Navigant Research Blog

Bringing Grid Security to the Boardroom

— August 14, 2012

What is the one most important thing we must do to improve the security of our electric grid?

That question came up during a panel session at the Smart Grid Security Virtual Summit in early August.  It sounds like a real stumper, but it isn’t.  New technology is important, but we have to pave the way for it.  The first order of business is: Get utility senior executives engaged.   Executive suites are where decisions get made and where funds are disbursed, but security practitioners rarely venture there, except to be grilled after a breach.  Out of all possible professions, why did I choose the one that doesn’t understand the rule, “Follow the money?”

Maybe things are about to change.  Earlier this week Andy Bochman, energy security lead at IBM, spoke about redefining cyber security metrics.  Andy and I have not always seen eye-to-eye on security metrics, but I think he’s on to something.  Andy stated that security metrics must be easy:

  • Easy to obtain
  • Easy to understand
  • Easy to share

Yes, yes, and YES!  Imagine having security metrics that a company executive could look at and understand immediately.  Imagine a CEO looking at security metrics and then saying, “Tell me more.”  It’s not as far-fetched as you think, but things have to change.  More precisely, we have to change.

During that same virtual summit my co-panelist Patrick Miller said, “CEOs manage risk to their bottom line.  We have to get on their radar.”  Combining Andy’s and Patrick’s thoughts, what the utility industry needs are Chief Security Officers who really are chiefs.  That means directly reporting to the COO or CFO – no lower.  Being a chief also means having a real-world security budget and SMART objectives to justify that budget.

What is necessary to reach this El Dorado?  We have to change the people, or else we have to change the people.  In other words, either we change our behaviors in ways that will enable us to become corporate leaders, or we give way to others who can.  Peter F. Drucker wrote that management is about getting the right things done.  That’s our job: understand the “right things” in the context of the business and make sure they get done.  Yes, corporations must change how they view security, but that’s not going to happen until security changes how it views the corporation.

Then again, none of this is absolutely necessary.  There are alternative approaches.  We could:

The ball is in our court.  Albert Einstein said, “We can’t solve problems by using the same kind of thinking we used when we created them.”  It is time to accept that what we’ve been doing hasn’t worked.  It is time for a new approach, and it starts at the top.


Dancing Around Climate Change

— August 14, 2012

The U.S. State Department has been tap-dancing for the last week, trying to quell the outrage over remarks made by Todd Stern, America’s chief climate negotiator, in a speech at Dartmouth.  Stern implied that global, top-down targets for limiting climate change – specifically, the goal of keeping global warming below 2 degrees Celsius – should be abandoned in favor of national initiatives to limit carbon emissions.

“Insisting on a structure that would guarantee such a goal will only lead to deadlock,” Stern said.  “It is more important to start now with a regime that can get us going in the right direction and that is built in a way maximally conducive to raising ambition, spurring innovation, and building political will.”

Representatives of the European Union, and of developing nations vulnerable to rising seas and other climate change effects, spluttered in outrage.

“Suddenly abandoning our agreement to keep global warming below 2C is to give up the fight against climate change before it even begins,” Tony de Brum, Minister in Assistance for the Marshall Islands, told the BBC.  “‘Flexibility’ on our 2C limit would set the world on a path to irreversible, runaway climate change.  For many low-lying island states, including my own, that is not a solution – it is a death sentence.”

Stern quickly backtracked:  “There have been some incorrect reports about comments I made in a recent speech relating to our global climate goal of holding the increase in global average temperature to below 2 degrees Celsius.  Of course, the U.S. continues to support this goal; we have not changed our policy.  My point in the speech was that insisting on an approach that would purport to guarantee such a goal — essentially by dividing up carbon rights to the atmosphere — will only lead to stalemate given the very different views countries would have on how such apportionment should be made.”

