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In This List

Utilities urged to 'move beyond the smart grid'

Essential Energy Insights - September, 2020

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Utilities, midstream reckon with energy transformation on the horizon


Utilities urged to 'move beyond the smart grid'

Noting the unprecedented challenges facing utilities and grid operators today, Itron Inc. CEO Philip Mezey told attendees at the DistribuTECH 2017 conference that they must "move beyond the smart grid" to deliver a broader, dynamic network of distributed and interconnected devices and generation resources.

"Maintaining a reliable and stable grid has become more challenging, deep solar penetration is dramatically changing generation portfolios, we're hearing increasing stories around data security breaches and privacy threats; and new participants and players are requiring us to open up the commercial marketplace," Mezey said in a Jan. 31 speech. "That means we have to rethink the existing paradigm of collecting and analyzing data in a central repository. A much more dynamic network environment is evolving where decisions have to be made locally and quickly."

Rapid change and radical new challenges were the theme of the keynote addresses on the opening day of the largest U.S. conference for the transmission and distribution industry, which was held in San Diego. Citing Donald Trump's ascent to the U.S. presidency, the U.K.'s vote to leave the European Union and the Federal Reserve's consistently off-base economic growth forecasts, Fortune magazine Senior Editor-at-Large Geoff Colvin pointed out that in the power sector, as in many other industries, "Our models just aren't working anymore."

In New York state, Gov. Andrew Cuomo and the New York Public Service Commission have set about "rethinking the energy industry" through its Reforming the Energy Vision program, launched in 2015, said Audrey Zibelman, the outgoing chairperson of the New York Public Service Commission.

The model is the network

"For us, the technology wasn't the problem; we could see that the technology is there," Zibelman said in her address. "We recognized that in order to achieve deep decarbonization, to create a more resilient, more efficient, more economic energy system, we needed to change the model. And for us, the model is the network."

Creating a more sophisticated and dynamic network lies at the heart of the challenge for many of the utilities and their suppliers exhibiting at the DistribuTECH show. As Zibelman noted, many of the technological challenges have been or are in the process of being met; now, the real obstacles are business and regulatory.

"We realized we needed to change the business model," Zibelman said. "If you're a distribution utility, it's not enough anymore to just supply the wires to the consumer; you need to be the platform: to interconnect consumers with suppliers, to reduce the cost of transactions and to convert data to information to help consumers achieve their goods in a more efficient way. You have to be the integrator of distributed energy resources and the enabler of those markets."

Big-city, regulated utilities like San Diego Gas & Electric Co. are faced with creating a new business model while continuing to provide reliable, low-cost electricity to its customers and meeting California's renewable energy targets, the most ambitious in the country. SDG&E has actually outperformed the state's Renewable Portfolio Standard, said the utility's new president, Scott Drury. "Over the last 12 months, more than 40% of the electricity we've provided has come from renewable energy."

Batteries and wildfires

At the same time, SDG&E is being driven to move beyond its traditional role of providing electricity to its residential and business customers. "We have enormous opportunities in the transportation sector, which is now the single largest emitter of greenhouse gases [of any economic sector]," said Drury. "In San Diego, 50% of the greenhouse gas emissions come from the movement of people and things. As our electricity is increasingly sourced from the sun and the wind, now is the time to transform the way we move both."

To that end, SDG&E has recently filed a request with the California Public Utilities Commission to install new charging infrastructure at the city's airport, its seaport and at delivery fleet base stations, as well as at 350 workplaces and residential complexes around the city. At the same time, the utility is moving aggressively to deploy energy storage in its territory. Early this year, for example, SDG&E expects to bring online two battery storage projects, in Escondido and El Cajon, that will total 37.5 MW of combined capacity. At 30 MW, the Escondido site will be the largest lithium-ion battery storage facility in the world, Drury said.

SDG&E is also trying to be a pioneer in weather forecasting and fire detection, to cope with the wildfires that increasingly rage through the eastern parts of its service territory. The company now has what Drury called "the largest private utility weather network in the world."

SDG&E, he said, is "developing some of the most advanced technology to decrease risks, advance situational awareness and improve responsiveness."

Fire detection, energy storage, electric vehicle charging, platform providers and deployers of dynamic sensing and data networks: the job description for today's utilities has moved far beyond simply generating and delivering electricity.

"A few years ago, people were talking about solar as the death knell for the utility industry," said Zibelman. "Nobody says that anymore. Now utilities are at the center of smart energy networks that will meet the demands of 21st-century consumers."