Interview with Doug Houseman
In this interview, Doug Houseman discusses current market conditions, challenges of grid modernization and the need to re-examine outdated power industry tenets. Houseman looks forward to results from the IEEE PES Grid Vision project and the good news about what he calls "the most reliable system in the world today."
Question: The U.S. Department of Energy's (DOE) stimulus-funded smart grid projects are coming to fruition, many related to interval meters and advanced metering infrastructure (AMI). Distribution automation is oft-cited as the next trend. What are you seeing in the market today?
Most of the stimulus money has been committed and spent and we're wrapping up many projects by the end of the year. Some projects won't be finished on schedule because they got started late or had equipment glitches, which is to be expected with a demo project where you're doing something for the first time. We actually learn more from when something goes wrong than when it goes right.
This effort has, to a large extent, done what it was supposed to do: deployed a large number of PMUs across the United States on the transmission side and put about 14 million interval meters out into the field over three years. That's a little slower than the rate of deployment we were seeing before the stimulus, but it is probably at a little faster rate than we would have had if the stimulus hadn't happened.
On the distribution automation side, that's picking up speed on its own as people see and understand what they can do with automation: for instance, relays serving as fault detection devices, not just at the substation in the first zone, but into the second zone on the circuit as well. Reliability is probably one of the biggest drivers in the U.S. market, especially after the storms and related outages in the Northeast this year and last year.
Question: So the basic drivers of reliability and cost-effectiveness never go away?
Reliability never goes away. You have to keep the lights on and you've got to do it in a cost-effective way. Anytime you can take a device on the grid, originally for protection purposes, and find another use for it, that's a good thing.
Question: Do you foresee a period when lessons learned are digested before utilities resume moving forward with their investments?
For utilities with small engineering staffs, there's already a "wait-and-see" stance coming out of the demo projects. Other utilities have a pretty good idea of what they want to do and how it's going to work – they'll continue to move ahead. I think we'll see a slowdown in investment, the slowest we've seen in 15 years, for several reasons: the uncertain outcomes of court cases involving new regulations from the U.S. Environmental Protection Agency, uncertainty around the direction of new regulations from the Federal Energy Regulatory Commission and whether the Public Utility Regulatory Policies Act of 1978 is going to change.
Question: For utilities that are actively pursuing grid modernization, what are some of the steps to realizing grid efficiencies? What are some of the hurdles?
Remember, interval meters are just sensors. To achieve conservation voltage reduction (CVR) and volt/VAR management requires additional equipment at the substation or out on the grid, plus communication networks. Not everyone has deployed that equipment yet. The timetable is based on a utility's ability to do the engineering work and get that gear deployed.
That timetable often is overlooked. It may take three to four years for a large-scale rollout of meters and AMI. It may take another two years to get the communications network completely stabilized, assure data quality, optimize the communications network and build analytics on top of it. In a three to seven year period, your engineers begin to understand what data you've got and where your challenges are on the grid.
Utilities may discover circuits where they aren't delivering enough voltage or other power quality issues they didn't know existed because they didn't have sensors and instrumentation. They may have to deploy engineering talent to fix existing problems to return to compliance and that means fewer engineering resources to take the next step. So it's not unusual that a decade could pass from the time the first meter goes in until you see a reasonably sized program for volt/Var, CVR or other use of grid data.
Data security and privacy issues also are coming to the fore and people have started to learn the complexity of running a communications network alongside the grid. Smaller organizations don't have enough engineers to figure all this out and get it done.
That said, a serious shortage of qualified power engineers worldwide may also hold back grid modernization on a macro scale. Only Poland turns out more power engineers than it needs on an annual basis and they number less than five. Five extra power engineers for 200-plus countries? Power engineering pays very well right now and a number of schools in the U.S. are expanding their programs. A number of universities are offering to retrain engineers for the power industry. The industry is making all the right noises but even with all of these efforts we still don't have enough qualified power engineers.
Question: You've described the timeframe needed to fully realize utility-side benefits from grid projects such as AMI. What about consumer benefits?
The DOE's Green Button initiative started last November and now almost any utility that has interval meters deployed is part of the Green Button program. More than 200 apps are available for iPhones and Android-based smartphones that enable people who want to get their electric usage data and analyze it and manage their use. The data is a day old and it's useful for comparing one's energy usage to others with similar demographics, homes and climates.
