Energy Central Power Perspectives™: Welcome Erwin Heuck, New Expert in the Utility Management CommunityPosted to Energy Central in the Utility Management Group
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- Jun 11, 2020 11:30 am GMTJun 11, 2020 11:30 am GMT
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To say that we’re living through an unprecedented period in the utility industry is not hyperbole, but rather reflective of the rapid pace of technological advancement, regulatory and policy focus on energy issues, and all associated market transformations. The future of the utility business is going to be more reflective of these changes than it will of what ‘has always been the way we did things’ from the past.
As utility companies continue on the path to this brave new world, the thought leaders in utility management are going to be key. With that in mind, Energy Central has prioritized ensuring we have such thought leaders as a part of our community to help guide the conversation—specifically within our Network of Experts. The Utility Management Community will in particular be critical to see how and why decisionmakers are pivoting and taking in new information, and so we’re so pleased to introduce to the community our latest addition to the Utility Management experts, Erwin Heuck.
Erwin has spent multiple decades in this industry and has experienced these rapid changes and how we must respond to them firsthand. Because of these experiences, his insights are no doubt valuable. As a way of introducing that background, Erwin joined me in a Q&A session as a part of our Energy Central Power Perspective ‘Welcome New Expert Interview Series’:
Matt Chester: Energy Central is quite excited to have you as a part of our Network of Experts. So that our community can get to know you better, perhaps you can start by introducing yourself quickly: what’s your history in the utility sector, and what expertise and experience you bring to the table today?
Erwin Heuck: I spent 28 years with SaskEnergy, the natural gas transmission and distribution utility in Saskatchewan, Canada, retiring in 2018 as the Director of the Transmission Facility Planning group. SaskEnergy has the exclusive franchise for transmission and distribution service and is about a 1 billion cubic feet (Bcf) per day (average) and 2 Bcf per day peak day sized company. It serves about a million people, or Rhode Island’s population with a service area the size of Texas. Saskatchewan’s GDP is roughly $80 billion (CAD) with an emphasis on resource development and agriculture. SaskEnergy was a full-service provider with gas gathering, production, processing, compression, salt and field storage, transmission assets, as well as high pressure and regulated distribution delivery service. Being a relatively small organization, I had the privilege and opportunity to be involved in all aspects of service for capacity and operation that helped shape customer service offerings and contracts.
Unusually, I spent my entire career in the planning area, starting in operations planning and mostly supporting the Gas Control group and finishing in System Facility and capital planning. My initial work was hydraulic modelling, both steady state and transient, in support of outage coordination, peak day and system capacity planning for operation. I created the hydraulic training modules for Gas Control group and spent a great deal of time working through receipt and delivery load factors, contract load factors, consumption and supply profiles, etc. At a network level it allowed me to understand how our integrated system of storage, compression and transmission assets supported our contractual obligations for service.
Ultimately, I moved from operations planning to integrating operations with existing and new facilities into a system planning and revenue/sustaining capital role. My group was responsible for system infrastructure facilities, planning and capital, and the long-range operations and capacity planning for all revenue related transmission assets. With this role, my thinking and efforts expanded to network capital risk and value, execution risk and prioritization of existing system capacity “preservation” and understanding the context of utility ownership models (crown and private) in how facilities are planned for and justified. Over the course of my career, I recommended and planned close to $1 billion of assets for our organization.
I’m very fortunate in that the entirety of my career was investigating and solving open ended issues where defining the problem was a key part in creating a suite of solutions; either facility, operational or contractual, often in combination with one another. The other piece I’ve always been challenged with is to take a view to the bigger network and the context of service capacity and service risk as an aggregation of assets working together.
MC: You spent a large portion of your career working in the natural gas part of the utility space. What do you think are some of the biggest developments to come in the next 5-10 years with regard to gas storage & transmission?
EH: There’s three issues that I find particularly interesting in the transition away from the 100-year-old electrical utility service model in the decentralization, decarbonization, and digitization of energy service.
