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The Goldilocks problem for grid modernization

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What’s the biggest challenge facing utilities today? Is it climate change, DER integration, or the explosive growth of data centers? The real answer is the need to balance all of the above, and navigating these forces while keeping the grid reliable and resilient is no small feat.

Enter Marcus McCarthy, Senior Vice President of Siemens Grid Software, who joins Power Perspectives to break down the evolving energy landscape. From the concept of the "Goldilocks Zone" in data center planning to how AI is reshaping grid operations, Marcus shares key lessons and strategies utilities need to future-proof their systems. For anyone seeking out insights into where the grid is headed next, this episode is a must-listen.

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Thanks to the sponsor of this episode of the Power Perspectives: Siemens

 

Key Links:

Siemens on Energy Central: energycentral.com/o/siemens 

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TRANSCRIPT

Jason Price:

When it comes to future proof in the grid, what is driving utility planning? Is it climate change, influx of DER, data centers, or all the above? Navigating the complex and dynamic changes to the grid, and how this impacts the Goldilocks zone so that we achieve what is just right, will be discussed along with a whole lot more on today's episode of Power Perspectives.

 I'm Jason Price coming to you from New York City and joining me as always Is Matt Chester podcast producer and community manager for Energy Central from Orlando, Florida Matt, what are the pressing questions in this topic area? You're hearing from the discussions at energycentral.com

 

Matt Chester:

Thanks, Jason. Yeah, across our energy central community, we see utility leaders grappling with a convergence of challenges, climate change, driving more extreme weather events that stress the grid, the rapid growth of distributed energy and how that reshapes traditional power flows and the surge in energy hungry data centers that are creating new demand pressures. The big questions being debated on a daily basis by our community members. Surrounding this include things like how are we going to modernize infrastructure? How are we going to maintain reliability? How do we fairly compensate distributed resources? How do we ensure regulatory frameworks keep pace with these shifts? And I think ultimately, utilities are looking for ways to balance resilience, flexibility and affordability while steering the grid towards a more sustainable future proof model. And, you know, as we all know, there doesn't seem to be a silver bullet solution at this time.

 

Jason Price:

Thanks, Matt. And before we dive into today's episode, I want to thank Siemens, our sponsor of today's show. And today's conversation will hopefully tee up some of those answers to the questions Matt suggested. As for this episode of Power Perspectives, we're joined by Marcus McCarthy, Senior Vice President of Siemens Grid Software for the U.

S. and Mexico. coming to the conversation with a wealth of experience leading both hardware and software technology businesses, Marcus specializes in developing growth strategies in his role at Siemens, and Marcus and his team are helping utilities navigate a rapidly evolving energy market, fostering innovation while addressing critical challenges.

So Marcus McCarthy, welcome to Power Perspectives.

 

Marcus McCarthy:

Thanks, Jason. It's an honor to be here. I'm a big fan of the podcast.

 

Jason Price:

We appreciate that. We appreciate you taking time today to talk to us. Marcus, before we dive into the topic at hand, I want to give you a chance to share a bit more about your role in the utility sector. So what exactly does the SVP of grid software at Siemens do and how do you interact with utilities?

 

Marcus McCarthy:

Thanks, Jason. So, on, uh, on the Siemens grid software business, we, um, we focus on developing software products for utilities as the name would suggest. so we have a broad range of software products targeted all segments, of the utility industry. so, for example, from a market operator point of view. we have software, or market management software that, that forecasts energy demand, looks at the energy bids coming into the marketplace and decides what electricity should be supplied where on the, on the market. and that's interesting software because it, it does this in a way that generates an optimal outcome, taking into account a large number of constraints and objectives that are often in conflict with each other. such as minimizing price, reducing carbon emissions, ensuring reliability of supply. so the, the system does this for a day ahead, an hour ahead, and it does it actually in real time as well. So, interesting, interesting, uh, solution. Um, in the ISO, TSO area, we, we have our, energy management system, Spectrum PAR7. Uh, so that allows, transmission utilities to, to monitor. The network to understand what's happening in real time and then operate the network in response to what's happening on the network. We also supply, I guess, the industry leading range of simulation and planning software. for transmission networks, that allows, transmission grids to, plan extensions and changes and everything that's happening there at the moment.

