ready to supply the smart grid features in meters. Conversely, many of the sensors and equipment changes for other grid devices are still under development. Thus, it is likely that smart metering will be the first major step taken by many utilities as they evolve to a smart grid.

This article is being written in the US to a worldwide audience. Some of my recommendations conflict with efforts already underway in the US. This article is not intended to challenge those efforts. Instead, a worldwide audience may operate under different rules with different stated objectives. Over time, I expect that the different smart grid approaches will merge, so any conflict with existing US efforts in these comments will cease within a few years.

The most important factor is that the current period of enlightenment by utilities and governments will likely be shortlived. Many governments are trying to use smart grid as a tool (one of many) to work through the current worldwide financial crisis. As the financial environment improves, those benefits provided by the smart grid will become less important. Also, many of the technological efforts are in the development stage. Those developments could take years to reach the feasibility stage after which deployments would begin.

If the utility community waits for the ideal solution to exist, it is likely that this time of enlightenment will have already passed. The financial crisis is now one year old. Already, US economists are saying that the worst of the crisis in the US has already occurred. That means that the recovery has begun. There is the possibility that unexpended stimulus funds could be withdrawn once the economy is recovering on its own. The same is true for tax benefits.

Clearly, what must happen first is anything that is aggressive and commits the utility to moving to a smart grid. Remember, once the recovery is underway, incentives may disappear. So if the utility has not “committed” itself to the smart grid, it may lose that opportunity as more conservative, cost saving concerns again become the rule for the industry and as politicians become distracted by newer, more pressing needs.

A utility cannot be partly smart. Smart decisions only emerge from a complete picture of utility operations. Of course, not every utility can afford to undertake a rapid evolution to a smart grid. This is especially true if government funding is not provided or if the utility has limited access to capital. Despite this painful truth, for a utility (and the community it serves) to be competitive in the evolving world marketplace, the electric utility will need to have a smart grid.

Also, realise that the recovery will separate the world into the “haves” and the “have nots” for smart grid. Countries and utilities that commit to a smart grid may have little choice but to continue moving forward. For the rest, the decision may be much more difficult.

The decision to move forward can take several different paths, but all will eventually include the following actions:

  • Integrate together existing software systems.
  • Develop software systems that provide the smart functionality (remember, the smart meters and smart sensors merely provide information to the smart systems).
  • Start deploying smart metering systems (irrespective of the type of communications to other sensors or devices, a smart grid requires smart metering).
  • Develop plans to upgrade network equipment that must provide performance data. Utilities with existing new networks may have to consider retrofits because they may still be paying for the existing networks. Utilities with older networks may have to identify funding sources for the huge investment needed to replace older networks.
  • Carefully plan how to train existing staff to work with the evolving new network. Confusion benefits no one. Also, as jobs change, staff can become nervous. So a people-focus is a key requirement to accompany the massive changes in technology and services.

The greatest challenge for most electric utilities is to take the first step. If that utility wants its community to actively participate in the economy of the 21st century, it will need to provide a smart grid. Remember, formal commitments to smart grids have already been made by the US, the European Union and China. Have or have not; that’s the choice.