How utilities can help reinvent electricity: May 6 keynote address

Published: Thu 05 Jun 2014
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Smart cities need smart energy. What role do utilities have in creating "Electricity 2.0," and how can help improve sustainability and quality of life in cities?

On Tuesday, May 6, the Siemens Smart Grid Software Leadership Conference will feature a keynote address by Jesse Berst, Founder and Chairman of the Smart Cities Council: Reinventing electricity (and your important role)

Berst recently outlined some highlights of his talk:

Why is now a key historic moment in the evolution of the utility industry?

Berst: If you take a moment to scan the horizon, you'll see that every part of the electricity value chain is changing. Every piece, from top to bottom: generation, usage, business model and more. Revolutions create a step function in prosperity and lifestyle. The whole history of human life is comprised of step functions leading to progress -- we spend time on a plateau, then a new discovery jumps us up to a whole new level. Then we plateau again until the next breakthrough emerges.

As utilities navigate this period of transformation, while everything is still in flux, they have a unique opportunity to create a better future. Eventually this change will settle down to new defaults, a new business-as-usual. But right now, utilities have an opportunity to proactively make a strategic and positive difference.

In a lot of ways, today is like 1882. Many important standards are just being developed. In 1882 a key issue was: what does a plug look like? Today's big questions are things like smart grid communication standards. The resolution of these issues determines the opportunities that will be available in the future.

Are utilities participating much in the development of key industry and technical standards?

Berst: Not as much as they could be, generally. What most utilities are missing is the sense of urgency to stand up and be counted in standards development -- both on technical side and on business model side.

If utilities want to have a voice in better ways to generate electricity, handle distributed generation, etc., now is the time to be at the table. If they wait, standards will get more locked down. And then everything will be much harder.

What allies do utilities have in the Electricity 2.0 revolution?

Berst: Many important stakeholders -- environmental groups, regulators, consumer advocacy groups, and think tanks -- are already weighing in on the standards process. Both for technical standards and for decisions that will affect the utility business model.

Historically utilities have been rather passive about directly engaging or collaborating with these players. You don't want to stick you head up when regulators might play whack-a-mole, or when consumer groups might organize protests. However, passivity simply will not work this time around.

Other stakeholders can become allies of utilities in the Electricity 2.0 revolution. Many groups like the Natural Resources Defense Council, Environmental Defense Fund and Rocky Mountain Institute have decided they need to work with utilities; and that utilities needs to exist as viable businesses in order to achieve their shared vision. We can join voices with stakeholders to find a new business model together.

And in terms of influence, coming to the table with partners is always better than showing up on your own. We can go together to regulators and policymakers.

Who within utilities are best positioned to play this participatory role?

Berst: This could be just about anyone in a utility. Consider what you might have to offer.

On the tech side, whatever your specialty is, think about how your organization is blending the IT/OT silos. All smart grid devices need to communicate. Think about how you'd like to see that work, how devices could share a network or data, use it for different purposes. Take that vision and use it to inform new standards in places like the Smart Grid Interoperability Panel or IEEE.

As for participating in the policymaking process, it's a mistake to think that a utility's designated regulatory affairs officer should be the only person to step into this kind of engagement. All utility departments should be part of that discussion.

Start asking the big questions about the future in your organization. Do you want to create energy services? Do you want be just a wires company that is paid an access fee? Decide what you want to be, and then help create a business and regulatory environment to make that possible.

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