Why you may be designing the wrong network, the wrong way

Editor's note: It is not unusual to read about the need for utilities to reorganize themselves to reflect the new realities of the smart grid. But those new realities don't just impact the org chart. They also impact the technology you choose and the way you design your communications system. One of the best explanations of this new thinking is from the book The Advanced Smart Grid. I asked co-authors Andres Carvallo and John Cooper to share their insights with SGN's readers. -- Jesse Berst

By Andres Carvallo and John Cooper

Change – both the pace of change and the approach to change – is a critical management issue in the electric industry. The utility environment has traditionally changed only gradually and under a controlled setting. But change is becoming more frequent, less predictable, and increasingly out of the direct control of utility managers. The utility approach to change management (cultural and organizational) will need to adapt to the new, more dynamic state.

Consider, for instance, that the current approach to change is based on a specific purpose (e.g., smart meters, distribution automation, demand response), which retains the silo focus so typical of utilities. In contrast to such purpose-driven change, service-driven change (e.g., service oriented architecture or SOA) adopts a more holistic, long view that ensures that all parts of the whole function well together.

Consider the pace of change in other industries, specifically the IT industry. Change has become a constant in the IT world. As more technology creeps into the electric industry and as it begins to use more IT and telecommunications, is it unusual that the pressure to change more rapidly would find its way in?

The new time cycle

Utilities will be forced to adapt to a new time cycle, where change happens much faster. They will need a new attitude about change, a new approach -- namely, to make adaptability a core competency. Utilities must adapt to the shift at the organizational level by transitioning away from traditional silos for more interoperability and cross training. They must adapt at the economic level by shifting their business models to be more oriented toward services and less towards sales of commodity kilowatts-per-hour. They must adapt at the technology level with a new IP network architecture that will more flexibly accommodate new technologies.

In fact, the standard practice of procuring systems that communicate using different physical networks; that store data in separate databases; and that require separate support systems has become a principal obstacle to implementing a smart grid. Such functional separation, which once provided the benefit of focus, now works against a utility that seeks to integrate operations and leverage a common network and a common database to provide improved interoperability while reducing costs.

As we move from application silos to integrated ecosystem, a new rule of integration is needed: applications procurement by utility divisions must meet network realities.

Next page: Procuring the right kind of communications network >>