Advancing Global Deployment

and Utilization of the Smart Grid

Smart Grid Maturity Model:

Creating a Clear Path to the Smart Grid
The Age Of Smarter Energy Is Here
Around the globe, progressive utilities an aging workforce and regulators are By 2010, nearly 60 “mega-cities”
see the inevitability of adopting a putting pressure on utilities to become worldwide — most of these in emerging
smart grid to modernize the power even more operationally efficient. markets — will have populations of five
grid. More than meters and mobility, The convergence of environmental million or more, up nearly 50 percent
the smart grid represents a whole new pressures, the demand for alternative since 2001. Governments, regulators
framework for improved management energy sources and financial and utility companies need to ensure
of electric generation, transmission expectations requires a new level of that these mega-cities will survive
and distribution. enterprise information and integration. under the crush of demand for access
to affordable power.
Few question that traditional power In many developed and emerging
grids are showing their age. Rising economies, getting a smart grid up and
energy costs, aging network assets, running cannot come soon enough.

Smart Grid Maturity Model – Levels, Descriptions and Results

Level 5: Perpetual Innovation
New business, operational, environmental and
Innovating – societal opportunities present themselves, and
Self-healing operations
Next Wave of Autonomic business
the capability exists to take advantage of them.
Improvements Innovators

Smart Grid functionality and benefits realized. Transformation

Level 4:
Management and operational systems rely on and Real time corrections
Optimizing – Broad reuse
take full advantage of observability and integrated
Enterprise Wide
control across and between enterprise functions. Victors

Smart Grid spreads. Operational linkages Systemization

Level 3:
established between two or more functional areas. Repeatable practices
Integrating – Shared information
Management ensures decisions span functional
Cross Functional
interests, resulting in cross functional benefits. Cross LOB Champions

Making decisions, at least at functional level. Strategy

Level 2:
Business cases in place, investments being
Functional Proof of Concepts
made. One or more functional deployments under
Investing
way with value being realized. Strategy in place. Missionaries

Contemplating Smart Grid transformation. Vision

Level 1:
May have vision, but no strategy yet. Exploring
Exploring and Experiments
options. Evaluating business cases, technologies.
Initiating
Might have elements already deployed. Prophets, Heroes

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Getting From Here To There
Building more traditional utility grids is and new sources of power and visibility into their usage and costs.
not the answer. Most countries today their applications — wind, solar, The smart grid helps consumers make
are looking for new and more efficient plug-in hybrid electric cars and “smart” homes and energy-conscious
ways to improve in their energy so forth — providing end-to-end choices possible.
generation and distribution. insight across all forms of energy. In
the process, smart grids will make But how do we get from here to
By contrast to traditional grids, smart possible greater levels of repeatability, there — from today’s conventional
grids add intelligence throughout reliability and security. power grid to tomorrow’s cleaner,
the grid to improve system reliability more efficient smart grid? Increasingly,
and efficiency, improve management Consumers will be able to interact with executives of utilities know that
of supply and demand, optimize the smart grid in multiple, convenient transformation to the smart grid is the
operations and streamline costs. ways as well. For instance, they may right thing to do. But many remain
The infusion of digital intelligence be able to select new services and unclear as to how to manage the
also enables integration of traditional pricing options, and gain near real-time transformation — and where to begin.

