Our next interview is with Cheri Warren, Division VII Director Elect for IEEE Board of Directors, Power & Energy and Vice President of Asset Management for National Grid.
What is the Smart Grid?
The Smart Grid is the next evolution of our electric system. We need to digitize it just like we have done everything else. The Smart Grid is about choice — a choice for customers about renewables, what kind of energy they use, when they use it, and how they live their lives. It's certainly changing the way we operate our electricity system, the way we design our system, adding new technologies such as sensors, adding a lot more automation, enabling the power system to operate in two directional flows. Today it doesn't do that and a lot more technology is needed to know what is happening and when it is happening, which will allow us to unlock some of the dollars that are embedded in our system.
For customers, Smart Grid will hopefully mean lower bills. That's a really big deal because everybody is in pretty tough shape with the economy. Additionally, it means more information, which is going to come in a whole host of different ways. So an elderly person who is really afraid of technology can do a phone call. If somebody is a techno wizard and they want to know what their electricity is doing every second of the day, there is probably going to be an app for that. But customers will have a lot more information about energy and they will be able to make really good choices.
What is your role and involvement in the Smart Grid?
In my volunteer role with IEEE, I'm the Division Seven Director Elect on the IEEE Board of Directors for the Power & Energy Society. In my professional role, I'm the Vice President of Asset Management with National Grid, and what’s cool about that is I'm responsible for investing about a half a billion dollars each year on T&D assets doing all the distribution planning, reliability, the strategy, the asset information and leading the Smart Grid Efforts, and all of R&D. So when you start thinking about the R&D perspective or Smart Grid, what are we going to do next, that's where linking all of those pieces together matters.
Part of my role is leading up the Smart Grid efforts at National Grid, as well as all of the asset management pieces. As you start thinking through Smart Grid, it's about making investments go a lot further than they have ever gone before from the electric system perspective.
At National Grid we managed some pilots a couple of years ago, then we pulled them back to take a hard look at the first generation's lessons learned. We have learned a tremendous amount from the industry today, looking at the new technologies which are moving at an exponential pace, and at new partnership models to determine if they are better placed to potentially put technology into the home. At the same time, we recognized that the missing link in the Smart Grid today was listening to customers. So as we proceed to make different changes to the power system, many people feel like they are going to pay more money and wonder what this mean to them, and what the benefits are for them personally. That has led to a different approach, so we are going listen much more deeply to customers. And from that effort we are going to develop what elements of Smart Grid need to go into people's homes.
What does the IEEE bring to the Smart Grid?
IEEE is one of my favorite topics because if you think about the Smart Grid, there is no one better placed to help advance that technology and accelerate us into the future than IEEE. With 38 societies — power, sensors, computers, communications, electric transportations, and life sciences — can you think of anybody better to design the Smart Grid of the future? Even from the clothes we wear to the way we interact with our devices in our houses, to the energy we use to how often we're getting real time data, to how we are going to deal with all this data — all of that comes together with IEEE. It really is the cradle of innovation. So, getting from here to 2050, that's what is going to happen to IEEE, and the IEEE Standards Association is also helping us get there and leading an effort to figure out what it's going to look like in 2050 and getting all the different groups together to help craft that vision. We can make the standards, and we can do the things we need in the technological space to actually deliver what people need.
Who are the stakeholders in the Smart Grid and how do they stand to benefit from the interpretation of the Smart Grid?
The stakeholders vary widely. Every single person on the planet is actually a stakeholder in Smart Grid, and that's not too wide ranging. If you think about it from the low-end consumers to the high-end businesses, regulators and politicians, and you start breaking it down into customer groups such as mothers and elderly, etc., every single person is going be touched by Smart Grid in some fashion or another and there’s a whole load of benefits that are going to come out of it, not the least of which are more jobs, green jobs in Worcester where we are going to do our pilot. We started looking at the asset map to determine all the strengths we already have in the community to help us achieve the green, smart revolution.
In Worcester, a solar power smart car wash was implemented by a group of folks who are doing solar power installations. They've created 20 new jobs already in the community, green jobs for stuff that is completely non-traditional. Do you know who is the most sustainable company on the planet today? Most people won’t know this answer, but the answer is Wal-Mart. There are a couple of reasons for this — one, as such a disliked company they couldn't get into the different areas they needed to, so they started looking around and asked themselves what do we need to do? They looked at sustainability and felt it was the right answer, but more importantly they felt they will put dollars on their bottom-line and have already proved that to be true. So, with respect to who is going to benefit, everybody will in one-way, or another. Others who will benefit greatly are low-income customers; we are going to put a percentage of their income back into their pocket that they wouldn’t have otherwise. So I think the benefits are wide-ranging and choice being one of those key benefits, as well.
