David J. Unger
The concept of the power grid as a “platform” — a hub that coordinates energy transactions between various producers and consumers rather than a one-way delivery system — is central to the way Illinois is building a blueprint for its grid of the future.
An extensive, statewide study of this future kicked off last week when hundreds of company representatives, regulators, academics and other industry insiders convened in Chicago to mark the start of NextGrid, an 18-month “consumer-focused collaborative study to transform Illinois’ energy landscape and economy.”
The launch event, which included presentations from NextGrid facilitators and managers, explored how advancing technologies and shifting consumer preferences are driving a profound change in the power grid.
Traditionally the grid has served as a one-way conduit for delivering energy to consumers. But increasingly, as other states are finding, the system is looking more like a hub that leverages technology for various transactions between energy companies and customers.
“When we think about the grid of the future, we have to think of it in terms of IT platforms that turn passive networks into intelligence and provide a vibrant marketplace where demand and supply-side resources are optimized and they don’t sacrifice reliability,” said keynote speaker Robert F. Powelson, who was appointed to the Federal Energy Regulatory Commission in May by President Trump. “We’re getting away from the monolithic, cathedral, 1,000-megawatt generation resources being built.”
Energy and ‘platform economics’
So-called “platform economics” have come to dominate many of the world’s largest industries, from banking to shopping to transportation. The concept is simple: Instead of offering consumers a discrete set of products, companies are instead increasingly developing networks or systems that enable participants to exchange information, services and products in many different directions. Think AirBnB, Uber or Amazon.
Those concepts have been making their way into the energy industry for some time, but they have increasingly been embraced by the mainstream in the past few years.
In 2014, New York launched its Reforming the Energy Vision plan, which is a NextGrid-like, statewide energy strategy that plans for a cleaner, more reliable power grid. Central to the state’s strategy is the concept of the utility as Distributed System Platform Provider. In this structure, the utility is charged with developing and managing a framework that encourages the interconnection of distributed power resources, energy efficiency, demand response, microgrids and other “smart-grid” technologies.
“There’s something more profound going on in grid modernization than just introducing new technologies. It has to do with changing fundamentally the structure of the grid … in some profound ways that have a lot to do with how to think about regulation,” Jeffrey Taft, chief architect for electric grid transformation at Pacific Northwest National Laboratory, said during a panel discussion at the NextGrid event. “People have started to focus on thinking of it as a platform for energy transactions as opposed to a one-way energy-delivery channel.”
ComEd, Illinois’ largest utility, has already begun embracing the platform concept. During an interview at the 2016 Energy Thought Summit, ComEd President and CEO Anne Pramaggiore discussed “shifting from a pipeline business architecture, which is a 20th-century architecture, to a platform business architecture which is 21st-century.”
“It’s not about selling a product,” Pramaggiore said. “It’s about creating an interaction. It’s about understanding the customer so well that I will find you the product that you’re looking for, and I think that’s what we’re moving toward.”
In July, the utility submitted plans to the Illinois Commerce Commission to construct a microgrid in Chicago’s Bronzeville neighborhood, which would act as a major demonstration of how the platform model might work.
Preparing for the future
The NextGrid effort is the result of a resolution passed in March by the Illinois Commerce Commission aimed at “develop[ing] a shared base of information and work[ing] to build consensus on critical issues facing the electric utility industry now and as it continues to rapidly transform.” The Commerce Commission is managing NextGrid. In August, the commission selected the Electrical and Computer Engineering Department at the University of Illinois at Urbana-Champaign as the lead facilitator.
Over the coming months, working groups will meet regularly to discuss and make recommendations on seven different areas: new technology deployments and grid integration; electricity markets; consumer and community participation; regulatory, environmental and policy issues; metering, communications and data; reliability, resiliency and cyber security; and ratemaking.
NextGrid will also include a technical advisory group to offer expertise, as well as an external advisory council to represent the perspectives of environmental organizations, consumer groups, energy companies and other stakeholders.
NextGrid will culminate in a report to serve as a “blueprint” for a power grid of the future.
“Innovations in technology, energy efficiency and the push for renewables, like wind and solar, are putting a mandate on states to re-evaluate and modernize the electric grid” Illinois Commerce Commission chairman and CEO Brien J. Sheahan said in a statement. “Illinois is among the states leading the charge.”
Evolving with cyber threats
With the platform concept, interconnection of any complex system always introduces an elevated risk of privacy or security intrusions. Questions of cybersecurity and resiliency were also on display at NextGrid’s launch event.
“Cybersecurity is evolving,” said Tim Yardley, associate director for technology at the Information Trust Institute, University of Illinois at Urbana-Champaign. “Our threats our evolving. Our attackers are evolving. And we must evolve with them.”
Nation-states pose the greatest threat, Yardley said, and the power industry still lacks adequate protections against a large-scale attack. A report released in February by the Department of Defense’s Defense Science Board found that “the cyber threat to U.S. critical infrastructure is outpacing efforts to reduce pervasive vulnerabilities.”
The challenge, Yardley and others pointed out, is determining how much cybersecurity is enough while recognizing that nothing can be perfectly cybersecure.
“This strikes me as a problem that is not only a problem for a particular firm, but it’s kind of a public-good problem,” said Susan Tierney, a senior advisor at Analysis Group and former assistant secretary for policy at the U.S. Department of Energy. “The attack can be much broader than affecting just one firm or entity on the system. So in some sense this is the kind of thing that cries out for really common standards that take the burden off of a particular firm to say, ‘how far do we go?’”