Reprinted with permission of the Smart Grid RoadShow

 

I recently had the good fortune to interview a smart grid thought leader, Robert Wilhite III, Global Director Management & Operations Consulting for DNV KEMA on issues related to the smart grid, DNV KEMA’s new interop lab, and what an optimal smart grid may look like in the future. Rob will be joining myself and other industry luminaries at the Smart Grid RoadShow to be held April 23-25, 2012 in St. Petersburg, FL. For now, I trust you enjoy this interview with Rob.

Brock: Last year DNV KEMA announced a Smart Grid InterOp Lab for testing compatibility of next generation smart grid technologies. What can you tell our readers about that lab and the role it plays in the developing smart grid?

Wilhite: We are thrilled to have continued DNV KEMA’s global leadership role for testing, certification, and risk management by opening DNV KEMA’s Smart Grid Interoperability Lab (SGIL) and its supporting network in October 2011. While the SGIL is the first such facility opened in the U.S., it does fit in nicely with DNV KEMA’s portfolio of labs in existence in both the U.S. and in Europe. This includes the following facilities:

· DNV KEMA PowerTest lab: http://KEMA.com/services/testing/hmv-components/labs/Powertest.aspx

· Smart meter calibration and testing lab: http://KEMA.com/services/testing/calibration/Default.aspx

· FlexPower Grid lab: http://www.KEMA.com/services/ges/smart-grid/flex-power-lab.aspx

The SGIL, co-located at the Duke Energy Envision Center in the Cincinnati area and at the existing DNV KEMA-Powertest lab in Chalfont, Pennsylvania, allows utilities to perform tests that are based on their smart grid design. Tests can be performed based on the particular use cases that they will be exercising in the real world, and on the ability to examine and optimize a myriad of possible options with the rigors of formalized test methods. Because there are no universally-adopted performance standards for these operations, it is difficult to predict their actual execution without either modeling the interaction or physically connecting the systems in a laboratory. It may be difficult to replicate all of the stimuli that would be required to show how the elements interact, or to effectively recreate events (e.g., power outages) in real-world demonstrations. Therefore, the SGIL will play a much needed role in supplementing on-going industry demonstration projects, in order to better understand, and resolve, risks of scaling smart grid networks. The SGIL offers many unique advantages to utilities and industry suppliers as they seek to manage the unknowns of the emerging smart grid-enabled future. The lab offers a live, operational smart grid environment to test and simulate compliance of products and services with existing and new standards, as they evolve. New products and services are tested individually, or in combinations, for compliance and interoperability with other products and services, using industry accepted standards and test protocols. (Note: text extracted from DNV KEMA’s Global Contact publication, June 2011).

Brock: DNV and KEMA have formally joined forces. Please explain for our readers what the new company will offer.

Wilhite: DNV KEMA's services cover the energy value chain from energy source to end user, including renewable energy, carbon reduction and energy efficiency, power generation, transmission & distribution, and energy-related testing, inspection & certification. The company consists of all 1,800 former KEMA employees, complemented by over 500 employees from DNV’s former renewable energy and sustainability activities. While DNV KEMA’s core markets are in Europe, North America and China, the company will pay special attention to growth regions such as Asia-Pacific, Latin-America and the Middle East which have a strong need for energy expertise.

Brock: Tell us more about standards development for the smart grid in the U.S. as compared to other countries.

Wilhite: First, I am more than impressed with the work that George Arnold and his team at NIST have done with this enormous and complex effort to develop a framework to guide smart grid interoperability standards development in the U.S. While many of the referenced standards will be internationally adopted, the undertaking to ensure that key stakeholder needs and concerns in North America are included in this accelerated effort is quite daunting. That being said, it is an even more complex undertaking to take these standards, and their resultant testing protocols, to the next level in the U.S. Given the disconnected nature, and often inconsistent approaches, of our state-driven regulatory regimes and lack of a national energy policy, the question of exactly HOW we apply these standards will remain a difficult one for the near future. I do not suggest that we need state authorities driving standards adoption for their regulated utilities, but a common approach to standards adoption and testing would remove a number of barriers to wider implementation of smart grid networks, especially for multi-state utilities.

This is perhaps the advantage that other countries have in adopting smart grid, as compared to the U.S. Brazil, for instance, has one electric system regulator that can, by default, seek consistent approaches for all of its utilities. In the European Union, more than 30 separate countries are working through common frameworks through collaborative initiatives such as CENELEC (http://www.cenelec.eu/aboutcenelec/whatwedo/standardsmakingprocess/index.html). While it is great to see that the U.S. experience is being shared with the European Union's Smart Grid Coordination Group, the model that the EU has already employed with standards programs like CENELEC appear to be successful in bridging natural barriers in language, culture, and geography. Finally, since approximately 20% of the world’s electric customers are found in China, we find that they are quick to adopt and apply their own standards, but are now also showing some signs of international collaboration. Should we move to a future where the standards development and adoption process become even more universal, growth rates for smart grid deployment would certainly be expected to increase as resulting program risks and costs decline.

Brock: Last summer you addressed President Obama's Council on Jobs and Competitiveness at NC State University. Is the smart grid adding jobs and helping to improve the economy?

