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What the power grid can learn from the internet and vice versa

Editorial:

 

Of the many technological revolutions that are underway at the moment, one of the most fundamental is the convergence of the electric power grid with the internet. Although it may seem like the melding of these two defining systems of our era has already produced great innovations, the next phase of convergence will be much more impactful. As society clarifies guiding principles for technology that can be both empowering and intrusive, new waves of design, finance and build-out become possible. It’s reasonable to anticipate that regulatory frameworks will be updated in the near future to more consistently recognize and protect the basic rights of network customers, and at the same time, businesses will unveil new consumer offerings that truly capitalize on the potential synergies between energy and information. These two changes, well within the power of current players to implement, could remake large parts of the physical infrastructure supporting the modern world, and open all kinds of opportunities for further progress.

New boundary-crossing services could unlock all kinds of value for consumers. Yet the scope and pace of new business in these areas will be shaped by rules designed for two separate networks.  

Similar to how the sharing economy has chaotically begun to displace many established business sectors, consumers and businesses can expect to see exciting new types of products and services being invented. These new businesses will leverage opportunities that could not have been easily imagined before, built on principles that include assured continual open information sharing. Certain kinds of productivity are only available by continually and closely connecting energy and information systems. Innovative business ventures will be driven forward by major advances in the usability and practical benefits of new information-rich energy services. At the same time, they will stimulate further technical advances, upping the game for both business and residential energy consumers. The drivers may be largely economic, but the overall impact will be much wider. Crucially, the entire process depends heavily on one core principle: The character of these innovations relies on instituting an effective set of widely-accepted practices for systematically ensuring that certain kinds of information are freely and openly shared.

 

 

The uneven canvas on which this new picture will be painted

 

The establishment of open access to the electric grid, despite being implemented incompletely and inconsistently over the last 22 years or so, was arguably the most significant benefit to electricity consumers in living memory. It enabled competition in electricity which led to innovative new services and cost savings estimated in the billions of dollars per year for North American electricity consumers. Although the development of competitive markets and open access to the grid remains a work in progress, and many newcomers may take it for granted, the principles and overall direction towards open markets and competition are unmistakable.

 

In parallel, during roughly the same period of time, the internet has grown from virtually nothing to the primary medium on which most new business and a host of other human activity is conducted. Along with a number of new problems, digitization and connectivity have probably brought even more benefits to society than competitive energy markets. But access to the full scope of benefits is dependent on the rules and systems that apply to the internet. To borrow a phrase (thank you, Marshall McLuhan) if the medium is even part of the message, the characteristics of most business going forward will be conditioned by the rules we apply to our shared medium, the internet. If the medium is open and free, business and social interaction are likely to thrive. To the extent that information flow over the medium is limited, the range of opportunities will be similarly limited.

 

The technical convergence between the grid and the net has been impressive and widely beneficial in its own right. For example, the proliferation of smart grid technology and the recognition of the Internet of Things (IoT) have each enabled astonishing advances. But those are just two tips of the iceberg. Convergence implies much more.

 

 

Different rules apply to the grid and the net – for now

 

There is no common open access regimen for the internet in the way there is for the electric grid. At the same time, there is no culture of mass participation on the electric grid the way there is on the internet.  More specifically, the smart grid and the IoT (Internet of Things) have been developed without the benefit of shared principles governing consumer access and without a comprehensive regulatory framework to ensure transparency and information flow.

 

There are practical reasons for these differences. Topping the list is the fact that the cost of entry for accessing the internet is a few hundred dollars, whereas the cost of connecting to the grid as a producer has traditionally been far higher, usually in the millions of dollars for most cost-effective generator connections. Improvements in small scale generation technology are reducing the minimum cost of entry, making economic options available at much lower levels in some locations. Nonetheless regulatory rules for the power grid are rooted in a view that begins by looking at the larger end of the spectrum. Open access principles for the power grid have generally been designed to recognize a certain set of rights for entities with generation investments scaled in the millions of dollars. With connection cost studies sometimes amounting to hundreds of thousands of dollars as just one example, there have been challenges accommodating small players on the grid. In contrast, significant internet content providers can often distribute material over the net for next to nothing. The general perception has been that there’s little need to ensure widely manageable terms of access are available to small-scale internet content providers.

