Project Management Institute

Xcel Energy, Boulder, Colorado, USA

PHOTO BY RON NEWKIRK

Kelly Virtue, Five Point Partners, Scottsdale, Arizona, USA

Kelly Virtue, Five Point Partners, Scottsdale, Arizona, USA

A power company lights the way for the smart-grid revolution.

For Xcel Energy, it was time to get smart.

In 2007, the utility company launched a project aimed at transforming Boulder into a model for green-energy grid projects. This went far beyond simply upgrading the existing infrastructure.

Xcel was out to accomplish nothing short of crafting a roadmap for a smart-grid system spanning the entire city. Tapping into cutting-edge technology, it would be able to switch power through automated substations, reroute power around bottlenecked lines, detect power outages and identify service risks. Consumers would also be able to monitor their usage in real time and presumably adjust any bad habits accordingly.

“This project enabled us to prove a lot of hypotheses about how we could improve the grid from the utility side and the customer side,” says Tom Henley, spokesman for Xcel Energy in Denver, Colorado.

At the time the project was conceived, there were no standards, no benchmarks and no clear path to convert a city from a conventional electric-grid system to a fully integrated smart one.

“It forced the company to look at all of the issues across the industry that relate to smart grids, such as how to accept and process data that utilities have never dealt with before, and how to make it work on the scale of a small city,” says Jeff Taft, consulting chief engineer on the project and smart grid global chief architect at consulting giant Accenture, Pittsburgh, Pennsylvania, USA.

There were no best practices, there were gaps in standards and many of the technology pieces were not designed to work together. It created the potential for a lot of confusion.

—Jeff Taft, Accenture, Pittsburgh, Pennsylvania, USA

READY, SMART, GO

Powering up the US$100 million project—now dubbed Smart Grid City—came down to finding the right team.

“Xcel brought together a tremendous amount of industry expertise through a consortium of leading technologists, engineering firms, business leaders and IT experts to make this project work,” says Kelly Virtue, project manager and director of smart-grid and client-side delivery services practice at Five Point Partners, an energy industry consultant in Scottsdale, Arizona, USA.

Public and private partners were divided into eight teams, led by a senior project manager who reported to Xcel. As head of the project management office, Ms. Virtue worked directly with all the project managers to make sure everyone's project goals and schedules were aligned and integrated with the client's business needs.

“It was definitely a challenge to keep everyone moving in the same direction, but it was also a great opportunity for our partners to implement their technology in the real world,” Mr. Henley says.

Over two years, the project teams deployed a fiber optic loop around the entire city that provides communication between 50,000 households and the utility about the amount and source of power in use. Participating residences were equipped with “smart meters” that allow homeowners to make choices based on that information, such as shutting off appliances during peak hours. Those users with the capability to produce their own power through such means as solar panels can put unused energy back into the system to offset their own utility costs or store it in their home for later use.

IN THE DARK

Phase one had an aggressive schedule, further complicated by a major storm that hit Boulder the day smart-meter installation was scheduled to begin. As a result, installation crews were forced to redeploy to attend to outages.

On top of that, project teams often had to create business architecture and design solutions as they went along.

“With so many partners and pieces of the project, it was a complex project management situation,” Mr. Taft says. “There were no best practices, there were gaps in standards and many of the technology pieces were not designed to work together. It created the potential for a lot of confusion.”

One of the biggest challenges was designing a system to ensure the grid's security as well as that of the community and individuals. Team leaders looked to projects in online bill-paying and privacy networks to establish a framework for devising their own solution.

“This was an innovative project, and innovation always precedes formal processes,” Ms. Virtue says. “We had to rely on what was available and design to those emerging specifications.”

Protection was considered a priority in every project decision and built into every layer of the system.

“Security can't be something you add on in the middle,” Mr. Taft says.

Some ideas—such as allowing homeowners to operate the system remotely from another country—were scrapped because they didn't pass the security test.

“If we hadn't thought about security from the beginning, we probably would have built those elements into the system,” he says. “Then we would have had to take them out at the end.”

THE “AHA” MOMENT

With all those stakeholders and vendors, the teams relied on steady communication between partners, project leaders, the community and the client to keep the project on track.

“When you are working on innovative projects, you are in a constant mode of discussion and education,” Ms. Virtue says. “It's high-stakes, with a lot of risks and a great degree of uncertainty in the ROI. Strong communication helped us build buy-in and address issues as they arose.”

Looking to garner community support, the teams actively sought participation and feedback from city leaders and end-users throughout the rollout. They held town-hall meetings, worked with the media and offered tours of project sites. There was also a touring trailer visited by more than 15,000 people who got a hands-on demonstration of the new technologies.

“Smart-grid technology doesn't make sense until you can see how it operates,” Mr. Taft says. “It gives them that ‘aha’ moment when they see how it will be relevant in their homes. You can't get that with a brochure or video.”

“There was a lot of excitement around engaging the customer,” says Ms. Virtue, who notes that the traveling trailer drew both proponents and naysayers. “We were able to survey what makes a difference to people and what motivates them and use those findings to design compelling opportunities to participate in smart-grid initiatives.”

THE NUMBERS GAME

With the first phase of the project completed last September, the project teams have begun gauging metrics. “A big part of the business case for Smart Grid City was defining and measuring benefits realization,” Ms. Virtue says. “With smart grids, there are so many benefits to articulate, so many things that have never been done before. We will be measuring outcomes for a while.”

With the initial infrastructure in place, Xcel is looking at using web portals to monitor energy usage.

img

50,000
The number of households on the smart grid, thanks to a fiber optic loop around the entire city

The company intends to roll out a test project that would let customers see the actual cost of energy at different times during the day, according to Mr. Henley. The project plan is under review by the Public Utility Commission, and assuming it receives approval, Mr. Henley says he hopes to have in-home energy-management devices installed in up to 1,100 homes this month.

“Research shows that if customers have information about the true cost of energy, they reduce their usage by as much as 30 percent,” he says. “If we can achieve that, we may be able to delay building a new power plant, which saves us and our customers hundreds of millions of dollars.”

img

30%
The amount Boulder customers can reduce their energy consumption by using information from their smart meters—enough to possibly delay building a new power plant

The company has already been able to cut its use of onsite work crews. Because Xcel can now read customer meters remotely, reduce outages and identify false alarms more quickly, it sends out fewer road crews to deal with problems.

Mr. Taft expects the review process to continue for at least a year, as project teams measure the value that the smart grid has brought across all seasons and assess how the project structure must be tweaked for a larger-scale deployment.

It could be just the beginning. The project partners have since created a consortium that aims to establish industry standards for future smart-grid projects.

“Boulder is a big living lab,” Mr. Taft says, “and we hope to learn enough from this project that we can deploy smart grids across the entire utility population.”

—Sarah Fister Gale

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

PM NETWORK JUNE 2010 WWW.PMI.ORG
JUNE 2010 PM NETWORK

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