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A Technical History of the SEI

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The Smart Grid<br />

The Challenge: The Need for New Approaches for Utilities<br />

Demand for electricity worldwide is projected to nearly double from 17,200 terawatt hours<br />

(TWh) 19 in 2009 to over 31,700 TWh in 2035 [PwC 2012]. Prices for electricity in Western countries<br />

are predicted to increase by 400 percent in 30 years [NRG 2012]. Increased demand could<br />

also lead to more blackouts. A PricewaterhouseCoopers study projects that blackouts in North<br />

America and Europe are two to three times more likely to occur by 2030 [PwC 2012]. Sustainable<br />

sources would reduce carbon emissions from electricity generation, yet non-fossil fuels provide<br />

<strong>the</strong> source for only 34 percent <strong>of</strong> electricity generation today.<br />

A smart grid helps to address some <strong>of</strong> <strong>the</strong>se issues, and transformation to smart grid is a major undertaking.<br />

Thus, electric utilities must carefully consider <strong>the</strong> reasons to invest in it. Some utilities<br />

might be driven to a smart grid transformation to protect against a steep rise in electricity generation<br />

and delivery costs as energy consumption explodes in <strong>the</strong> coming decades. O<strong>the</strong>r utilities<br />

might want to push forward with sustainable sources to reduce carbon emissions from electricity<br />

generation [NRG 2012]. Still o<strong>the</strong>r utilities might desire to build empowered and involved workforces,<br />

improve business performance, create greater customer satisfaction, extend asset life, or<br />

comply with regulations [SGMM Team 2010a]. Whatever <strong>the</strong> motivation, industry consultants advise<br />

utilities to recognize <strong>the</strong> need to “define a smart grid vision and develop a road map to get<br />

<strong>the</strong>re” [Asthana 2010]. As Steve Rupp <strong>of</strong> SAIC Energy, Environment and Infrastructure says,<br />

“The key to success in any grid transformation is to have a good plan and to work that plan”<br />

[Rupp 2012].<br />

A Solution: Smart Grid Model and Transformation Process<br />

Smart Grid Maturity Model (SGMM) development began in 2007, when IBM formed a coalition<br />

<strong>of</strong> major utility companies, <strong>the</strong> Global Intelligent Utility Network Coalition (GIUNC). 20 IBM,<br />

GIUNC, and American Productivity and Quality Center (APQC) created <strong>the</strong> model to change <strong>the</strong><br />

way power is generated, distributed, and used by adding digital intelligence to <strong>the</strong> current systems.<br />

The SGMM supports <strong>the</strong> transformation process and helps utilities with planning. In 2009,<br />

IBM handed <strong>of</strong>f SGMM stewardship to <strong>the</strong> <strong>SEI</strong> because it believed that a neutral third party<br />

would be more effective in encouraging industry adoption <strong>of</strong> <strong>the</strong> model [Jones 2009]. With input<br />

from industry stakeholders and <strong>the</strong> Department <strong>of</strong> Energy (DOE)—<strong>the</strong> stewardship sponsor—<strong>the</strong><br />

<strong>SEI</strong> released Version 1.1 <strong>of</strong> <strong>the</strong> SGMM in 2010 [SGMM Team 2010b] and Version 1.2 in 2011<br />

[SGMM Team 2011].<br />

The SGMM product suite consists <strong>of</strong> <strong>the</strong> model itself, <strong>the</strong> Navigation Process <strong>of</strong> expert-led workshops<br />

and analysis, <strong>the</strong> Compass questionnaire-based assessment for determining maturity ratings<br />

19 Wh = terawatt hours<br />

20 The GUINC website is https://www-304.ibm.com/communities/service/html/communityview?communityUuid=1a988236-4f84-4a80-8d8b-b5a288d1566a.<br />

A 2009 press release can be seen at<br />

www-03.ibm.com/press/us/en/pressrelease/28838.wss.<br />

CMU/<strong>SEI</strong>-2016-SR-027 | SOFTWARE ENGINEERING INSTITUTE | CARNEGIE MELLON UNIVERSITY 137<br />

Distribution Statement A: Approved for Public Release; Distribution is Unlimited.

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