Regulators in most places have yet to institute time-of-use (TOU) pricing. Probably the largest-scale move to TOU pricing is in Ontario, where the provincial government followed smart meter deployment with TOU rates. Although the spread between peak and off-peak pricing is modest, the results have been reasonably good. In the U.S., Exelon in Illinois has done a TOU trial, which is now becoming a permanent program for some of their customers in the Chicago area. But only 2 percent to 3 percent of the U.S. population actually has access to TOU rates.
Question: What's your view of the efficacy of TOU rates? Will they help balance supply and demand, particularly during the daily peak?
TOU rates are a good stepping stone to where we need to be in the future, but they are only a stepping stone. Eventually we'll have to find a way to make demand match supply, particularly if we really want 50 percent or more intermittent, renewable energy on the grid. Then we'll have to be able to respond to the weather – how much sun is shining, how much wind is blowing. Time-of-use pricing is a nice stepping stone because it gets people thinking about how they use electricity.
TOU pricing may be useful for the next 15 or 20 years. Beyond that I don't have a good answer for the mechanism we'll use to balance demand and supply. I am optimistic that robotics and sensors – automation, if you will – will get so much better that I'll just enter my priorities into a device and create my own profile. I'll want my room temperature within a certain range for comfort, I'll want my stored food to stay cold, and other uses defined by priority. Automation and perhaps a home area network will provide the intelligence to balance the equation even if the sun doesn't shine or the voltage to my home drops in frequency to, say, 59.91 Hz, or rises to 60.11 Hz. Devices will turn off or turn on depending on whether it's advantageous to the system to use more or less electricity. I certainly don't have all of the answers, but I do know that we need to think beyond where we're thinking now, if we're going to get to the high levels of renewable energy penetration that some say we need to reach.
Question: It sounds like the moving parts that govern developments on the grid include technology, markets, regulation and end-user behavior? If so, what are the tasks associated with each?
Yes. End-user behavior will be driven by the pocket book. We have worked really hard on the technology piece. We have done some work on the market piece. We have done very little in the way of thinking through what modern day regulation might look like.
Most of the tenets that our regulations are based on were written back in the 1920s and 1930s. One is that everyone should have access to grid-based electricity. Going forward, does that really make sense? Perhaps there are more feasible, less expensive ways to extend service to, say, a remote community. Often now we are using DC current in our homes, in our electronics. Should we only deliver AC over the grid? Or because our solar photovoltaics and other distributed generation are making DC, should there be some DC component mixed on the grid?
We really need to step back and look at this if we want the grid of 1950 to be ready for the society of 2050.
Question: What sort of effort could bring stakeholders together for that re-examination?
The IEEE Power and Energy Society has a long term Grid Vision Project underway, which is looking a the power technology and how it will evolve of over the next couple decades. Also in addition, IEEE has four other long term smart grid vision projects involving the IEEE Communication Society, Computer Society, Intelligent Transportation Society, and Controls Systems Society. Together they are articulating visions of what the grid may look like in the future for their respective technology area and what we'd need to change to achieve those visions. Those documents may be ready by the end of this year.
Question: How do you feel about our rate of progress? What's your prognosis for the power industry going forward?
We have the most reliable system in the world today. If you look at the uptime statistics for the electric grid versus the phone company or the cable company or any other system, the electric grid beats the others' uptime statistics. We can and we must get it right. I have been involved in disaster recovery efforts in Haiti and elsewhere. Electricity is the thin veneer between being civilized and not. Society is much more polite when the power is on than when it's off.
Compared to where we were four or five years ago, we probably have made more progress than we made in the prior two decades. That's not a bad thing. I just wish I was two decades younger because the next 20 years are going to be a lot of fun and I am within a decade of retirement. I'm not sure that I'll get to see the outcomes of our work.
In Doug Houseman's three decades in the power industry, he has run his own consultancy, served as CTO for Capgemini's global energy, utility and chemical practice, and consulted for companies such as Electricity de France, E On, Singapore Power, China Power and Light, Duke Energy, Florida Power & Light, Hydro One, Mid American Energy and Energy Australia. He is currently working on the DOE Smart Grid Clearing House, NIST Smart Grid Project, IEEE P2030, and other smart grid related projects. He currently serves as vice president of technical innovation at EnerNex, LLC.