An Interview with SGIP’s Sharon Allan: Connectivity is key to U.S. energy transition

It’s the first day of DistribuTECH 2017 in San Diego, and SGIP President and CEO Sharon Allan has been running 20 minutes behind schedule practically since 7:30 this morning. It was closer to 7:50 when she arrived at the breakfast where she and Julia Hamm, President and CEO of the Smart Electric Power Alliance (SEPA) announced the two organizations’ intent to merge under the SEPA brand.

It’s not that Allan is deliberately late. Rather she seems to know everyone at this major energy industry conference and can barely walk a dozen steps without hearing her name called out by a friend or colleague eager for a handshake, hug or a quick catch-up.

What’s even more impressive is that by the time we meet at the SEPA booth for our late afternoon interview, she has just as much energy and is just as intensely focused as she was in the morning. She seems to think at double-time as well, and the depth and scope of her industry knowledge and experience are immediately apparent.

In the more than 30 years she has worked in the information technology and energy industries, Allan has gone from rolling out connectivity solutions for IBM to running an automated metering information company for Elster to leading smart grid services for the consulting firm Accenture.

Working with her in the newly merged SEPA organization, where she will have the title of Chief Innovation Officer, is — I suspect — going to be exhilarating

In a brief, but insightful interview, we talked about how her background in high tech led her to the energy industry and, eventually, SGIP; how she sees the industry evolving, and the role her organization and SEPA will play going forward.

Mike Kruger: Looking at your resume, you have a strong background in information technology, or IT, including time at IBM. Can you tell us a little more about yourself, and how you got from IT to smart grid?

Sharon Allan: I came into the energy industry in the 1990s; I was recruited out of IBM to join ABB. It was about the same time that Enron was the darling of Wall Street, and the industry thought that North America would completely deregulate. My focus at ABB was to develop software that could connect devices and systems to price electricity based on market values and signals throughout the day. Our whole focus was on the notion of interconnectivity, of connecting devices and having technology that would be software-enabled.

We developed the first meter data management, or MDM, systems for the market — although back then we didn’t use the term MDM — and we began embedding communications into field devices. I guess the part that I didn’t know then was that it was going to take nearly 30 years to actually see that vision of interconnectivity come to pass. But I came into the industry really based upon the concept of connectivity and how we could drive change with connectedness. Today the industry calls that IoT, or Internet of Things.

MK: When you were at either IBM or ABB, was there an “aha” moment when you said, “This is it. This is the future”? Do you remember that, or any other experience when the bigger picture came into focus and just made sense to you?

When I first came into the energy industry, I had been at IBM, which was the king of everything. But there was a no-name company that was very small and not known in the industry — Cisco Systems — and Cisco invented something called a router, the basic device for connecting networks. At the time IBM systems were in every bank, and we had a proprietary protocol that was called SNA. All of a sudden, Cisco introduced this thing called TCP/IP, and I lived through the transformation as this little company, Cisco, ended up eating the lunch of IBM — to the point that the IBM division I was part of eventually was sold to Cisco.

So, when I came into the energy industry, I looked around and saw a lot of things not connected. There were no standards, and I thought, “Wow! I’ve lived this before in another industry, and you cannot stop the movement of automation and standards connectivity. This will happen.”

So my “aha” moment coming in was that things were going to get more connected, which at the time was not the general belief. In those early days, it was me talking about connectedness of meters and AMI (advanced metering infrastructure). At ABB, we were one of the early companies to actually produce meter data management systems and AMI systems.  It was very much the pioneer days; nobody understood what the benefits would be or why we were talking about this change since AMR (automated meter reading) was predominant.

Sometimes when you’re trying to change, you have to pioneer. You have to take a lot of heat and believe in where you’re going. You can say we were lucky that we got it right; that the industry did evolve in that direction that we had envisioned.

MK: So fast forward 10-15 years, and the SGIP opportunity comes around. What appealed to you about taking the reins at the organization at the time when it was kind of a nascent thing rolling out of initiatives at the National Institute for Standards and Technology (NIST) and getting on its feet as a nonprofit?

SA: I had been in the energy industry for a long time, and I wanted to give back to the industry. Right now, these are my giving-back years to the industry. The birth of SGIP grew out of the time when ARRA (American Recovery and Reinvestment Act) funds were flowing.  The National Institute of Standards and Technology initiated the Smart Grid Interoperability Panel (SGIP) to support the institute in fulfilling its responsibility, under the Energy Independence and Security Act of 2007, to coordinate standards development for the smart grid. In April 2013, the SGIP fully transitioned to a nonprofit, private-public partnership organization, SGIP 2.0, Inc., supported by funding from industry stakeholders and a cooperative agreement with NIST. By November 2014, when SGIP asked me to come in, the dynamics of the market had changed. The organization needed a new leader and a new vision for taking it to the next level.