3
Enter the Smart Grid Maturity Model
The Smart Grid Maturity Model is a The Smart Grid Maturity model was and investments in smart grids, the
methodology that creates a road map developed by IBM in collaboration with SEI will assume primary responsibility
of activities, investments and best the Global Intelligent Utility Network for the ongoing governance, growth
practices that leads to creating a smart Coalition, which includes leading and evolution of the model. In order
grid. The Maturity Model can be used utilities from around the world, and to support widespread adoption and
to establish the smart grid journey, with support from APQC (American use, the SEI will ensure availability of
to communicate vision and strategy, Productivity & Quality Center). The the model and supporting materials
and to assess current opportunities, intent for the model is to stimulate, guide and services for the user community;
choices and future goals. and support a utility’s own efforts and maintain consistency of its application,
investments in smart grids. The more validity, and results; and analyze and
The Smart Grid Maturity Model can widely the Maturity Model is adopted provide feedback on its use, value and
be used as a strategic framework and used as a tool for measuring and impact for stakeholders.
to develop business cases and sharing best practices, the more benefit
explicit plans to move forward. It uses it will bring to all participants, the In addition, the World Energy
observable indicators to measure industry and the planet. Council (WEC) will be a channel for
progress. Ultimately, the Maturity global dissemination, participation
Model helps you move in an orderly Therefore, in 2009, IBM and the Global and adoption of the model using
fashion through the maze of Intelligent Utility Network Coalition its worldwide network of member
challenges in a smart grid handed over the Smart Grid Maturity committees. Together, they will lead the
transformation — from technological Model to Carnegie Mellon University’s Smart Grid Maturity Model activities
to regulatory to organizational. Software Engineering Institute (SEI). To globally to support the transformation
stimulate, guide, and support efforts of the utility industry.

Using the Smart Grid Maturity Model, IBM can help you
implement top-to-bottom processes and technologies and
guide you on your path to the smart grid.

4
It All Begins With A Vision
The Smart Grid Maturity business cases and technology, and Level Four: Optimizing Enterprise Wide
Model — essentially a matrix of almost access which elements you have Real-time corrections and broad
200 outcomes, capabilities and already deployed. reuse of systems and information
benefits, plotted and tracked in various are transformative when compared
work domains — progresses through Level Two: Strategizing for Investing to the old analog grid. Smart grid
five levels of maturity. Not every utility Getting a strategy in place for functionality and benefits are being
will need, or want, to go to the last investing is next. At this level, you realized in powerful new ways—from
level. Depending on their situation, a make decisions, at least at a functional end-to-end observability to real-world
utility can select which level is optimal level, regarding the way forward. aware systems to environmental score
for their smart grid vision. Level 5 for With business cases developed, keeping and reporting.
example perpetuates innovation into investments are made on one or two
new frontiers of the energy business. functional deployments — with value Level Five: Perpetual Innovation

Before you go there, let’s start at being realized. New business as well as operational,

the beginning. environmental and societal

Level Three: Integrating Across Operations opportunities present themselves,
Level One: Vision Now your smart grid program and the capability now exists to take
Having a vision of your smart utility, starts to spread. Operational advantage of them. Self-healing and
and how your business and customers linkages are established between autonomic, your utility is in a perpetual
ultimately benefit, is the critical first two or more functional areas. state of readiness to respond (and
level of the Smart Grid Maturity Model. Management decisions span innovate) on a dime.
At this stage, you may not have a functional interests, resulting in
strategy to realize that vision, but it’s benefits ranging from shared
a time to explore options, evaluate information to repeatable practices.

Tom Standish, group president of Regulated Operations,

CenterPoint Energy, encourages every utility to participate in
the Smart Grid Maturity Model survey. “It provides insights
into where you are on your smart grid journey and what
milestone objectives to set to achieve the benefits of smart grid —
for both customers and business,” Standish said.

5
Utility Domains Impacted by Smart Grid
With this general progression of the Organization analytics. Automated data flows — from
“levels of maturity” in mind, let’s take For a smart grid to be successful, the the customer via automated metering
a look at the eight domains in your organizational structure must promote and the power generation side, for
utility that are impacted by the and reward cross-functional planning example — streamline your entire
changes brought about by the smart and operations, but still allow for business model.
grid transformation. empowered decision making. In doing
so, the organization flattens, which Societal and Environment
People and Technology Domains: helps to drive a culture of innovation A smart grid allows a utility, and
The core business areas that are most and integration. society, to make choices and take
affected in a smart grid transformation. advantage of energy alternatives and
Technology efficiencies, regarding both production
Strategy, Management and Regulatory A cohesive technology strategy must and consumption. In this domain, the
The mission, vision, strategy, and how connect and support the innumerable utility establishes a path to actualize
it is managed must be fully integrated data sources and users that make the “triple bottom line” — addressing
in order to guide the way to a smart up a smart grid, today and into the financial, environmental and societal
grid. By the end of the process, you’ve future. Eventually, the smart grid issues at once.
created an open environment for new establishes a common architectural
business opportunities. You’ve also framework, which allows you to Process Domains:
optimized systems, resulting in likely optimize processes across the board The four process areas most affected
favorable treatment for regulatory policy. via near real-time simulation and by a smart grid transformation.

