Published on 19-Dec-2013
"It's not just regulators and the government you have to care about. If you can’t explain the [smart grid] vision to a guy on the street, your message is in trouble." - Jerry O’Sullivan, Managing Director, ESB Networks
Energy & Utilities
Smart Work, Smarter Planet
Leadership Series, Smart Grid, Smarter Energy
As Managing Director of ESB Networks, Jerry O’Sullivan is equally comfortable sharing his vision for sustainability with cabinet ministers and front-line workers. That’s ultimately what he had to do to get the broad buy-in ESB needed to realize its vision.
When the Irish government set the goal of generating 40 percent of energy from renewable sources, ESB – Ireland's national electricity provider – came up with a plan that combines the use of smart meters, advanced energy storage options and nighttime electric vehicle charging to mitigate the peaks and valleys of electricity demand. And with remote sensing, intelligence and automation incorporated into the management of its grid, ESB is taking proactive steps to prevent or rapidly resolve network outages, earning the highest customer satisfaction in Europe.
Leadership is…Getting the message out With so many stakeholder groups affected by – and affecting – the outcome of the project, it was crucial for ESB to articulate a value proposition that was both compelling and simple enough for all groups to digest. “It's not just regulators and the government you have to care about. If you can’t explain the [smart grid] vision to a guy on the street, your message is in trouble.” – Jerry O’Sullivan, Managing Director, ESB Networks
Lessons learned…Don’t separate the smart grid program from the company’s core operations ESB found that the most effective organizational strategy for driving smarter grid activities is to keep it integrated with core operations from the start. “You don’t succeed in smart grid if you set up a specialized organization first.” – Jerry O’Sullivan, Managing Director, ESB Networks
The benefits of ESB’s Smart Grid solution: · Reduced average electricity peak consumption by nearly 9 percent among households using smart meters · Expected to reduce service-level penalties by 100% through improved network reliability and faster recovery · Increased customer satisfaction levels by 15 percent
ESB Networks: Grid intelligence triggers a new era of transformation across Ireland
Visit the Smarter Computing Leadership Series webpage: http://bit.ly/ESBCaseStudy
In Ireland, the sweeping rural electrification efforts that peaked in late 1950s and 60s persist in the collective memory of many citizens as a once-in-a-lifetime transformational moment. Back then, extending the grid out beyond the cities meant more than the convenience of lights and appliances to Ireland's rural residents: it signaled a new age of economic opportunity for the country as a whole. Ireland has made the most of that opportunity, largely by attracting a vibrant and diverse range of world-class companies, across multiple industries, to its lush and verdant shores.
A fast track to sustainability
Today, Ireland is on the threshold of a new transformation that again involves electricity, and again involves Ireland’s Electricity Supply Board, or ESB. Back in 2008, the Irish government announced a major sustainable energy initiative aimed at boosting the share of energy consumption derived from renewable sources to 40 percent by 2020, and ensuring that electric vehicles account for at least one in 10 cars on Irish roads. Among its peers in the European Union, Ireland had already been on the fastest track to sustainability. With its 2020 plan, the country laid out an even more ambitious vision.
Within ESB, it was hard to imagine a figure more qualified to lead the effort than Jerry O'Sullivan. A Civil engineer by training, O'Sullivan – now Managing Director of ESB Networks – spent time in nearly every part of the company's operations. This includes working on conservation initiatives aimed at reducing the need to build additional power plants in the 1990s, back before the term ‘demand-side management’ had entered the common industry lexicon. When O'Sullivan was appointed Head of Sustainability and Network Systems in 2008, he became the point person in ESB’s broad-based effort to become a world leader in smart networks and sustainability.
His immediate priority was to gain support among the many stakeholders – from the highest echelons of the Irish government to every member of ESB’s workforce – whose buy-in would be essential to realizing the company’s vision. Formulating and refining the plan had been challenging enough. But to articulate it in a simple, understandable way, one that showed each stakeholder group how it all came together and how each stood to gain from a smart grid, that required O'Sullivan to become, in effect, the “messenger in chief.”
The message wasn't easy to get across. “Smart grid as a term had often been misused it was generally difficult to understand,” says O'Sullivan. “I wanted a message I could convey in five minutes – whether I was having tea with the Taoiseach (Ireland’s Prime Minister) and the Energy Minister or drinking a pint with a linesman in a pub – so they could see instantly how each stakeholder fits in to the overall vision and how they could contribute.”
