Fostering Smart Grid Evolution

The grid’s intelligence has been developing since the beginning of the electric power industry. And most customers expect to continue benefitting from an ever-smarter grid that will readily support future demands for electrical energy—wherever, whenever, and however it’s needed. That’s probably a reasonable expectation, so long as utility leaders understand how their decisions and actions can help or hinder the next critical stages of smart grid development.

The whole utility enterprise will need to become more flexible, capable, and responsive to new challenges and opportunities. So, what are the options? How can a utility take deliberate steps that promote timely and efficient advancement of the full smart grid value proposition? What are the likely outcomes and consequences when an electric utility develops its infrastructure, information, and processes in a fragmented and incidental fashion?

Driving Transformation

As with any institution or business of notable size, the utility enterprise is an elaborate conglomerate of people, technologies, information, resources, practices and services. This conglomerate is a living and thinking system of systems that is always changing in response to a wide range of external and internal conditions that reflect the past, present, and anticipated future of the utility’s environment. Day by day, month by month, and year by year, the utility works to survive and prosper amidst a complicated mixture of objectives, perspectives, needs, mandates, capabilities, and constraints.

At any given time, a utility’s employees and technologies have their respective capabilities and limitations that are, within allowable cost, combined and applied to support the business. Over time, the scope, complexity, and distribution of information and functions tend to grow and shift from people to technologies that can transform the enterprise.

No matter what, one way or another, the utility evolves. However, that evolution doesn’t assure survival, much less prosperity. In fact, the course of evolution can just as easily cause transformation for the better, or for the worse. The way a utility evolves will ultimately determine the outcomes.

Beginning with rocks and sticks, technologies have been a key driver and extension of social development and civilization. Today, the global society is enveloped by an expanding cloud of energy-hungry technologies, many of them electrically powered. That energy is provided by a huge and complicated energy ecosystem in which people and their electric infrastructure are coupled ever more tightly and evolving ever more symbiotically.

Similarly, the global society is rapidly developing—and developing from—an enormous information ecosystem that’s becoming ever more embedded in virtually every part of the world. Evolving information technologies are driving dramatic transformations in all domains, including the energy domain in general and the electric infrastructure in particular. Now, the inevitable and ongoing melding of the energy and information ecosystems is spawning the many parts of what will hopefully congeal into a truly intelligent and enabling electric infrastructure, the smart grid.

Looking ahead, a combination of developments in technology, demographics, policy, and markets will usher in an era of escalating electrification; a time when the ability to successfully manage and satisfy the growing demands for electrical energy will substantially shape many major aspects of the future. That success will depend a great deal on a smart grid that productively employs information and services from, and interactions among, large numbers of intelligent, communicating entities—including people—at every point in the electric supply chain.

Many of the more promising smart grid capabilities will require extensive orchestration of information and functions in many highly distributed components; meaning that much of the desired smartness of the anticipated smart grid can’t happen without successful integration of unprecedented scale and complexity, both within and among utilities. To get it done, utilities will have to build and operate increasingly large and interconnected information frameworks that are much more functional and secure than those in use today. Done right, utilities can reasonably look forward to the timely emergence of improved means and methods for producing, moving, storing, and using electrical energy. To get it right, utilities should strive to thoughtfully plan and implement the conditions that will foster efficient an orderly smart grid development. This is the essence of managing smart grid evolution.

Managed vs. Incidental

Smart grid capabilities, and their respective benefits, are generally realized by integrating intelligent components, data, communications, processes, and practices. Furthermore, the benefits realized are substantially affected by the extent to which the integration effectively encompasses the whole utility enterprise. This includes the degree to which IT/OT convergence is accomplished by eliminating traditional technical and organizational barriers between an electric utility’s business information technologies (IT) and the operations technologies (OT) that monitor and control the utility’s electric system. In a nutshell, increasing the extent and quality of integration will substantially increase the range and value of the smart grid benefits.

The case for enterprise-level smart grid integration would seem to be a no-brainer—except for the frustrating fact that it’s much more easily said than done. There, alas, is the rub. Achieving efficient smart grid integration that empowers the whole utility enterprise requires deliberate, ongoing, and consistent enterprise-level planning and management by a large and very diverse cast of suitably qualified participants. It also takes significant amounts of time, money, and resources that might at first glance appear unaffordable, unjustifiable, or both. Needless to say, the managed approach to smart grid evolution can seem to some like an unnecessary barrier to progress. As a result, some decision makers will mislabel the path of managed evolution as “analysis paralysis,” declare themselves as “enlightened pragmatists,” and then steer toward the presumably easier course.

