Smart Grid Trends to Watch: ICT Innovations and New Entrants

The convergence of information and communications technologies (ICT) with the traditional operations technologies (OT) is an ongoing Smart Grid trend.   Within the USA and its 3000+ electric utilities, Smart Grid investments focused on optimization of transmission and distribution grid operations through machine to machine (M2M) communications and forays into data analytics for applications ranging from revenue assurance to voltage conservation.

This ICT/OT convergence trend is encouraging new entrants into the vendor ecosystem that supports electric, gas, and water utilities.  One of the latest entrants is Dell Computers.  Dell made two announcements in the past two months that illustrate how ICT companies are exploring Smart Grid market opportunities.  2013 will be the year to watch their strategies and progress.

Dell recently unveiled their Smart Grid Data Management Solution which combines high-performance computing, networking and storage to manage data for review and action in utility operations.  Leveraging domain expertise and the PI System™ from OSIsoft, they developed and tested a reference architecture in a simulation environment that modeled a utility’s transmission grid operations.  Transmission grids have been one of the early beneficiaries of the Smart Grid through products called Phasor Measurement Units (PMUs), which are extremely high speed monitors that sense changes in transmission conditions.  Taking hundreds of measurements per second from multiple PMUs leads to large quantities of data that challenge existing data storage practices in utilities. Dell’s solution coupled with OSIsoft’s solution provides faster updates and makes actionable data available to staff, applications and business systems.  It’s an excellent example of how M2M communications and data management technologies can become ubiquitous in the Smart Grid.

This is a noteworthy collaboration between a traditional ICT vendor (Dell) and a traditional OT vendor (OSIsoft) that is focused on grid operations.  But Dell has also signaled its intent to get involved in the consumer side of the electricity value chain by joining the Pecan Street Inc. Advisory Board.  Pecan Street is an energy and smart grid research and development organization, and serves as a living laboratory with a community microgrid characterized by residence-based solar generation, electric vehicles (EVs), energy efficiency and energy management solutions for homes.  The project is conducting research in the brave new world of consumer/prosumer evolutions and their energy interactions through data analytics.

While the term “big data” is used in this project, its volumes are dwarfed by the volumes of data that are generated by today’s PMU deployments.   Similarly, if smart meters ever provide data to utilities at 15 minute intervals, that would constitute really big data, at least as analytics providers in financial services or telecommunications would define it.  It’s more accurate to describe the Pecan Street project as one that offers horizontal complexity and scalability as the types of devices, with all their variations in hardware, firmware, and software will need to be managed in addition to the networks that connect them.  There aren’t too many analytics companies out there that can offer this expertise, and the best ones are proven performers in other industry sectors outside of electric utilities.

However, Dell has proven abilities in the arena of data management, and they understand a thing or two about consumers after successfully building a competitive business that sells direct to them.  So their moves into the Smart Grid sector portend more than a continuation of the ICT/OT convergence trend.  It also highlights another trend – that of businesses (others are Verizon and Comcast) that are experienced in consumer retail operations and engaged in exploratory activities to directly engage with electricity and water consumers.  Traditional utilities may discover that their business models are disrupted more by this second trend than the first.  Of course, this second trend is a riskier play, and it is too early to tell if these new players will become intermediaries between consumers and utilities.  It will be interesting to watch Dell in 2013 and see how these trends progress.


Smart Grid Data Management – The Start of an Outsourcing Trend?

The new volumes of data that can be collected via Smart Grid-enabled solutions and innovative technologies create opportunities and challenges for utilities and consumers in residential, commercial, and industrial categories.  New data about equipment performance, building performance, and electricity consumption holds tremendous potential to help utilities and consumers manage energy use and costs.   However, there are some common challenges to the collection, management, and intelligent use of this data.  These challenges reflect the relative newness of the solutions, evidenced in the lack of resources (vendor and utility) that have experience in these areas, and the lack of experience within existing resources in handling new data. 

Here are two areas impacted by new volumes of familiar data or entirely new data – Distribution Automation and SCADA operations; and meter data collection and management.  I’ll discuss customer information and energy use data in a future blog.    

Distribution Automation and SCADA operations.  Distribution Automation is defined in the Smart Grid Dictionary as “the range of applications and technologies, such as substation and feeder SCADA, OMS (Outage Management System), integration, and smart metering that add intelligence to improve reliability, efficiency, customer service, and asset management for utilities.” SCADA, which is shorthand for Supervisory Control and Data Acquisition, is defined as “systems used by utilities to monitor and control their generation, transmission, and distribution equipment and facilities.”   Smart Grid innovations make it much easier to remotely monitor more substation equipment and obtain data about operating conditions through IP-enabled sensors, such as low oil levels or abnormal temperatures in critical assets.  Analysis of this new data enables predictive maintenance of these assets, which means that substation operators can prevent equipment failures and extend the life of expensive equipment.  It also means that they can schedule field resources to be at the right place at the right time.  Most power failures that consumers experience occur at the distribution level of the grid, so improving maintenance schedules can result in better grid reliability metrics and fewer inconveniences for us.

