Demandbase Connect

September 1, 2010

What Utility Executives Think About the Smart Grid

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Pages: 123456

Where can you get the most frank answers to the question, "What do utility executives think about the smart grid?" Probably from the 2009–2010 " Platts/Capgemini Utilities Executive Study." Conducted in March and released mid-July, it surveyed senior executives from 106 electric (57%) or electric and gas (42%) utilities in North America (19% from Canada). Participants were asked about current industry trends, the industry's future, what utilities are doing to prepare for the future, and perceptions of the Obama administration's impact on the utility industry.

In verbatim comments addressing current industry issues, variants of the word "change" occur or are implied frequently. Some survey participants, like this one, see change as a positive for the industry: "[The changing landscape] makes it probably the most exciting time to be involved in this industry." Others expressed more anxiety about converging change agents (aging demographics, aging infrastructure, and pressure from environmental regulations): "It's the perfect storm."

One issue that cuts across a multitude of survey issues is the smart grid. A summary of comments related to smart grid technology deployment follows. For details of participants' views on this and other issues, download the full report. Note that all participants could comment on any topic, whether or not it was their area of responsibility, but they did not have to comment on every topic.

Current Smart Grid Status

The executive summary notes that 45% of respondents' companies have a smart grid strategy in place, while 52% said their utility has one in development. "Over two-thirds of participants also said they expect their smart grid strategies will change over the next five years as a result of evolving technologies." Full smart meter implementation has been reached by 37% of respondents and advanced meter infrastructure (AMI) by 35%.

Although "smart meters" have gotten the most press and consumer attention—not to mention federal stimulus dollars—not all utilities begin their smart grid projects with new, digital meters. One respondent said, "We've had a smart grid in many cases for the last 20 or 30 years. We started with the system operating departments in different companies, and they have progressed infinitely and dramatically over the last 10 years . . . now what we are going to start seeing . . . is integrating it at a much lower level, on the individual house level, and there are a million things that have to be figured out."

One expressed concern that not all utilities in a given service territory may be doing things the same way, which could raise issues related to a lack of consistency. But, aside from having a single set of federal standards, the most likely way to gain greater consistency, even at the service territory level, is through cooperation.

According to one respondent, "There is more of a willingness in utilities in the last 3-5 years to share information. We come back from those years of mergers and de-mergers and everybody being fairly closed off as far as communicating changes in their systems. The willingness now of utilities to work more collaboratively together to define what our requirements are, and to set the stage for how we are going to move ahead with some of this new technology and meet these challenges in the future."

Other respondents disagreed about the level of cooperation across company lines and with regulators. Clearly, implementation of a smarter North American grid would be simplified (though never simple) if cooperation among utilities, technology vendors, and government entities at all levels (including across the 49th parallel) were a given—a point made by more than one executive.

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