 

They key high level issue is that serious inconsistencies exist between the regulation of the energy system and the regulation of the internet. In some respects, regulation of the electric grid is much more developed than regulation of the internet, and the two areas have not been reconciled to reflect the new world ahead. Regulation of grid access has been most systematic at the wholesale level with retail regulation catching up. The reverse is true for the internet, where retail consumer service is the primary point of regulation. A side note: Many people misunderstand the nature of regulation. In almost all cases, economic regulation is not designed to limit or control economic activity. It’s designed to ensure basic levels of trust and accountability exist so that economic activity can flow freely within open and competitive frameworks.

 

One of the best analogies for the current situation would be to imagine what it would be like if an entirely new sector of the economy was dropped into the middle of a major business centre before there were any laws or rules about stock trading. There could be lots of investment activity, but uncertainties, suspicion and inefficiencies would limit the benefits. All kinds of questionable behavior would likely crop up, consumers would have to spend a lot of time learning how to avoid pitfalls and hucksters, and lenders would be cautious about investing large sums on long term projects. Conversely, in regulated systems where laws are in place to force standardized disclosures, along with monitoring for and sanctioning dishonest or misleading practices, investors can become comfortable with many market conditions and are more likely to devote large amounts of capital to long term projects.

 

 

Open access principles for the grid – a good starting point

 

Most western economies have now implemented open access rules in one form or another for the wholesale transmission grid. In principle, in these jurisdictions, customers can buy power from anyone they like. Anyone with wholesale power products to sell, assuming they can demonstrably meet technical standards for safety and reliability, is entitled to use the wholesale grid to transmit their product to customers under essentially the same terms available to other sellers. The transmission grid is a common carrier and owners of grid assets must play by the rules respecting basic principles of equitable access to the grid.

 

Although there are myriad exceptions and secondary level issues, the over-riding principles are pretty simple, more or less as follows:

 

1. Customer choice: Any customer or consumer of wholesale power services should be able to use the transmission grid to receive power services on essentially the same basis as any comparable customer, regardless of their chosen supplier or suppliers of energy. The differences between how grid customers are treated should be demonstrably non-discriminatory, based on transparent rules and systems for defined classes of customers, free from any taint of preferential treatment related to the customer’s choice of suppliers. Although the formal rules are applied more consistently to transmission customers at the moment, the principle is increasingly extended to distribution customers as well.

 

2. Open access: Any producer or marketer with wholesale power services to sell, should be able to use the transmission grid as a common carrier on essentially the same terms as any other producer or marketer, without risk of discriminatory or predatory practices working against them. And at the distribution level, customers of the LDCs increasingly have valuable wholesale services to sell - they should also be able to rely on the distribution grid as a common carrier without risk of unfair treatment.

 

3. Obligation to serve: The operator of the power grid has to serve all customers on essentially the same basis, with adjustments for certain differences between broad customer classes. For example, larger and more sophisticated customers can be expected to install higher level communication systems for grid co-ordination.

 

4. Obligation to share real time information: Part of the open access regime established by legislation and regulation, mostly in the 1990’s, was to ensure that critical information on the state of the grid and anticipated power flows is available in real time to all users on essentially the same basis.

 

5. Obligation to connect at fair market price: Although the ability to connect should be implicit in open access, in order for open access to function properly, parties wishing to connect to the grid for the purpose of injecting power should be able to get connected at a demonstrably reasonable price, with appropriate considerations for local grid conditions. This requires codes and review procedures because a variety of factors have to be considered in determining the pricing of connection services.

 

 

Of course the rules and terms have varied by region and over time, but the principles generally fall into the lines summarized above.

 

The internet does not have the same kind of regulated requirements. For starters, access to the internet is not considered an essential service and consequently ISPs do not have an obligation to serve all customers. That assumption may need to be reviewed as internet access is increasingly viewed as essential to modern life. While it’s naturally assumed that competition between ISPs must be allowed to operate, there is little assurance that competition of this type is growing, even though use of the internet is growing. Secondly, there is no systematic guarantee that comparable levels of service will be made available on a non-discriminatory basis to everyone who wants to use the internet to access or distribute content. The principles used to regulate the two systems need to be consistent, or the development of networks undergoing convergence will be unfairly skewed to one system or another.

 

Open source principles for the internet – full of promise

 

One of the most remarkable discoveries emerging from the growth of the internet has been that crowd sourcing in its various forms is playing a major role in the development of certain high value products. By inviting society at large to participate in solving certain kinds of problems, information, insights and various forms of creativity are being made available to the public at speeds and costs significantly better than what’s generally available through traditional methods of rolling out proprietary innovations. While non-proprietary open source formats will not be ideal for all types of technology innovation, the case can be made that freely available open technology platforms will be much more effective at facilitating the growth of certain types of boundary-crossing innovations – especially when merging huge systems like the grid and the internet.