So I knew the organization needed a new strategy and vision and path. I understood the energy industry; I knew a lot of people in the industry, and it was a new challenge. My first question was — have we arrived? Has the industry truly transformed?  Is there work still to be done? And I concluded, yes, there was still work to be done. So that’s what attracted me. I was going to come in and chart a new course for an organization that was initially birthed with one purpose but needed to change.

MK: Looking at SGIP’s website, you can see the group’s evolution in your new initiatives — the Energy Internet of Things (IoT), Open FMB (Field Message Bus), and Orange Button. Can you talk a little bit about these projects in general and where this work is headed? What are the points of connection with the integration of distributed energy resources (DERs) and other issues that SEPA has been working on?

SA: As I mentioned, back in the ‘90s we had a lot of things that were not connected. Now we have more connectivity at the substation level, and we’ve had the rollout of AMI systems, which were initially designed for billing. But when you start to look at where we’re going as an industry — the changing expectations of customers and the integration of DERs — connectedness becomes very important. If we’re going to stimulate innovation, we have to be able embrace a common language and a common way of exchanging data. The Internet of Things becomes that underlying means that is not just an energy industry-only approach. It’s a cross-industry approach, rather than the utility-specific perspectives we are familiar with in the industry.

What better way to chart the future than building it upon a platform and a movement that is getting adopted across the industry? So that is why we initially embraced IoT, and that gave us legs for our program called OpenFMB, which is changing the way that devices in the field communicate. Many of our energy systems have a meter that connects to an AMI system, or you have supervisory control and data acquisition (SCADA) devices going up to SCADA systems. What that means is that there’s a lot of information that flows all the way up to a central enterprise system and then back out to the field. When you start rethinking how to better manage things, it brings you to the conclusion that things need to move closer to the edge, where activity is happening.  By embracing a new way of doing things, OpenFMB allows devices to talk to each other, and to publish and subscribe to information.

Much of our industry has been very client-server oriented – with hierarchical flows of information. Now we’re really moving to a new paradigm where things can interact and exchange information in a publish-and-subscribe manner, as opposed to a master-slave or client-server manner. That’s part of our IoT platform, and a lot of it is driven by the penetration of DERs and two-way power flows. The questions now are — how do you manage it, and how do you engage with the edges of the grid?  Distribution is probably where we will see increased capital spending in the future.

MK: So if I’m a SEPA member — a utility — and I’m interested in these issues, what’s the best way to tap into SGIP’s resources?  Is it through your website, or are there other ways for folks to get connected as we merge the two groups?

SA: First, we’ll be looking to integrate many of our technical white papers into the SEPA repository, so they will become available. A lot of our papers are written by our members, and they’re often very technical, although we do have some business-related papers aimed at regulators who are starting to think about DERs.  What are the questions they need to be asking?  What needs to happen around pricing signals?  Most of our information is publically available to the industry.

Second, SGIP has a number of technical working groups, such as our Grid Architecture Group, our OpenFMB Group, our Cybersecurity Group and our five Orange Button groups. Upon merger, SEPA members are welcome to join any of these working groups.

In terms of the companies that are members of both organizations, SGIP is already actively engaged with many of the utilities. I personally have been involved for several months now, running a DER group that only has utility members, and those conversations bridge multiple functional areas within the utility.

This merger now enables us to be that common bridge. We know that storage and solar don’t exist in isolation. They’re connected to the grid; so we have to have conversations that connect all these things together. That’s the value of bringing SEPA and SGIP together.

MK: Your new role at SEPA will be focused on innovation. How can we foster energy innovation on customer-grid solutions that will deliver benefits for the widest range of industry stakeholders? How do we balance the speed of technological innovation with the more deliberate pace of standards development, and business and regulatory decision making?

SA: Innovation involves turning an idea into a solution that adds value from a customer perspective.  To do this, we must engage in dialogues about questions that seek to understand, as opposed to discussions lacking focus and surrounded by the noise in the industry.  We must be willing to not accept the status quo.

Customers don’t just want electricity; they want affordable, safe and reliable energy wherever and whenever they want to use it. As more users also become providers of energy, there is a need to better manage, coordinate, monitor and understand the market signals that are closer to each of these customers. Technology, policy and standards rarely ever move forward simultaneously in an innovation cycle.  Our goal is to reduce the friction as much as possible so innovation can advance while the three components mature.