6
 What is the Intelligent
Utility Network?
Grid Operations Customer Management and Experience The Intelligent Utility Network is
A holistic smart grid is based on a Through the smart grid, the customer IBM’s solution for the smart grid. It
solid core foundation of intelligent grid becomes empowered to make their encompasses a broad set of offerings
components (such as sensors and own choices regarding their use and that address the complete energy
actuators) and operational design. Use cost of energy. Customer care, pricing value chain, from power generation
of technology and automation is fused options, advanced services, outage to consumer premise. The Intelligent
with enterprise processes. One way in detection — the smart grid makes the Utility Network fundamentally is an
which the smart grid could impact the utility more responsive to the customer. information network which connects
operation is by delivering ubiquitous together the ‘participants’ in the
and dynamic control system-wide. Value Chain Integration energy value chain, at multiple levels,
Extending automation beyond and enables the intelligent flow of
Work and Asset Management traditional boundaries and across the information which can be used to
When operating and maintaining entire value chain opens opportunities transform and optimize their respective
assets is based on up-to-date, for innovation and efficiencies. roles in the regulation, generation,
fact-based performance data, the Ultimately, the smart grid helps supply and consumption of electricity.
utility moves from a preventative coordinate energy management and The Intelligent Utility Network is the
maintenance model to a predictive generation across the supply chain, information management component of
and self-healing model. This is a huge driving down costs. the smart grid.
leap forward in optimizing the use of
equipment and people.

7
Putting the Smart Grid Maturity Model Into Action
DONG Energy is Denmark’s largest truest sense of the word, Dong is also that takes advantage of alternative
energy company, formed in March an innovator, now running pilots in wind and traditional energy sources. These
2006 by the merger of six diverse energy to power electric vehicles. companies face similar challenges
companies in the fields of electrical in integrating renewable energy into
Like many electrical distribution
and gas distribution and sales, companies around the world, Dong is their business models, from managing
power generation, and oil and gas moving through a transformation from innovation to the daily challenge of
exploration. An energy company in the a conventional energy model to one relieving stressed-out grids.

Strategy, Management & Organization & Structure Technology Societal & Environmental Grid Op
SG/MM Regulatory
Vision, planning, Communications, Information, Conservation and Advanced
The Smart Grid decision making,
strategy execution
culture, knowledge
management, training
engineering,
integration of
green initiatives,
sustainability,
observabil
advanced
Maturity Model and discipline,
regulatory, investment
and education information and
operational
economics and
ability to integrate
control, qu
reliability
technology, standards, alternative and
and business distributed energy
analytics tools

• Overall strategy expanded due to SG • Collaboratively engage all stakeholders • Autonomic computing, machine learning • Actualize the "triple bottom line“ — • Grid emplo
capabilities in all aspects of transformed business • Pervasive use and leadership on (financial, environmental and societal) • Automated
Level 5: • Optimized rate design/regulatory policy • Organizational changes support new standards • Customers enabled to manage their own (applying p
(most beneficial regulatory treatment for ventures and services that emerge • Leader and influence in conferences and usage (e.g. tools and self-adaptive controls)
Innovating – investments made) networks)
• Entrepreneurial mind set, Culture of industry groups, etc… • Optimized r
Next Wave of • New business model opportunities innovation • Leading edge grid stability systems • Tailored analytics and advice to • Ubiquitous
Improvements present themselves and are customers
implemented • Managing distributed generation

