Smart grid: on the ground, fits and starts

Phil Carson | Apr 12, 2010


Slicing and dicing the variety of smart grid efforts worldwide to produce insights for all takes many forms. Market analysis firm IDC's Energy Insights practice just released one such report.

I'll share a few findings, having spoken yesterday with report author Jill Feblowitz, the Energy Insights practice director at IDC. (She's also lead analyst for IDC's Utility IT Strategies practice.)

The IDC's Energy Insights practice's mission is to maximize the business value of technology investments and minimize risk through planning, a notion that provides context to the report's findings discussed here.

The report released yesterday was dubbed "meter-to-cash," a phrase that describes the whole back-end business process from meter reading to billing to presentation to customer payment. Feblowitz and her colleague, Marcus Torchia, surveyed business and IT executives at major utilities in the United States, United Kingdom, Australia and China.

First, the survey found that smart grid investments are strong across all four countries. As one might expect, new technologies impact business processes and utility-customer interactions. In the data management area, however, "missed opportunities are abundant."

"Surprisingly," according to the report's executive summary, "utilities are not yet at a point where they are making full use of the data. Less than half the respondents [across all four countries] are applying analytics to consumption and other customer data to understand customer consumption patterns or responses to new pricing. Utilities are finding that managing meter data is more complex than originally anticipated."

"There wasn't a comprehensive, strategic approach to telecommunications infrastructure," Feblowitz told me. "Utilities were approaching it from the standpoint of 'let's get the smart meters in first, then maybe we'll think about the telecommunications strategy and infrastructure later on. That's all well and good but it may mean you make some costly mistakes."

While some meter data management is being done - e.g., getting meter data to the customer via the billing process - much of the meter data is not yet being analyzed for its business value.

"The reason why a lot of data isn't being used is that the utilities haven't really developed a strategy on how to manage it, who [within the utility] is going to get access to it, determine its value and figure out how to release that value," Feblowitz said. "It was pretty clear from the survey that utilities weren't using the data for capital planning, analyzing consumers' consumption behavior or payment behavior."

"People have not sat down and decided what they want to get from the data," Feblowitz continued. "A lot of folks are still deciding where and how to store the data, let alone do the analytics to provide decision support."

Two recommendation from the report:

  • Utilities need a comprehensive, long-term roadmap for an enterprise IT architecture that takes into account changes in business processes and customer interactions as a result of smart implementations.
  • In network communications, utilities should embrace a converged network strategy that can scale as more applications are deployed.


"Enterprise architecture is really critical," Feblowitz told me. "Not everyone is doing it. There are a couple benefits. First, it allows you to do things more quickly and to be more nimble if you re-architect to be more Web-service oriented. We recommend that people take a step back" and assess their current enterprise architecture. How easy will it be for different personnel within the organization to get value out of that data?

Data analytics can help create a basis for dynamic pricing, demand management and peak load shifting programs, Feblowitz added.

"We asked utilities to look at what sort of [network communications] strategy they had and most weren't looking at strategy," she continued. "They were either building a private network or using their existing network to support communications for the grid. It varied from country to country."

Just look at your whole network communication needs - not just for smart metering, but also for being able to communicate data from sensing devices on the grid, Feblowitz suggested. Perhaps you need a policy of using a mix of public and private telecommunications support. Maybe you decide to do it all internally.

"The fact is," Feblowitz said, "there's often not a conscious policy. It's just: 'we've installed smart meters, now we have to get that data backhauled, so let's go with a proprietary, fixed network and get that data in."

The recommendation: "Understand the requirements for using interval data to support load profiling, capital investment and planning for distribution, and pricing and target marketing."

Phil Carson
Intelligent Utility Daily





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"Utilities were approaching it from the standpoint of 'let's get the smart meters in first, then maybe we'll think about the telecommunications strategy and infrastructure later on. That's all well and good but it may mean you make some costly mistakes."

Correct. The question is, how and why is money spent like this...somewhat haphazardly, without solid justification and absent anything that could laughingly be called a plan. I've speculated in prior posts and have been excoriated for suggesting that a tangle of ulterior motives abound.

Let's suppose I'm wrong. What then explains multiple out-of-the-shoot stumbles? Could it simply be the sudden availability of public money to an immature concept? If so, how can discipline now be imposed before "costly mistakes" overwhelm any perceived benefits?

In my estimation, the entire Smart Grid effort is at risk of being fatally undermined by a lack of what I'll call "adult supervision": professionals that say "no" for cause. Engineers often provide this service...and are roundly discounted by "big idea guys" as crank deal-killers. The irony is that "big idea guys" are the real deal killers. Unfortunately, they aren't discovered until it's literally too late.

My advice to the "big idea guys": seek professional help before you drive the Smart Grid over the dumb cliff.