Given the rigors and resources associated with managed evolution, many utility decision-makers are understandably inclined to routinely favor more expedient, self-contained, and independent automation initiatives that quickly produce some tangible results and, at least on the surface, create the impression that the things that need to happen are getting done. The temptations of expedience are often reinforced by influential purveyors of smart grid products and services who persuasively assert that much of what a utility should want from the smart grid is right around the corner—once it buys their product. Only with time or good foresight does it become clear that this incidental approach to smart grid evolution will all too often produce a cumulative chaos within and among a utility’s key resources and processes, eating away at its performance and productivity while increasingly hindering the utility’s ability to realize the range and value of smart grid benefits that would otherwise be possible.

Each piecemeal solution, no matter how elegant and efficient, can significantly compound the size, difficulty, and cost of the overall challenge. Worse yet, in the absence of managed smart grid evolution, a utility will often react spontaneously to forces and circumstances, both internal and external, that are poorly understood by the utility and its stakeholders. As a consequence, the utility organization can morph in unexpected, and often undesirable, ways.

Consider the emergence of electric vehicles (EV). Any significant shift to EVs will require many sizable, complex, and sometimes rapid changes to electric infrastructure, as well as utility operations and customer experience. Implementing the necessary changes will expose the presence or absence of timely, coordinated, strategic planning and action. Will the transformation that’s necessary for EVs be successfully facilitated by an organized framework of resources and practices? Or, to put it bluntly, will the transformation spawn a confused scrum of projects and activities that result in a procession of costly surprises and missteps?

Evolutionary Pressures

Each electric utility’s vision and mission are somewhat distinct from those of other electric utilities. Nonetheless, a handful of elements typically overlap. First, most strive to be the preferred energy provider in their market by providing energy when, where, and how it’s needed; by effectively responding to customer service requests; by providing quality power—i.e., high availability and consistent technical compliance; by committing to environmental innovation and stewardship; and by charging a fair and competitive price for services rendered. Electric utilities also strive to achieve sustainable performance, which is measured with metrics like customer satisfaction, profitability, cash flow, efficiency, return on investment, agility, and resilience. These are the high-level drivers that must be understood and accommodated when managing smart grid evolution.

Meanwhile, an electric utility operates and evolves within its own local ecosystem that fits uniquely into the global scheme of things. Some elements of the local ecosystem are very similar for most utilities. For example, new technologies, federal laws and regulations, global and national economic conditions, and trends like the aging of our workforce. Other elements of the local ecosystem might differ significantly from one utility to the next. This list is much longer and includes things like customers’ attitudes and expectations, geography, weather, demographics, regional and local regulation, local economic conditions, size of the utility, financial performance and resources, staff capabilities and limitations, ownership, governance, organization, culture, operating practices, physical plant, information and control assets, energy supply, load profile, utilization of outside resources, quality of service, cost of service, environmental compliance, etc. These are just some of the notable factors that can either help or hinder smart grid evolution at any given utility.

Some of the bigger challenges ahead result from the fact that many electric utilities currently employ a complicated and extensively improvised patchwork of systems and processes that fall into two main categories. The first category comprises the known collection of systems and processes that are adequately recognized and understood by their respective communities of interest; for example, the CIS supports customer service and billing processes, and SCADA supports electric system operations. The second category is made up of an unknown number of obscure, possibly unique, and essentially hidden elements—for example, databases, spreadsheets, and applications in individual PCs. Generally, these hidden elements are poorly documented (if at all), poorly protected (if at all), and sometimes disturbingly critical to the utility’s business and operations. Commonly, the elements of both categories are somehow linked with a largely ad-hoc, disjointed, and poorly understood assemblage of electronic and human interfaces that turn the conglomeration of elements into the utility’s own distinct sort of biotechnical system. This isn’t meant as a criticism, but rather as a forthright observation of an important problem. The circumstances confronting us today simply evolved while good people with good intentions did their best to work with whatever resources, constraints, and information they had at the time. Still, in many cases, perhaps most, this is the starting point for smart grid evolution.

The number and variety of significant factors makes it clear that there can be no one smart grid development strategy that will plug and play for most electric utilities. The large body of factors that must be balanced should also make clear the downside of an incidental approach to smart grid evolution, often favoring the sort of expedient solutions that can ultimately work against the long-term interests of the enterprise. Indeed, even the common practice of emulating other utilities can easily lead to costly dead ends, incongruities, and re-works. That’s not to say that expedience is always bad; there will be times when there’s no other acceptable choice. And occasionally the expedient solution is also the best long-term solution. The trouble is that expedience is somewhat akin to an effective but highly addictive painkiller that must be used carefully and only when truly necessary. Thus, it’s reasonable to say that expedient smart grid solutions do have their place, so long as they are judiciously employed and aligned with an overall plan.