First is energy asset collaboration. For utility scale electric and gas assets such as peaking generation and gas cavern storage, the interdependency of large gas/electric assets and how they cooperate, operationally, to manage network level reliability is key. In the smaller-scale distribution system, gas-to-power and power-to-gas, decentralization, and common customer base will similarly drive a convergence and coordination of energy service at the distribution or community level.
Second is energy asset scale. I’m very interested in the convergence in the operation and support for large utility-scale gas and electric assets to manage service capacity and reliability. Similarly, I’m interested in the convergence of small-scale gas and electric distribution assets and technologies, essentially serving same customers and geographic area. Ultimately, I see a divergence between big-scale and small-scale energy service, and a convergence to energy service versus gas/electric. I’d like to see how that works out in the transition to renewables and distributed energy service.
Lastly is energy asset ownership model. Having worked for a Publicly owned Crown utility having a franchise monopoly for service and representing the private sector technology providers through the Distributed Energy Association of Saskatchewan, I find it very interesting to see an energy service model that works to the strengths of each group. Publicly owned utilities provide equity in access to service, good governance, open and transparent operation, rates and service, significant and beneficial community engagement. The private sector provides efficiencies of service, new technology adoption, speed to market, customer responsiveness, and quick service cycles. So, what is the right blend of energy service, by scale, by ownership that delivers optimum service now and into the future? The bulk of the technology and service innovation is happening in the point of sale customer self-generation space.
MC: Your current role has you focusing heavily on community-scale energy. Can you talk about some of the unique challenges of community-scale energy and why it’s such a valuable choice for the future of the industry?
EH: The increased complexity, collaboration, and partnerships needed to execute projects and the non-traditional service aspect of community scale energy is its biggest challenge. Legacy assets and legacy thinking is the biggest issue.
The value comes in revisiting the 100-year-old model of energy service and the opportunity to allow people and communities to be much more involved in their energy service in a way that creates awareness and accountability for the resource. Distributed energy’s value is in driving greater participation, literally Power to the People, with the benefit of creating resilient energy service that optimizes local participation and benefit. Lowest unit cost thinking has given us centralized energy service, but also plastic bags, disposable lighters, and agricultural monoculture. Let’s think about the greater value statement for how we spend our dollars, how sustainable our consumer choices are and how we benefit the community around us.
MC: On the customer side of things, do you think utilities are doing a good job at listening to whether their customers are asking for advances in community-scale storage? Is advancement coming from such customer pressure, or is the driver from somewhere else?
EH: As I’ve said, the private sector is much more responsive to customer need as a means of creating and maintaining shareholder value. Unfortunately, while businesses and communities are often looking to the utilities to lead the energy transition, the reality is that many of the utility’s leadership and senior management simply see energy choice in terms of disruption, grid exodus, and revenue destruction. Municipal, state, and provincial policy reflected through renewable portfolios and other measures are holding the utilities to levels of integration around renewable and potentially non-utility scale solutions to generation. The greatest leadership I see today around distributed energy targets and plans is at the municipal level.
MC: Is there anything else about yourself that you’d like to share with the community?
EH: I’m interested in the energy transition path that looks more like evolution, not revolution, and planned and purposeful integration of energy choice into the grid in a way that drives benefit to the utility as well. That may be easier with a system that has 3 customers per kilometer of infrastructure.
Lastly, as an engineering student, I spent my formative university years hanging out with the philosophy students versus the engineering students. As a result, I realize that I’m more interested in the creative construction of a new models than in the creative destruction of old models; an energy dialectic that takes the best of the old and amalgamates it with the best of the new to create something that is neither. We’ll see!
Please join me in thanking Erwin Heuck for his time in this interview and for his accepted role as a Utility Management expert in the Energy Central community. When you see Erwin engaging with content around Energy Central, be sure to say hi, ask a question, and make him feel welcome!