Energy Manager

Smart grid outlook: Business benefit, data, analytics and customer-centric technologies ahead

The term ‘smart grid’ has so many definitions that it is often difficult to find industry experts who can agree on trends in the industry. However, based on my company's work with hundreds of utilities in North America and around the world, we have found several trends that should continue to drive activity throughout the rest of 2010. We base these observations on our own straightforward definition of smart grid, which is:

March 24, 2010
By Andy Zetlan

An integrated toolset to efficiently plan, design and reliably operate the grid in a sustainable manner.

While there are many factors that affect grid development—such as a diverse customer base, cost of power, operational hurdles of increasing demand to a stressed delivery network, and peak demand management—we believe one of the most significant factors driving smart grid trends in 2010 will be the shift in government regulations. Government regulation is evolving away from creating general mandates and moving toward judging the business and social benefits of additional smart grid investments suggested by utilities. It is likely those investments will fit the trends described below.

More customer-centric technology
Utilities will continue to invest in customer-centric technologies, including smart meters, home-based smart devices, demand-response devices and associated networks. Some of these are mandated by government regulation (as in Canada) while other utilities are aggressively pursuing these investments to enhance customer communication, to better understand consumption patterns, and to enable demand response. Dozens of requests for proposal, contract announcements and implementation projects have been initiated over the past two years, and that trend is likely to continue for at least two more, as many of the projects will be completed within that period.

Better analytics to reduce operations costs
Utilities are beginning to understand that analytical engines such as Distribution Management Systems (DMS) will bring detailed knowledge about distribution networks that has not existed in the past. Dispatchers will be able to manage the network to avoid overloads, balance loads, manage voltage and determine the most effective use of demand response (at peak and at other times).


In addition, DMS enables stronger outage management capability and identifies potential loss points for investigation. Up to now, there has been a rush to collect data from the field, which has led to a massive surge in the demand for smart meters and other devices. Utilities now understand that a better approach is to install measurement devices in conjunction with analytic software; they not only measure but provide intelligence regarding the operation of the network in real-time and into the future.

The recent use of DMS software at Progress Energy and the University of Michigan in the United States (and at several utilities worldwide) demonstrates this trend.

Data management and security
The smart grid brings with it a great deal of additional data to manage, plus many additional attributes and data types. New assets like smart meters and smart switches will be added, and information must be maintained about those devices. Data will be collected from those assets more frequently than they are today, and will raise challenges for managing the data for many uses.

Utilities will start to deal more aggressively with the reduction of the number of databases to ensure the integrity of the data that is maintained, including automating work processes that update asset information. Also, government regulation and common business practice will force a dramatic rise in the attention given to security of both the data and of the devices that collect it.

Utilities will focus smart grid efforts on business benefit
Until now, the priorities for the smart grid were often set by government regulators. Once these initial investments are completed, however, utilities will continue with incremental investments that provide strong business benefit. For some utilities, the investment will result in cost savings, such as the cancellation of power plant construction or of circuit reconstruction to handle increasing demand (for example, the influx of electric vehicles and their charging stations).

For other utilities, increased reliability, reducing outages and interruptions, and managing voltage carefully to improve quality of service will be the objective. And, for others, success will be defined by stronger customer interaction, which will provide both new revenue and conservation opportunities, and change the demand patterns to enable growth of consumption without significant investment.

In all instances, these changes will provide the ultimate benefit of added sustainability to our already fragile environment.

New technology to monitor distribution network
Utilities will add technologies to more closely monitor the distribution network to enhance its management and integrity. Coupled with DMS analytical functionality, SCADA systems will grow through additional Remote Terminal Unit (RTU) deployments to provide a more comprehensive view of the power delivery network.

Because voltage management will require RTUs to employ more precise sensors, the industry is responding with the development of smart RTUs; the addition of motorized switches in conjunction with those RTU deployments will enable the level of ‘self-healing’ that improves the integrity of the power delivery network.

Of course, utilities will have to deal with the challenges that these smart grid advancements will bring. For example, traditional ‘silo’ functions in utilities will need to integrate more effectively. Customer service, system operations, engineering, maintenance and other functions will be collaborating on smart grid issues in a manner that is different than traditional work practices of the past, and may, as a result, be one of the more difficult goals to achieve.

Utilities will simply have to organize themselves around important business processes (new service design and deployment, outage management) while retaining traditional organizations to cultivate and grow important skill sets.

Intense growth ahead
The smart grid era is driving significant changes to utilities and their customers, and these trends provide a level of understanding of where we are today and what to expect in 2010—and beyond. The next few years should be, as a result, a period of intense growth and change in an often unchanging industry.

Andy Zetlan has more than 35 years of utility industry experience and an advanced knowledge of smart grid technology. As a Telvent smart grid industry expert, he is a frequent speaker at industry conferences and has served as a professor of GIS technology at the University of Delaware. You can reach him at For more information, visit