Global utility executives embrace smart grid strategy


Atlanta, GA, U.S.A. — (METERING.COM) — February 10, 2009 – Global utility executives have embraced smart grid strategy as a platform for fundamental business process transformation initiatives that span the entire energy value chain across generation, transmission and distribution, and customer service operations, according to a new White Paper from business solutions provider, Ventyx.

C-level utility executives now drive smart grid strategy increasingly across utility functional areas, and the vast majority of utilities already have, or are developing, multi-year smart grid strategic implementation roadmaps.

The White Paper, “Transforming the energy value chain: Smartgrid strategy of leading global utilities,” is based on interviews with senior level executives and smart grid engineering leaders from two dozen leading global utilities.

Ensuring reliable supply of service remains the top strategic priority among the survey participants, closely followed by the development of a smart grid roadmap. Eighty-seven percent of those interviewed indicated the formal establishment of a smart grid initiative at their company, with over 50 percent indicating that these efforts had been formalized in the past year and roughly one third indicating formalization in the past 2-3 years.

The top perceived benefits of smart grid initiatives were the facilitation of energy efficiency and customer choice for demand response programs, closely followed by improving system performance and reliability.

Participants indicated that advanced metering, meter data management, substation and distribution automation, and demand response systems/programs were the most critical to near term smart grid plans. However, the perceived readiness of demand response was low relative to its strategic near term importance to each company’s smart grid plans.

Participants also indicated that integrated two-way infrastructure communications and distributed energy storage – viewed as “vital” and “promising” respectively – are critical to building a path to smart grid.

A significant theme among participants was the fact that smart grid plans and system investments were dependent on the ability to obtain rate recovery for those investments. Many of the participants identified recovery, along with change management and system integration challenges with legacy platforms, as the biggest risks to their smart grid plans for 2009 and beyond. Several participants cited the risks to smart grid investments posed by the downturn in the global economy and the pressure this has placed on consumers’ budgets, which could in turn be reflected in adverse rate recovery reviews by commissions.

As utilities begin to consider the potentially new business operating models presented by two-way connectivity with customers, the potential for entirely new operating models has emerged, according to the interviews. While, AMI is seen by those interviewed as the foundation for the smart grid of the future, other new business model opportunities include the ability to deploy increasing levels of distributed resources through significant expansions of energy efficiency and demand response. The potential to physically and financially optimize both planning and day-to-day utility operations for distributed generation and renewable resources, expanding custom choice, and integrating utility commercial operations with demand response programs were also cited as high priorities.

However, the challenge remains of implementing the new business operating models, business processes and technology, while continuing to maintain service levels and reliability for customers. According to one participant this challenge can be likened to “trying to make engine adjustments to a car while flying down the highway headlong without stopping."