The following is an article by Mike Carlson, president of Siemens Digital Grid, about his keynote presentation taking place at this year’s Energy Thought Summit in Austin, Texas, which brings together thought leaders, entrepreneurs and innovators for smart, engaging dialogue about how to innovate and elevate the energy industry.
By Mike Carlson
I recently read an article in the Harvard Business Review that indicated companies waste 30 percent of the energy they consume. And it’s not for lack of technology, but for many companies, it’s because of the way they’re structured and managed. Most organizations don’t have the data and knowledge around their energy consumption, much less the expertise, tools and technology to manage it. Combine that challenge with the organizational impacts of “who owns energy,” and you have a less-than-optimal environment for effective energy management.
I think this scenario offers some parallels for many utilities today. Companies are not the only entities that remain siloed in their approach to energy. Utilities themselves are still working on ways to break down barriers so they can serve a shifting, changing market — in a recent survey only 38 percent of utilities indicated they have the ability to share data across their entire organization.
But there is no doubt utilities want to be able to take advantage of the value data provides. The same survey showed that 47 percent strive to be digitally-driven organizations across every business unit. But, to be digitally-driven, they have to be agile.
The energy landscape
There is what seems like a laundry list of catalysts and accelerators driving the evolution of our energy industry. They include pressure to create more resilient power systems with near century-old infrastructure, coal retirements combined with the low price of natural gas, and the ever increasing input from renewable sources, all of which drive shifts in power creation and lead to the growth alternative generation and distribution models such as microgrids. Finally, our policy and regulatory environment is calling for cleaner, more reliable power while we need to prepare for threats both natural and man-made which further challenge our systems.
Most of us across the industry are aware of these challenges. We experience them every day when we read about them in our newspapers, listen to our customers talk about them and talk about them within our own companies. In order to realize how to turn these challenges into opportunity, we have to look to technology to address a changing demand and drive an exciting opportunity to reform this industry.
We simply cannot address a 21st century energy landscape with the status quo. We must bring together our physical and virtual worlds to move the power industry into the next century and beyond.
The power of valuable data
So, how do we get there? We can start with a focus on the data we’re already collecting. The volume of digital information in today’s society is staggering and expected to increase tenfold every five years. Utilities certainly reflect this trend. They collect vast amounts of data—just think about the proliferation of smart meters over the past 10 years. We now have over 50 million smart meters gathering energy data across the U.S. And in North America alone, utility spending on data analytics is expected to grow 29% each year, totaling over $2 billion this year.
We are in an era of unprecedented data collection. But the key word we should focus on is “collection.” We need to be asking ourselves not are we collecting enough data, but are we collecting the right data and more importantly, what do we do with it once collected. Obtaining data is the easy part – utilizing it is the challenge the industry must step-up to. It may help to think about this scenario similar to security camera footage. Often, security cameras are only capturing film on two to four second intervals. But, this still allows someone watching the footage to determine who entered a building or what type car drove through an intersection. These cameras aren’t collecting every single millisecond of footage, but they are capturing footage of value.
What we must do as an industry is use technology that makes transforms data into valuable information and more importantly, leads to knowledgeable actions.
When Siemens deployed our EnergyIP meter data management platform for JEA in Jacksonville, Florida, the remote connect-disconnect function allowed the utility to avoid 130,000 truck rolls and realize $1.6 million in savings in just a year and a half. We’re excited to announce this week that we’ll be deploying the same type of meter data management technology for ConEdison to help them intelligently manage new customer engagement initiatives.
But value doesn’t just mean monetary returns, though it certainly helps justify some of the cost. Value can mean managing intermittent generation to provide reliable power for millions. Our software system in California is helping the California Independent System Operator do just this by intelligently managing renewable generation to meet energy needs across six states, analyzing exact power generation and demand on the grid every five minutes.
Value can mean satisfying end-users by keeping the lights on during extreme weather events. A new Distribution Feeder Automation System we designed specifically for ConEdison in Lower Manhattan splits grid networks during flooding so issues can be isolated and power remains flowing for more customers.
Value can also mean embracing new energy models that reduce greenhouse gas emissions while improving reliability. Like at Blue Lake Rancheria, a Native American reservation that will use our microgrid management software to manage a low-carbon microgrid powered by a photovoltaic solar installation, battery storage and a biomass fuel system. Siemens software provides the operators the ability to manage and control the energy resources so they can deliver reliable power to the 100-acre reservation, operating on or off the grid in coordination with their local utility, Pacific Gas & Electric, and reduce an estimated 150 tons of carbon per year.
There’s no doubt it’s an exciting time to be a part of the energy industry. I might guess that in 50 years, someone in my position will look back on this era as one that transformed how energy is produced, transmitted and consumed. As demonstrated in the Siemens work across the U.S., we’re certainly excited to be a part of this evolution as a technology partner for utilities and energy providers who are agile enough to turn challenge into opportunity and embrace the digital world.
Image credit: GarettTT
Mike Carlson is a global management executive with more than 25 years of experience in finance, technology and operations management across industries. Currently Mike is President of Siemens Digital Grid North America. Mike’s initial background started in finance and systems and he has dedicated his 15+ years in the utility industry to harnessing technology to achieve value through business transformation and grid modernization. As the former CIO of Xcel Energy, Mike was a key player in designing and implementing the utility’s business transformation and smart grid strategy. In his current role at Siemens Mike is responsible for driving the business strategy and execution for the Digital Grid North America business and global software development.