What does the utility need to do differently to better understand these customer needs?
We are all suffering from a very systemic problem. We have been a heavily regulated utility industry for about 125 years. Traditionally what happens to a regulated industry is we don't have a lot of customers' focus. People come home, they flick on the light switch, they expect the power to be there, they pay their energy bill, they complain when the power is not on or if the bill is too high. That's the sum total of the relationship that we have today. If Smart Grid is going to be a reality, we have got to fundamentally change that relationship and we have got to do it in a really new and creative way.
How should we design the utilities system in the future, who should be involved?
The new technique that we are going to try at National Grid guide by Dr. David Cooperrider, Case Western University, who came up with this concept of change. He has managed to get 350 people in a room from every aspect of the whole ecosystem and our case students, regulators, universities, government officials, every kind of customer, utility workers, anybody who has a stake in this, into a room for a strategic planning session. He has had numerous successes, including taking $75 million off bottom line, and taking a company's 300 grievances down to zero, which is probably the best case study in Cleveland.
What are the economic and regulatory issues facing Smart Grid?
There are a whole lot of different barriers to make Smart Grid — economic, regulatory, customer acceptance — and certainly today we have all been through the job loss issues that are still mounting, people are very much strapped for dollars, the regulators have watched a lot of the first generation Smart Grid pilots, some been successful, some not so much and they are quite worried that they don't get one of the unsuccessful ones in their state and why is that? They need ensure the customers have protection, that the utilities aren’t just spending money on things that don't bring value. I think where we get a little bit off the track — whether you're a CEO or regulator or a customer or a company — is short-term focus. In the electric asset industry, we put stuff on the ground for 40-50 years. If we're making decisions on two or three years, we are probably not making the right decision for the long-term. So we have to look at the future to put the right assets in place today.
What is the killer app for the Smart Grid?
Killer apps are always what everybody wants because they are the really cool things. Certainly on the electric side of the house, the killer app is being able to manage peak load and load in a very different way. If you could begin to save on peak loads, there are literally billions of dollars sitting on the sideline that can be re-invested in much more intelligent ways. We’ve got to get the regulatory community and finance community in lockstep. Today, our assets are about 55% utilized. On the hottest day in the year when you flick the switch and you want your air conditioner on, it comes on. But the vast majority of the time those assets aren't being utilized properly. So, the killer app is how do we manage that in a very different way to unlock some of those dollars. We've got to get back to listening to customers to work out what that real killer app is for them.
What should consumers know about the Smart Grid?
Consumers need to know it's about their choice. It's about what kind of energy they want to use, when they want to use it, how it fits into their lifestyle, what things they might like to do differently in the future, and how can energy underpin that. Just like the telephone's rate 20 years ago, could you even contemplate every single person would have a cell phone? Those sorts of evolutionary changes are going to happen in power and exactly what those look like or what’s going to unfold as we implement Smart Grid is unforeseen. Today, we are going to get lot better control of our system, those two-way flows. If you want to put a solar panel on your roof, you can do it, and if you're in business it's going to create more opportunity in demand response, energy efficiency and the way that we actually communicate back and forth, again helping to save dollars.
How will consumers benefit from the Smart Grid?
Consumers are going to benefit through choice and through the fact that their bills aren’t going to rise so steeply. Much like the roads, bridges and the infrastructure in this country is actually quite aged, and age doesn't mean it’s bad, but when something is 80 years old, maybe it needs to retire. So, as we get the holes in the steel and we need to replace those assets, we're going to do it smarter. Energy is one of the key components. It's the economic engine for the United States. As we get energy in the right places for the right reasons, that helps to fuel that economic engine, and that’s part of what Smart Grid is going to bring us.
Cheri Warren serves as Division VII Director Elect for IEEE Board of Directors, Power & Energy, and Vice President of Asset Management for National Grid where she is responsible for investing about a half a billion dollars each year on T&D assets. She is also involved in distribution planning, reliability, strategy, asset information and leading Smart Grid and R&D efforts of the group.