Quite a topical area right now, on the distribution network side, we have, grid scale X meter data management, uh, important market leading software, for managing, uh, meter data within the utility, which used to be a billing, Issue only nowadays, the meters are very, very important in terms of data. that's used in a lot of different ways on the network with regard to, um, and, uh, we also have a grid scale X, um, grid model builder and insights. It's a software to improve the digital twin of the distribution network and also to help to manage DERs and understand the impacts of behind the meter DERs on the network overall as they're deployed. We have a microgrid management system, which, allows an operator or owner of a microgrid to optimally operate that microgrid with batteries with different, uh, different generating sources and deciding when to connect to the, to the grid or disconnect from the grid. and then we have a whole consulting business that helps, utilities. Mainly to do power system planning, business strategy, um, optimize business processes and do a lot of training, a lot of PhDs in that business. So, I spend my time working across all these aspects of the business, spending a lot of time with customers, um, and translating their thoughts, their problems into, into solutions within our business.

 

Jason Price:

Okay. All right. That's very helpful. So let's, let's talk big picture here. And this is, I feel like this is a question we ask a lot of our guests, so bear with me, but basically the rise of DER, Distributed Energy Resources, has created both opportunities and challenges for utilities. So what do you see, you know, as Siemens, what do you see as the most pressing issue when it comes to integrating DERs in today's grid?

 

Marcus McCarthy:

Yeah, so it's a, it's a topic I think that's continuing to be a conversation, ongoing conversation every day. Harnessing the potential of DERs as an asset for grid flexibility and while scaling customer satisfaction. It's quite a challenging change, uh, to networks. some of the issues that we, we work with on a daily basis, the whole area of permitting planning, prioritizing and executing network upgrades, uh, to enable the interconnection of grid scale DGRs is obviously a, a major challenge. Uh, we don't have the network to move sufficient energy from where it's being generated to where it's needed today. Um, with long interconnection queues and our, our planning software. Um, is being used to to speed up that process to optimize the process. when trying to operate DERs as part of the grid, we're really changing from a few power supply areas on the grid to a large number of potential power supply areas. Um, and that creates a whole lot of competing, uh, priorities, in terms of managing, uh, voltage and frequency on the network. And that's an ongoing issue that we're, we're making our way through. and then I think maintaining stability with inverter based DER resources on the network is an ongoing issue, uh, for NERC.

NERC are continuing to look at issuing. Regulations in that area on our network, and then on the distribution grid, as we deploy behind the meter DERs, the distribution grid was never designed to operate, with these type of loads, um, on, on distribution transformers and understanding. those DERs and how they're impacting the network and planning for that and planning for the future of distribution grids where you may have two way flows and islanding and other aspects like that.

 

Jason Price:

I want to ask you about, you know, DERs. It's basically a technology, it's not just a concept, it's technologies and it's a portfolio of technologies that have been around for quite some time. It's been, you know, at least two decades. I studied DERs when I was in school. So, you know, why does it continue to be such a pressing challenge for utilities today?

 

Marcus McCarthy:

I think, I think there's two reasons. I think it's based on volume and public expectations. If you take historically, it wasn't an issue because the volume was low and we could continue operating networks as we did previously. It wasn't really impactful on the network. and historically, the public wasn't really mindful or, overly involved. I think what we see today is that the number of DERs is increasing, and I mean that across the network, you know, at grid scale, at transmission, um, in front of the meter and behind the meter, we're seeing a proliferation of DERs. And I think the impacts of those DERs then, and the opportunities associated with those DERs are starting to be realized.