• SG drives strategy and influences • Integrated systems and control drive • Data flows end to end (e.g. customer to • Collaboration with external stakeholders • Integration
corporate direction organizational transformation generation) • Environmentally driven investments • Dynamic gr
• SG is a core competency • End to end grid observability allows • Enterprise business processes optimized (aligned with SG strategy) • Tactical for
Level 4: • External stakeholders share in strategy organizational leverage by stakeholders with strategic IT architecture • Environmental scorecard/reporting • Information
• Real world aware systems — complex
Optimizing – • Willing to invest and divest, or engage • Organization flattens
event processing, monitoring and
• Programs to shave peak demand through en
in JV and IP sharing to execute strategy • Significant restructuring likely occurs • Ability to scale DG units • Automated
Enterprise Wide now (tuning to leverage new SG control
protection
• Now enabled for enhanced mkt driven or • Available active mgmt. of end user
capabilities and processes) • Predictive modeling and near real-time increased a
innovative regulatory funding schemes energy uses and devices
simulation, analytics drives optimization context)
• Enterprise-wide security implemented

• Completed SG strategy and business • SG is driver for org. change (addressing • SG impacted business processes aligned • Active programs to address issue • Sharing da
case incorporated into corp. strategy aging workforce, culture issues, etc.) with IT architecture across LOBs • Segmented & tailored information for • Implement
• SG governance model deployed • SG measures on balanced scorecard • Common architectural framework e.g. customers — including environmental decisions &
Level 3: • SG Leader(s) (with authority) ensure • Performance and compensation linked to standards, common data models, etc. and social benefits • Move from
Integrating – cross LOB application of SG SG success • Use of advanced intelligence/analytics • Programs to encourage off-peak usage planning
• Mandate/consensus with regulators to • Advanced sensor plan (e.g. PMUs) • Integrated reporting of sustainability and • The custom
Cross Functional make and fund SG investments
• Consistent SG leadership cross LOBs
• Implementing SG technology to improve impact grid manag
• Org. is adopting a matrix or overlay
• Corp. strategy expanded to leverage new structure cross LOB performance • Synthesize triple bottom line view across • New proces
SG enabled services or offerings • Culture of collaboration and integration • Data comms. detailed strategy/tactics LOBs increased a

• Integrated vision & acknowledgement • New vision influences change • Tactical IT investments aligned to • Established energy efficiency programs • Initial distri
• Initial strategy / business plan approved • Organizing more around operational strategic IT architecture within a LOB for customers automation
• Initial alignment of investments to vision end-to-end processes (e.g. breaking • Common selection process applied • “Triple bottom line" view — (financial, • Implement
Level 2: • Distinct SG set-aside funding / budget silos) • Common architectural vision and environmental and societal) restoration
Functional • Collaboration with regulators and • Matrix teams for planning and design of commitment to standards across LOBs • Environmental proof of concepts • Piloting rem
stakeholders SG initiatives across LOBs • Conceptual data comms. strategy underway (RAM) for
Investing • Evaluating performance and • IED connectivity and business pilots • Consumption information provided to • Expanding
• Commitment to proof of concepts
compensation for Smart Grid • Implementing information security customers communica
• Identify initial SG leader

• Developing first SG vision • Articulated need to change • Exploring strategic IT arch. for SG • Awareness of issues and utility’s role in • Exploring n
• Support for experimentation • Executive commitment to change • Change control process for IT for SG addressing the issues comms. de
• Informal discussion with regulators • Culture of individual initiatives and • Identifying uses of technology to • Environmental compliance • Proof of co
Level 1: • Funding likely out of existing budget discoveries improve functional performance • Initiating conservation, efficiency, • Exploring o
Exploring and • Knowledge growing; possibly • Developing processes to evaluate “green” linked to su
compartmentalized (i.e. in silos) technologies for SG • Renewables program • Building bu
Initiating • Safety & ph