 

The combination of mass collaboration and open-source technology has led to significant advances in many fields. Often exemplified in Wikipedia, the non-profit venture dedicated to making the sum of human knowledge available to everyone in the world, and the public sequencing of the human genome, the principles of open source technology and online collaboration have undoubtedly led to some of the most ground-breaking advances of our time. Other examples of widely impactful open source technology include the PHP operating system, the server language which underlies the majority of websites on the internet, and the Android operating system, which underlies the majority of smart phones in the world. These software platforms have achieved commercial success in part because their open source nature allows for continual examination and improvement by virtually all affected parties. It has become apparent that many of the world’s brightest minds are ready and willing to contribute to public knowledge in open source formats, with little more personal gain than the sheer joy of sharing their insights. Don Tapscott explored this principle at length in his 2007 book “Wikinomics.”

 

The principles of open source technology are well developed in the software field, but have yet to be systematically developed or applied to the energy sector. In summary, the principles could be summarized as follows:

 

1. The underlying mechanics of platforms and tools for common usage must be visible and available to the public. The core architecture cannot be proprietary or obscured from users.

 

2. Peer production, with established transparent processes for revising and updating shared products, should be the primary mode of development for certain categories of products, particularly where standardization is needed.

 

3. Special intellectual property licenses apply, making the work available for anyone to use and develop further, while prohibiting any use of the work or its derivatives in proprietary forms.

 

 

In the electric grid there have been many examples over time of technology that is essentially open source. Supervisory control and data acquisition systems (known as SCADA) are widely used parts of many electrical systems, a control system architecture that often relies on open source types of designs, although it predates the internet and open source protocols. As explained in Wikipedia, "the SCADA concept was developed as a universal means of remote access to a variety of local control modules, which could be from different manufacturers allowing access through standard automation protocols."

 

Consistent open access principles very handy for category-bridging services

 

As business evolves to offer more services for consumers that continually integrate information flows from the internet and the power grid, it will be increasingly important to ensure that consistent principles are at work on both sides of the power/information dividing line. Many people will of course suggest that the dividing line is becoming increasingly illusory. One of the implications of convergence is that the two sets of governing principles will need to be reconciled if not merged.

 

From a consumer perspective, the grid and the net will increasingly be viewed as two aspects of a wider network. Users and customers can be expected to ask relatively obvious questions. Why shouldn’t the principles behind open access rules for the grid apply to related or analogous services accessed over the net? And why shouldn’t the flexibility and collaboration opportunities characteristic of the internet be generally available to users of the grid? If services are being offered that depend on continually integrated access to both systems, the governing principles will need to be co-ordinated at least.

 

Many key principles defining open access have been developed for use in the power grid. However, their application is not 100% consistent and the rules are naturally evolving, largely in response to the increasingly digital nature of the grid. It would be very helpful to define a current and comprehensive set of principles and a related code of practice that would define and protect the essential rights of users of the power grid. Some of what the pioneers of an open internet have done would apply to the power grid, and in some cases, aspects of some of the principles devised to ensure open access to the power grid could apply to maintaining the health of the internet.

 

It should be noted that most of the development of open access power grids has focused on the wholesale level. Much work remains to be done, inevitably on a region-by-region basis, to extend open access grid principles from the wholesale (Transmission) level to the retail (Distribution) level. It will make sense to co-ordinate the wholesale to retail extension of open access principles with work already underway on development of protocols for integration of DERs (Distributed Energy Resources) at the distribution level. Such work is expected to accelerate in regions around the globe in the near future.

 

 

Towards a common open source platform for Distributed Resources

 

What do open access grids have in common with open source technology platforms?

 

1. A wide participation base

2. Designed to accommodate continual evolution

3. A high degree of control by users

4. High degree of trust amongst users and suppliers, related to having the kinds of control mentioned above

5. Large overlap between user base and supplier base

6. Simultaneous interest in competition and collaboration.

 

Like any major system, the power grid and the internet rely on having a strong basis of trust amongst users. This is particularly true as users have to rely increasingly on software platforms to mediate their exchange of supply and demand services, their integration with other resources, both local and distant, trading and other functions of a full feature DER integration platform. A critical common factor that unites open source technology and open access grids is a built-in accountability to users.

