In my new book The Advanced Smart Grid: Edge Power Driving Sustainability, my co-author Andres Carvallo and I lay out our vision for a Smart Grid that is built from the ground up, starting with the customer use cases around which the utility will build its processes for service delivery. Our experience at Austin Energy from 2003 — 2010 led us to conclude that the Smart Grid is a complex undertaking that will take years to accomplish—no kidding. We learned that beyond Smart Grid applications like AMI and demand response, the advanced Smart Grid will need to accommodate an array of new purposes, including two-way information flow from an army of distributed energy resources (DER), including solar PV panels, electric vehicle charging stations, and smart building energy management systems. The data requirements, beyond the data thrown off from DER, beyond the AMI systems and distribution automation systems, will be immense. So, start with a well-designed architecture and be prepared for massive organizational realignment, complex project management, and even new business models and energy services. Smart Grids are not for the weak of heart, but they promise excitement and a new future that will transform utilities and energize the economy.
We’ve broken the challenges down into five challenge areas that logically flow from one step to the next, leading to the final challenge, preparing a smart grid strategy, as depicted in the graphic below.
First, as new customer use cases (1) drive service delivery innovations (2), the need for business process improvement and organizational realignment (3) becomes apparent. And as a plan to implement a smart grid begins to be formulated, the complexity and details of project planning and potential project implementation constraints (4) loom large. Working around those constraints, the utility must also address the traditional utility business model, which requires updating and as new approaches are introduced, the days of commodity kWh sales transition to also include more dynamic business models (5), featuring higher margin energy services that take advantage of new energy technologies and new attitudes about energy, providing more targeted value to an emerging and more dynamic energy marketplace.
New customer use cases will arise as energy consumers mature and distinct market segments begin to emerge out of the three traditional utility market segments—residential, commercial and industrial. Whether it is home energy management systems that enable new demand response behaviors, distributed generation systems that turn consumers into prosumers, or electric vehicle charging systems that bring mobile power demands and new revenues, new technologies lead customers to new relationships with electricity, which will in turn demand altogether new market strategies from utilities. And new market strategies will lead utilities to devise new business processes and resource allocation mechanisms, and to design new IT system solutions and new strategies for working with their counterparts on the operational side of the utility, where new sensor and control devices deployed in the field bring new capabilities that drive greater efficiencies and create new demands on the utility, such as a dramatic increase in the need to manage data effectively and securely.
