Tuesday, May 9, 2017

The Integrated Energy Network: “It’s Right on Point”

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The Story In Brief

“I encourage EPRI to continue to move this ball forward,” said David Owens, Edison Electric Institute’s Executive Vice President, Business Operations Group and Regulatory Affairs. Drawing from decades of experience in the electric power industry, Owens speaks with EPRI Journal about EPRI’s Integrated Energy Network concept—the opportunities it presents and key actions going forward.

David Owens
EJ: What is your reaction to EPRI’s Integrated Energy Network concept?

Owens: I was introduced to the concept at EPRI’s Summer Seminar last year, and I thought, ‘As always, they were thinking outside of the box.’ Foundational to the Integrated Energy Network is a recognition that the industry is in a transformation driven by technology and changing customer needs and expectations. Surrounding that is a desire for cleaner energy and an acknowledgment that we are digitizing the electric system. Although other systems such as water are not as advanced as electric, they will be digitized as well. So in building a smarter electricity infrastructure, the question becomes how can we integrate that with other resources and networks? The Integrated Energy Network concept is valuable, and it’s right on point.

EJ: What are the key opportunities?

Owens: I’ll start with some context. EPRI has been vigilant in pointing out to the energy sector—and in particular to private and public electric companies—that we are moving to a more decentralized electric system. That means that customers have their own power supplies, such as solar, along with a range of new technologies. They always had that opportunity, but with advances in renewables and public policies encouraging states to reduce their carbon footprints, there has been a movement to more distributed energy systems. EPRI recognized that and said that the grid has to change. It cannot be one-dimensional. It has to be multi-dimensional. It has to be dynamic and flexible and give customers options. To maintain reliability, affordability, and security with many more customer sources of electricity, you need to look at the grid with an integrated approach.

That is how EPRI began changing the vocabulary. It’s not just connecting devices. It’s integrating those technologies in a framework that supports reliability, affordability, and cleaner energy. That dialogue has been going on for several years, and EPRI has been a forerunner.

Utilities need to have visibility and control over those customer sources of electricity. That means the system has to be digitized and smarter, and it has to have automated controls, monitors, sensors, and switches. We have to make major new investments in the grid.

The Integrated Energy Network speaks to the need for greater collaboration and dialogue with more stakeholders to get the best designed systems. This is different from the planning process we have today.

With the Integrated Energy Network, EPRI is saying that it’s not just the grid and the electricity sector. We also have to look at other systems—water, communications, transportation, and energy—with an integrated approach. Each one of these sets of technologies has different laws, regulatory oversight, and players. All those players have different responsibilities, goals, and attributes. This is particularly true in electricity because customers can deploy their own technologies.

Rather than look at these as separate industries, you use an integrated approach to get the most efficiency, clean energy, control, reliability, resilience, and security. Then, if you deploy a new technology, you can take a comprehensive view of the benefits the technology is contributing to those outcomes.

A simple example is a smart city. Cities are trying to improve their street lighting and make their buildings smarter and more efficient. They’re providing incentives and addressing challenges for electric charging stations to make the transportation sector cleaner. They’re looking for ways to rebuild aging water infrastructure. They’re recognizing the important goal: ‘Let’s make all of these infrastructures and systems smarter and more integrated.’

EJ: What’s the best way to do that?

Owens: EPRI says that the key to all of this is data analytics. You’re producing a lot of information, and you need to use it to make smarter investments to achieve the goals of reliable, cleaner service and customer choice.

EPRI also suggests that integration requires a new regulatory structure. We need to examine and adopt regulatory models that make sure that customers get the right price signals and that encourage the efficient use of energy.

EPRI makes the point that the grid can link all these technologies and that major investments can be more efficient and cost-effective if you use an integrated approach.

We need to examine and adopt regulatory models that make sure that customers get the right price signals and that encourage the efficient use of energy.
EJ: What is the role of customers in achieving the goals of reliable, affordable, clean energy and resources?

Owens: It is a much more complicated world. We are moving from a centralized system where the utility did the planning, building, and operating to a system where customers want flexibility, choice, and a broad array of new options. EPRI is saying that utilities have to understand their customers and may have to customize services to meet customers’ changing needs and expectations. For example, a data center may want superior reliability more than a residential customer. It may want no deviations in frequency and voltage, whereas a residential customer might not need that high level of electric service. The data center might pay a premium for that service, which means that the utility might deploy control technologies and energy storage to support the superior reliability.

Foundational to the Integrated Energy Network is a recognition that the industry is in a transformation driven by technology and changing customer needs and expectations.

The Integrated Energy Network also focuses on a cleaner power supply because that is what customers want. Using the automated controls and other digital technologies that give customers choice and flexibility, utilities can achieve the goals of reliability, affordability, and clean energy.

EJ: How important is it to begin these conversations?

Owens: They’re critical. The private utility industry has annual capital expenditures of more than $100 billion, and they’re looking at modernizing the grid, building cleaner energy supplies, and giving customers individualized services. To do that, they need to improve stakeholder participation. The Integrated Energy Network speaks to the need for greater collaboration and dialogue with more stakeholders to get the best designed systems. This is different from the planning process we have today. I encourage EPRI to continue to move this ball forward because just about every utility is talking with their public utility commission about investments to modernize the grid.


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