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SmartGrid Applications – Introducing Change in a Conservative Industry

Rick Cowburn, Principal – Vidya Knowledge Systems


FALSE HOPES & UNWANTED OPPORTUNITIES

•  Two case studies introducing analytics to the electric power industry •  Based on 30 years of senior level experience •  Taking advantage of structural change to change the industry paradigms


Electric Industry Restructuring - 1996 •  Created hourly spot power market •  Proposal to CEO: •  An hourly power market needs hourly customer meters •  Hourly data analytics is a key competitive advantage

•  Installed Alberta’s largest ‘smart grid’ system •  From 25,000 data points / year to 100,000,000 data points / year


Pool Prices – April 18 – April 14 2001


False Hopes for ‘Smart Grid’ •  IF price changes too rapidly for Demand response THEN

Demand response is impractical

HENCE Demand-side analytics are an autopsy .

•  Advanced metering is dead in Alberta for economic reasons Pity…


Unwanted Opportunities •  If you have a 20 year old house, it is served by a 20 year old distribution system •  Why does your distribution bill go UP every year ? •  Because you are subsidizing the distribution systems in the new parts of town, thank you very much

•  Why do we have this lunatic cross-subsidization ? •  Because utilities didn’t have data to do it any other way •  HAD to average costs across the whole service area


The New World of Asset Data •  Utilities are now integrating their data resources •  Geographic Information Systems (GIS) can now provide asset details (type, age, original cost) AND connectivity (who uses what asset)

•  Utilities now have a data platform for analytics •  Can work out asset costs for each individual customer •  Price fidelity is an absolute axiom of competition -price distortions do incalculable market damage


Introducing Change •  In 1997 (when nobody was watching) for large customers true distribution costing was introduced •  An initial shock of adjustment

followed by…

“Isn’t that how it’s supposed to be? User Pay?”

•  15 years later the data is finally available for all customers AND ?


An Unwanted Opportunity •  The vultures can’t feed •  Neither utility shareholders NOR equipment vendors stand to gain from this opportunity

•  Change is stressful •  Industry old-timers would have to learn new skills

•  Customers don’t know •  Everybody just grumbles and pays the bill…


Truth Advances One Funeral at a Time A new scientific idea does not triumph by convincing its opponents who declare themselves enlightened -Rather its opponents gradually die out, and the upcoming generation grows to trust its truth right from the beginning Max Planck, 1933


Experiences •  If you can’t do the business case with hard numbers on one computer screen find a better career path… •  If the market’s old and cold, don’t quit your day job (but keep your passions burning)

Rick Cowburn - SmartGrid Applications - Introducing Change in a Conservative Industry  
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