Monday, May 2, 2011

Smart Grid lessons from distance running...

A long time ago, I was a competitive distance runner.  Well, I was competitive in the sense that I was in Junior Varsity and Varsity cross-country races in High School, but my competition was pretty much the guys bumping, huffing and puffing in the middle of the pack.

Bill Cosby was a High School Cross Country runner, too.  He defined Cross Country as a sport where you run 10 miles to throw up.  Funny to a non-runner, too true to be all that funny for me.

I never became a great distance runner, but I learned how to stay in the race, endure the tough parts, and finish respectably.  Some of those lessons have analogous lessons in the evolving Smart Grid world.

Lesson 1: Don't be in a hurry.
In every race, there were some who would take off like rabbits.  A few (very few) could pull ahead and stay there for the whole race.  Most of them faded into the middle of the pack, or worse yet, got shelled off the back.

Those who could stay out front had already learned Lesson 2.

Lesson 2: Plan to run the whole race.
A good runner knows what to expect from the course, when and where to push, and when to take it easier and recover a bit.  You only have so much energy to expend, and knowing where and how to expend it, and always keeping some for the end makes the difference between a good run and 10 miles of sheer freaking torture.

Lesson 3: Get better at the hardest stuff.
I am not built like a distance runner.  I had a distance runner's upper body, but a football lineman's legs.  On the flat, any decent runner could outstrip me after a few miles.  My one advantage was hills.  The steeper, and the later in the race, the better.  Nothing takes the heart out of a distance runner like someone hammering smoothly past, up a steep hill, late in the race.  The problem was, there were never enough hills for me to place well, and I never got really good on the flats, but I got better.

Okay, enough of me reliving my gory days (no that isn't a typo, I left the "l" out on purpose), how does this relate to Smart Grid?

Lesson 1: Don't be in a hurry.
I hate to say it, but the ARRA funding wasn't necessarily the best thing for Smart Grid.  Having to get a plan together, be "shovel ready", and spend all the money in a short time frame seems to have given folks a bad case of "starting line fever."  Taking off and getting the lead early isn't necessarily how to do well in a market place that is going to take at least a decade to develop.  Probably closer to 20 years.

I hear the cries of "Sacrilege!", with fingers pointing to the fast-track standards development, and the massive rollouts of Smart Meters in many places.  Well, I'm not the only one saying that the Emperor's naughty bits are showing.

Let's be real.  Where we're talking about changing how we produce, distribute and use energy, we aren't talking a technological change.  In reality, we're talking about a societal change.  Changing a society takes time.  You can hammer through hardware implementations in the grid as fast as you like, and design model tariffs for every scenario, but until the ones making energy usage decisions (i.e. the folks buying appliances, homes and cars, flipping light switches and making decisions about their businesses and commercial buildings) are accustomed to the new paradigm, the new system doesn't exist.

Look at internet services.  The generation of people who dreamed up the technology isn't the generation that built a marketplace around it.  Our kids are more fluent with, and have a more intuitive sense of, the paradigm than most of us old geeks.  The same thing will happen with Smart Grid.  We can theorize, but the market won't really be in play until a generation has grown up with it as normal.

That means my daughter may not really "grok" it, but her kids will.

It's going to be a long run, and being out in front now may mean that you will learn (or maybe are already learning) Lessons 2 and 3 the hard way.

Lesson 2: Plan to run the whole race.
This is really an extension of Lesson 1.  The fact is, we don't know the course yet, and early lock-in of a race plan is a risky idea.  Whether you're a systems vendor, a utility, or a consumer, be careful.  Plan for change.  If the profitability of a decision is dependent on a kickback, rebate, tax break or other incentive that doesn't naturally occur in the marketplace, don't bet the race on it.  It may not be there later.

Some companies are learning this the hard way right now.  They put a pile of money into systems that support (or mostly support) what has already been deemed a "legacy" standard, and isn't able to do what is being asked of it today, let alone tomorrow.

If you're one of those companies, you know what I'm talking about.  That next hill is going to hurt...

Lesson 3: Get better at the hardest stuff.
Lets face it, folks.  Utilities are good at engineering.  Really good.  They have had to be for a long time.  Many (though not all) of them have gotten pretty good at dealing with regulators as well.

What they aren't good at (for the most part) is dealing with customers as "customers" instead of "ratepayers."

What's the difference?
  • A ratepayer is someone who pays a tariffed rate for something that you (and only you) provide, on terms that are set in the tariff.  
  • A customer is someone who you have to convince should spend their hard earned dollars on your service.
Even if a utility doesn't face competition per se it needs to start treating customers like customers and not ratepayers.

Making good on the promise of Smart Grid over the long haul will require both honesty and trust.  Utility service is moving away from "We provide it, you pay for it" towards a collaboration.  In a smart-grid world, customer-owned devices will be providing energy services, and customers will expect fair compensation for that.  Utilities will command and control less, and act more as a conductor in an orchestra than a drill sergeant.  That requires a greater degree of trust.

Utilities with "ratepayers" don't trust, and are rarely trusted.  Utilities with "customers" are actively engaged in the process of earning their customer's trust.

One other thing I learned.  There are lots of ways to "play dirty" in the middle of the pack to get an advantage.  The advantage is temporary.  The pack remembers, and a runner who uses those tricks will end up paying the price, maybe not today's race, maybe not tomorrow's, but soon and for the rest of the season.*

* With apologies to Casablanca fans everywhere...

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