1/9/2019 Digital Power Evolution: Taking the Grid on its 21st Century Journey - Electric Light & Power

Digital Power Evolution:

Taking the Grid on its 21st
Century Journey
By Steve Martin
07/23/2018 Chief Digital O cer, GE Power

Electricity is the workhorse of our world. Without it, life as we know it shuts down. Since the
modern miracle of electricity emerged in 1892, it has underpinned economic growth,
increases in living standards and health. Today’s energy services are vital to not only human
wellbeing but economic development worldwide.

But despite this global dependency, the energy grid as it stands today wasn’t designed to
manage current complexities; several critical trends are driving it to function very di erently
than how it was originally envisioned. The electron once followed a simple, linear path from
generation to our communities, but it is now facing a complicated, multidirectional course.
This is due in part to distributed generation which is much closer to points of consumption,
and an increasing number of fuel types many of which are hard to manage and even harder

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to predict.  In addition to the complexity associated with new operational demands, grid
operators are also investing more and more to ensure the grid remains secure as it is
increasingly a target of attack.

As the Grid Evolves, it Will Grow More Complex

While this challenge isn’t new, the next 10 years will bring a level of complexity far beyond
what we’ve experienced thus far. Consider e orts for decarbonization. The rise of prosumers
plus new mandates focusing on renewable energy from states like California mean that
disparate resources will continue to increase. The growth of electric vehicles has also put
new pressures on the grid. By 2040, over half of all vehicles will be electric, and AAA has
found that 50 million Americans are likely going electric for their next vehicle purchase. That
said, Dr. Michael E. Webber noted, "deep electri cation is a direct pathway to an e cient—
and more productive—economy, and that’s something we all support."

Accessibility of electricity to all through utility scale e ciency and decentralization, is on the
rise. As more citizens produce some portion of the energy that they need, additional
complexities arise. The truth is, utilities are in a tough spot. They didn’t ask for the rise of
prosumers and cyber threats, nor the complications that have come with consumer
electricity demands. There is, I think, a light at the end of the tunnel—it starts and ends with
digital innovation.

Software is Essential to a Secure, E cient Grid

Imagine if utilities could match the amount of energy that is generated through multiple fuel
types (including consumer provided) with changing consumption patterns in near real time.
As we enter the new Digital Energy era, this is the opportunity for the 21st century grid. Our
customers have the revolutionary hardware, but now it’s time for them to think about
revolutionary software.

The economic value of the convergence of hardware and software is massive. According to
some estimates, an incremental $2 trillion of value can be unlocked across just the electricity
value chain as a result of digitization. At this point in time, we are not a particularly e cient
industry largely because we are in a state of over-supply by design. Software is going to help
get us much closer to optimal output despite increasingly volatile consumptions patterns.
Getting to predictive, prescriptive and fully autonomous operations are tablestakes for the
digital utility of the future, not just due to the desire for operational e ciency but also
because it’s the only practical way to manage the complexity.

So how can the industry achieve this? Utilities must run, analyze and optimize their networks
to reach what we call Network Level Optimization.

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As the industry begins to think about digital innovation, the rst step is to ensure that
modern operational software is in place and integrated. This class of software that operates
generation, transmission and distribution is arguably the most mission critical software on
the planet. This software will not only deliver electricity, it will provide a model-driven view of
the network itself and begin to self-optimize. It will also provide the data necessary to
e ectively utilize assets and drive foundational performance.

Energy Innovators are Already Using Data to Improve Performance

Consider RWE Generation, a leading generation company in Europe powering more than
one third of the energy supply in Germany. RWE has taken steps to modernize its gas and
steam turbine to improve plant e ciency by up to two percent and output by up to six
percent. This convergence between its hardware and software means bringing more reliable
energy to more people. Another example is Chicago-based ComEd, which uses algorithms to
manage and optimize distributed energy resources for its microgrids. By using software to
control the network, it’s able to manage actions for multiple microgrid installations.

Once the foundational elements are in place, utilities will be left with massive amounts of
data. Today, this is the point where most utilities stop in their journey towards digital
transformation. There’s so much data that it’s hard to know how to make sense of it all,
which is why as an industry we’re only using about 3-6 percent of our data. That’s where the
power of advanced analytics and optimization platforms come in. These tools involve layering
on a single platform that takes the full view of the network and uncovers opportunities for
greater performance and e ciency. By getting the most out of their assets, utilities can
predict and prevent failures while improving overall performance.

Exelon, one of America's leading energy providers, is a great example of a utility at the
forefront of this advancement. It is using its data to predict when systems need repairs and
to ultimately improve its operations at generation facilities. Exelon’s new optimization
algorithms are also crunching data from its wind farms, which has helped boost annual
energy production from its wind turbines by one to two percent.

It’s clear the industry is already beginning to see software and real-time yield management
technology provide e ciency gains. New York Power Authority’s (NYPA’s) CEO Gil Quiniones
recently noted that 54 percent of the energy that NYPA generates is consumed by
consumers, whereas most of the industry is closer to 40 percent. What’s more: With every
point of e ciency gained, there is potential for $1.5 billion saved.

NYPA is on its way to becoming the world’s rst digital utility, but it’s important to realize that
no two utilities are at the same stage in their digital transformation. For example, Uniper, a

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major German utility, is taking data management in-house by creating its own application for
predictive maintenance.

Creating the Electrical Grid of Tomorrow

To modernize and reach the potential of the 21st century grid, we must invest in technology
to better manage operational systems and optimize assets. In their own silos, Generation,
Transmission and Distribution aren’t reaching their full impact unless they are connected,
and they require software to manage the dissemination of energy reliably, e ciently and
safely.

Now is the time to think about the convergence of hardware and software to improve the
grid’s reliability and pro tability. The industry must begin developing plans for regulators and
determining the best course of action for customers and needs. Digital innovation will de ne
the 21st century grid, and it’s never been a more important time to align our industry with
the pace of technology innovation. The problems we face today are the simplest they will
ever be, and each passing day brings with it more complexities to consider.

About the author: Steven Martin is the Chief Digital O cer for GE Power and is
responsible for leading and advancing the business's digital industrial strategy. He oversees
GE Power’s software business, which is focused on building solutions to transform the
electricity industry from generation to transmission and distribution. Prior to joining GE in
2016, Martin spent 14 years at Microsoft and was most recently the chief data scientist for
Azure.

Martin holds a BS in behavioral psychology from the University of Texas at Austin and is an
ongoing student of behavioral economics.

Digital solutions will be part of the POWER-GEN International conference and exhibition Dec.
4-6 in Orlando. Click here to learn more about the conference tracks.

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