How Vendor Partnerships are Shaping the Smart Grid

By Jay Stinson, Intergraph Utilities & Communications, and Ken Geisler, Siemens PTD

From metering technologies and distribution management to geographic information systems and SCADA solutions, it seems everyone is offering up a piece of the smart grid puzzle. It is important for utilities to understand, however, that smart grid is not a single technology.

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For electric utilities to truly achieve a smart grid and experience benefits such as increased efficiency, security and safety, and decreased operational costs, they need to put in place a comprehensive system of “smart” or advanced technology–from the field to the operations center to the network. Since a smart grid combines various technologies, the return on investment is directly related to the extent of integration and the scope of implementation. As utilities begin to implement and integrate more advanced operational solutions, their grids become “smarter.”

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Smart grid initiatives involve many moving parts, and no single vendor is able to address every aspect. With 50 percent of the average information technology project’s cost typically related to integration, utilities are looking for effective ways to transform their grids without breaking the bank. Partnerships between vendors offer one way for utilities to simplify their smart grid implementations. By investing in pre-integrated, best-of-breed solutions for various smart grid puzzle pieces, utilities can mitigate risks due to the long-term dedication of the vendors and reduce upfront costs and cost of ownership over time.

Keys to a Successful Partnership

What makes a smart grid partnership successful?

First, a shared vision and methodology–not just for a particular customer, but for the industry as a whole. If two vendors disagree even a little bit on how the smart grid of the future should look and which key ingredients will make it a viable option for utilities of all types and sizes, then a long-term partnership will eventually be derailed. Without a common vision to work toward, two companies cannot effectively collaborate for any significant length of time. It also helps if partners share similar backgrounds and cultures, which can significantly help in developing an understanding of and appreciation for each others’ businesses.

Second, it is crucial that vendors partnering to deliver an integrated solution do not contain overlapping products within their portfolios; in other words, they are not competitors on any front. When working on such an involved, long-term project as the smart grid, a utility should align itself with partners whose technologies complement one another, and should not have vendors working together on some projects and competing on others, which can quickly complicate any relationship.

Finally, it is just as critical for the utility to become a partner with its vendors as it is for the vendors to partner with each other. If the utility does not share the vision and commitment of the vendors, and is not willing to work with them hand-in-hand throughout a project’s duration, then even the strongest partnership between vendors will not be successful.

Pioneering Partnerships

Partnerships between vendors who offer complementary smart grid components present a solution to utilities that is, overall, less complex. For example, if two vendors have a commitment to each other to ensure their products tightly integrate, the utility enjoys significant time savings and reduced risk by not having to achieve this integration on its own. Instead of working with a prime contractor and one or more subcontractors, the utility maintains a simpler, more defined agreement with a single, combined entity.

“Prior to moving towards a smart grid, our operators were responsible for using five to six separate applications on multiple screens just to try to get an overall picture of what was going on with our grid,” said Charles Jenkins, senior vice president of transmission and system operations at Oncor, which serves 7 million customers in Texas. “Utilizing multiple systems made it more difficult for our employees to quickly and efficiently respond to storms and other outage situations. The true value of the smart grid for us is being able to see and control our various critical applications–outage management, distribution automation, geographic information systems, network analysis, workforce management, SCADA, the list goes on–all through one unified system.”

The partnership between Intergraph and Siemens, combining distribution management with outage and mobile workforce management, is one example of a partnership developed to help utilities achieve an end-to-end smart grid solution. Other examples of effective smart grid vendor partnerships are centered on the fusion of communications solutions like broadband over power lines into the grid as a means for conducting activities like asset analysis. Another key tool now being incorporated into smart grid implementations is meter data management technology, which can help utilities make sense of the plethora of data now being gathered by technologically advanced meters.

The Grid of the Future

The grid of the future will be different from the system that is in place now, many pieces of which were put into service 30 to 50 years ago. Many utilities no longer have the liberty of building new generation plants to meet increasing energy needs. They must instead use existing resources more efficiently, while at the same time meeting the higher expectations of customers and regulators. Some utilities are even under government mandate to become carbon neutral, putting increased pressure on them to carefully monitor and more closely control electricity demand and usage.

Moving forward, partnerships between vendors with a common vision and complementary technologies will play a vital role in helping utilities shape an electric grid that will allow them to continue to thrive among these new requirements. Such partnerships will help utilities streamline the integration of applications and data that form the smart grid. By implementing truly integrated smart grids, utilities will be better positioned to proactively avoid problems instead of simply reacting to them.

“Just like any business, a utility needs to have a vision and framework of how it sees its organization evolving over the long term,” added Oncor’s Jenkins. “Utilities must anticipate future challenges and opportunities for the delivery of electric power, and nowadays must determine how they can keep costs under control while still remaining poised for growth and flexible to meet the energy needs of the future. Developing this vision should be the first step for any utility planning to move towards a smart grid. Until a utility has a strong grasp on its long-term goals and vision, it will be impossible to select the best solutions and vendors to partner with to build an effective smart grid.”

Jay Stinson is vice president, Intergraph Utilities & Communications, and Ken Geisler is director of business development, Siemens Power Transmission & Distribution Inc.

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