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Breaking through the execution impasse

“Think big. Start small. Scale fast”, was this year’s theme at the IDC Utilities Executive Summit. You’d be forgiven if you thought you’ve heard that advice before. As two smart grid consulting veterans, we’ve both suggested such an approach. Nevertheless, Roberta Bigliani and her team seemed more interested in making this a question, than proffering advice. Why? Because much of what we have discussed over the last four years at the summit and elsewhere across Europe –-decentralized generation; energy aggregation; energy trading—is possible and apparent, but probably not to the levels we expected. Where is the scale?

IDC put the question out to the audience. Wisely they removed ‘Regulation as a barrier’ from the optional answers. While regulation still has much to do to support the transformation, it is all too easy to sweep other issues under the regulation carpet. 

In the OMNETRIC workshop, we further explored the scale challenge, starting out with an aspect of grid modernization many of us in Europe have either worked on or observed for some time: smart metering. Starting back in the 1990’s to squeeze costs associated with high industrial meter reading and field servicing, smart metering for the last 15 years has been part of a regulatory strategy to tap energy efficiency incentives as a lower cost alternative to power plant investments. It has also evolved into an information-driven “behavioral” solution that’s cost-effective and customer friendly. However, this has been a three-decade evolution that falls short of scaling fast. The major hurdle was perhaps a weak roadmap that failed to prioritize use cases and uncover the full value. Smart Metering 3.0 is just emerging and this time around many utilities are closely assessing the benefits of near real-time intelligence at the edge of the grid. We believe as this feeds new services for customers, this time there will be a significant acceleration in deployments driving broader scale.

When it comes to DER integration, we considered VPP and microgrid. At OMNETRIC, we have implementation experience with both, in Europe and the US, working with Siemens. But the examples remain the exceptions rather than the market rule. Of IDC’s suggested hurdles to scale, we’d agree that innovation occurring in silos remains prevalent at many utilities. Too often successes occur under the radar and fail to cross-pollinate. In our experience, however, it’s also the complexity of bringing multiple stakeholders – utilities, cities, aggregators, service providers, citizens – together to realize these projects that inhibits scale. We will all need to collaborate differently going forward to improve the orders of magnitude in this domain.

Indeed, getting better at collaboration across ecosystems is essential, but also as utilities with other utilities. We introduced the CryptoKitties craze of late last year: initially a playful experiment of early stage blockchain technology, CrytoKitties involves trading unique digital kittens across a community on a distributed network. The craze turned viral. The entire Ethereum blockchain risked grinding to a halt. We shared how collaboratively developers from competing applications solved the system congestion in one week without scaling the solution, saving the technology and the business model. For those involved in the CryptoKitties challenge, the takeaway was that until the model stagnates there are no losers. Surely that’s an incentive to collaborate.

So about that scale? In our opinion, the fact this transformation is digitally-led doesn’t change the focus on value. Uncovering the value through use cases is essential, but make those part of a journey to an end destination rather than ad-hoc pilots. And collaborate. Collaborate across departments, across the value chain, across the ecosystem. Indeed, maybe in future, our advice should be, “Target value. Collaborate widely. And scale will come”.