The utility industry’s new technology transition

The utility industry’s new technology transition

By: Lisa Davis, Member of the Managing Board, Siemens AG



For more than a century the electric grid has evolved to become a foundation for economic growth, providing reliable and affordable electricity for businesses to produce new products and households to make daily life more efficient. During this period, the utility industry has adjusted to new generation sources and refined its business models based on new technologies. However, the change taking place today is more than an adjustment – it is a transformation happening at a pace and scale the industry has never experienced before.


This was a key theme at the Edison Electric Institute’s (EEI) Annual Convention, in San Diego, California, which brought together industry members and thought leaders to focus on how digitalization and new technologies are transforming the utility industry at a rapid pace across every level of the energy value chain – from generation, transmission, distribution, and use. At Siemens, we believe that the future energy ecosystem will rely on utilities combining smart grid technologies with existing and new infrastructure to ensure a range of options can work together for our customers.


The underlying catalyst for the utility industry’s rapid transformation today is driven by the convergence of two key realities. First, we are increasingly developing and deploying innovative energy technologies that are equipped with digital capabilities which can interact with distributed energy systems. Second, there is a broad recognition of the need to decarbonize our economy which is driving renewable energy technology. This convergence has enabled the traditional business models that utilities have employed for decades to shift due to digitalization, decentralization and decarbonization, so that now different generation, distribution and transmission systems can function together on the grid.


Enabled by the Internet of Things, utilities are shaping the future grid by linking microgrids to existing transmission and distribution assets. Take for example our new partnership with ComEd which is the first utility-operated microgrid cluster in the nation. Using software that will operate within the Siemens field-proven Microgrid Management System (MGMS), the microgrid will be constructed in the Bronzeville neighborhood on Chicago’s South Side and will connect with the microgrid on the nearby campus of the Illinois Institute of Technology (IIT). The Bronzeville Community Microgrid is expected to serve roughly 1,060 customers, including those providing critical services like the Chicago Police Department headquarters. What consumers get from this connectivity is more efficiency, protection against severe weather, and much better environmental outcomes working within a system that still leverages the local utility.

Another transformation taking place is how utilities balance the inherent variability of renewable resources like solar and wind as communities continue to ramp up adoption. Battery-based energy storage systems are providing flexible “capacity” that reduces the need for backup thermal generation. Last week Fluence - the global energy storage technology and services company jointly owned by Siemens and The AES Corporation – announced a new project to supply a 10 MW, 4-hour Advancion energy storage solution to provide flexible peaking capacity that would normally be supplied by a natural gas turbine or other traditional generation asset. The new project for Salt River Project (SRP) and AES in Chandler, AZ – the first storage “peaker” outside of California – will provide fast, flexible, zero-direct emissions energy storage to meet peak needs in the greater Phoenix metropolitan area. By linking these systems together, utilities are creating new business models to balance the grid by leveraging battery storage to firm renewable generation.


Yet, to truly envision the power industry of the future, our transmission systems must leverage the Internet of Things to enable smarter grids. Utilities place transformers on the power grid to act as critical nodes for power distribution, and as the grid needs to balance both centralized and distributed generation assets, it is crucial that grid operators can seamlessly switch between different generation sources and end users. That is why Siemens introduced digital technologies to the traditional transformers, creating our new Sensformers which will leverage cloud-based applications for grid operators to visualize data and react based on an assets’ performance in real-time.


As utilities adopt renewable, digital and distributed technologies, we can see old electricity business models begin to shift and a new energy ecosystem form that prioritizes systems working together. These changes are unlocking exciting new possibilities for both utilities and consumers by using large amounts of data that can make energy generation, distribution and use cleaner and more decentralized while providing consumers with a more individualized experience. As Siemens helps our customers navigate the power sector’s rapid transformation, we also have a responsibility to deliver services and products that can work together in order to securely, reliably and affordably improve our modern-day energy systems.


Published On: June 25th, 2018