And there is a, um, either an oh, oh moment and also a. Oh, how can we use this moment happening at the same time? And it's all related to the volume. and in utilities, we, we operate for reliability. We operate for. economic supply, and, and this is opening up a whole lot of, uh, opportunities to have different ways of operating networks. and then there's the public interest in DERs. a lot of people really care about the future of the planet and are, are doing their best to, to participate in reducing carbon emissions. And I think the, the, the public interest in DERs is, is part of the. reason that they're becoming such an important part of the conversation today.

 

Jason Price:

That's helpful. switching topics for a second. I want to talk to you about data centers. And I know you've got your perspective and Siemens is doing a lot and across the spectrum of energy and power and data centers is a hot topic for you as it is for others. It's increasing the demand, you know, both the data centers just general and the power load that's required of them. So it's, it's a very tricky area that we're all trying to figure out to some degree. When we refer to data centers, define for us what is meant by the Goldilocks zone and how is the trend of data centers in the Goldilocks zone shaping conversations that you're having with utilities.

 

Marcus McCarthy:

All right, interesting question. So, there's, um, there's lots of Goldilocks zones, related to data centers because they're operating at the real age of capability of technology in so many different ways. But I presume you're referring to the efforts within data center to match their energy needs in a, in a perfect and non wasteful manner. While reducing carbon emissions and optimizing economic benefits of this whole kind of trade off this optimization across multiple factors that are often in conflict with each other and then trying to get that mix just right is what we're kind of talking about in terms of the Goldilocks. So, and it really is about solving a, a problem of. Optimizing a long list of competing objectives, with different constraints, um, among those objectives. for example, at a data center, I could be operating my own microgrid, um, and have a great connection. So I might have a solar. Combined generator battery capability, and then, uh, I need to decide in advance, how I want to optimize the operation of those assets, to minimize the cost, minimize the carbon footprint, while safely and securely providing sufficient electricity. For what the future demand of the data center is for the next 24 hours. And then I might also, want to bid some of that capacity to the market if I have it as well to optimize my, my solution economically. So, if you think of all of these constraining, competing objectives, it's a very difficult thing to do.

And I guess that's why they're calling it the Goldilocks. So, and then on top of that, your, your transmission system operator. May also want to know what your forecasts are and may want some element of controller or participation in when you connect to the transmission greater or, or, or participate by providing, electricity to the grid.

So, particularly complex area that we're, we're working with a large number of data center providers are 

Good. Okay. Great context. So the next question is data centers and the intersection of data centers and the utilities. there's different models. There's different approaches. it's a fairly dynamic and in some respects fluid situation. What are some case studies that you have that.

 

Jason Price:

Perhaps you can share. are there any common issues that arise or, or solutions that you've seen that are being adopted or not being adopted? Just, you know, can you talk about that?

 

Marcus McCarthy:

Really insightful question. And not a lot of people are aware of how, how difficult this interaction between the utility and the data center is, I think the area where we're seeing. The biggest issue is in, um, a lack of understanding of the constraints and objectives on both sides of the table. and we're seeing a lot of, opportunity for our consulting business to sit in the middle there and to facilitate engagement between utilities and data centers in a particular area. we're also seeing. increasing sophistication, and increasing development of opportunities for the data center operator to help the utility and what they're trying to achieve. And then the, the utility needs to understand the commercial objectives of the data center as well. So it's a, it's an integration, collaboration, communication. problem. the technology to do that is, is all there. It's just a matter of everybody getting around the table and understanding what the objectives and constraints are.

 

Jason Price:

Okay. Um, thank you for that. Let's talk about, you know, some other areas that I think Siemens is in it's really around the grid of the future and the role of AI and autonomous systems. I believe you have product lines and support and you provide some advisor in this area. I'd love to hear how are you advising utility partners approach AI, the use of AI and drive grid mod?

Just what are those conversations like and how are you approaching them?

 

Marcus McCarthy:

Yeah, so there, there's a quite a, quite a number of areas where we are deploying AI today and, and discussing, you know, opportunities with customers, to deploy AI. Um, to help them to optimize what they're doing, on a daily basis. So. In take, uh, for example, a utility, um, a utility planning department, right?