 

The rapidly growing field of DERs is likely to attract a lot of development and attention during the next business cycle. Although the opportunities for development of DER integrating platforms and tools are numerous, there is no agreed-upon framework for integrating DERs into LDCs or into micro-grids. While it’s unlikely that any one framework will suit all needs, development of the industry and integration of resources will be much more efficient and economic when there is convergence on a small number of widely accepted models, designs, conventions, codes, protocols and frameworks. Much work is already underway on this of course at LDC and corporate levels. Yet there has been little development to date on industry-wide standard platforms.

 

In order to ensure that users have faith in and make maximum use of local DER platforms it will be very helpful if the platform is open source, fully tested by thousands of users online, and free of inappropriate proprietary commercial influence. Open source platforms for implementing open access grid principles at the distribution level are a logical basis for enabling co-ordinated focus on the development of efficient and reliable DERs and their suitable integration into the grid. This seems to be part of a growing consensus in the engineering and technical community. The IEEE (Institute of Electrical and Electronics Engineers) recently began high level work on development of standards and pilots. A 2017 paper by the IEEE Standards Association says, “Next generation infrastructures and vertical industry and consumer deployments are expected to be dependent upon open source, across all market sectors.” It goes on to say that “Open Source provided the potential for expanded integration of previously discrete technology eco-systems (e.g. 5G, IoT, Analytics, Big Data, Virtual and Augmented Reality, Artificial Reality, Vertical platforms: Smart Energy, Smart Cities, Automotive, etc.). Industry feedback indicated open source solutions could provide improved time to market solutions and potentially provide economic benefits to both suppliers and consumers. Research indicated … open source community initiations were expanding, where open source was being considered more frequently as an option to address industry requirements.”

 

Open source and open technology platforms would by no means be an attempt to discourage or displace private sector development of proprietary innovations. It would limit proprietary development no more than the Android operating system displaces proprietary development of software, phones or apps. In fact proprietary products will undoubtedly lead most of the investment ahead. The primary purpose of this type of discussion is to define the categories of shared platforms on which standardization and open technologies are able to open more doors for more development than proprietary formats alone.

 

With these concepts in mind, groups including the IEEE and APPrO are proposing to host discussion on how to encourage collaboration on the development of a common open source platform for efficient and reliable integration of DERs. This article is the first contribution from APPrO in what is hoped will be a range of commentary offered from diverse players under the general heading of identifying opportunities for efficient integrated development of energy and information technology, and for managing what could be a watershed of innovation. Many will be exploring the broader question: What are the most relevant lessons that the grid can learn from the net, and vice versa?

 

The IEEE-SA Board of Governors has confirmed its intent to offer a platform and guidance for Open Source projects within the IEEE-SA for use by the entire IEEE. For more information on these initiatives, readers may wish to Google IEEE-SA Standards Board Open Source or visit this location:

https://mentor.ieee.org/802-ec/dcn/17/ec-17-0172-00-00EC-ieee-sa-update-on-open-source-activity.pdf

 

See also the related posting “An Open-Source Electric Grid”.

 

What else can the grid learn from the net? From APPrO’s perspective, if the discussion proves fruitful, the organization is considering issuing public invitations and open challenges to design the most effective open access, open source platform for integration and management of DERs. The industry wide initiative could include an open global challenge, encouraging anyone with an interest in the future shape of the power system to prepare submissions on how to design the most dependable, efficient and inclusive open access open source distributed energy integration platform. The proposed systems should be suitable for use by LDCs and micro-grids, and meet all applicable legal and technical requirements.

 

Conclusion

 

There are a lot of commonalities between the grid and the net. As they converge, it will be necessary to ensure consistency in the over-riding principles that govern the rights enjoyed by users of the grid and the net. After all, the two sets of customers are essentially the same people and they will increasingly be using services that treat the grid and the net as two aspects of a wider network.

 

In making plans for further development of the electrical grid, parties at all levels would be wise to focus on the development of common open technology platforms for integration of distributed resources, while considering how to make sure the open access principles developed for the grid are applied, in appropriate forms of course, to the use of the internet.

 

— Jake Brooks, Editor

This editorial  is also available on LinkedIn at this location where users may post comments and use other social media functions.

 

Note: This posting contains conjecture and opinion and should not be relied upon as definitive or used as a guide for any kind of investment decision. It contains the views of the author and may or may not reflect the views of APPrO or any APPrO members.

 

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