Smart grid and the connection to smart cities

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Modernizing the nation’s electric grid is paying dividends for many utilities. Ongoing population growth and economic development in urban metropolitan areas makes meeting the growing demand for electricity a perpetual challenge. Utility experts advocate a smart grid as a solution, and urban planners propose smart cities as a solution. Sustainable solutions for a smart grid and for smart cities must actually be collaborative and complementary.

Utility executives routinely develop long-term smart grid strategies that will yield optimal returns on sustainable solution. Government leaders and urban planning experts advocate that future energy management solutions be incorporated within broader regional economic development initiatives. Unfortunately, this smart cities approach rarely aligns with smart grid planning — it is time for all investment. The American Recovery and Reinvestment Act (ARRA) provided billions of subsidy dollars allocated to the national electric grid modernization effort. Many utility experts have developed business cases that outline how smart meters and advanced transmission and distribution upgrades have transformed business operations at electric utilities. Improved outage management, reduced labor costs, and near real-time meter alerts are among the benefits touted to improve utility business operations.

Modernizing the nation’s electric grid is paying dividends for many utilities.

Over the last four years, I have delivered management consulting and customer engagement services to utilities as part of smart grid initiatives in Texas and Ohio. Although early smart grid adopters are realizing tangible benefits, greater external forces are changing the landscape of energy management. Urbanization, globalization, and climate change necessitate that electric utilities collaborate in new ways with diverse stakeholders.

Smart Urban Planning

In short, smart grid initiatives can no longer be decoupled from 21st Century sustainable urban planning. Urban centers are already plagued with energy delivery challenges, water shortages, and highways that, during rush hour, resemble oversized parking lots. Unlike traditional urban planning models, 21st Century urban planning requires sustainable and integrated solutions. The United Nations indicates that half of the world’s population lives in cities. Many demographers project 75 percent of the world’s population will live in cities by 2050. Going forward, utilities will have to quantify benefits realization within a cross-sector and multi-stakeholder context.  Smart cities holistically and collaboratively solve urban problems within this context while simultaneously growing their local economies.

Recent major weather events and natural disasters have prompted more grid hardening measures among utilities. After Hurricane Sand,y the Federal Emergency Management Agency (FEMA) reported that 8.5 million people lost power, and more than 23,000 people were left homeless along the nation’s Atlantic coast. New York City officials faced power outages, flooding in hospitals and schools, and a subway system that had to be shut down. The images of babies being evacuated from flooded hospitals conveyed the literal life and death importance of smart and integrated collaboration. Smart cities are in essence, the reflection of human sustainability and business continuity. Smart cities will increasingly encompass electric utilities whose commercial and industrial customers may also become new collaborative partners in a smart cities framework. Utility executives must begin to address the resilience of the grid within a larger human-focused paradigm.

Change is driven by social will.  The general public continues to expect more from its electric utility.

While nature will continue to present challenges to transmission and distribution infrastructure for an electric utility, planning for manmade stresses to infrastructure has proven to be equally important. In a 2008 report, the FBI refers to the nation’s electric grid as critical infrastructure.  Furthermore, it states that copper theft from transformers is a national security issue. The Department of Homeland Security regularly reports on copper theft and anything perceived to be grid vulnerability within its Daily Open Source Infrastructure report. Enhanced public safety in an area targeted for urban revitalization has always been viewed as a necessary step to ensure sustainable smart cities. Public safety now also signifies the protection of infrastructure that enables the flow of electricity, water, transportation, and telecommunications. A security solution for a utility is now inherently part of a larger national security and smart cities solution.

Smart Resilience

Ultimately, all utilities need to regularly review and examine the strengths and weaknesses of their respective emergency operations plans. Oftentimes, such plans effectively outline work order management and quality assurance processes in great detail. Although expeditious power restoration is obviously the desired outcome, the evolving dynamics of urban landscapes necessitate a coordinated plan with other stakeholders. New lessons continue to be learned. Atlanta and other southern cities have experienced crippling snow storms this year. Hurricane Sandy’s impact on the Atlantic coast seemed more like a hurricane on the Gulf Coast. If these abnormal weather patterns are the new normal, then utilities have to be resilient. This is a resilience that requires new competencies and leadership that can adapt to the convergence of smart grid and smart cities.

Smart cities will increasingly encompass electric utilities whose commercial and industrial customers may also become new collaborative partners in a smart cities framework.  Utility executives must begin to address the resilience of the grid within a larger human-focused paradigm.

This is such a global issue that the Rockefeller Foundation recently funded the 100 Resilient Cities initiative.  Chief Resilience Officers have been funded in 100 municipal governments around the world. Their sole purpose is to build communities that can recover, persist or even thrive amid disruption. Being able to function across sectors and globally are job requirements for this role. Five years ago, many organizations did not have a chief of sustainability or a chief diversity officer. Most electric utilities now have an executive that serve in related roles. Dedicating human capital to disaster preparedness, resilience planning, and smart infrastructure planning within a utility only makes sense.

Change is also driven by social will.  The general public continues to expect more from its electric utility. There is also a growing expectation that public-facing organizations create value for its customers. It is timely that electric utilities are slowly beginning to see the value of substantive and strategic customer engagement. After all, cities and grids are only as smart as the people served by them.