A Primer on the Smart Grid and Intelligent Utility Network Trend

Smart Grid2 In a world where increased focus is on reducing CO2 emissions, governments and energy & utility companies are looking for ways to modernize and transform their utility infrastructure in order to improve energy efficiency and reliability. 

For developed economies, the traditional way power has been generated is based on a central generation model with one-way power and information flow from large, often distant generating stations, via transmission and distribution lines to end consumers.   Most of these generation systems contain an aging infrastructure with some equipment dating back 60 years.  This traditional infrastructure lacks sufficient technology and communications at the distribution and end-use level that would enable grid automation & monitoring capabilities.   The model has been a push model, meaning that there is little to no automated information coming back to the central sites from those that use the power.  So if the user suddenly has no power, the only way the utility company knows about it is if they get a call from the users.  Furthermore, the user has very little information available to help them understand how much power they are using, when they are using it, and what they are using it for.

The Smart Grid (also called Intelligent Utility Network) technology is an important emerging trend within the Energy and Utility Industry.  As consumers, we are increasingly aware that the way we consume and save energy can be improved.  Within the energy and utility industry, energy efficiency is also on the minds of the industry leaders.  And our governments are all interested in finding new sources of energy.   By embedding technology into the electrical distribution network, a Smart Grid can transform the way power is distributed and used.  Intelligence throughout the grid can dramatically reduce outages and faults, improve responsiveness, handle current and future demand, increase efficiency and manage costs.

The following video from IEEE will provide some additional introduction into the concept of the Smart Grid.

Produced by IEEE and ScienCentral, Inc.

A Smart Grid can present many opportunities for consumers, businesses, and utilities to benefit from the efficient distribution of energy and availability of intelligent equipment and devices.  For governments, it offers significant opportunities to wisely manage a country’s fuel resources by potentially reducing the need for additional generation sources, better integrating renewable energy sources into the grid’s operations, reducing outages and cascading problems, and enabling users of power to better manage their energy consumption.

The Smart Grid technology will enable energy customers to

  • manage electricity consumption to meet specific household/business goals such as cost, availability, and environmental impact
  • seek energy providers, information, and technologies that help them meet their goals
  • do business with utility companies who communicate a set of energy-related values consistent with their own
  • seek convenient and more personalized ways to interact with their utility to negotiate customized solutions to allow them to meet their needs
  • act on their own wants and needs where regulatory representation does not provide results satisfying these specific needs, primarily through execution of alternative solutions (e.g., self-generation)

So what exactly are the characteristics of a Smart Grid?  The US Department of Energy has characterized a smart grid as having the following attributes:

  • Self-healing from power disturbance events
  • Enabling active participation by consumers in demand response
  • Operating resiliently against physical and cyber attack
  • Providing power quality for 21st century needs
  • Accommodating all generation and storage options
  • Enabling new products, services, and markets
  • Optimizing assets and operating efficiently

The consumer of power from a future Smart Grid will see many differences as a result of adding intelligence into the network.   Some examples are:

  • Smart electricity meters, water meters, and gas meters that collect real-time data on utility usage.
  • Distributed generation, such as solar panels and other micro generation.  These new generators could be located at the home, in the neighborhood, or in the local community.
  • Dedicated energy display units and smart thermostats that provide the user with feedback on energy usage in real-time.
  • Smart appliances with connectivity to the intelligent utility network via the in home meters and display units.
  • Plug-in vehicles as a both source and consumer of energy.  The vehicles, when plugged in would provide information on energy usage.
  • Linked connection to the in-home network and home PCs for further analysis of all the information collected.

The Smart Grid transformation is much more than installation of new technology in a piece-part fashion.  The call for the transformation to a Smart Grid impacts every part of the utility infrastructure including generation, distribution, and usage.  It will be a disruptive change, but a change that will provide huge rewards for the future.  For the utility industry itself, changes needs to happen in four key areas:

  1. Strategy.  We need a  fundamental rethink of business strategy and industry business models across the board.
  2. Collaboration.  Utility providers will need to develop a much closer collaboration with customers, regulators, financers, researchers, technology and service vendors, and other stakeholders than ever before.
  3. People.  The change will be very disruptive to utility companies.  They will need a renewed focus on staff, their roles, competencies, compensation, performance and structure.
  4. Process.  Utility providers will need to re-architect business processes and applications.

There is much work to be done to transform old utility infrastructures to a Smart Grid system.  The transformation will not happen overnight, but could happen over a series of decades.  When complete, countries that transform their utilities infrastructure to an Intelligent Utility Network will have a modern network of sensor-based interactive technologies that will give utilities and consumers unprecedented control over managing energy use, improving energy grid operations, and significantly reducing energy costs. 

