GE’s Minds and Machines event in San Francisco in October was a showcase for the company's latest thinking (yes, its Predix), but also a way to see what some of their customers are having success with. I sat down with some folks from Exelon, the largest utility in the United States, to get an update on how it is using Predix and spurring some interesting innovation.
I’m new to the electric power industry, after spending 20 years in the electronics industry where the word “innovation” has been so overused it’s become meaningless, so it’s fascinating to work in an industry that has not (until now) seen waves of disruptive innovation that take out the weak and the slow. In fact, not much seems to have changed since Edison, Westinghouse and Tesla went at it a century ago. (I'm looking forward to the upcoming movie The Current War with Benedict Cumberbatch as Edison; it’s out for the U.S. Thanksgiving holiday break).
Exelon is a utility holding company based in Chicago; here’s the mandatory box score:
- 10 million electric and gas customers
- 34,000 employees
- 35,500 megawatts of generation
- 11,000 miles of transmission
- $34 billion in revenue
- Well known subsidiaries; Atlantic City Electric, BGE, ComEd, Delmarva Power, PECO and Pepco
Brian Hurst (VP & Chief Analytics Officer) and Ankush Agarwal (Director, Infrastructure Analytics) told me their analytics journey started three years ago with Predix when they scoped out 120 use cases across the Exelon universe of six utilities. Obviously they weren’t going to get much traction by working on all 120, so they chose five high-impact areas where they had good data and could expect a strong ROI. The areas are:
- Network Connectivity (how the grid is built and interacts)
- Storm readiness (how to plan for response)
- Outage prediction
- Historical outage data (to inform #3)
- Asset health (in T&D)
These use cases are built on Predix, and a lot of resources have gone into developing them, so Exelon is working with GE to make these into products that other utilities can license and take advantage of without reinventing the wheel. The Exelon team calls this co-innovation, and it’s an interesting business model for GE and the utility who deliver the best solutions. It’s similar to the wildly successful App Exchange model that has driven growth for Salesforce. It allows genuinely useful applications to be shared across many potential users thus cutting the cost and time to market for utilities that don’t have Exelon’s resources.
Brian Hurst presented use case #2 for storm readiness in the Chicago area at the GE event and in this picture shows a new model for deploying crews based on data not tradition:
As you can see, they predict that they can respond faster by targeting the most vulnerable areas based on the type of storm, vegetation and grid assets in that sector. This is a predictive model so we will follow up with Brian and Ankush after the next storm to report on how well the model worked.
This concept of innovation inside utilities (as opposed to it coming in from the outside) is very timely when there are many industry experts telling us that utilities are facing an existential moment (Amory Lovins for example). Looking back at my electronics experience there are many examples of companies not innovating fast enough and disappearing; Motorola for example. Exelon however is taking innovation seriously and I heard from Brian Hoff their Director of Corporate Innovation who is passionate about nurturing innovation from within. A great example of this is an Exelon internal innovation program which he described like a science fair and this year they generated (no pun intended) 500 ideas from 3,000 staffers which is roughly 10% of their workforce. This points to a tremendous level of employee engagement and Exelon will bring these people together every year in Washington DC (PEPCO area) to share their stories. Another innovation which Brian described addresses head on the dramatic changes that utilities are going to face as we adopt electric vehicles (EV’s). After energy efficiency the biggest impact on the utility business model is going to come from EV’s and the surrounding infrastructure so Exelon decided to help early adopters research and buy EV’s by launching a site called ez-ev.com:
Exelon built EZ-EV so anyone who wants to learn about and buy an EV can use the site so they are embracing the shift to mobility and a new service model.
Brian Hurst and Ankush also shared the Exelon experience with other utilities at Utility Analytics Week in November so we will see how fast the co-innovation model is adopted in 2018. Please feel free to comment below and share your thoughts on utility innovation and analytics.