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Blogging the GridThe Smart Grid Threat That’s Even Bigger Than Security
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Aug 31, 2010
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You’d be forgiven for thinking that with the recent excitement over the Stuxnet virus and other cyber threats, that this blogger believes security issues present the biggest challenge to the success of a national Smart Grid.
But there's something else that threatens the grand Smart Grid project on an even more fundamental level: We all have to believe in the goodness of this work enough to see it through ... even when there are setbacks. And sometimes it seems we might not.
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The corollary of the oft-cited Field of Dreams baseball diamond axiom – “If you build it, they will come” – is the far less-often cited “… and if you don’t, they won’t.” In 2010 we’re still in the Smart Grid’s infancy, and while it’s not yet clear what’s the right way to build it, this case has shown that failing to plan and permit up front is one guaranteed way to fail. The net net is that the Smart Grid will not be fully deployed in Boulder … not for the foreseeable future anyway.
According to Smart Grid News, Greentech Media and earth2tech’s Katie Fehrenbacher: The real problem is that [they] … didn’t perform a cost-benefit analysis prior to starting the project. [Also] the group originally didn’t file for a “Certificate of Public Convenience and Necessity” … when the project started … a filing that would have enabled the PUC to cap costs of the project to protect rate payers.
Go back to an online debate we held on the Smart Grid Security Blog and the Smart Grid News site almost a year ago. We began with a post I called “First Mover Disadvantage,” turning a standard business school strategy on its head. The basic idea was that in these very early days, there’s far too much uncertainty (e.g., technology, standards, business models, regulatory environment, etc.) for companies, especially electric utilities, to get a jump on the market without enduring substantial setbacks and risk enormous costs for themselves and their rate payers.
Jack’s response, "Not the Lead Dog? Get used to the View," made the case that despite the uncertainty, those utilities with enough chutzpah to get their hands dirty, make mistakes, learn from them and press on, would command a disproportionate share of influence in the market over those sitting on the sidelines waiting for the eventual shake out.
I like both of these ideas, and surely a decent university debate team could make a lot of hay advancing either argument. But I’m going to say that SmartGridCity is an example of moving big and early, and in so doing, doing it wrong from the get-go. Projects this complex, with this many players, will inevitably be quite risky, and therefore must be managed extra carefully. There is less room for short cuts, and even when designed and managed flawlessly, they may still endure their share of lumps. These folks sealed their fate in the beginning, and added insult to injury by boasting so publicly about its achievements.
It’s that last part that bothers me the most, as the biggest threats to the success of the Smart Grid aren’t what you might first imagine: It’s not cyber terrorists, regularity inertia, or flawed technology that most threaten the build-out of the U.S. Smart Grid. Rather, it’s a potential public perception that promised Smart Grid benefits aren’t nearly worth the costs that could kill it before it's born.
In the early days when we're still trying to figure out what works, there are going to be more Bakersfields, BG&E's and now Michigans for sure. But it's important that the industry ensure that success stories make their way to the media at least as often as the gotcha's. I want to focus on the security challenges facing the Smart Grid, but won't be able to do that for long if we don't get the thing fielded in the first place.
Andy Bochman and Jack Danahy are authors of the Smart Grid Security Blog.
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| Handling Risk Management & Living System SG... Threats |
| Handling Risk Management and Living System Smart Grid Stillborn Threats SmartGridNews.com has a video and this article of the security expert Andy Bochman about two Smart Grid Stillborn Threads. To handle those threats, the electric power industry needs to be restructured with an EWPC-AF based Energy Policy Act. A few days ago, I posted a comment under the video "Smart Grid Security Standards May Be Asking the Impossible of Utilities ( http://bit.ly/SGN004 )," with a title "Was Whole Power System Architecting Bypassed?" Today, I read his blog post "Smart Grid: The Smart Grid Threat That’s Even Bigger Than Security," and I will show that those two threats have to do with the architecture of the whole electric power industry, on risk management and its living system aspects. The reason the security (risk) threat is greater than necessary is explained in the section “Transportation Ultraquality is the Province of Engineers Not Politics,” of the 2007 EWPC article "Demand Integration is NOT the Province of Politics ( http://bit.ly/6lsNd7 )." System security and system adequacy risk management requirements were not fully addressed in the explicit high level architecture act of “The Integrated Energy and Communication Systems Architecture (IECSA)” design work, which concentrated on interoperability. Based on his article, I agree with Andy that "... it’s a potential public perception that promised Smart Grid benefits aren’t nearly worth the costs that could kill it before it's born." He "... want to focus on the security challenges facing the Smart Grid, but won't be able to do that for long if we don't get the thing fielded in the first place." Architecting evidence in support of the urgent need to restructure the electric power industry can be found in the EWPC article "Should the Smart Grid be a Technological Project to Address a Challenge Faced by Utility Executives? ( http://bit.ly/bvSEHU )." |
