Interview with Steven Collier, Part 2
In this second interview, Steven Collier continues to explore synergies between the Smart Grid and the Internet and argues for broader industry acceptance of the Internet as the "control plane" for the Smart Grid.
Question: What is the problem with utilities owning and operating their Smart Grids?
Utilities face a number of formidable barriers to successful deployment of a Smart Grid. Interoperability is a huge issue. Utilities are purchasing various components of the Smart Grid from a variety of vendors. They are also building out a variety of communications systems using a spectrum of technologies and configurations, and communications protocols including power line carrier, wireless radio, fiber, ZigBee home area networks, and more. The overwhelming majority of these systems are not interoperable with each other. Some can’t even co-exist on the same grid. Not only does this create barriers to communicating data between and among utilities in the national grid, it creates serious problems inside each individual utility. Let's say a utility buys all of its smart meters from Vendor X and its SCADA system from Vendor Y. Each may require its own proprietary telecom network and each will have its own proprietary data protocol. Getting them to integrate seamlessly is a huge challenge. And it can be a comparable challenge to get both of them to interoperate with the utility's other enterprise applications. Now suppose Vendor X goes out of business, or the utility discovers that Vendor Z offers something that is cheaper or better. In every case I've seen, mix and match is practically impossible and the utility has had to rip out all the old stuff and replace it with all new stuff. That's neither convenient nor economical.
Question: Are there other barriers?
Yes. Another barrier is cost. The Smart Grid is not cheap. Rapid deployment of comprehensive Smart Grid capabilities can mean increased costs leading to resistance from customers and regulators. Another barrier is unfamiliarity and discomfort with the new technologies that are needed for the Smart Grid. Many are new and unproven, and they change rapidly. Andres Carvallo, formerly CIO of Austin Energy, and now at Proximetry says, "Smart grid technology has the shelf life of a banana." Utilities are accustomed to installing and operating assets and equipment that last for decades. The new technologies involve a level of risk and uncertainty that is daunting for an industry that has not changed its core technologies very much in a century. There are other barriers including regulatory restrictions and uncertainty, unfamiliarity and discomfort with new operating schemes and business models, and just plain unwillingness to accept that the conventional approaches to planning, building and operating the grid will not be adequate for the future, especially when it seems to be operating pretty well in comparison to most of the rest of the world.
Question: Utilities point to the security of data in the Internet Cloud — and to their regulatory mandates to protect privacy — as reasons to avoid the Internet. What is your answer?
This issue of customer data privacy is important and I don't diminish it or denigrate utilities for being concerned about it. However, the entire world banking industry and many other national and global industries rely on the Internet for commerce with their customers. While the cybersecurity problem is real, these industries have shown that it can be addressed successfully with appropriate technologies and business practices.
In addition, I think that the regulatory mandates and Smart Grid data security are separable issues. Utilities will achieve adequate security using the Internet for the Smart Grid and doing business in the Cloud just as other companies have. Technology and markets change more rapidly than institutions, but the institutions eventually accommodate the technological and market change. A central premise of the Smart Grid is that it will provide tremendous benefits to utilities, consumers and society at large. The public good is an intrinsic underpinning of regulation. Furthermore, the Smart Grid will supply consumers with valuable information and tools that will help them make energy management, conservation and even renewable energy decisions. They will allow their data to be used for these just as they do now with their banks or iTunes or even Facebook. You have to ask, "Whose data is it?" The answer is that it is ultimately the consumer's data and they will readily sign up for it to be used by utilities and others that provide them with benefits that they want.
Question: Do you think that data security is a serious problem independent of regulatory requirements?
No. The perception — and perhaps to some degree the reality — is that we don't have the data security issue fully scoped out yet, much less solved. However, experts in this area say it is possible to secure data and applications in the Cloud, and I agree. I've already mentioned that giant global corporations, even entire industries are doing so. Data and applications can actually be more secure in the Cloud than they are on a computer or server on the utility's premises. There can be redundancy and backup in the Cloud that is simply not possible otherwise. And the data and applications can remain available for use even in the event of natural or man-made disasters that could destroy the utility's information and telecom facilities.
In fact, the electric utility industry in the U.S. has a much greater physical security problem than a cybersecurity one. Our grid is becoming unable to handle the demands that are being put on it, resulting in increasing frequency of service outages that can affect many consumers in multiple states for multiple days. And our central station generation and bulk transmission corridors are sitting ducks for terrorists or vandals. There's really not a critical facility from generation through transmission to distribution in this country that one can't get practically within spitting distance of. How do we address this problem? With a smarter grid that enables us to detect, analyze and manage in real time. The cybersecurity risk of an Internet-based Smart Grid is far outweighed by the greater risk of not having the kind of Smart Grid that only the Internet can support.
Question: Do you think that there is any other critical issue faced by the Smart Grid?
We are trying to optimize a sub-optimum grid. If we were to build the grid from ground zero today, it wouldn't look like the grid we have in the U.S. today. We presently have about 10,000 power plants in the U.S. and about 750,000 miles of transmission lines. For more than a century, the economies of scale dictated that we build ever-larger centralized generation facilities and transport the energy over large transmission corridors to distant load centers. Now risk, environmental concerns and sustainability issues outweigh economies of scale. In its 2009 report, "Keeping the Lights On in a New World" the Electricity Advisory Committee's findings for the U.S Department of Energy concluded that "...the current electric power infrastructure... will be unable to ensure a reliable, cost-effective, secure, and environmentally sustainable supply of electricity for the next two decades... much of the electricity supply and delivery infrastructure is nearing the end of its useful life." The U.S. DOE says in its "Smart Grid System Report," issued in July 2009, "...the information networks that are transforming our economy in other areas are also being applied to applications for dynamic optimization of electric system operations, maintenance and planning." It's the Internet that is transforming not only our economy, but also that of the entire world. The same will be true for the Internet as it brings us Metcalfe's Enernet.
Question: What makes the Internet an inevitable partner?
A new grid paradigm is unavoidable. In its 2008 report, "Smart Grid: Enabler of the New Energy Economy" the U.S DOE recognizes this, saying "...a Smart Grid uses digital technology to improve reliability, security, and efficiency of the electric system: from large generation, through the delivery systems to electricity consumers and a growing number of distributed-generation and storage resources." The grid will also have to accommodate electric vehicles which can have a demand and energy consumption comparable to a residence, but wandering around the grid. Decentralization of monitoring and control on a massive scale is essential. With millions of consumers potentially contributing energy to the grid, it cannot be managed by a few people in a central control room. Management and control have to be distributed and automated. I can think of no other way to do this as rapidly, economically, securely or interoperably as doing it with the Internet. The Smart Grid will simply be an extension of the Internet of Things.
As VP of marketing and business development at Milsoft Utility Solutions, Steven Collier writes and speaks widely on new and emerging energy, telecom and information technologies.
NOTE: Part I of this interview was published April 30, 2012.