Creating a Smart Utility

By Jeff Buxton, Enspiria Solutions

The average age of U.S. electric grid transformers is 42 years. Electromechanical meters still in use to measure energy consumption were expected to last 30-50 years. Shifting utility and stakeholder requirements and digital technology emergence with shortened product life cycles require utilities to plan technology deployments in a more disciplined manner. Road map planning is essential in a utility’s smart grid preparation.

Why do You Need a Road Map?

A clear road map could create consensus about utility business drivers and needs, as well as the technologies required. A well-designed road map provides a clear path and can serve as a powerful marketing tool internally and externally. The map conveys prudent planning, the desired vision and an understanding about business needs (customer and operational needs).

A solid business road map can provide clarity and confidence for both consumers and the creators.

Mapping instills the discipline of sound business planning. Given an uncertain future, the process might help identify alternative actions and determine reactions to varying conditions. Mapping injects a timed expectation for results, placing milestones and ensuring they can be measured.

The road map ties business strategies to technology decisions by linking business needs, functional requirements and technology and implementation decisions. The road map ensures technology choices are traced to business strategies. It also forces implementation plan prioritization. Technology choices can significantly impact budgets and the resource availability.

A sound road map optimizes limited financial and human resources by prioritizing the selection process, which provides the first elements of project portfolio management.

What is a Road Map?

Like smart grid, the term road map is overused to the point of losing its purpose. In addition, like smart grid, road maps for different purposes exist. The best mapping processes result in a smart utility implementation plan. Components of a full business road map include:

  • Strategy/vision,
  • Business needs/functional requirements,
  • Technology deployment requirements,
  • Capital investment,
  • Implementation plan/phasing plan/release schedule, and
  • Organizational change and business readiness plan.

Each component provides insight into the final road map’s basis and prioritization. Each path is built upon interdependent components. Road maps should fulfill a prioritized need, including the specific time for results.

How to Develop a Road Map

The “as is/to be” business process model often is used to develop a road map. The starting point, or the beginning of the utility’s transformation, is where the utility is now, the “as is” or current state.

The next step involves developing a vision/goal/objective of how the smart grid is expected to transform the utility and its business needs, the “to be” or future state.

Finally, the road map process can identify needed steps to evolve. This is the most valuable part of the process as it prioritizes steps and groups them into logical, efficient implementation activities (see Figure 1).

The process might seem traditional, but the implementation is not. Several factors contribute to this challenging process:

  • The technologies are complex, interdependent and rapidly evolving. All commercially available and developing smart grid applications should be well-understood, their dependencies documented and their relative value to the utility determined.
  • The same high-level business objectives can be solved with technology approaches.
  • The costs of smart grid programs can be significant.
  • Qualitative benefits such as customer service are difficult to incorporate.
  • Business needs may cross many functional boundaries and impact many group budgets.
  • Changes may be significant and introduce strong resistance.
  • Programs and implementation strategies may include uncertain consumer participation and response.
  • The future direction of the regulatory and legislative environment is uncertain.

A deliberate process with strong facilitation and executive sponsorship often is required to complete a successful smart grid road map.

How to Guide Stakeholders

Once the plans are completed and socialized within the organization, each can begin to serve several purposes for a well-managed utility.

The process should create buy in from operational groups: the implementation teams, utility management, regulatory interests, external stakeholders and customers. In this way, goals and objectives are aligned. Critical decision processes are smoother, and approvals are more certain.

The availability of a precise road map provides insightful guidance to the management of the utility’s projects portfolio. The utility can institute well-managed project portfolio management and more effectively align multiyear budgets to longer-term technology plans.

Finally, the prioritization activities ingrained in the mapping process provide sequence directions. When hard choices must be made about projects and implementation activities, the organization has a vehicle to resolve conflicts quickly.

Alternatives–Prioritization, Evaluation

Each utility will use its own criteria for prioritizing road map programs and may include:

  • Leveraging foundational investments that might already exist,
  • Alignment among the utility/business/operational/customer drivers and the potential need for the proposed investment,
  • Technology dependencies,
  • Compliance requirements,
  • Operational performance improvements,
  • Financial and rate constraints,
  • Capital resources and operating budget constraints, and
  • Market acceptance and penetration.

Visualization, Presentation

Developing a road map, identifying business needs and prioritizing investment are valuable. The process might fail, however, if the results cannot be linked to corporate imperatives or evoke a sense of purpose, clarity of direction and strong organizational support.

The communication of the road map is as important as the development. This is a significant challenge for the same reasons that make the process difficult in the first place: complexity, lack of vision or alignment to organizational goals, cross-functional impacts, budget implications, lots of experts and unresolved uncertainties.

There is no single way to portray a sound road map because each utility will bring its own bias and influence. Some organizations are driven by technologies and will want to see their road maps organized around those. Others are driven by business needs or regulatory drivers and will want road maps organized to emphasize these influences. Figure 2 presents a smart grid technology road map focused on continuous performance improvement.

Planning has become a critical planning tool for rapidly evolving utilities. Smart grid road maps are influenced by key technology investments that form the building blocks of a smart grid.

Jeff Buxton is Enspiria Solutions’ executive consultant and general manager of sales and marketing. (Enspiria Solutions is a Black & Veatch Co.) Buxton has 30 years of industry experience with expertise in strategic business planning.

Reach him at jbuxton@enspiria.com”>href=”mailto:jbuxton@enspiria.com”>jbuxton@enspiria.com

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