INTERVIEW: Frank Hoss by Chris Trayhorn, Publisher of mThink Blue Book, May 14, 2007 Energy & Utilities: From your perspective, what is the intelligent grid? Frank Hoss: The intelligent grid focuses primarily on the efficient, reliable and safe distribution of electricity. It’s the marriage of the electrical distribution infrastructure, with a communications infrastructure. That can be in the form of a number of communication protocols such as two-way radio frequency, broadband over power line, power line carrier, cellular or WiMax. It’s that combination that makes the data – which was always available on the distribution grid – more readily accessible for operating, maintenance and planning decisions. It also lets the utility run its distribution operations in a much more autonomous, automated, remote fashion. E&U: What do you see as the catalyst behind efforts to make the intelligent grid a reality? FH: A number of events have made it possible to focus on the intelligent grid and make it feasible. Data from distribution grid devices has always been available, but the problem has been retrieving it and using it remotely on a wide scale. The needed communications have been prohibitively expensive up til now. Over the last several years, communication technology has developed rapidly, so bandwith and wide-scale deployment are more economically feasible now. And many utilities are experiencing government or regulatory mandates to implement smart metering, which requires a very robust, wide-scale communications infrastructure. So utilities now have a mechanism to get communications in place affordably. And to a large extent, the distribution grid has been operated as a “black box,” with few actual data points used in grid operations. But with programs and initiatives like demand response, dynamic pricing, distributed generation, renewable and alternative energy sources, islanding, smart homes, much more needs to be known about the distribution grid to keep it operating efficiently and safely. And because It’s not uncommon for it to take 10 or 12 years from concept to execution, efficient grid operations are going to be instrumental in alleviating either transmission congestion or the generation capacity problems. E&U: What are the main challenges utilities face in making the intelligent grid a reality? FH: The intelligent grid is going to be an evolution, starting with mandated smart metering. For utilities, it’s a huge investment, and they want to get it right the first time. Communications is a major part of that. Even with widescale communication solutions becoming affordable, it’s still changing quickly, and something else even better may emerge in the near future. One good example is WiMax. Now you have several major telecommunications companies that are investing billions of dollars in WiMax over the next several years, which could make it a preferred solution for utilities. Also, when utilities are considering intelligent grid solutions, what they’re implementing today must position them for the operating and regulatory environments of 15 to 20 years from now. That’s why it’s so important that they do it right the first time, so they can leverage what they’re doing today for future implementations. E&U: How do utilities ensure the intelligent grid solutions they choose for today will be current in the fast-paced technology development cycle of the future? FH: When we talk about intelligent grid solutions, it’s multiple solutions that will need to be implemented and integrated. But any solution must meet three primary conditions: 1) the solution must be open, meaning there’s no proprietary software or code involved, so the utility can interface with that particular solution without having to go back to the vendor; 2) the solution has to adhere to a standard communication protocol, as being IPaddressable or in line with the IEC 61850 requirements; and 3) the solution must be scalable. When you talk about building the intelligent grid over the entire distribution infrastructure, you’re talking about having to integrate multiple solutions. The more they can scale, the better for the utility in terms of both integration and maintenance of those solutions going forward. Finally, utilities must realize the intelligent grid is an evolution that will take years to implement. They need to make sure that what they’re doing today will prepare them for 15 to 20 years down the road. And the intelligent grid is not the same for every utility, because each one has different drivers that will result in different solutions. One good way for the utility to prepare is to start examining plausible scenarios, maybe in five-year increments, within which they may find themselves having to operate at some point and determining how the company must respond to be successful. And then extend these scenarios to 15 or 20 years out. Each solution should be a building block or enabler for what they’re going to need to do over the next five years. It’s not a perfect crystal ball, but I think adherence to those three primary solutions and the use of plausible scenarios can help the utility develop a realistic intelligent grid road map. E&U: Are there any additional challenges facing a utility that needs to implement an intelligent grid solution? FH: I think another challenge is the sheer magnitude of data that’s going to be available from implementing intelligent grid solutions. It’s going to require that the utilities have an extremely robust data management capability. Probably the best way to show this is to talk through an example. If you take a utility that’s looking to deploy just 1 million smart meters, that’s going to be equivalent to about 110 million records on a daily basis. Of those 110 million, 96 million would be usage records, with another 10 million records associated with voltage readings, and then an estimate of about 4 million records associated with missed readings/rereads. Add to this, some of the other programs and initiatives that are going on in the industry; for example, distributed generation. If 2 percent of your customers will have distributed generation, that adds 4 million records per day for the distributed generation requirement. And then when you start looking at load management and demand side management, that could add up to another 50 million records per day. So when you examine this on an annual basis, all those records represent a combined 59 terabytes of data, which is huge. The other aspect is the timing of the data. Prior to intelligent grid solutions, the need for the frequency of the data ranged anywhere from months down to days, and in some cases, maybe hourly readings. With the intelligent grid solutions operating the distribution grid in a near-real-time fashion, we’re now talking about milliseconds in some cases. This is new territory for many of the utilities and for the vendors that are providing solutions – not only to be able to acquire the data but to process it and provide it as output to wherever it’s needed within a-millisecond-or-less time frame. E&U: What’s the justification for implementing intelligent grid solutions? FH: Whether it’s being mandated or whether the programs or initiatives are under way to make utilities much more energy-efficient, intelligent grid solutions will have to be deployed. Utilities are challenged to provide a business case any time they spend money, not only internally but a justification that will stand up to the scrutiny of regulators as well as customers and stockholders. As far as intelligent grid solutions, whether it be smart metering as the starting point or other solutions, utilities have to leverage whatever piece they’re currently considering to its maximum value within the company. For example, if you’re installing smart metering primarily for automated meterreading capabilities, consider whether you can also use that meter information to identify outages. You’ll detect the outages much sooner and do a much better job of deploying field crews to make the repairs. It would take a very small additional investment to be able to leverage initial smart metering capabilities to support outage management like this, and the utility would realize some very significant benefits. There are a lot of opportunities like that in these intelligent grid solutions. E&U: How does the GridWise Alliance support the intelligent grid efforts? FH: The GridWise Alliance is an organization that has been together about five years. It is a collection of utilities as well as vendors primarily focused on effecting policy, legislation and regulations within the utility industry, at federal and state levels. We want to make sure that, whether it’s the Department of Energy, FERC, other regulatory bodies, or Congress that they’re putting legislation out there that advances the intelligent grid and the deployment of energy-efficient solutions. We’re also interested in having various companies like DOE provide the right type of research and programs to make the intelligent grid solutions a reality. We want to stay on top of those drivers and mandates to ensure they’re in line with where the distribution grid needs to go. Filed under: White Papers Tagged under: Utilities About the Author Chris Trayhorn, Publisher of mThink Blue Book Chris Trayhorn is the Chairman of the Performance Marketing Industry Blue Ribbon Panel and the CEO of mThink.com, a leading online and content marketing agency. He has founded four successful marketing companies in London and San Francisco in the last 15 years, and is currently the founder and publisher of Revenue+Performance magazine, the magazine of the performance marketing industry since 2002.