06 Mar The Digital Mindset
by Sonita Lontoh, VP of Strategic Marketing, Digital Grid – Siemens
A lot can happen in a day – 5.5 million new “things” get connected every day, and 50 billion by 2020. Subsequently, even more can happen in a year – more than 50 percent of the World’s data was created last year.
Digitalization is happening now.
As digitalization becomes more main stream it is impacting not just our personal lives, but also our work lives. For companies and utilities this means that it is important to ensure their employees are ready for these changes. Did you know that before there was an accessible and reliable grid to plug into, organizations that needed electricity employed a CEO, which in the 1900s stood for Chief Electricity Officer? What we see today as many organizations are moving towards digitalization are roles such as Chief Digitalization Officer and Chief Data Officer – reminiscent of what CEO once stood for. As digitalization becomes more main stream, these roles will be integrated into organizations as they become just a regular part of everyday operations, just as Chief Electricity Officer did in the 1900s.
We all know that the energy world is changing, and we currently have three big trends taking place that are especially driving these changes: decentralization, decarbonization, and most importantly, digitalization. For us at Siemens, digitalization pervades all aspects of our engineering, product and solutions disciplines, across a wide array of industries from energy to manufacturing to buildings and cities.
An important impact digitalization will have is on our grid and its aging infrastructure. The United States is facing major challenges around aging infrastructure, which has been made more and more apparent as we consider the stresses the grid experiences. Take for example, Superstorm Sandy, which in 2012 impacted the entire eastern seaboard, inundated lower Manhattan and areas of the New Jersey coast, and caused power outages affecting 8.5 million people across 21 states. Consolidated Edison, one of the largest utilities in the region, turned to Siemens to figure out how to design and implement a distribution feeder automation system that would keep the power flowing even during events of extreme system stress as they experienced with Superstorm Sandy. We proposed a digital solution that employed ultra-fast communication and automation technology to deliver the required reliability and resilience benefits at a fraction of the cost of conventional solutions. Today, because ConEdison chose to consider their digital options, power delivery in lower Manhattan is more reliable and resilient than ever before.
This is simply one example of how digitalization offers the power sector a pathway to address the challenges of aging infrastructure, extreme weather and other stressors while still keeping power affordable. Speaking of stressors on the grid, many people consider stress on the grid as a bad thing, and while it makes delivering reliable energy more difficult, in many cases the stress the grid is experiencing is in part due to distributed energy resources like rooftop solar PV and battery storage, which are generally considered desirable. While such technologies can improve the carbon emissions footprint of a utility and the community it serves, the intermittent nature of their production can also challenge a grid operator to ensure high levels of power reliability that we have all come to rely on. The key to ensuring reliability and high levels of renewables and locally-sourced energy is through digitalization.
Two years ago, Siemens deployed a first-of-its-kind DER aggregation and control solution for Arizona Public Service, which used the technology to manage smart inverters for 1,500 residential PV systems, providing it with a valuable tool to realize high levels of renewable production while mitigating adverse effects on the distribution grid. So, as you can see digitalization actually helps enable the other two trends I mentioned previously: decentralization and decarbonization. But how do you scale digitalization from just a few marquis projects? Imagine what would be required to scale up a system from 1,500 smart inverters to a number ten, one hundred or even a thousand times that amount?! You don’t just need automation technology, you need an efficient way to capture, house and access the data upon which advanced systems rely.
As I mentioned at the beginning of this blog, the number of “things” that get connected to the grid is growing exponentially. At Siemens we can attest to the increasingly connected nature of our power grid. Today, there are over 70 million AMI meters, 1.6 million solar PV installations, 3,700 energy storage systems in the U.S. alone, and those numbers are growing, along with the number of smart inverters, line sensors, transfer switches, switchgear, transformers and protection relays. We have approximately 3.5 million connectable automation devices already in the field globally, and our AMI data management software manages from 20 million meters with an additional 55 million meters contracted. The point here is that ensuring the reliable and efficient operation of the grid will depend on the energy sector’s ability to scale digitalization, in to deliver requisite advances in power system engineering, control, communications and computational technology, including IoT technology as found in our MindSphere – an open, cloud-based IoT operation system.
Thus far, I have mentioned the challenges companies and utilities are increasingly facing, why we need digitalization and the technology needed to adapt to these changes. But, technology is not enough. Digitalization requires at least three other critical components: a “digital” mindset among business and leadership; a culture of innovation; and perhaps most importantly, entrepreneurship. What will ultimately make this shift successful is an increased appetite for risk, rapid experimentation, breaking down of siloes and the ability to develop next-generation leaders who not only excel in technical skills, but also have the soft skills to succeed in digital transformation. With these components, companies and utilities can plan confidently for transformative enhancements in productivity, reliability, safety, customer experience, compliance and revenue management.
Siemens recognizes the need to help build that “digital” mindset and as a result we are working closely with universities across the United States to help create and provide unique academic programs that will prepare students to be those next generation leaders in energy, and to be ready to enter the evolving 21st century energy landscape. This is especially important because, according to a recent DOE jobs report, the country does not have the amount of workers needed to fill 1.5 million new energy jobs by 2030 and found that 75 percent of companies have challenges in hiring qualified candidates. With an expected 50 billion+ of connected devices to be installed in the next decades, it is imperative to develop the next generation of leaders.
Meeting these challenges won’t be easy. It requires a “digital” mindset as well as the openness for cutting-edge products and services and calls for a comprehensive portfolio of physical and digital technologies, as well as products and solutions that allow us to actively build our energy future. While many aren’t there yet, a number of companies and utilities are already adopting the “digital” mindset and embarking on their digitalization journey.
To learn more and read about digital agility for utilities click here.