Jose Antonio Vanderhorst-Silverio | Jul 4, 2010
By following John Kotter’s suggestions about why transformations efforts fail, it becomes crystal clear that the smart grid undergoing process lacks a clear vision as it was not designed as transformation effort, but to make use of the financial opportunities given by the stimulus package. A vision that puts customer first is urgently needed to initiate a transformation process. The emerging vision leads to two systems that mutually reinforce each other: the regulated Smart T&D Grid and the competitive Smart Enterprise that put customers first. The vision integrates the two systems into a smart grid only at real-time operation.
Initiating the Smart Grid Transformation Part 1 of 3
By José Antonio Vanderhorst-Silverio, Ph.D.
Creator of the EWPC-AF
Systemic Consultant: Electricity
First posted in the GMH Blog, on July 4th 2010.
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To start the process as a real transformation effort, a critical thing to be done on Step 5 is to question the Investor Owned Utilities Architecture Framework (IOUs-AF) and its extensions as a “structure that seriously undermines the vision.”
Similar to the 4th person, I've been studying this intensely for 15 years. Unlike the 4th person, I’ve been designing the solution. All started back in 1995, which led to a 1996 paper financed by USAID where I made a proposal that the Dominican power industry needed an integral transformation to a long term vision. After I gave the presentation at the Peak Load Management Alliance Fall 2004 Conference, Achieving Market Value Through DR Technologies, I have evolved to become the system architect that created the global Electricity Without Price Controls Architecture Framework (EWPC-AF) to replace the century old IOUs-AF.
The summary of the EWPC-AF article says that “A new approach to power energy policy design, based on system’s architecting heuristics, has led to an emerging simplified synthesis of the power industry regulatory policy. Instead of undergoing business as usual regulatory proceedings, the approach to the Electricity Without Price Controls Architecture Framework is poised to replace the Investor Owned Utilities Architecture Framework and its incremental extensions that have evolved by analytic patchwork as a extremely complex system”
To start considering that emerging approach to enable a powerful EWPC-AF global guiding coalition, as required on Step 2, please take a look at the EWPC article A Single System & the Enterprise War, whose summary says: “A single integrated emergent power service system is optimally structured into the enterprise and the grid subsystems, that are highly cohesive with lightly coupled interfaces. The enterprise subsystem is designed to enable an architecting war among Second Generation Retailers (2GRs), while the grid subsystem remains regulated.”
To remove the obstacle of the assumption that utilities can impose supply side rates across the board, the EWPC-AF offers risk taking competitive 2GRs that will develop the Smart Enterprise by marketing and selling high tech product and services to customers on the TALC. Unlike regulated utilities, 2GRs should be able to offer customers one stop well coordinated integrated offerings that "align retail rates with energy efficiency and demand response objectives."
As the 1st person anticipated under a different scenario, regulated utilities will no longer get distracted with customer facing smart meter activities of the stimulus package. Instead, those utilities whose investors prefer regulation can concentrate their efforts into modernizing the transmission and distribution infrastructure. The result will be a very clearly defined T&D Smart Grid vision.
Those remaining utilities that want to go through Kotter’s, which also include, Steps 6 - Plan for and creating short-term wins; Step 7 - Consolidate improvements and producing still more change, and Step 8 - Institutionalize the new approaches, to do a complete cultural change, should make the decision to sell their T&D assets to be able to join as 2GRs the global EWPC-AF coalition to help develop the Smart Enterprise vision.
Last but not least, the complete smart grid comes alive under the system operator at real time. At other times the complementary Smart Enterprise is helping coordinate customer investments to integrate the resources of the demand side to power system planning, operation and control or executing pre and post real-time economic transactions with customers and central station generators.