Interview with Chuck Adams
In this interview, Chuck Adams discusses regulatory factors influencing Smart Grid’s development in Asia, Europe and the United States. He explains the IEEE Standards Association’s role to help create Smart Grid standards and the need for better coordination among standards groups for Smart Grid.
Question: We are beginning to see notable variations in how some regions and countries are preparing to evolve to Smart Grid. What are the most important strategic trends to be aware of right now?
As you know, the European Union has issued a mandate that the industry develop common interfaces to integrate the systems used by each member country. Once they received the mandate, power companies quickly began working on Smart Grid because the mandate addresses everything from frequency to voltage levels to timing factors and other operational factors that vary between countries. And so over the course of the past six months, companies have begun to focus on how to develop the common interfaces required across their systems.
In Asia, Smart Grid strategy variances can be identified from country to country. Japan has established priorities for its technology needs that range from assessing Smart Grid’s environmental impact to converting to more regenerative energy, improving reliability and building storage backups, among other things. Japan essentially has a mandate to work with industry to steer industry efforts in the right direction to focus on these high priorities. In the case of China, there is a current focus to extend localized generation capability throughout the entire country and promote industry deployment of ultra-high voltage transmission and storage technologies within the Smart Grid.
The United States does not provide a mandate per se. In the U.S., each state’s public utility commission works closely with the industries or companies within its state to establish priorities, approve billing and tariffs, identify the equipment requirements employed by the utilities and, if you extend this approach, influence which standards companies can deploy for Smart Grid utilization, as with smart meters, for example.
Question: How should the United States go forward with Smart Grid? Companies must deal with various layers of regulation as well as the uncertain economic environment.
Outside the United States, in Asia and Europe, for example, countries can provide subsidies for grid infrastructure development. In the decentralized environment of United States, such subsidies do not typically exist. The U.S. relies on independent industry operation where possible, as defined in the technology transfer act that was released during the mid-90’s.
And yet the U.S. has 3,000 utilities and three grids. What’s the business incentive to tie these grids together and to force commonality of services across all these utility companies? It’s very difficult in the United States. We know, for the public good, that this needs to be done. President Obama constantly talks about rebuilding the country’s infrastructure, noting that if we don’t do it, we will lag other nations. At some point something’s going to happen. I don’t know how this will occur or what circumstances will force it. However, industry will see a business opportunity and recognize that there is value in improving the reliability of the grid and integrating the grids with common infrastructure and interoperable features.
Question: What role is the IEEE Standards Association playing to help the industry create new technologies and standards?
The IEEE-SA brought together the three industry constituents needed for Smart Grid—the power, IT and communications industries—to develop and publish the IEEE 2030 framework. The framework creates interconnection and interoperable interface standards for services that will be delivered over the three technology domains.
This landmark standard has been ratified and published and now industry will focus on developing interoperability specifications for key IEEE 2030 applications. We’ve already begun developing IEEE 2030 interoperability requirements for connecting electric vehicles to the grid and for integrating and testing storage equipment, for example. And separate from IEEE 2030, the IEEE-SA is developing another iteration of IEEE 1547 for interconnecting distributed resources with electric power systems to focus on renewables.
So IEEE-SA is helping the industry move forward. The IEEE-SA has more than 100 standards or standards under development that pertain to Smart Grid. But there are still a lot of challenges out there, in particular a lot of very specific interoperability standards that need to be developed for IEEE 2030 applications. This is not something that will be completed in a year or two. Development will probably evolve over a decade or two, as technology and business requirements converge to address industry, customer and enterprise priorities and requirements.
IEEE will need to continue to reach out to industry in the United States, Europe and Asia and other regions to build this. As the industry begins working with this framework, we can expect to see some important strategic shifts in the standards industry. These shifts are now beginning to emerge.
Question: What types of strategic shifts do you expect to see?
In 2012, I believe we’re going to see more focused standardization activities. Standards organizations will begin to recognize that they need to coordinate their Smart Grid standardization efforts because there are too many technologies involved for any one organization to address them all. None of these organizations can be an island. The IEEE recognizes this.
From a business point of view, support for customers will become paramount in importance. The industry has to move into an era where interoperability, compliance certification, education of the consumers and technical support are top priorities. These activities require a level of commitment, support and education that power distribution companies have not had to provide in the past.
Question: Last year you spoke at an IEEE Smart Grid-focused event in the Middle East—EnergyCon in the Kingdom of Bahrain—where topics like renewable energy and energy conservation were addressed. Did this event signify the beginning of change in how the Middle East approaches energy?
The discussions seemed to focus on two areas. The first discussion area included energy conservation, energy efficiency and energy management. This surprised me a bit because Bahrain and Saudi Arabia are sitting on major oil reserves. Yet energy utilization was a primary concern at this event.
Two groups were quite involved in this discussion. One was Saudi Arabian Oil Company (Saudi Aramco), the state-managed oil company of the Kingdom of Saudi Arabia. Saudi Aramco is extremely focused on energy management and energy efficiency in terms of their own operations. The other group was the Saudi Arabian Standards Organization, which is very focused on energy conservation and energy management. Generally, both organizations acknowledged that energy resources aren’t inexhaustible. It was intriguing to see that this region of the world recognizes the importance of energy management.
As for the second focus area, conference participants were also interested in understanding what the future will be for energy management structures, energy sources and energy deliverables. Their industry and governments were interested in the investments required to become a partner in next-generation energy sourcing and requirements. The imperative is to be an integral participant in the post-oil era in the industry and to be prepared when industry evolves to renewable or other sources of energy.
Question: The Smart Grid means different things to different people. How do you view the Smart Grid, and how would you define it?
To me, Smart Grid describes how we will use our energy networks during the course of the next few decades. It’s how we will use those networks to improve reliability and services. It also represents a transition that we're going to see in the utility business. At some point power companies will use the term "Smart Grid" to describe the services they provide and deliver. The power industry will realize that people will charge their electric cars no matter where they are and that the billing must be reconciled to the car owner’s original billing location. An entity will have to maintain a repository of information about all these electric cars and each individual battery so that when a customer charges a battery in Alabama, for example, the network sends the bill to their account in Chicago. The utility company will recognize that such services represent "value added" deliverables that customers will accept and pay for.
While I view the term “Smart Grid” from this perspective, others can define Smart Grid in other ways. Depending on the context, it can describe a system designed to address energy efficiency, energy utilization, energy reliability, energy distribution, or energy related services. It can focus on interfacing electronic automobiles into the grid, conveying intelligence associated with the automobile’s battery charging over the grid or using automobile batteries for energy storage that consumers can then sell back to the utility. It can also include intelligent devices that a consumer electronic company puts on the grid. All of these things can fall under the umbrella of Smart Grid.