Phase II – Highlights, People and Technology Domains (v3.1) Black text = Requirements for this level Blue text = Descriptive characteristics or desired traits

8
The path forward is the Intelligent aspirations and to identify where they grid implementation. The company
Utility Network (IUN), which uses were on their path to a smart grid and turned to the Maturity Model to
information technology to improve where they wanted to be. prioritize its list of projects and focus
the management and, therefore, the on a core set of five projects that will
performance of electrical grids. DONG Through its planning process, DONG provide the greatest benefit, giving
Energy used the Smart Grid Maturity Energy identified more than 80 DONG Energy a clear path forward
Model to determine their overall projects that would advance its smart on its smart grid journey.

Grid Operations Work & Asset Management Customer Management & Value Chain Integration
SG/MM Advanced grid Optimize the assets
Experience
Retail, customer care, Enabling demand
The Smart Grid observability &
advanced grid
and resources
(people and
pricing options and
control, advanced
and supply
management,
Maturity Model control, quality and
reliability
equipment) services, visibility into
utilization, quality,
distributed
generation and load
and, performance management,
leveraging market
opportunities

• Grid employs self-healing capabilities • Optimizing the use of assets between • Customer management of their end to • Coordinated energy management and
• Automated grid decisions system wide and across supply chain participants end energy supply and usage level generation throughout the supply chain
Level 5: (applying proven analytic based • Just in time retirement of assets • Outage detection at residence/device • Coordinated control of entire energy
controls) • Enterprise-wide abstract representation • Plug-n-play customer based generation assets
Innovating –
• Optimized rate design/regulatory policy of assets for investment decisions • Near real-time data on customer usage • Dispatchable recourses are available for
Next Wave of • Ubiquitous system wide dynamic control • Consumption level by device available increasingly granular market options
Improvements (e.g. LMP – Locational Marginal Pricing)
• Mobility and CO2 programs

• Integration into enterprise processes • Enterprise view of assets: location, • Usage analysis within pricing programs • Energy resources dispatchable/tradable,
• Dynamic grid management status, interrelationships, connectivity • Circuit level outage detection/notification utility realizes gain from ancillary
• Tactical forecasts based on real data and proximity • Net billing programs in the home services (e.g. power on demand)
Level 4: • Information available across enterprise • Asset models reality based (real data) • Automated response to pricing signals • Portfolio optimization modeling
• Optimization across fleet of assets • Common customer experience expanded for new resources and real
Optimizing – through end-to-end observability
time markets.
• Automated decision making within • CBM and predictive management on key integrated across all channels
Enterprise Wide protection schemes (leveraging components • Recent customer usage data (e.g. daily) • Ability to communicate with HAN (Home
increased analytics capabilities and • Efficient inventory management utilizing • Behavior modeling augments customer Area Network), incl. visibility and control
context) real asset status and modeling segmentation of customer large demand appliances

• Sharing data across functions/systems • Component performance and trend • High degree customer segmentation • Integrated resource plan includes new
• Implementing control analytics to support analysis • Two-way meter, remote disconnect & targeted resources and technologies (e.g.
decisions & system calculations • Developing CBM (Condition Based Mgmt.) connect, and remote load control DR, DG, volt/VAR)
Level 3: • Move from estimation to fact-based on key components • Outage detection at substation • Enabling market and consumption
Integrating – planning • Integrating RAM to asset mgmt, mobile • Common customer experience information for use by customer energy
• The customer meter becomes an essential work force and work order creation mgmt systems
Cross Functional grid management “sensor” • Tracking inventory, source to utilization
• Customer participation in DR enabled
• New resources available as substitute for
• New interactive products/services
• New process being defined due to • Modeling asset investments for key market products to meet reliability
• Predictive customer experience objectives
increased automation and observability components based on SG data

