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Data-Driven Transformation

Building a business case around smart grid data.

Fortnightly Magazine - January 2011

Much has been said about the smart grid’s potential for transforming the utility business. But while the industry has focused on technology, process and organization, another factor—data—likely will prove to be a key transformational driver. Benefits for utilities and their customers depend on how effectively companies make use of a torrent of new and powerful data.

Smart grid represents the largest and most pervasive transformation that utilities will likely undertake, as it’s a transformation in infrastructure, business, and technology on an unprecedented scale. Smart grid also provides substantial amounts of new data, and utilities must decide how to best use that data for business value.

Like most large-scale transformation initiatives, smart grid projects traditionally focus on technology, process, and organization. However, a fourth element—data—has the potential to be a key transformational driver in helping utilities leverage new opportunities from smart grid investments.

Smart Grid Transformation

The smart grid transformation is a unique challenge, as it isn’t limited to a specific technology, functional area, or even organizational group. Its impact is broad and affects business operations, resources, infrastructure, systems, and data. In short, smart grid has the potential to transform a utility’s entire business.

The electric distribution system will be transformed by a multitude of new devices and technologies such as smart meters, grid monitoring sensors, data collection nodes, and voltage regulation devices. These devices will communicate and operate over new communication networks and feed new business applications ( i.e., meter data management systems). Success in this transformation will depend on interoperability and the ease and effectiveness with which devices and systems share data and interface with each other.

From an operational perspective, smart grid will change the business of distributing electricity, as processes should be reengineered or adapted to take advantage of new capabilities. The nature of the utility-customer relationship will also change. What was once an interaction limited simply to monthly billing will expand to allow for increased levels of information exchange and greater customer involvement in decisions about electricity consumption.

Smart grid also highlights the nascent role of information management. New meters, sensors, and grid devices will provide volumes of data that previously haven’t been available. Newly available data on interval demand, interval consumption, meter condition, and grid status can be a source of potential business value if it’s properly developed, managed, and leveraged.

This transformation also comes with new resource needs and skill requirements, as new technologies and operations require knowledgeable people to manage them. Additionally, the way utilities measure performance and operational effectiveness should adapt to account for new ways of doing business.

The convergence of these forces presents significant opportunities for utilities to improve existing processes and develop new capabilities, such as:

Increased operational efficiency : Reduced operating cost, increased automation, and streamlined processes can

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