Handling Smart Grid & Intelligent Utility High Complexity
By José Antonio Vanderhorst-Silverio, Ph.D.
Systemic Consultant: Electricity
First posted in the GMH Blog, on February 21st, 2009.
Copyright © 2009 José Antonio Vanderhorst-Silverio. All rights reserved. No part of this article may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording, without written permission from José Antonio Vanderhorst-Silverio. This article is an unedited, an uncorrected, draft material of The EWPC Textbook. Please write to firstname.lastname@example.org to contact the author for any kind of engagement.
Mr. Roger Gray is the author of the Jan/Feb 2009 edition of Intelligent Utility article Get Involved - The "Who" of Intelligent Initiatives - How you organize to implement your intelligent utility vision is more important than the smart grid system you pick. In fact, neither the intelligent utility nor the smart grid are single systems. Rather, intelligent utility is a vision implemented by strategy, business process, and system change.
This is my suggestion on how to start to handle the complexity of intelliget initiative:
Mr. Roger Gray
There are two key elements on your article that I selected:
1) "Involvement in the intelligent utility effort transcends the utility and goes beyond its walls."
2) "As utilities start to organize to plan and implement intelligent utility and smart grid projects, we need to recognize what is a fundamental weakness in our industry: marketing and the customer relationship."
What those two elements are begging for is an emergent whole system that goes beyond the walls of the utility, in which customers are able to make real choices. As you will see that is only possible by separating the grid from the enterprise, as explained next.
This is what I wrote under the article Hype Aside, Building the Smart Grid will require Both 'Top Down' and Bottom Up Approach," by Tim Wolf , Vice President, Plexus Research, an R. W. Beck Company:
Mr. Tim Wolf,
It seems to me that your article is a perfect contribution to continue with incremental extensions of the investor owned utilities (IOUs) paradigm. I gather that by reading "... developing a sound Smart Grid plan that transcends organizational boundaries within the utility and establishes at least a 5- to 10-year time horizon." After the Theory of the U was developed, we know how to tackle problems with very high complexity, you are in a fact restricting yourself to learn from the past.
As system architects do, why no transcend the boundaries of the utility itself to learn from the whole power system, that is trying to emerge since the 80s? The emergent future is a paradigm shift, which is discontinuous from the present. As mentioned in the EWPC article Propelling the Power Industry to a Superior Solution Path, Mr. Steve Pullins (and much earlier myself) most of the value creation is occurring after the meter, in a vibrant open market where many disruptive technologies are available.
Those disruptive technologies, however, are generating a very costly everyone for himself (EFH) market, that I started to mentioned after the IEEE Power & Energy article a Dominican strategy, as Dominican “customers have invested large amounts of money to reduce shortage costs individually.” As we look carefully, the same thing has been happening in the U.S., as can be seen in the post U.S Power Service is Regulated as a 3rd World Country, that says:
According to the Galvin Electricity Initiative, "the U.S. electric power system is designed and operated to meet a ‘3 nines’ reliability standard. This means that electric grid power is 99.97% reliable. While this sounds good in theory, in practice it translates to interruptions in the electricity supply that cost American consumers an estimated $150 billion a year… In other words, for every dollar spent on electricity, consumers are spending at least 50 cents on other goods and services to cover the costs of power failures...”
That is how large was already the vibrant U.S. EFH market when that quote was made. It is easy to know that as digital penetration increases, that competitive market will keep growing, while leaving behind an obsolete IOUs market. That is why Mr. Pullins findings lead to the awareness needed for IOUs investors to adopt as soon as possible the EWPC paradigm in their favor.
Sufices to say that the EWPC paradigm separates the whole emerging system into two subsystems that mutually reinforce each other. One open wholesale and retail market system and one regulated transportation (T&D) only system that should evolve into the smart grid. That is the vision.
Besides the above documents, among the more that 130 EWPC articles, I suggest to start reading this two:
1) The Sixth Disruptive Technology
2) Leadership Answers What to do First
José Antonio Vanderhorst-Silverio, Ph.D.
Systemic Consultant: Electricity
EWPC System Architect