BALANCING THE TRIPLE BOTTOM LINE: BUILDING A CREDIBLE AND FUNDABLE SMART GRID BUSINESS CASE
Free (open access)
3 - 14
ROBERT J. SARFI, KEN LEE, LEOPOLDO A. GEMOETS
For many electric utilities North America, justifying Smart Grid and combined Smart Grid or Smart City initiatives have become particularly challenging. For the most part, while the benefits of the technologies have been proven, prior generations of technology have already claimed benefit, regulators are weary, and federal subsidies are waning. As a consequence, developing a business case for technology implementation, upgrade, or enhancement presents a veritable challenge. The reality of todays context is that: Technology is expensive; Next to wholesale energy costs, payroll is the second highest cost for a utility; Hard dollar benefits are elusive because most utilities are concerned about impending staff retirements, the acquisition of new talent is challenging and expensive, and they are understaffed in many areas; On-going costs are often underestimated in order to justify projects. Given this context, public power entities and municipal governments struggle to develop a compelling business case to move forward with implementing the fundamental architectural components of a Smart Grid or Smart City. The current model used by utilities to justify large technology investment is dated, and simply no longer relevant. This is the first part of a two-part paper that discusses how utilities can use the concept of the Triple Bottom Line (TBL) to justify investment that is measured in terms of Economic, Societal, and Environmental benefit. While TBL is well understood in many developing nations it is relatively unheard of by North America utilities. This first paper will discuss how to define, quantify, appreciate, and harvest value from technology investment. A subsequent paper will follow the utilities identified in this paper as they measure the TBL benefits of their technology investments.
smart grid, smart city, Triple Bottom Line, TBL