Generating Insights | Accelerating into a new era in energy

By Stephen J. Callahan, IBM

In the early days of smart grid—before the term “smart grid” became popular—one of the most frequent conversations in the industry was how to “futureproof” the implementation of smart meters. I remind you that this dialogue began when smart meters were generally not outfitted with remote disconnect/connect capabilities, and the only operational discussion was in regard to reducing truck rolls. In terms of customers, everyone was focused on how to limit the changes required in utilities’ massive customer information systems, since, instead of having a single meter read per month, metering data would be on a per-minute and in some cases sub-minute basis.

We’ve come a long way in the smart grid journey since these discussions (which really only began ten or so years ago). In retrospect, the future-proof discussion seems prophetic. Although at the time it concentrated exclusively on meters given that high capital costs were associated with their implementation, the future-proof discussion in the present context revolves around higher evolutionary phases of smart grid focused primarily on operations and the customer. Indeed, meters constitute only the foundation for the innovation available through smart grid. It is through these operational and customer innovations that the true value of smart grid will be realized.

The Evolutionary Tree of Smart Grid

To put this innovation in context, one needs to consider the evolutionary tree of smart grid.

Smart Grid 1.0

“Smart Grid 1.0” is a meter-centric smart grid, and is the current phase of implementation for the vast majority of utilities implementing smart grid. It’s quite mature from the perspective of the many details and intricacies that had to be discovered and created over the course of an implementation. All of the business cases for Smart Grid 1.0 are remarkably similar across utilities, and the technology has become generally stable and more feature-rich than the earliest implementations.

For many utilities, it is the beginning and end of their smart grid vision.

Smart Grid 2.0

“Smart Grid 2.0” is an operations-centric smart grid. Implementations of this branch of smart grid are emerging with a focus on how to use smart meters in outage management, meters as adjuncts to network monitoring, and—more ambitiously meters as sensors. Smart Grid 2.0 also has an important sub-branch that is not dependent on metering and revolves around the notion of improving the intelligence of the grid through applications such as conditionbased maintenance, line sensing, and grid automation. These more advanced ideas are complementary to the Smart Grid 1.0 lineage, but not necessarily dependent upon it. As we will see below, however, this sub-branch is critically dependent on the key transition element from Smart Grid 1.0 to 2.0: the network.

Smart Grid 3.0

“Smart Grid 3.0” is a customer-centric smart grid. It focuses specifically on using smart grid to inform and empower customers through the applications that support the efficient and effective use of energy. Almost everyone implementing smart meters had some vision of the customer, albeit often ambiguously defined. This branch of smart grid expands the utility’s reach into the customer premise to enable broad functionality that will most likely be delivered through technologies new to the utility. It also creates an expectation, set by customers, about how they will interact with utilities in the future.

Much of the early Smart Grid 1.0 planning had elements of the more advanced stages of Smart Grid 2.0 and 3.0. Improved outage management was a frequent element in the originating smart meter business cases, and many of these cases relied on an assumption of demand response by customers in order to balance the full implementation cost of the rollout. But it is also true that the underlying technology and infrastructure to achieve a Smart Grid 2.0 or 3.0, vision was not included in the business cases of many utilities.

So, the future-proof question that was raised was indeed the right one. However, the scope of requirements that were used to plan this vision was generally inadequate. As with all change—and smart grid is certainly a big change for the industry— the focus on the end states of the respective smart grid phases overshadowed the key elements of planning for the transition from one phase to another. As smart grid continues to evolve, these transition phases are ever more important to meeting the requirements of improved operations and the expectations of customers. What are the key elements of these transition phases?

Smart Grid 1.0 to 2.0

For the transition phase from Smart Grid 1.0 to 2.0, the key transition element is the network. Network costs and infrastructure to implement a basic smart meter implementation continue to be expensive. For this reason, very few utilities considered the upper levels of smart grid maturity in their implementations. The result is the deployment of networks that meet the requirements of meter reading but are woefully underengineered to implement anything but basic Smart

Grid 2.0 functions. More than a handful of utilities are struggling with this now, as the expectations of the smart metering infrastructure to support operations far exceed the capability of the infrastructure deployed.

Smart Grid 2.0 to 3.0

For the transition phase from 2.0 to 3.0, the key transition element is applications. The current state within the industry in regard to customers is elemental. Utilities have added to their websites the capability for customers with smart meters to see graphs of their energy use in a basic format. Only a few pioneers are experimenting with more advanced customer interaction applications that better leverage the dramatic increase in information granularity and accuracy.

One might read the aforementioned state of smart grid implementation and conclude that the efforts to future-proof Smart Grid 1.0 fell short. Fortunately this is not true. As the evolution of smart grid continues, what is needed is a view of that can be used to drive the appropriate investment in operations and customer functionality. That view starts with a rich customer interaction vision. It then takes that vision and projects backward into utility operations to define the set of applications and infrastructure required to implement the customer vision, predicated on the foundation of the already implemented smart metering infrastructure.

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