Wilhite: Just to clarify, I was one of several dozen invited participants to share perspectives with the President’s appointed Council on what short-term options should be considered relative to creating incremental jobs in the energy sector. A more detailed review of my observations from this session is captured in a blog posting on DNV KEMA’s Smart Grid Sherpa site: http://smartgridsherpa.com/blog/a-view-from-obamas-smart-grid-action-session. Following this posting, I did comment on whether jobs were truly being created as a result of smart grid, please see these comments at http://smartgridsherpa.com/blog/smart-energy-job-growth-exceeding-smart-grid and at http://smartgridsherpa.com/blog/has-smart-grid-spending-to-date-fostered-enough-job-creation. Since then, I would say that we have come pretty far in determining more effective metrics for estimating smart grid job growth. I would not suggest that we rely exclusively on the federal government’s reported metrics from the stimulus grant and demonstration projects. Instead, we need to have better methods to determine indirect jobs creation (e.g., suppliers to smart grid device manufacturers, educational institutions for new workers), plus those positions created as a result of induced job creation when direct and indirect suppliers to the energy value chain further expend their economic gains into other sectors. We also need to understand how smart grid investments in the energy sector also have impacts to other, related industries (such as increased PHEV sales as a result of smart grid-enabled vehicle charging stations). Finally, given the connected tissue of our global industry, we need job creation metrics that also consider the worldwide nature of these investments, as seldom do we find hardware or software systems truly manufactured only in the U.S. or exclusively with domestic components. Look for a future analysis report on this subject to be made available by DNV KEMA.

Brock: Looking to the future, how will an optimal smart grid look in year 2030?

Wilhite: This question is rather timely, in that I just addressed this subject in one of my recent blog postings at our Smart Grid Sherpa site, http://smartgridsherpa.com/blog/when-does-the-smart-grid-become-intelligent. First, I have never been a big fan of the term “smart grid”, as we have certainly employed some degree of automated technology in our transmission grids, and to a lesser extent in some distribution systems, over the past 20 or more years. As the use of analog measurement devices transforms into digital sensors; telecommunications systems become more reliable, cheaper, and faster; and data analytics and IT systems significantly expand in capability, we are finding that today’s “smart” grid will become tomorrow’s “intelligent” network.

As stated in the referenced blog posting, the key question, however, is how will we know when the grid transitions from being merely “smart” to becoming truly “intelligent (or optimal)?”

Perhaps the answer is best obtained by identifying some relevant dimensions of this future state. Reflecting on the progress of a current Smart Grid program, perhaps we will one day find intelligent grids where:

• Sensors and controls become truly autonomous, driven by self-correcting, intelligent algorithms that are operationally embedded and completely interoperable

• Utilities and energy providers are making the automation investment decision a priority, with intelligent controls a design standard for asset management and operations

• New, third-party stakeholders and market participants offer a larger array of new and innovative products and services

• Regulators and policy makers enable more effective cost recovery schemes, not tied to the current regimes, and with majority support (or demand) from relevant industry stakeholders

• Consumers demand the flexibility and fully engage as active participants, often demanding greater levels of innovation and automation from their energy providers.

Then only remaining questions, perhaps, are how long will it take to reach this intelligent position and is this truly an optimal state?

Brock: What has to change to enable an optimal smart grid in year 2030?

Wilhite: An optimal “intelligent” grid will not appear overnight, nor can it develop without significant changes in policy and regulation. Today’s electric and gas providers operate in a market that is significantly controlled through regulatory and government authorities. Energy providers of the future will seek to operate under a market and customer-driven model, rather than our regulatory construct of today. The advantage to all of us with a market-driven model is greater flexibility in product and service choices, pricing options, and increased innovation. Indeed, we have already witnessed some of these changes in the U.S. (e.g., Texas) where retail energy competition and consumer choice has been introduced. Driving these changes will also require clarity from our federal policy makers, in the form of a national energy policy that sets direction.

From the utility perspective, I do believe that the distinction between “T” and “D” will blur, such that equal degrees of automation will exist at all voltage delivery levels. We will also see a greater increase in privatized transmission systems, especially DC-powered systems that, with proper regulatory and pricing incentives, will induce private funding from non-conventional sources to serve remote sources of renewable power production facilities. Furthermore, the dividing line between utility and customer-owned systems will also become less concrete. In fact, in one of my recent Smart Grid Sherpa blog postings, I have suggested the notion that we may not require an electric meter in the near future, once the current generation of AMI deployments have reached the end of their asset life cycle (see posting: http://smartgridsherpa.com/blog/what-is-smarter-than-a-meter).

Finally, I believe that it is inevitable that our industry will see some form of disintermediation, such that consumers become power producers, even bypassing the distribution company as a supplier in the energy value chain. The utility model is well-established and represents significant investment, so it is not going away anytime soon. However, it will certainly be challenged by innovative ideas, which will attract an increasing number of start-up ventures and new private source capital, and interest from established industrial and technology firms, further fueling innovation and new applications. In short, the Utility of the Future will need to anticipate the potential for unlocking new value with transformational changes, while responding to the need to be even more efficient with current systems.

Brock: Thank you Rob. I appreciate your time. I look forward to continuing this dialogue at the Smart Grid RoadShow in April with other colleagues and being able to debate what's going on today and where we are headed in the future.

Jon Brock is President of utility and energy advisor Desert Sky Group, LLC. Jon is also a member of the SGRS Program Advisory Committee. He can be reached at jbrock@desertskygroup.com