CIOs: Carbon Pricing, Renewables, Electric Vehicles
As I interviewed a number of chief information officers at major electric utilities this week for an article for our sister magazine, EnergyBiz, I thought a few of their observations might generate discussion here at Intelligent Utility Daily.
With energy legislation pending - some in Washington, D.C. refer to the refreshed possibilities as a "spill bill" - how will electric utility CIOs address the possible inclusion of a carbon pricing signal, a possible national renewable portfolio standard and further incentives for the adoption of electric vehicles?
CIOs now have a seat at the executive table, due to the obvious demands that smarter grids place on operational aspects of the business and due to the need for business analytics.
CIOs must be intimately involved in utility-wide collaboration on pending changes. (Just for bookkeeping purposes, let's acknowledge that the explosion in data creation, storage and analysis fed by advanced metering infrastructure continues to bedevil many utilities.)
Within the IT department, there's a concerted effort to create and maintain a more flexible architecture ahead of expected waves of change. In many cases, utilities are turning to "enterprise service bus" (ESB), a software architecture that allows different systems to talk to each other.
In the past, I'm told, if two systems needed to exchange data, IT would build a custom link. ESB should provide a means by which CIOs can provide utility executives with the sorts of business intelligence that will serve strategic decision making closer to real time. That concept - strategic decision making in real time -- in itself reflects the pace of change upon us.
Now, with organizational and technology foundations in place, let's turn to specific concerns. What are CIOs thinking as energy legislation is bandied about in Washington? How will the IT function deal with carbon price signals, RPSs and electric vehicles?
The first two topics are speculative and pending, while the third is upon us, so we'll treat them separately.
Modeling the effects that a carbon price signal and/or a national RPS might have on one's utility business is absolutely critical, I'm told. That's often done with existing resources or tools built by IT for the business side to sketch out various scenarios informed by, say, dynamic pricing, demand response programs, a new mix of power generation resources, efforts to reduce carbon emissions, etc. That can also mean integrating wind forecasting into the overall supply-demand equation.
Once modeling informs strategic business decisions, then the IT investments needed to implement those decisions will (presumably) be made. There's some sense that after a few years of recession and constrained budgets, IT and other departments are concerned about their ability to deliver on some initiatives, according to my sources.
Lastly, just what sort of challenge to CIOs and their IT departments is represented by electric vehicles? Within the past six months, at conferences I've attended, sessions on electric vehicles have gone from half-full to overflowing - seemingly in anticipation of widespread availability of the vehicles, coupled with significant federal stimulus dollars focused on encouraging adoption through the construction of charging infrastructure.
Once again, apart from the operational aspects of EV adoption - toughening neighborhood distribution infrastructure for higher loads, for example - the IT piece is likely to deal with pricing that encourages off-peak charging and bill settlement issues for those who charge away from home.
One of my sources considered vehicle-to-grid (V2G) technology distant enough not to merit much discussion, while another said that such a development could be categorized as distributed storage - perhaps raising as many regulatory issues (who owns the stored electricity, vehicle owner or utility?) as technology challenges.
Believe me, we'll have some juicy details and a wide variety of sources to put the flesh on these thematic bones in an upcoming issue of EnergyBiz magazine.
Meanwhile, please sound off if these themes and observations ring true or if we've overlooked a critical piece of the puzzle.
Intelligent Utility Daily