There is a ton of information available on Smart Grids.  Here are a few example resources for you to explore….

For other “Primers” here on HorizonWatching, check out http://horizonwatching.typepad.com/horizonwatching/primer/

IBM Launches Smarter Planet Campaign

In the future, every human being, company, organization, city, nation, natural system, and man-made system will be interconnected, instrumented, and intelligent.   Imagine what that will be like.  Wow! 

How do we get there?  IBM's Smart Planet campaign, which kicks off today, will help position IBM to participate in this future.   As I write this Sam Palmisano, IBM's CEO is preparing to speak to The Council on Foreign  Relations in New York City on the topic of “A Smarter Planet: The Next Leadership Agenda.  At the bottom of this post I'll provide some more links on the campaign

This is a perfect time to launch this campaign.  At this very moment in our planet's history, there are a number of very significant and fundamental shifts that are occurring in society, business and technology.  These shifts are playing an increasingly critical role in shaping the agenda of both the CEO and IT Managers.  IBM is in a unique position in the industry and should have a big role in communicating to CEOs and CIOs the implications of these shifts.  IBM will also need to deliver a roadmap to the future Smarter Planet.  Look for the Smarter Planet campaign to do just that.

Fundamental Shifts…

So let's reflect on some of the important shifts that are occurring across our great planet…

New Intelligence:  The explosion of information is driving the need for new  intelligent systems.

  • An explosion of next-generation mobile & computing devices, a system of a trillion smart devices and physical things—more connected, alive with intelligence are creating insights that could improve competitive advantage.
  • Scores of new devices and touch points that are collecting terabytes of valuable new customer data daily.   This has created a massive data explosion – enterprise data expected to grow 57% CAGR 2010
  • Web 2.0 is enabling two-way collaboration with customers that is shaping new business models and razor thin margins are forcing companies to identify and capture customer opportunities in real-time

Globalization:  Globalization is transforming society and reshaping business at a rate that few imagined.

  • Global markets are creating change on an unprecedented scale – new consumers, new infrastructure, new WW talent pools, and aggressive new competitors for Western markets will impact firms of all sizes
  • A huge new global “middle class” is awakening before our eyes” – unfolding with a greater disposable income.  Just consider the impact China and India consumers will have in the future.
    • A growing Chinese middle and upper class: 2005=7%; 2015=45%; 2025=71%.
    • Indian middle and upper class: 2005=7%; 2015=26%; 2025=49%
  • An estimated 2 Billion people will be on the Web by 2011.  This will drive an insatiable demand for goods and infrastructure.  Companies will have a much more demanding customer set that wants locally tailored/customized solutions.

Impact of Technology:  Technology has enabled a freedom of choice that has created a wealth of new client expectations.

  • Technology is freeing people from traditional constraints that once governed their lives. It is enabling personal and professional “freedom” and interaction wherever, whenever, however.
  • Growing global prosperity is giving rise to the pursuit of new customers in new markets, while ubiquitous connectivity is creating a growing class of more informed and collaborative customers
  • Systems & processes enable billions of people to work & live; physical goods to be developed, manufactured, bought & sold; services to be delivered; & movement of everything from people , to money to oil, & water

Green Initiatives:  New environmental responsibilities have awoken the public’s consciousness and shocked business into new approaches.

  • New responsibilities including environment, air, energy, water & food shortages are now pervasive and urgent issues. There are visible signs of climate change, $140+ /bbl. petroleum prices, rising energy costs, rising energy demand, environmental compliance and governance mandates
  • Mainstreaming of “green” beliefs/activism. Customers, employees, regulators, investors, and other stakeholders look for actions that produce genuine results that improve their environmental and financial results. Companies & governments of all sizes need to look across their operations, prioritize their focus areas / investments, & take action now.

Bigger Than The Industrial Revolution

This is an exciting time to work in the Information Technology industry as we are in the position to truly lead in this transformation to the vision I stated at the beginning of this post.

Future generations will look back at this time in history much like we look back at impact the period of the Industrial Revolution.  Back then, developing economies experienced major transformations in agriculture, manufacturing, and transportation.   Much of this was caused because of the introduction of the steam engine and related technologies.  The Industrial Revolution and the changes that occurred as a result, had a profound effect on socioeconomic and cultural conditions of those developing economies. 

The vision of a Smarter Planet will have a much larger impact than the Industrial Revolution.  It will usher in the Industrialization of Services.   And if you have been reading my posts this year, you know that I believe  that Cloud Computing will be the 'steam engine' that supplies the brain power for us to accelerate towards the Smarter Planet Vision.

Want To Learn More?

Take a look at A Smarter Planet page on ibm.com or check out some videos at Youtube playlist: Building a smarter planet