Jason Handley, Director, Smart Grid Emerging Technology and Operations at Duke Energy, provided an interesting keynote address at the recent ARC Industry Forum in Orlando, Florida. As ARC’s Harry Forbes reminded Forum attendees in his intro, Duke Energy has long been a leader and role model in the utility industry. Today, it serves 7.5 million electric customers and 1.6 million natural gas customers in six states. Mr. Handley shared the company’s strategic vision to achieve top-quartile performance in customer satisfaction over the next decade. Under the company’s “Road Ahead” program, it is investing $25 billion in energy grid modernization and $11 billion in cleaner generation, and plans to expand its natural gas infrastructure to be able to almost double its current business mix from gas…all within ten years.
Mr. Handley summarized some of the challenges Duke Energy faces:
Customers want choice and control, regardless of market structure
Increased penetration of distributed energy resources (DERs) will drive the need for grid edge intelligence
IoT drives connectivity to all “things” (utility- and customer-owned)
Flat-to-declining load growth in regulated service area due to DERs and energy efficiency improvements
Shift to more distributed functions and advanced analytics
Heightened need for cybersecurity and privacy
He explained that the company will need to develop ways to deliver on customers’ wants and desires to create a “motivating customer experience.” To this end, customer-centric initiatives include things like implementing mechanisms to support flexible bill due dates, pre-pay programs, alerts, digital engagement, recognizing customer milestones, and individualized offers. The company believes that, through more frequent customer interactions, it can ultimately develop a relationship that goes deeper than just price. In just one example of the move toward a more customer-centric mindset, the company no longer refers to its customers as “ratepayers.”
The trend toward reduced electric consumption has put a drag on utility revenues. To make up the difference, utilities must realize more revenue through services and outcomes and increased customer engagement. The triangle in the figure represents this journey.
According to Mr. Handley, “We’re not going to get out of the asset business, just enhance it with intelligence.”
Modernizing the Power Grid
According to Mr. Handley, the utility industry is moving from a period of steady linear progression to one of “hairball” complexity. Since variable generation resources (solar, wind, etc.) don’t work well on today’s grid, smart grids will be needed. “Tomorrow’s grid will generate a large volume of data and different data types, including data from new assets that the utility may or may not own. Decision making will have to be both centralized and distributed, with more distributed intelligence and control,” Mr. Handley explained. “We’ll have to move to self-healing and self-optimizing grids and we’ll also have to operate in an [environmentally] sustainable manner.” Tomorrow’s grid will be a conglomeration of multiple generation sources from Duke Energy and others engaging in millions of energy transactions per second in a new peer-to-peer energy economy.
Utility Industry Moving from Linear Progressions to “Hairball” Complexity
This “smarter” energy future will require investments in:
Advanced metering infrastructure
Distribution hardening and resiliency
Communication network updates
Together, these comprise Duke Energy’s a plan to build a better energy future by making the grid smarter, more reliable, and more secure – while generating and stimulating economic growth.
This will require a correct investment approach and a platform to both manage data and accommodate “prosumers,” an emerging term used to describe those who consume, produce, and control their energy use.
Digital transformation at Duke Energy focuses on six pillars.
These involve numerous technologies and approaches, each with different potential impact. These include: smart breakers; intelligent machines; microgrids; wearables; blockchain; advanced combustion; carbon capture & storage; fuel cells; solid-state transformers; peer-to-peer energy networks; cybersecurity; and distributed intelligence (DI), an architecture that supports building layered intelligence on the grid. He explained that DI can occur at many locations, including the grid edge. It provides a method to optimize where the intelligence is located to dramatically reduce data transport requirements.
In summary, Mr. Handley said, “Our goal is to provide a strategy to allow Duke Energy to move forward.