What is distribution platform optimization?
It is about how utilities can do a better job of forecasting, planning, building and then operating their networks. And those networks could be a combination of their traditional power networks, communication networks to manage customer interactions—it could even be interactions with social networks.
Grid optimization could mean determining how to engage customers in meaningful ways, providing at least the quality of service that they provide today, if not better, at a more efficient price point and lower cost.
And so the role of a distribution platform optimizer is really about trying to figure out how to come up with the best mix of utilities solutions and customer engagement modules to make that a reality.
What role will distribution platform optimizers play in future energy markets?
The role is to figure out the locations on the grid and the specific circumstances under which you need to come up with optimized solutions.
When we talk about distribution platform optimization, we are talking about working on solutions at the margin. Instead of investing capital or reinforcing networks, we determine where you may have issue on the grid—soft spots, additional load, voltage problems, or power quality issues.
Over time, the idea will be to do more holistically across the grid. But today the role is really about identifying and putting in place the appropriate regulatory structures, customer engagement modules and contracts, and the right control regimes to enable utilities to deal with those issues on the margin.
Do utilities need to choose a modernization strategy that makes sense with their current portfolio?
Absolutely. But industry economics and innovation are making the value—or utilization—of different elements of a utility’s portfolio more volatile.
So utilities have to look at their current portfolio, but also be mindful that portfolio economics can get turned upside down quickly, and to continue evaluating what is happening in the broader global market.
How does digital fit into this?
The pivot to digital is probably the single most important strategy to allow utilities to be more flexible as the market changes around them. Digital technologies can transform every function in a utility to make them more nimble and responsive to customers and to create competitive advantage.
Common digital technologies utilities are embracing include control systems, asset performance health and optimization, workforce management, customer engagement and new product/service development.
What are the consequences of utilities not transforming?
I think there are multiple winning strategies in the industry today, but staying where you are is not one of them. Utilities that do not adapt and change to the rapidly evolving marketplace will be left running smaller footprint businesses with increasingly aggressive performance targets and efficiency drivers.
Without substantial change, earnings, investor appetite, and consumer appeal will suffer.
What are you most excited about regarding the future of T&D?
I’m most excited about the opportunity to implement more digital technologies to modernize and optimize the utilities business and enable utilities to engage more directly with customers, especially in distribution.
How did you get into the utilities business?
I started working for Accenture in 1991. I lived in Charlotte and was staffed on a job in manufacturing a few hours south of Charlotte. My girlfriend (now wife of 23 years) lived in Virginia Beach. There was a utilities project starting up in Raleigh four hours closer to Virginia Beach than my manufacturing client. I took the utilities job and never looked back.