Stimulus Funds and the Smart Grid: The First Thing We Need to Rebuild is Our Approach


By John McDonald, GE

Within our industry, we’ve been talking about a smarter grid for just about as long as any of us can remember—long before anyone coined the term smart grid. We’ve been developing solutions and installing them here and there all over the world, making slow and steady progress. But things are about to change fast.

With stimulus funding and growing public understanding, we have a phenomenal opportunity to fast-track smart grid rollouts and make great strides in improving our transmission and distribution systems. But the first improvement we need to make is how we plan, manage and integrate new smart grid technologies into our infrastructure. If we move forward with our current siloed way of doing business, we won’t maximize the value of stimulus dollar investments.


Holistic Means the Whole Organization


Utilities must break down the barriers between departments and functions. The independent, function-based decision-making of the past 100 years is the enemy of smart grid success. Siloed thinking can hinder smart grid implementations by creating disparate solutions and investments of limited resources into redundant systems. An optimized smart grid is a holistic approach to energy delivery. There are no territories, secrets and sacred cows. Departments that interacted little with each other in the past must become day-to-day partners.

It’s a huge operational change that can be effectively led only from the top levels of a utility. The CEO and C-level executives must mandate the change. They need to organize cross-functional work groups and reward holistic thinking to change utilities’ culture for smart grid success.

Supplier organizations also need to broaden their vision. Instead of focusing solely on the solutions they offer, they must understand how their products and services fit into the entire smart grid. Holistic supplier thinking will result in more functional, flexible and practical products and services. Holistic suppliers and the utilities that choose their products will have a business advantage.


It’s Time for a Clear Roadmap


Another vital responsibility for C-level executives is establishing and sharing the utility’s smart grid objectives and direction throughout the enterprise with a smart grid roadmap. Working together, the executive suite can outline a methodology for evaluating, approving and purchasing smart grid products to ensure that purchases are planned, vetted and discussed across functions. This will also help ensure that stimulus funds deliver maximum value per dollar.

A smart grid roadmap needs to touch on these four guideposts for success:

1. Setting goals. What are the utility’s pressing issues? Determined by regulations, equipment, economic factors and business issues, your smart grid plan needs clear, measureable goals.
2. Understanding the available technology. You need to know what’s real, what’s vaporware and what’s on the horizon. Only then can you set your direction and begin to fashion an overall improvement plan.
3. Discussing industry standards. Standards are emerging for technologies across the smart grid. Knowing the standards status helps you choose solutions that are scalable and flexible. If you ignore standards, you risk installing solutions that will become obsolete and expensive to maintain.
4. Creating a solid business case. Ensuring there is a clear value proposition created with a stringent vetting process ensures you make an investment that improves your operation in meaningful, important ways.


The ideal roadmap should also focus on city-scale technology deployments rather than small pilot projects. While there is a place for pilot projects to test functionality, they cannot test the technology or human behavior on a scale large enough to gauge success. The technology exists and it’s proven; it’s time to roll it out.


A New Measure of Operational Success


Siloed system implementation also leads to siloed reporting, metrics and evaluation. Therefore, department A could consider a new system rollout a success, although it missed its potential to deliver great value for the objectives of department B.

For example, a utility might have one team evaluating and installing an outage management system (OMS), while a different team is evaluating and installing smart meters. The OMS team could choose an outage product that does not consider meter point information in the solution. The smart meter team could dismiss the need for meters that connect and report into an OMS. Each team could implement its solution and consider the projects successful—even quantifying the success by hitting target metrics.

Although each team missed the tremendous potential of an integrated system to understand outage scope, diagnose the cause of the outage and reroute power, they both could claim success. An electric utility organization policy that mandates holistic solution planning and evaluation would re-channel thinking and prevent these missed opportunities and overlooked synergies, so stimulus money invested would deliver maximum value.

The deployed smart grid is a new and evolving entity. Utilities, suppliers, engineers and regulators are fine-tuning solutions, implementing new ideas and benchmarking performance every day.

Early adopters will have the advantage of working closely with solution providers and have a hand in determining the ultimate design and functionality of smart grid tools. If you are one of the influencers, addressing your particular challenges will become a priority. The smart grid will work even better for you because you will help design it.

For the smart grid to deliver on its full potential for positive change in how we move and deliver electricity, we must change how we work as organizations. Stimulus funds are making the need more urgent.

Instead of the evolutionary change our industry is accustomed to and comfortable with, stimulus opportunity is now. Companies that embrace the new reality and change how they do business will get the most for their stimulus buck. They will select and install holistic solutions that deliver value across the enterprise today and long after stimulus funding is exhausted.

John D. McDonald, P.E., is GE Energy T&D’s general manager for marketing in Atlanta. He has 35 years of experience in the electric utility transmission and distribution industry, is a fellow of IEEE and was awarded the IEEE Millennium Medal in 2000, the IEEE Power & Energy Society (PES) Excellence in Power Distribution Engineering Award in 2002, and the IEEE PES Substations Committee Distinguished Service Award in 2003. McDonald is a member of the Department of Energy’s Smart Grid Electricity Advisory Committee (EAC), a member of NEMA’s Smart Grid Task Force and on the board of directors of the GridWise Alliance.


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