Meter Data Collection and Management.  As smart meters replace monthly manual or drive-by meter reads, utilities can obtain data as often as they like, although a 15 minute interval is typical.  This means an exponential increase in meter data.  A million meters, read every 15 minutes, results in 36 billion annual meter reads.  Meter Data Management Systems (MDMS) help collect and manage this data. However, utilities have not dealt with data in these volumes before, and that creates many data management challenges – such as how to organize and define what data is most important for different uses and how to extract meaningful information from it. 

In both cases, the sheer volume of data can be overwhelming, and utilities and vendors recognize the importance of expertise and knowledge in organization and management of this data.  For instance, how should predictive maintenance alarms in a substation be prioritized?  If you receive 20 alarms at once, are the proper analytics in place and are resources appropriately trained to focus responses to the most critical equipment issues first? 

Given the resource and budget constraints that many utilities face, it is no surprise that 60% of utilities responding to a recent survey indicated that they planned to outsource some or all of their MDMS operations and/or data storage.  Perhaps a similar percentage would be happy to outsource predictive maintenance.  Outsourcing selected data management functions may be the most realistic answer to accelerating the deployment of Smart Grid solutions in the distribution grid and keeping costs and rates down for utilities and their customers.


Doing the Right Thing on Energy Policy

“You can always count on Americans to do the right thing – after they’ve tried everything else.”  Winston Churchill made this statement in the context of a World War and a Cold War.  Today, the context is a new “arms race” – to be the global leader in energy security technologies encompassing clean energy sources, energy transmission and storage, and energy efficiency.   The question is – can we win this technology race without a clear, focused, and forward-thinking federal energy policy? 

At the GridWise Global Forum this past week, a parade of speakers highlighted the need for a coherent national energy policy.  Silicon Valley venture capitalists are also vocal about the need for market certainty promulgated by federal and state energy policies to aid the flow of investments into Smart Grid technologies and new energy sources.   Jeffrey Immelt, CEO of General Electric, said during a presentation at GridWise, “The rest of the world is moving 10 times faster than we are. This is a great country. But, you know, we have to have an energy policy. This is just stupid what we have today.”  

What we have today in the USA is an extremely fragmented energy ecosystem.  There are over 3200 utilities ranging from investor-owned utilities (IOUs) to municipals and rural cooperatives.  There are 50 state regulatory agencies focused on retail electricity, gas, and telecom, involved in rate setting and consumer issues.  The Federal Energy Regulatory Commission (FERC) has oversight of interstate transmission and wholesale electricity rates.  The North American Electric Reliability Corporation (NERC) has a mission to ensure the reliability of the bulk power system.   There are Independent System Operators (ISOs) and Regional Transmission Operators (RTOs) that coordinate regional power markets and transmission.  In contrast, nations like China and Australia have simpler regulatory structures, and can formulate and enact energy policy on a national scale.

While there may not be any quick fixes to achieve a more rational regulatory structure in the USA, the federal government is taking positive steps as outlined by Secretary Steven Chu of the Department of Energy (DOE).  For instance, overall electric grid security is extremely important to national security, and a natural focus for federal action.  $30 M in funding allocations recently were announced for R&D and coordination between the public and private sectors in cyber security technologies. The Advanced Research Projects Agency – Energy (ARPA-E) funds early-stage, innovative technologies that could be potential-gamechangers.  Recent investments are in energy storage, efficient energy transmission, and advances in cooling technologies for buildings.  As Dr. Chu pointed out in his speech at the GridWise Global Forum, some of the greatest challenges are not technical – they are behavioral.  Getting Americans to change their energy consumption habits will not be easy, and requires outreach and education from a variety of entities and through a number of media channels.   

The progress towards a Smart Grid, especially when contrasted to other nations, highlights the problems with our current regulatory practices, our aging infrastructure, and our lack of a federal energy policy.  Thinking that we can continue as is with the current systems, technologies, and subsidized fossil fuels is not a policy that wins this energy technology race.  Will we do the right thing, as Churchill observed, to succeed in this new global competition?

Learn more

An upcoming conference in San Francisco, West Coast Green, will explore themes around the built environment and creating smarter cities and communities.  I will moderate a panel titled Smart Systems for Future Communities, which will discuss technologies and approaches to revising our thinking about infrastructure and better energy systems. 

Utilities and energy service providers will have massive amounts of data on generation, transmission, distribution, and consumption because of Smart Grid technologies.  How will they handle it, and what does this mean for consumers?  A new ebook available for download here covers topics focused on Smart Grid data management, with content reflecting contributions from several writers, including myself.