• Initial distribution to sub-station • Developing mobile workforce strategy • Piloting AMI/AMR • Introducing support for home energy
automation projects • Approach for tracking, inventory and • Modeling of reliability issues to drive management systems
• Implementing advanced outage event history of assets under investments for improvements • Redefine value chain to include entire
Level 2: restoration schemes development • Piloted remote disconnect/connect eco-system (RTOs, customers,
suppliers)
Functional • Piloting remote monitoring on key assets • Developing an integrated view of GIS • More frequent customer usage data
(RAM) for manual decision making and RAM with location, status and nodal • Assessing impact of new services and • Pilot investments to support utilization of
Investing • Expanding and investing in extended interconnectivity delivery processes (e.g. HAN) a diverse resource portfolio
communications networks • Programs to promote customer DG

• Exploring new sensors, switches, • Conducting value analysis for new • Research on how to reshape the • Identified assets and programs within
comms. devices and technologies systems customer experience through SG value chain to facilitate load
• Proof of concepts / component testing • Exploring RAM (Remote Asset • Broad customer segmentation (e.g. management programs
Level 1: • Exploring outage & distribution mgmt. Monitoring), beyond SCADA geography, income) • Identified distributed generation sources
and existing capabilities to support
Exploring and linked to sub-station automation • Exploring proactive/predictive asset • Load management in place for C&I
• Building business case at functional level maintenance • Reactive customer experience • Develop strategy for diverse resource
Initiating • Safety & physical security • Exploring using spatial view of assets portfolio

Phase II – Highlights, People and Technology Domains (v3.1) Black text = Requirements for this level Blue text = Descriptive characteristics or desired traits

9
Why Participate Now? By participating today rather than the integration skills, leading-edge
With the Smart Grid Maturity Model, down the road, utilities can become technology, partner ecosystem, and
best practice organizations stand a leader in a movement to advance business and regulatory expertise
out, as leaders and innovators among the energy industry forward. At the required to support every level of
peers and customers alike. In the same time, participating utilities Smart Grid Maturity Model activities.
transition to a smart grid, participants will demonstrate efforts to improve We provide planning and business
who use the Maturity Model can customer service and the case development from pilot programs
benefit greatly from the sharing of environment in association with to full-scale execution.
best practices — including shared other industry leaders.
research, benchmarking data and Our extensive experience can deliver

custom reports. Why IBM a comprehensive Intelligent Utility

Along with leading the global support Network solution that is manageable
These utilities can use it to collaborate for the Smart Grid Maturity Model, and scalable in a secure environment.
with regulators, vendors and other IBM has proven successful around We can become smarter about energy
utilities, network with peers, and the world in delivering smart grid by applying technology and accessing
share their experiences — all of which solutions that provide improved information to transform the way power
contribute to an evolving industry view reliability and end-to-end network data is sourced, distributed and consumed.
of smart grid value. in near real-time. We bring to the table IBM scientists and industry experts

“The Smart Grid Maturity Model has been a key tool in

Country Energy progressing along the path to our Intelligent
Network. Through mapping and benchmarking, our current
operations against the model has allowed us to identify the
areas in which to focus our efforts to make the greatest gains
and form our overall Intelligent Network strategy.”
— Col Ussher, Executive General Manager, Country Energy

10
are working with clients to build smart Proven, tested and validated In addition, our global Centers of
energy solutions around the world. solutions and methodologies. IBM’s Excellence and solutions labs ensure
We are working with utility companies successful Energy & Utilities Solutions proven solutions even before they
globally to accelerate the adoption of Framework has been validated with are implemented—minimizing risk in
smart grids to help make them more top energy and utilities companies, scheduling, cost and performance.
reliable and give customers better and is focused on transformative
usage information. solutions found in the Maturity Model.

IBM’s Intelligent Utility Network addresses the challenges of

rising energy costs, aging infrastructure and increased demand
for reliability by leveraging all of the benefits of automation
and digitization.

11
 © Copyright IBM Corporation 2009

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