Enterprise Framework

Information is the lifeblood of a smart grid enabled utility, and good things will become possible when the right information is provided in a useful form at the right time and place. This means that many sources must provide a lot of information, in many forms, to a lot of places at many different times, and, once provided, the information must be properly managed and correctly applied to its intended purpose. Further, the composite of smart grid elements—including people—and their interactions becomes a fully useful smart grid only when the elements are effectively organized, implemented, and managed as integral parts of the utility enterprise’s overall system of systems. Knowing this, one can see why a utility might want to assemble and use an enterprise framework for developing and integrating its smart grid. By so doing, the utility might reasonably expect to more effectively manage the scope, complexity, cost, and success of its smart grid evolution.

For starters, an enterprise framework supporting smart grid evolution must provide a structure of shared and interoperable technologies for creating, moving, managing, and applying useful information. As such, the framework must certainly provide unified technologies and practices for building and managing interfaces among the technologies within the overall system of systems—for example, a strong network infrastructure, standard web technologies, an enterprise service bus (ESB), a common information model (CIM), and service oriented architecture (SOA). For IT professionals, these are the defining characteristics of a framework. However, the framework can and should go well beyond the interfaces.

The system platforms that support most smart grid applications commonly require very similar sets of essential functions, like cyber security, web services, data storage, database management, backup and disaster recovery. A utility can effectively fulfill these common requirements with shared system resources. Components suitable for sharing include the hardware and software for virtually every part of a complete system platform. Host processors, memory, network interfaces, and operating system software can be consolidated and shared via technologies for clustering and virtualization. Data storage can likewise be combined and shared in enterprise-class storage management systems. On top of the core platform components, the utility can add a suite of shared software resources that support cyber security, web applications, and database management. When well implemented, the framework of shared system resources will help the utility achieve higher system availability by substantially unifying and thus simplifying the physical, logical, and procedural mechanics needed for redundancy and recovery.

A less apparent category of enterprise framework components is the handful of utility application systems that are in fact critical to smart grid evolution. Prominent within this category of application systems are asset management, workflow management, document management, GIS, service order management, and customer information and billing. Significantly, each of these application systems can benefit from using shared system resources. Also noteworthy, the value that can be derived from these systems is much more likely to be fully realized when they are implemented and managed as enterprise systems that are well aligned with the utility’s smart grid goals.

Completing the enterprise framework are the practices applied to smart grid development and integration. The practices of key interest here pertain to the utility’s vision and strategy, enterprise cyber security, process design, change management, stakeholder engagement, business case development and maintenance, and risk management. Not surprising, these same practices are fundamentally important to business and governance of all sorts—which should help explain why the practices employed are as critical to a utility’s smart grid evolution as are the technologies deployed. It’s useful here to again point out the simplifying impact of the aforementioned framework of shared system resources; given the number of common requirements that can be supported with shared resources, such a framework can make it easier for a utility to implement uniform practices for integrating, securing, and managing the combined data and processes of the smart grid system of systems. The task for each utility is to select, implement, and consistently adhere to a unified body of practices that will best promote that particular utility’s smart grid success. Fortunately, there are best practices applicable to each key area of interest and to each form of enterprise. Unfortunately, implementing and managing a unified body of practices isn’t easy, and, when progress becomes difficult, as it certainly will, a utility’s commitment to good practices might waver.

Smart Grid: A Strategic Choice

One way or another, smart grid technologies and processes can and will emerge and evolve at every utility. No matter what, time marches on, stuff happens, and things change. This is as true for utility automation as it is for everything else.

The path of smart grid evolution isn’t a mostly pre-ordained consequence of immutable circumstances. Granted, a utility has little or no control over many of the major factors affecting its path forward. Nevertheless, the utility’s approach to understanding and managing its smart grid evolution is arguably the most significant factor of all. As with most any sort of endeavor, employing a deliberate, organized, integrated, and proactive approach will lead to a path and outcomes that are very different and more desirable when compared to the path and outcomes that will result from a largely incidental, disjointed, and reactive approach.

Even so, there’s no easy path to smart grid evolution. Each approach has its respective costs and challenges that must be understood and weighed against the likely outcomes of using the approach. A managed approach, supported by an enterprise framework, will involve substantial costs and challenges that are generally recognized and well understood early on. As daunting as those costs and challenges might seem at the outset, this should be seen as a good thing. On the other hand, an unmanaged approach that lacks a cohesive enterprise framework may seem less daunting in the beginning but will, in the long run, almost certainly result in a less productive path, characterized by higher costs and more difficult challenges that will often be unanticipated, unidentified, and poorly understood.

Despite the complexities, challenges, and differences among various utilities, the path of managed smart grid evolution is universally feasible. Regardless of its particular circumstances, each utility has the option and the ability to implement an approach and framework that’s most suitable to its needs and goals. It can be done. It’s a strategic choice.