“Apportionment” is a diplomatic term for the so-called “firewall” between the economies of the developed world, which have nominally agreed to make major cuts in their emissions of greenhouse gas emissions, and developing nations, which have so far largely avoided such limits, arguing that they should have the same right to unfettered economic development, and to the production of millions of tons of carbon, that the First World has long enjoyed.  That firewall has become somewhat porous, as the emerging economic powers China and India attempt to retain their status as “developing nations” and thus avoid accepting internationally mandated emissions cuts. In that light Mr. Stern’s remarks sound only sensible:  “As a matter of substance, you cannot meet the climate challenge by focusing only on developed countries when developing countries already account for around 55% of global emissions from fossil fuels and will account for 65% by 2030.”

On this, Stern and EU Commissioner for Climate Action Connie Hedegaard are in agreement.

The Coalition of the Unwilling

Unfortunately the firewall debate has become an excuse for countries on both sides to engage in spitball fights while avoiding the monumental task of finding a way out of the carbon impasse.  The recent talks in Bonn, following last year’s Durban climate summit, degenerated into “angry exchanges between rich nations, fast-industrializing ones and those prone to climate impacts,” the BBC reported, as the “coalition of the unwilling” – including the United States, China, India, and Saudi Arabia – blocked the path to further binding agreements on carbon emissions and on financing mitigation measures in the poor, low-lying countries that are already seeing the effects of rising seas, widespread drought, and so on.

“It’s absurd to watch governments sit and point fingers and fight like little kids while the scientists explain about the terrifying impacts of climate change,” remarked Tove Maria Ryding of Greenpeace International.  For all its public commitment to finding a new energy strategy that will confront the realities of global climate change, the Obama Administration has been unsuccessful, to date, in shifting away from the obstructionist policies of the Bush years.  That’s most clearly demonstrated in the fight over emissions from airliners arriving and departing from European airports.  The EU wants to make all foreign airlines subject to its strict carbon trading system; U.S. airlines are fiercely rejecting those restrictions, and are pressuring the administration to file a protest, through the International Civil Aviation Organization (ICAO), to challenge the EU’s authority to regulate non-European airlines.

The natural gas boom in the United States has fundamentally shifted the ground underneath President Obama’s halting energy initiatives, giving the U.S. a domestic source of cheap fossil fuel even as U.S. emissions have actually flattened (largely due to the global recession).  But this unforeseen bounty could easily become an excuse for doing nothing on the larger questions of energy strategy and climate change.

“America’s good fortune has come despite the unqualified failure of Mr Obama’s most cherished policies on energy,” commented The Economist, in a column noting that both Obama and Mitt Romney, his Republican opponent, lack the vision to craft a realistic energy policy to transform today’s carbon-based economy.  “The lesson of the shale gas boom, after all, is not that government should forswear any part in shaping the energy mix, but rather that innovation and entrepreneurship can yield dramatic results in a short time if the right incentives are in place.”

Moving away from toothless, top-down United Nations mandates in favor of pragmatic progress at the national level may well be the most intelligent way forward for limiting climate change.  But tap-dancing is not going to get us there.


In the Dark, India Nears a Turning Point

— August 13, 2012

As my colleague wrote Brittany Gibson wrote earlier, the Indian grid has had a hard time of it lately.

India is seen as a promising market for nearly everything, if only because of its impressive population and burgeoning middle class.  But one of the primary engines of economic growth in countries like India is energy – not just the amount of energy, but access to that energy.  Two days of extensive blackouts across northern and eastern India put the country’s economic ambitions in sharp contrast with reality: India’s power infrastructure simply isn’t there yet.   Some 600 million people were affected by the power failures, 200 trains had to stop operating when three grids failed, and “vital services” had to run on generators.

The Indian grid has a generation capacity of 163 gigawatts (GW), nearly all of which is regulated.  The grid system, including generation and transmission and distribution infrastructure, is mostly state-owned (at least 70%); however, pockets of privately-owned utilities and distribution companies exist.  Highly diversified, cradle-to-grave companies like Tata and Reliance participate in these markets.

