Why the Smart Grid Industry Can’t Talk the Talk (and What to Do About It)

Why the Smart Grid Industry Can’t Talk the Talk (and What to Do About It)

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By: Jesse Berst

As an industry, we’ve gotten good at the technologies of the Smart Grid. Too bad we haven’t gotten any better at talking about it. At the National Governors Association last month, the CEO of a major utility started his speech with the confession that he didn’t really know what "Smart Grid” meant.

 

Pretty sad when a utility CEO isn’t knowledgeable enough about the Smart Grid to explain it, especially when he’s standing in front of 43 governors and a bunch of television cameras. What a wasted opportunity to help influential people understand and to recruit them to the cause.

 

Can you imagine if an automobile CEO began his bailout plea with "I don’t really know what an automobile is, but can I have $20 billion please?” Or if the CEO of CitiGroup began a speech with: "I don’t really know what a bank is, but...”

 

The Value of Simplicity

As an industry, we must take the advice of NARUC Chairman Fred Butler, who told SGN recently that "Consumers have a right to know how the Smart Grid will benefit them and why it justifies an increase in rates.” (See link to full interview below.) As he put it: "We'll know we're there where consumers start asking for it.”

 

But consumers will never ask for it until they understand it. To make the case to consumers, we must simplify. In those situations, I’ve found the best approach is to describe the Smart Grid as three pieces:

·      Smart devices

·      Two-way communications

·      Advanced control systems

 

Some engineers shy away from this definition because it isn’t comprehensive and detailed. Like the character Sheldon on the sitcom The Big Bang Theory, they would rather be precise than be understood. In reality, the pinnacle of intelligence is the ability to express complex ideas in simple terms - a lesson preached for at least the last 2,400 years by notables ranging from Aristotle to Abraham Lincoln to Albert Einstein.

 

It’s not the world’s job to figure out the Smart Grid. It’s our job to explain it to them in language they understand.

 

I hope you’ll use the "Leave a Comment” button at the bottom of this article to suggest better ways to describe the Smart Grid and its benefits. I promise to plagiarize the best ideas. And I invite you to plagiarize any of my descriptions that resonate with you.

 

The Value of Analogies

Another powerful communications technique is analogy - drawing a comparison to something the listeners already understand. I typically compare the transformation of the Smart Grid to the "digitalization” of the telephone network. And when talking about the importance of this transformation to our economic future, I often compare it to previous infrastructure build outs such as the transcontinental railroad, the interstate highway system, and the Internet.

 

To some extent, our success in taking Smart Grid mainstream will depend on our ability to create easy-to-understand analogies. They are the bridges that allow an audience to cross over from their world to ours.

 

The Value of Complexity

When we talk to each other, however, I’d argue that we may need additional complexity. I’ve often been struck by how many vendors don’t understand the market and how different subsectors relate to each other.

 

Our firm often provides market entry consulting. In that role, we often find ourselves explaining how the Smart Grid sector works to executives who are unfamiliar with electric power but very familiar with business structures and value chains.

 

To bring them up to speed, it’s often helpful to use a "taxonomy” or sector chart. For example, in the Capgemini article on the big picture of the Smart Grid, Meir Shargal and Doug Houseman present a chart to show how the Smart Grid is constructed and managed, and to address some IT issues.

 

Metaphors like this will differ to suit various purposes. In the past, I focused my chart on solution areas. I always struggled with how to represent underlying technologies, which tend to appear over and over again in different solution sets.

 

In the last few weeks, I’ve taken to drawing the sector as shown in the drawing below. You'll notice that I've clumped core technologies at the top as a group. I did that because I think the Smart Grid starts with those core technologies and because we need to give them more visibility in our own discussions and thinking.

 

 

You may or may not agree with this representation, but I think it serves at least one important purpose. It helps us realize the value and role of core technologies. Most high-tech industries have understood this for decades. They treat core technologies as foundations or "platforms.” Once the platform is in place, they amortize its cost by building as many applications on top of it as possible.

 

Many electric power utilities and vendors, however, still think in terms of point solutions. They build or buy all the technology for that solution, often in isolation from other departments. As a result, each solution has to bear the full cost of the technology platform. And consequently, we see many utilities with redundant or overlapping technologies.

 

Clearly, we can’t afford build out siloed applications going forward. We must learn the lessons of installing core technologies and then leveraging them over and over again to create additional solutions. I’ve found that utilities begin to think very differently about what and when to buy when they make this shift in their thinking. And that vendors think very differently about their value proposition and about where to put their attention (namely, more on leveraging standard platforms and less on proprietary technology).

 

I’ll be interested to hear from you with your improvements to the taxonomy we use at GlobalSmartEnergy (the publishers of Smart Grid News). And to hear if you agree that it is time the industry started thinking and talking in terms of core technologies and platforms.

 

   Email Jesse Berst directly

   SGN interview with Fred Butler

   SGN article about the National Governor’s Association meeting (and Jesse’s presentation)

   Capgemini article on The Big Picture of Your Coming Smart Grid