One of the roles in planning is to do contingency analysis to, so to understand, given these contingencies, what the risk might be and, and how, and to develop plans ahead of time on how the utility might react to those risks when they happen. So in traditional mode, um, a planner might. You know, analyze and perform plans, create plans for maybe 5 or 6, uh, contingencies in 1 day, historically. But via the use of AI, the AI can. analyze hundreds of thousands of potential contingencies on the network, uh, look at what the options might be for those plans and then, suggest where the, uh, planner might spend their time focusing, because these are the real, the highest risk contingencies for the network going forward.

So it's really, um, An assistant that does a lot of data analysis, understanding context and helps the planner to do their work better, in more volume. And that's really, I think, part of what we see with AI is that it is a, it is a partner, uh, to, to a planner in that regard. Um, and in other areas, for instance, when there's a problem on the network. AI can very, very quickly look at, the current operation of the network, look at, at what the options are for restoring supply, look at whether that's safe in a power flow analysis, um, point of view, and, and can give the operator, for instance, a list of options. but also then tell the operator, you know, what the upside and downside of those options are in terms of, know, optimally restoring the maximum number of people and what the potential cost of that might be as opposed to a different approach.

So again, it's, it's, it's helping the operator. To get to the data that they need more quickly. And I think that's the, that's the pattern we're seeing with AI is it's not a complete solution on its own. It works with the utility to, to optimize solutions.

 

Jason Price:

Without naming names, I'll put you on the hot spot here, but, AI and its interactions and uses with utilities can be a major transformation. do you have any concrete cases that you could share to just show the power and extent and range that, um, that what you're seeing out there in the field?

 

Marcus McCarthy:

One of the areas that I think is really, really interesting is in, uh, in operating a marketplace, for instance, AI is very, very useful in terms of, learning what power may be generated based on the weather forecast for the day before from photovoltaic. it's, it's actually really, really complex to do that reliably, um, across a large number of, of PV installations. And it's not just the forecast, it's the cloud cover. And it's, it's doing it a day ahead, but then doing it in real time, depending on the conditions that show up on the day, and depending on where, for instance, cloud cover might be, uh, with regard to large solar farms, um, that sit out there and how are they going to be impacted. So, um, AI can do a really, really good job of, of taking a lot of historic data. And using it to learn, um, and to forecast better, um, going forward. And we have, we have software in, in production today that, that very, very accurately, uses a real time data on cloud cover and sunshine, et cetera, et cetera, to, to, better forecast what energy is going to be available in real time from, from PV. And again, I gave you the example ago where we're using AI to suggest, switching operations on a network, um, the different solutions that might be available, um, and to help the utility get to the sort of a semi autonomous network. very much. network management, which helps them to optimize the, the, whatever their objective is for operating the network. So, again, I think with all of these things, we're seeing a lot of them as a, as a two expert system. The AI is, is helping to prepare data to learn. And then the operator is making the final decision based on the context that they have at that, at that point in time. So, we don't really see it as a. machine making decisions automatically. it really is a, is a two expert system.

 

Jason Price:

That's a great way to frame it. So thank you, Marcus. I think that's interesting to look at, way to look at it. It makes complete sense. All right. So, um, This is a question, you know, it can be Siemens or it can be more broad, and that is, what are some areas, if you're looking at your crystal ball, or utility leaders looking at their crystal ball, what should they be thinking about tomorrow?

What are some, perhaps some trends or areas of focus that we should be preparing for,

 

Marcus McCarthy:

Okay. Um, I think for ISOs and TSOs, they need to continue preparing for increased volume of generating sources with inverter based connections to the network. Alongside intermittent moves from micro grids, I think that's something that we're going to see more of as micro grids related to buildings to data centers to, to other facilities that will have their own, their own ability to, to, to serve themselves at times. And those two, those two topics are interrelated as well. So, the microgrid, um, and the, the increased, um, IBR, inverter based, uh, DERs on the network, those are going to continue to add complexity, continue to add, Dependencies that we haven't seen before in terms of the traditional operation of transmission networks on the distribution side. you know, historically, if you asked everybody on the distribution side of the network, they would have, you know, the, the policy was to to operate the. Network to failure.