| José Antonio Vanderhorst-Silverio, Ph.D. - 08/31/2010 - 19:25 |
| solutions in need of problems. |
| this smart-grid/city stuff has all the hallmarks of that dodo known as "home automation". every year is the "year of home automation" - when folks really *will* pony up hard earned money to remotely control their curtains,etc... |
| Lefty Goldblatt - 09/01/2010 - 02:25 |
| alternative to |
| "Smart Grid will not be fully deployed in Boulder" The words "fully deployed" hint at the core problem. Connect this with “First Mover Disadvantage,”.... The basic idea was that in these very early days, there’s far too much uncertainty (e.g., technology, standards, business models, regulatory environment, etc.) for companies, especially electric utilities..... A better alternative is to "partially deploy", i.e. do the parts that don't require large up front investment or intrude on the consumer's sense of control. From a consumer's perspective, "Don't touch my light switch or thermostat, and if you want me to participate, make it worth my while." The other necessary piece is to make it very easy for the consumer to participate. Enable an e-bay like auction for electricity. Let the consumer buy low and in the future sell back high. This won't sit well with utilities, which til now have owned production and control. And it won't be popular with companies that imagine producing and selling a massive deployment of connected control devices. It will however result in a demand driven move to Smart Grid. |
| bill ferree - 09/01/2010 - 09:47 |
| A Message to US Senator Harry Reid... Energy Bill |
| Bill, Please consider the EWPC article “A Message to US Senator Harry Reid About a Minimalist Energy Bill ( http://bit.ly/EWPC48 ),” whose summary says: "Federal and state governments should take the leadership to initiate the transformation of the electric power industry, instead of developing individual symptomatic energy policies, for example, on energy efficiency, on the smart grid, and on Feed-In Tariffs, that are easily water dawn by the powerful energy industry lobby. The shared vision can be enacted as a fundamental minimalist, holistic and emergent energy policy, based on the Electricity Without Price Controls Architecture Framework (EWPC-AF). Such policy will reduce the likelihood of The Third Depression by attracting private funding and creating green jobs from coast to coast." What you are suggesting is exactly a shift from the Investor Owned Utilities Architecture Framework that resulted from the “The Integrated Energy and Communication Systems Architecture (IECSA)” into the emergent EWPC-AF. |
| José Antonio Vanderhorst-Silverio, Ph.D. - 09/01/2010 - 12:15 |
| Change the focus |
| I feel the problem with Smart Grid projects, especifically Xcel Energy's SmartGrid City, is that they have not distinguished technical from sociological assumptions. Thus, instead of making small focused experiments to tests fundamental assumptions they tried a huge pilot program were you couldn't even tell why and what went wrong. I think that understanding what people need, especially unknown or latent needs, is the most important thing before deploying large scale SG pilots. Moreover, most of the technology is already tested, what you need to identify is how people will embrace it, what they can do and how they can change their habits (and if they will). Therefore, regulatory agencies and IOUs can jointly prioritize those technology deployments into meaningful policy. |
| Juan Pablo Carvallo - 09/02/2010 - 12:56 |
| consumers |
| The fact that consumers have not been considered as customers by utility companies for quite some time leads to resistance to new technologies. As a consumer of electricity, rates have been raising faster than inflation for years. Since Utility companies are essentially a regional monopoly, there is no incentive to keep rates down and to help customers in the style of business that compete; such as restaurants, autos, clothing stores etc. We consumers are just about completely fed up with price increases and poor explanations for these increases. Rude treatment of customers is tolerated because there is no where they can go. Beware, when enough Consumers of electricity get fed up with not being treated like Customers, anything that looks like it will increase prices or inconvenience lifestyles will be fought hard. Utility companies have brought this upon themselves and it is time for a change. I for one, oppose any Smart Grid System because lowering my electric bills and making it easier to navigate my bill was never the goal of my utility. All we, as consumers, have heard is we will be charged on a cost of electricity by time basis. In this way, our utility does not have to purchase expensive peak power or build more plants. It's all about the Utility and not about the consumer. |
| Kent Johnson - 09/02/2010 - 14:02 |
| Re: Change the focus |
| Juan Pablo, You are writing on the assumption that we are facing a trivial problem. It is non trivial. The effective solution to high tech whole products and services is in the competitive marketplace. Ken is giving the sentiment of many customers. The solution is to restructure the electric power industry into a regulated T&D Grid side and a competitive Enterprise side, that lets customers choose. If you want to go deeper, please take a look at the EWPC article “A Message to US Senator Harry Reid About a Minimalist Energy Bill ( http://bit.ly/EWPC48 ),” that I mentioned above. |
| José Antonio Vanderhorst-Silverio, Ph.D. - 09/02/2010 - 15:04 |
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