The Need for a Proactive Smart Grid Strategy
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- Jun 29, 2020 3:53 pm GMTJun 24, 2020 7:33 pm GMT
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This item is part of the Grid Modernization - Special Issue - 06/2020, click here for more
Energy providers face a new responsibility to meet an evolving set of customer values emerging from a group that is more engaged than ever before. Values that include both the traditional demands for low-cost energy that is reliable and resilient and new demands for energy that is smart, clean, and green.
Utilities must be purposeful and proactive in making decisions to best deliver these values to their customers. Each utility’s smart grid strategy is represented by the series of decisions it makes over time (either intentionally or not), and this strategy determines the extent to which customer values are delivered.
Not all smart grid strategies will look the same. Every strategy should address a utility’s unique set of issues and challenges, help utilities reach their vision for success, and meet customers’ expectations. To start, a smart grid strategy should provide two things. First, a vision for how the utility will be serving its customers in 5, 10, or even 20 years, and second, a reasonable and actionable plan to get there.
The good news is that the approach for developing a successful and actionable strategy will be similar for everyone and is certainly within reach. A few foundational requirements have emerged from the stories of those utilities that have succeeded and those that have failed in their journey to meet customer expectations. Each utility should meet the following six requirements in the process of developing its smart grid strategy:
- Clearly define the decisions that need to be made both today and in the future. Utilities must identify the decisions that will allow them to both address their problems and position them to reach their desired goal. Once decisions are identified, stakeholders can shift their focus to identifying alternatives.
- Define clear values and tradeoffs that will serve as the decision criteria. Utilities need to explicitly define what they genuinely want for the utility, their customers, and other stakeholders. All potential courses of action should be evaluated against these criteria, either quantitatively or qualitatively.
- Identify creative, but doable, alternatives that are relevant to customers. A utility’s smart grid strategy is only as good as the opportunities considered and needs to push beyond the utility tendency for incremental thinking. It is important to involve many perspectives in this process to balance creativity with feasibility.
- Inform decisions with relevant and reliable information. Investments in the smart grid may be new territory for utilities and the expertise needed may lie outside of the organization. Expert judgement and relevant data should play a large role to support decision-making.
- Prioritize investments using sound reasoning. Time, people, and money are limited. Utilities need to consciously choose the projects that deliver the values they care about most, relative to the cost to deliver those values. Providing rationale behind why projects were chosen and how they will meet customer needs plays a big role in driving stakeholder buy-in.
- Commit to action. The first five requirements provide clarity of intent, but a strategy is not successful until utilities communicate a clear set of next steps for implementation, identify the owners of those actions, and formalize a timeline for execution that works for all stakeholders involved.
The view from 30,000 feet may look easy and is by no means enough to solve the problem. Some decision-makers try to generalize problems and follow in the footsteps of others who have already started the journey, but this approach can leave significant value on the table. The reality is that each utility has a decidedly different set of needs, and its smart grid strategy should reflect what makes sense for the utility and its customers. However, each utility has one thing in common: the need to develop a proactive and actionable smart grid strategy to meet customer expectations.