Message in a model
To get his point across, O'Sullivan came up with a graphical framework comprised of five overlapping rings. To understand the “five rings” model, picture an array of five overlapping circles, each representing a component of a comprehensive master plan. The first is the expansion of wind power, taking advantage of the fact that near constant windiness – day and night – is one of Ireland’s key national resources. The second ring is smart grid, under which ESB is combining automation and intelligence to optimize transmission and distribution network efficiency, predict problems and greatly reduce outages.
The third is the deployment of smart meters, enabling a two-way interaction with customers, which will enable billing to reflect the individual’s consumption profile rather than the current flat rate tariffs. The fourth ring is the smart meter communicating with smart devices in the home and enabling the much more energy-aware customer of the future. The fifth ring encapsulates the new game-changing technologies distributed at user level that will be a major part part of the integrated solution. These include technologies such as electric vehicles (EVs) and the need for the establishment of a nationwide charging infrastructure to support the widespread use of EVs and distributed generation.
In this integrated smart network model OSullivan says ‘’the technologies like the EV needs to communicate with the wind farm and everything in between,’’ with energy and vast amounts of information flowing in both directions. This is a very different from the old and traditional passive electricity networks and represents the coming together of conventional networks with information and communications technology. This gives the energy-aware customer of the future the ability to capture the electricity they generate themselves, giving them the option to either sell it back to the grid or release it slowly and efficiently through advanced storage systems.
The elegance of the model is in the confluence of its parts, where the rings overlap. It starts with wind, Ireland’s ubiquitous resource. As it blows all night when demand on the grid is low, the charging up of electric vehicles and heating units after hours is an ideal way to utilize excess load, while at the same time reducing energy consumption during daytime peaks. The same holds true for smart metering, which also helps reduce peak demand by giving households the means to make more efficient decisions on when to use appliances and the like. Still, for all its elegance, the model also adds risk and complexity, since the large-scale introduction of renewable sources into the mix tends to increase the variability of electricity supply and demand, where the slightest imbalance, for even a matter of milliseconds, can cause the grid to go down.
The common – and indispensable – thread that ties it all together and keeps the balance is real-time intelligence on everything that’s going into and coming out of the system. A good example is seen in ESB’s EV program which is being progressed by a newly formed and dedicated business area known as ESB ecars. If EVs are charged in a way that doesn't account for capacity conditions in the grid, it can place significant additional load on grid resources, even to the point of raising peak consumption and potentially destabilizing the grid. ESB's charging solution uses an IBM cloud-based analytics solution known as the Intelligent Electric Vehicle Enablement Platform which will enable the intelligent linkage between EV usage patterns and conditions on the grid. Designed and implemented by IBM, the charging solution enables citizens' driving patterns to be analyzed and uses optimization algorithms to formulate a charging plan that best balances customer lifestyles and grid capacity. That’s intelligence in action.
A commitment to social responsibility
In his quest to secure funding from the European Union for what would be a first-of-a-kind project anywhere in the world, O’Sullivan cites the breadth and clarity of ESB’s vision as a major factor in his success. In making the case domestically, ESB reinforced its commitment to ensuring that the economic development benefits of the electric vehicle initiative accrue to all Irish citizens, be they rural or urban. Indeed for O'Sullivan, the son of a farmer who rose through the ranks at ESB, rural empathy comes naturally. “We have a strong sense of social responsibility – a commitment to being part of fabric of rural Ireland – that very much reflects our origins as a company,” says O'Sullivan. “That's why so much of our program, like placing charging stations across the countryside, reaches out to the rural population.”
A steady path to progress
Working with IBM, ESB has made steady progress on all fronts, from the 10,000 smart meters it has rolled out as part of one of the largest and most statistically valid consumer behavior trials conducted worldwide to the 1,000 EV charging stations now in service across the country. At the same time, O’Sullivan’s team is also working jointly with the IBM Smarter Cities Technology Centre in Dublin in using the data gathered as part of the trials along with the network system to better inform ESB’s network operation and planning activities.
With some 20 percent of Ireland’s energy currently coming from wind power, ESB is halfway toward its 2020 goal. On the heels of major investments in grid automation and analytics, ranging from predictive maintenance of grid assets to network self-healing capabilities, the average ESB customer can expect fewer service disruptions and faster service recovery when they do occur. That improvement is a big reason ESB Networks now boasts an average customer satisfaction rating of 84 percent, an increase of 15 percent that stands higher than ESB’s best performing European peers.