Energy was traveling in one direction on the network, and historically we operated distribution networks to failure on equipment. I think as the, as the operation of that network becomes more complex, as the number of DERs on the network increase, I think the complexity of operating that network will increase. Improving the quality of the digital twin of the distribution network is, is a, is a challenge, that we will face, and that, um, we need to put more time and effort into, because Only by having a good model of the network as it operates, can we optimally, um, include these DERs in, in how we operate the network.

So it's, it's getting the model right for the distribution side. And I think we have a lot of, um, a lot of effort to put in there, um, because the level of data and sophistication of that model is, will need to increase as, as we try to do more with distribution networks.

 

Jason Price:

Yeah, that'll be key to maintain the stability, no doubt. Really helpful and, um, and you said you've listened to the podcast, uh, in the past, so you know that we have something called lightning round, which is where we are now. So we'll give you the final word, an opportunity to have the final word, but for now we're going to throw a bunch of questions at you and we ask you to keep your response to one word or phrase.

 

Marcus McCarthy:

Okay.

 

Jason Price:

So are you ready?

 

Marcus McCarthy:

Okay.

 

Jason Price:

Alright, here we go. What time of day do you get your best work done?

 

Marcus McCarthy:

During my workout or immediately afterwards. So before all the phone calls and meetings start when I get a little bit of time to, to, to spend some time inside my head and think,

 

Jason Price:

What's your favorite city you've traveled to?

 

Marcus McCarthy:

I guess, Rome in Italy. I could just spend days walking around Rome. There's something fantastic. Every time you turn around a corner, there's something terrific to see. And you can stop and eat anywhere. So yeah, Rome would be one of my favorites.

 

Jason Price:

Here's a Goldilocks related question. When it comes to cuisine, do you like it not too spicy, too spicy, or just right?

 

Marcus McCarthy:

Uh, too spicy. I love spicy food. I often think food is more enjoyable when there isn't so much spice in it, but I always go too spicy. There's something addictive about it.

 

Jason Price:

What's one word that sums up the future of energy?

 

Marcus McCarthy:

Interesting. We're not, you know, for such a long time, for anybody who's been in the industry for quite a while. it was a, it was a very quiet, moving forward methodical industry for so long. and now there's just so much happening, so much challenge, so much innovation. it's really, really interesting.

That's what it is. Really interesting. And, um, and, and a really fun industry to be in at the moment.

 

Jason Price:

We've been collecting lightning round questions from past podcast guests, so I'm going to ask you the same question in a moment, but the question from Mike Goggins of SSP, who joined the show recently, he left the following question, which you're going to answer, and that is, what one decision do you make that changed the direction of your career?

 

Marcus McCarthy:

On two separate occasions during my career, um, I, I stepped out of corporate life to go to, to do a startup myself one time, and I bought a company that I, that I owned and operated for a while. and I, as I said, stepped in and out of different corporate, um, elements of my career. I think owning my own business has helped me have a very different perspective, On what business is about on a day to day basis. So I think that that decision to step out and do my own thing was, was very, very formal.

 

Jason Price:

All right, now it's your turn. What lightning round question do you want to challenge a future guest? And Marcus, it can be a related topic to energy or it can be an off the wall question?

 

Marcus McCarthy:

It's maybe a little bit off the wall, but it's about people. So, um, the, the question I'd like to pass forward is, uh, cause I'd like to, I'd like to learn from people, how do you help those around you to be better every day? How do you help people to reach their true potential?

 

Jason Price:

That's a great question. So we'll ask that for future guests. All right, so I told you you'd get the final word. So knowing that you've got a utility audience listening in today, What's some advice you'd want to share? What is, uh, some meaning meaningful closing thoughts you'd like to share with them as they navigate through this complex and rapidly evolving landscape?

