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The Smart Grid Tipping Point

My buddy Jay Carlson is a born salesman. This guy has the attributes of a carnivore. He is always on the hunt for red meat. So it is more than appropriate

My buddy Jay Carlson is a born salesman. This guy has the attributes of a carnivore. He is always on the hunt for red meat. So it is more than appropriate that Jay sells for sister publication BEEF magazine.

Jay and I were at our favorite Kansas City dive Woodyard Bar-B-Que talking about Malcolm Gladwell's book The Tipping Point: How Little Things Can Make a Big Difference while chewing on burnt ends. Gladwell has a way of framing things that makes you say, “I knew that.” Yes, you might have known it, but you couldn't access the knowledge in a way you could easily put it into use.

Gladwell sees sales as critical to tipping trends into the mainstream, but he also lists “mavens” as key. The maven is a technical expert who gets the underlying value. And the salesman can take the value the maven has unearthed to the marketplace.

So here is how these traits play out on a local scale. When I was in the market for a new vehicle, I used my engineering background to research the capabilities and predicted the reliability of all available minivans. I selected the “best of breed” and shared my findings with Jay. He trusted my sleuthing skills, and we were soon proud owners of Honda Odysseys. Jay went on to pitch the value of this vehicle to all his friends and acquaintances. With the Odyssey new on the market, we found ourselves wait-listed to purchase a vehicle that sold above the sticker price. The tipping point had been breached.

Why the Focus on Smart Grid?

Today, we have all the pieces falling into place to justify smart grid investments, and the investments are flooding in. On the utility side, we desperately need a sophisticated delivery system if we are to integrate wind and solar while building out our static and dynamic energy-storage capabilities. On the customer side, automated meter intelligence fed into meter data management systems will enable innovative dynamic and time-of-day rates, providing the economic incentive for customers to support demand-side management opportunities.

Let's take a minute to review the major events that drove us to the tipping point in the smart grid movement.

Back in 2004, the Electric Power Research Institute and the Electricity Innovation Institute collaborated on the “Intelligrid Vision” to link communications and electricity into a smart grid: an integrated, self-healing and electronically controlled power system that would recognize problems, find solutions and optimize the performance of the system.

But a movement is born when a sponsor puts his or her reputation and weight behind an initiative and turns a vision into reality. And that person came on the scene in 2005 when TXU (now Oncor) CEO John Wilder announced his utility's commitment to partner with Current Communications to create “The Nation's First Multipurpose Smart Grid.”

This smart grid would not be just another pilot. This was the real deal, targeted to serve 2 million Texas homes and businesses. With the vision set and the gears in motion, Oncor leads the nation in extracting value out of the investments it has made in all aspects of smart grid. In fact, this utility was probably too far down the smart grid road to snag stimulus money because much of this utility's infrastructure was already in place.

Several of my buddies at Oncor were charged with installing intelligent metering, automating distribution and integrating their distribution management system. It is one of the few times I can recall when management pushed engineers and information technologists to move technology forward at a pace sufficiently frenetic as to give them heartburn. But I have to hand it to the team at Oncor. They are pulling it off and creating quite a dynamic, entrepreneurial culture in the doing.

I've always liked tracking progress at Duke Energy, and in 2006, this utility shared its vision with its “ROADS” project. Duke developed a communication architecture to enable remote operation and access to the distribution system. The utility planned its work and worked its plans, and now it has smart tools in place as it moves to embrace customer solutions.

We have witnessed steady advances in smart grid in the customer, distribution, substation and transmission arenas. And interest in the smart grid continues to grow along with concern over our carbon footprint and concern over global economic woes.

Smart Grid Reaches the Tipping Point

We reached the tipping point on Feb. 17, 2009, when President Obama signed into law the American Recovery and Reinvestment Act.

Eight months later, on Oct. 27, the U.S. Department of Energy announced the recipients of the $3.4 billion stimulus funds for smart grid. These funds combined with additional moneys from the utilities resulted in an $8 billion investment in the grid. The Department of Energy did its homework and selected 100 diverse projects that — with few exceptions — make good economic and technical sense and will move the industry forward.

At least in the smart grid arena, projects were selected that will deliver more than jobs. “Smart Spending” will enable us to build out our smart grid at the transmission, distribution and customer levels. Let's make the most of this once-in-a-lifetime opportunity that has “tipped” our way.

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