ESB expects that same improvement in reliability to maximize service-level incentives. In the coming years, O'Sullivan sees yet another source of cost savings in the form of new power plants that, in the end, won’t need to be built, the results of more efficient grid management and the already successful efforts to curtail peak power usage through smarter consumption. Indeed, the smart meter consumer behavior trials conducted by ESB Networks on behalf of the regulator showed that when households were provided with a smart meter, average electricity peak consumption was reduced by nearly nine percent.
As his “five rings” model connotes, O'Sullivan believes that when it comes to smarter grid strategy, integration is everything. While the immediate goals, approaches and details of individual initiatives may differ, they are in fact part of a holistic program, share common goals and need to stay that way. The same principle also guides ESB’s organizational strategy as it relates to the smart grid program. From the very outset, O'Sullivan and his team resolved to make its smart grid activities a seamless outgrowth of its core operational people and practices. “In our view, you don’t succeed in smart grid if you set up a specialized organization first,” O’Sullivan says. “The whole workforce needs to be involved if you really want to imbue the new strategy – and that’s the biggest management challenge.”
But in the case of its ecars initiative, ESB took a slightly different approach. “To ensure that the nascent effort wouldn’t be smothered at birth, we chose to set up a dedicated unit and resource it with a young and more diverse talent pool drawn from investment banking, marketing, IT and engineering,” O’Sullivan explains. “The plan is that once the EV market matures, the unit will be reincorporated into the core business, while at the same time giving it the air to breathe and develop an appropriate culture.”
A framework for smart grid governance
ESB sees the multi-tier governance framework it put in place to support smart grid as a critical instrument for keeping the entire organization aligned, as well as to ensure that its goals and priorities are in sync with changes in the broader energy landscape. At the highest level, O'Sullivan meets with other ESB directors every six months to take stock of big picture trends – ranging from disruptive technologies to energy commodity prices – and revise its strategic roadmap accordingly. To take a focused, hard look at the smart grid program in particular, O'Sullivan meets every three months with his senior managers, to whom he directs the basic dictum: “If we’re not doing things to support the strategy that we’ve set for ourselves in our strategy documents, then we shouldn’t be doing them.”
The monthly briefing meetings held with all employees also represent the most effective venue for reinforcing the message of what smart grid means to ESB, how the pieces fit together and what it means to them as employees. “It's also chance for all employees to sit down and ask themselves what can we do here – at this location – to support the strategy?” O'Sullivan explains. “It reflects the huge pride in doing things well and being innovative that's been deep in the ESB culture over 85 years.”
Staying true to core values
The International Energy Agency describes Ireland as a world leader in the smart networks space, a source of achievement and pride that O'Sullivan expects to grow as its program progresses. What hasn’t changed, in his view, is the company’s deep cultural affinity for the cause of rural electrification. “The work we’re doing with partners like IBM in the areas of smart power and sustainability will bring new economic development opportunities to all of Ireland,” O'Sullivan says, adding: “With IBM’s support we learned a lot from observing the innovation experiences of other energy companies around the world. Now, with the progress we’re making toward our comprehensive, integrated smart grid vision, our experience may end up having a similar impact on the rest of the world.”
Smarter grid strategy reduces power outages
- Instrumented: The solution monitors and tracks electricity usage from a variety of sources, ranging from real-time smart meters in the home to sensors mounted on electric vehicles, to compile a broad profile of customer power usage and broader behavior patterns.
- Interconnected: Near real-time monitoring enables not only consistent, usage-based billing but also a feedback loop to grid planners to ensure grid capacity is in sync with electricity demand.
- Intelligent: Embedded algorithms predict the impact of electricity usage patterns – be they household or vehicle-based – on grid capacity at different times of the day, enabling planners to make necessary adjustments and maintain grid stability.
ESB’s Smart Grid solution uses…
IBM Intelligent Electric Vehicle Enablement Platform
IBM Global Business Services: Business and Customer Strategy, IBM Global Business Services: Technology Strategy, IBM Research
Products and services used
IBM products and services that were used in this case study.
GBS S&T: Business and Customer Strategy - Business Strategy, GBS Technology Strategy, IBM Global Business Services
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