Different Worlds

‘Smart Grid,” a term we should all be familiar with by now, is the integration of technology – both new and old – within the industry and society. This integration actually simulates the laws of attraction. Generally speaking, in order for there to be attraction there needs to be desire, and we can all agree that there is a desire for things to be easier, more streamlined, and therefore, there is attraction. Attraction between the energy world and technology: a smart grid. However, like any attraction, there are obstacles to overcome. This marriage of technology and energy has unique roadblocks to overcome and unlike most other industry modernization, it must endure the differences in state of minds to coexist.

New technologies can greatly enhance the energy industry and in turn evolve mankind as we have seen in other markets. The banking industry has come a long way in a relatively short period of time; we have transitioned from walking down the street to get money from the local bank teller and writing our transactions down in our bank books, to using technology that does almost every banking transaction for us. That being said, next time you take a plane to the other side of the planet and take out money from an ATM, think of the technology and data that has gone into processing that transaction. It’s instant, efficient and seamless. Much like the banking industry, the telecom industry has also moved forward with new technology. Starting with rotary phones with shared ringers and land lines, to now having wireless smart phones and applications that use the Internet to share voice, video, and screens anywhere in the world. So next time you pick up your Smartphone (which for most people will be in the next few minutes) think how far the device has come and imagine having to wait to see if the ring was yours or your neighbor’s.

As you read this article, markets are constantly interacting – effectively merging into one ecosystem where among other things, smartphones now help manage your banking through apps. Through this integration, the responsibility of market evolution has grown as it is no longer in the hands of the industry providers. Anyone with the technical know-how can build a mobile application that can add real value to the economy.

Keeping my previous observations in mind, when I look at the energy industry, I see international need for the same advancement. Unfortunately, it seems that while the world around us has changed, improved and integrated, the energy industry has willingly remained in times past.

As a self-proclaimed energy industry expert that is deeply involved in the industry, I can tell you that there are three main parallels between the banking industry, the telecommunications industry and the energy industry. In all three cases, there is a mix of regulated and non-regulated entities, which are all prime markets for advancement and integration due to their size and scope, and they invoice the customer directly.  So why has it been so difficult for the energy industry to keep up with the Joneses? It’s because of the Venus and Mars phenomena.

I’m sure you’ve heard of the “Men are from Mars, and women and from Venus” adage, but in case you haven’t, here’s a refresher. “Men are from Mars, and women and from Venus” is the idea that the differences between men and women are caused by the fact that they come from two different planets. This means that, for the most part, men and women do not behave, feel, think or respond in the same ways to the same situation. However, despite their differences, they need to find common ground and coexist.

How can this theory possibly relate to the energy industry? Well, it appears that the energy market and “smart grid” have the same observable facts. There are different ways of seeing things on both sides, and to integrate and to get to the “big data” solutions, they need to find common ground for Venus and Mars to coexist.

Now let’s take a look at the differences between the players in the Smart Grid Industry. The providers (smart grid) and the clients of smart grid (energy organizations) infrastructure have very different ways of thought.

Smart Grid providers have the following thinking patterns: 

  • Highly specialized, using specific solutions to accomplish specific tasks.
  • Able to focus on narrow issues and block out unrelated information and distractions.
  • Narrowly focused its specific tasks or activities for long periods of time.
  • Able to separate information, stimulus, emotions, business relationships, etc. into separate algorithms to solve specific problems.
  • Sees individual issues and disseminates them into specific parts to provide focus to a problem.
  • With smart technologies being a pioneering market, providers have huge incentive to be first installed so the solution captures unique information. This creates real “stickiness” for the particular solution even if it is only used for a pilot.
  • Required to have an aggressive behavior, and are more dominant and more narrowly focused on the physical aspects of getting into clients and getting data collected.
  • Have a dominant perceptual sense of technology vision, which typically oversells and under delivers as providers want to be part of a bigger picture to create a footprint in the relationship and use it to market pioneering technology (gain new untapped market opportunities).
  • Mostly interested in high rate of returns and work in a very competitive pioneering market place looking for the “Big Win.”
  • Technologically savvy personnel that do not always understand the politics of their client.

