Although today microgrids serve a tiny fraction of the market, that share will grow as costs fall. Utilities can benefit if they plan ahead.
A new watchword for the industry and its regulators.
If you’ve read my column regularly for a few years, then you probably know one of my favorite industry events is the DistribuTECH annual conference and tradeshow. DTECH gives me a clear sense of what the industry’s technology leaders are hearing from their customers, and how they expect to focus their work.
Each year, certain themes tend to emerge from DTECH. They show up in the conference proceedings and in exhibitors’ booths—and most importantly, during conversations with attendees. Last year’s themes seemed to be “analytics” and “advanced distribution management systems.” In 2010 and 2011, the themes involved demand response and customer engagement. And before that, every DTECH exhibitor was providing “smart grid solutions”—whatever that meant to them.
At 2013’s DTECH, the theme seemed to be “resilience”—specifically, the system’s ability to withstand a variety of assaults, physical and cyber. The implications of this theme raise some interesting questions about the industry’s future—in terms of both investment plans and operational strategies.
Virtually every conversation at DistribuTECH included some discussion about the effects of last October’s Superstorm Sandy. Not since Hurricane Katrina has a weather event created such widespread destruction of infrastructure systems—or such nationwide concern. That’s because Sandy struck the Northeast at a fateful moment in history. 1
The storm arrived after a series of storms in recent years caused extended outages in the region. Sandy also hit just after a wave of cyber attacks had exposed the fragility of many critical networks, and just as the Federal Energy Regulatory Commission (FERC) was intensifying its scrutiny 2 of the North American Electric Reliability Corp. (NERC)—which FERC has tasked with creating and enforcing standards for reliability and security.
Defense Sec. Leon Panetta, in a speech 3 before a group of executives on October 11, described a recent “unprecedented” wave of cyber intrusions, and called for decisive action to secure critical infrastructure. He asked industry leaders to work harder to secure their systems, and implored Congress to pass legislation to promote information sharing for a more united front against cyber attacks. He also said the administration might issue an executive order if Congress failed to act.
Panetta was talking specifically about cybersecurity. But Superstorm Sandy put a gigantic real-world exclamation point on the message: our critical infrastructure must be made resilient. The threats are very real. They’re costing our economy billions of dollars a year, and if we don’t do something about it, they’ll cost us many billions more in the future—even trillions, if you believe in worst-case scenarios; In my recent interview with Amory Lovins (“Turning Energy Inside Out ,” this issue), he described the findings of a Defense Science Board Task Force suggesting damage to U.S. critical infrastructure could cause “economy-shattering disruption.”
The question, however, is how can we make the utility system resilient?
Among the range of approaches to resilience that are being proposed, most can be divided into four basic categories: 1) regulatory mandates;