 

Marcus McCarthy:

I'm not, I'm not sure I really am qualified to give to give advice, but, um, I can talk about one thing that I'm observing, uh, in the marketplace today, that is helping everybody to get the best outcomes and the best results. I think, looking at the relationship between. You know, between companies, um, as, um, as a partnership, um, not really as a customer supplier relationship, but what we're trying to do right now in terms of in terms of hardware and software systems and solutions is complex. if we can work as partners. We get so much further so much faster and get get a better outcomes. my perception of of how these relationships when we work in a, you know, a pure customer supplier relationship. It doesn't get us as far as working as partners. I guess the thing that I would. Would like to see is is a and I'm seeing it more and more. I think it's happening naturally to be honest is is greater partnerships across the industry to optimize the outcome for everybody.

 

Jason Price:

Excellent. Great closing thoughts. I think I would agree with much of what you've shared there. So thank you for that. And I implore our Energy Central listeners to share their follow up questions and comments to this episode and sharing with Marcus and I'm sure Marcus. We'll take time to respond back to them, and you know where you can find Marcus on the Energy Central platform as one of our, one of our contributors.

So thank you again for taking time today to talk to us on the episode, Marcus.

 

Marcus McCarthy:

Thank you.

 

Jason Price:

And you can always reach him, as I mentioned, through the Energy Central platform, where he welcomes your questions and comments. We also want to give a shout out of thanks to the podcast sponsor. That made today's episode possible. Thank you to Siemens. Siemens is leading the shift toward future proof grid infrastructure with technologies that enhance efficiency, reliability, and sustainability.

Siemens grid software enables grid operators to accelerate and secure the energy transition in a sustainable, and profitable way. The grid software suite connects the physical and the digital world with an integrated OT and IT landscape along the entire value chain, from planning through operations to maintenance.

As part of Siemens Accelerator, the digital products help utilities accelerate digital transformation easier, faster, and at scale. And once again, I'm your host, Jason Price. Plug in and stay fully charged in the discussion by hopping into the community at energycentral.com and we'll see you next time at Energy Central's Power Perspectives podcast.

 

About Energy Central Podcasts

Power Perspectives features conversations with thought leaders in the utility sector. At least twice monthly, we connect with an Energy Central Power Industry Network community member to discuss compelling topics that impact professionals who work in the power industry. Some podcasts may be a continuation of thought-provoking posts or discussions started in the community or with an industry leader that is interested in sharing their expertise and doing a deeper dive into hot topics or issues relevant to the industry.

Power Perspectives is the premiere podcast series from Energy Central, a Power Industry Network of Communities built specifically for professionals in the electric power industry and a place where professionals can share, learn, and connect in a collaborative environment. Supported by leading industry organizations, our mission is to help global power industry professionals work better. Since 1995, we’ve been a trusted news and information source for professionals working in the power industry, and today our managed communities are a place for lively discussions, debates, and analysis to take place. If you’re not yet a member, visit www.EnergyCentral.com to register for free and join over 200,000 of your peers working in the power industry.

Power Perspectives is hosted by Jason Price, Community Ambassador of Energy Central. Jason is a Business Development Executive at West Monroe, working in the East Coast Energy and Utilities Group. Jason is joined in the podcast booth by the producer of the podcast, Matt Chester, who is also the Community Manager of Energy Central and energy analyst/independent consultant in energy policy, markets, and technology.  

If you want to be a guest on a future episode of Power Perspectives, let us know! We’ll be pulling guests from our community members who submit engaging content that gets our community talking, and perhaps that next guest will be you! Likewise, if you see an article submitted by a fellow Energy Central community member that you’d like to see broken down in more detail in a conversation, feel free to send us a note to nominate them.  For more information, contact us at [email protected]. Podcast interviews are free for Expert Members and professionals who work for a utility.  We have package offers available for solution providers and vendors. 

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