An energy organization or clients such as a utility, transmission operator or market operator have the following thinking patterns:

  • More diffused organization that utilizes significant portions of its resources on a variety of tasks to ultimately achieve a few key objectives; i.e., keep the power flowing.
  • Sees everyday things from a broader, “big-picture” vantage point to achieve narrowly defined shareholder goals, focus on their own needs and have very little use of others outside their jurisdiction unless directed by policy or regulation.
  • Are equipped to divide their attention among multiple activities or tasks but have limited resources.
  • Have a tendency to not work together although there is no competitive reason why because they have defined territories.
  • Tends to link everything together within its jurisdiction and once things work, it is opposed to change.
  • Looks at the idiosyncrasies within their territory and once finely tuned to address them, will not sway too far as both the energy organization and their owners are not risk takers.
  • Historically trusted and influenced by policy change but also protected to continue to get their same rate of return by the regulators.
  • Happy to achieve a regulated rate of return and are historically unionized with set jobs and policies where most are given bonuses based on doing their job and protecting their borders so there is no competition.
  • Manages an aging workforce that is set in their ways.

At the end of the day, differences between the smart grid and the energy operators increase because of the involvement of politics, attention and “hype” around the industry. The real Mars and Venus issues lie in the fact that most energy organizations in the world that require technologies to evolve are blessed with multi-level political systems. These systems are run by people elected into positions (not energy experts) and who want movement on items within their political term.

So you have local, regional, state and federal parties all wanting action with different agendas. There is no “global” entity to manage change. The truth is there is no market desire for a single change agent, because each party wants to have complete localized rights and not give up its jurisdictional rights. Recently, I’ve heard of arguments between regulated parties with respect to who owns the customers data. Let’s be clear, in all other markets it’s the customer; the customer owns their own data. Giving up the assumed rights of data causes issues, internal fighting and in-turn a desire to reinforce data islands to protect historic rights.

On top of all of this, now add to the mix politicians throwing around “big money” on “big data” integration. It’s estimated that spending will be in the tens of billions of dollars for the next 10 years on smart grid technology. It’s like telling a company involved or interested in smart grid, “Have a shower, put on your best suit and then come tell me a little about yourself. I might like you and you might get lucky!” It’s a great teaser line to get the vendors to the “party” especially if the vendor is aggressive and is more focused on the physical aspects of getting in and getting data collected first.

The fact is, we want and need a smart grid. We have forgotten the real issue at hand. We need data. We need it for so many reasons, and we can use it in so many ways – many of which we don’t even realize yet.

To spend money on a pilot project without a global vision or standardizing the data first is wasteful and in most cases counterproductive for all those involved. It may satisfy the politicians, energy organizations, or even the smart grid organization that gets the multimillion-dollar deal, but it doesn’t help the energy market overall. We are not any closer to achieving our goal to be as advanced as the other industries. It’s almost like the competition between men and women in society. Going back to the Venus vs. Mars theory, the question still exists as to why genders respond so differently to very similar situations.

Just like the energy organizations and the smart grid organizations, although they have come a long way, they have yet to find a solution. Both parties are interested in what is best for them rather than what is best for the energy industry as a whole. Just like if you were to ask any individual in today’s society what gender they think is the smarter one, it would always be a biased opinion based on their own best interest.

Reality check: We need standards. Start off simple and advance them from there. We need policies that are global to help guide our standards. We need policies that require data solutions for smart grids to be open, easily interpretable and we need real support to ensure interoperability of data. Just like equality was created in the workplace to support both men and women ensuring they do their best rather than focusing on the differences between each other. Those are standards that were put into place.

We don’t need self-interest to come first and we really don’t need politicians to be blindsided by companies that say they can create a dress that looks good on anybody. We all know that one size does not fit all! We need a market that allows the small creative technology provider to be in the market with the big guys. We need to get to a point where the data is not locked in once the smart technology is implemented. We need smart meters that interoperate together. The companies in the market need to manage the Venus and Mars Phenomena, just like society has come to. This is not rocket science, but we need things done now before we waste time and money that, in most cases, comes from the public’s pocket. Let’s be smart and fix the smart grid problem.


Gary Michor  is a results-oriented executive and adviser with more than 20 years of experience leading firms that work in the energy and data communications industries. Contact him at [email protected], or visit www.screamingpower.ca.

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