In addition, the system operators in India are organized at a state, regional (i.e.,several states), and national level.  One characteristic of system operation that distinguishes India from more developed Asian economies is that these operators are referred to as state load dispatch centers, regional load dispatch centers, and the national load dispatch center, respectively.  This characterization of system operators originates from the fact that system operators can and often do shed load in order to balance the system; in the Indian electricity market, load is elastic.  Not surprisingly, this makes it difficult to do business.

Indian system operators are notorious for shedding load on a daily basis.  Indeed, this is the main tool operators have manage the system, and anecdotal evidence suggests that transmission losses (i.e., theft) are in the neighborhood of 40%.  According to data from the Energy Information Agency, transmission losses in the United States are closer to 7 percent.

As Brittany mentioned in her earlier post, cleantech, especially smart grid technology, distributed generation, and energy storage, would help India optimize the country’s existing assets.  It seems like a no-brainer, but truthfully, India today is simply too price sensitive to move toward cleantech adoption.  Although there were technical reasons for the blackouts, politically, this short-sighted approach is what led to two days of darkness for India.  Perhaps Indian leaders will be more savvy to cleantech now.


Why Wireless Charging Could Change the Electric Vehicle Market

— August 9, 2012

A number of factors may hinder the growth of the market for all-electric vehicles.  Surveys consistently show that people are interested in the concept of an electric vehicle, but do not want to pay a high cost premium and are concerned about the range and about getting stranded by a flat battery, as it were.  OEMs and government agencies are working to address these concerns by subsidizing advanced battery development work, encouraging the installation of new charging points, and offering financial (tax rebates) and convenience (free parking, HOV lane access) incentives.  The spread of wireless charging options could help extend the customer base for EVs, as well.

While plugging in a long cable might not be a huge inconvenience when parked at home overnight, the idea of leaving an expensive cable out in the street has understandably caused some people to express concern.  Theft and mischief are potential issues if the number of cars grows and seeing an EV recharging becomes commonplace.

All the major vehicle manufacturers have started work on wireless charging technology, although it’s seen as a practical reality for the future rather than a critical piece of the picture that’s needed now while the market is in its infancy.  BMW announced a partnership with Siemens in 2011.  Delphi has been working with WiTricity for about 2 years, and Qualcomm purchased HaloIPT in 2011.  In July 2012, Qualcomm updated progress with its plans for testing in London by announcing that Renault and Delta Motorsports had both agreed to participate.

The technology to charge batteries via induction loops and/or magnetic resonance has been around for years.  What’s needed now is some agreement and provisional standards for the hardware.  The last thing anyone needs is a unique charging system in every electric vehicle.  A few years ago each manufacturer had its own view on what the plug should look like, but now standards are emerging that means some charging stations can be used by different vehicle models.  Japan and the United States seem to have gotten their act together but Europe is still a work in progress.

In the short term, the wireless charging developers need to get together to hammer out some agreements about the basic technology so that everyone can focus on making it efficient, safe, and affordable.  Cooperation today will pay off for all in the future.  And wireless power also is relevant for many other devices in consumer electronics and industrial applications, as covered in our recent report, Wireless Power.

But the biggest payoff in the future will be the opportunity that wireless charging brings to the EV market.  The initial challenge is to develop a working system for static charging.  But Qualcomm in particular has a vision for the future of dynamic charging, in which batteries are topped up while the vehicle is moving or while waiting at traffic lights, as well as when parked.  Momentum Dynamics has developed a new business case for commercial fleets of electric vehicles based on its wireless charging technology.

This is where things get exciting.  If batteries can constantly be topped up, then the quantity of on-board energy storage can be reduced, making possible a big reduction in the initial purchase price of the vehicle as well as eliminating range anxiety.  Managing the incremental payment process for multiple short charging periods is ideally suited to a company such as Qualcomm, with its background in wireless communications.  And that also explains why Qualcomm is taking a leadership role in this aspect of the electric vehicle industry.


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