White Paper: Smart Grid & Utility Project Portfolio Management

By Lee Merkhofer, Ph.D., Folio Technologies LLC

Project portfolio management (PPM) is a tool supported process by which organizations select projects and manage project portfolios using techniques similar to those employed by financial managers to optimize investment portfolios. Organizations, including utilities, are adopting PPM mainly because it enables them to make better project choices and, thereby, create more value while reducing risk.

However, PPM offers another advantage that at times can be extremely useful: when appropriately implemented, PPM can intelligently drive transformational change. In other words, if your business is currently at Point A and you wish to get to Point B, PPM can help ensure that you follow a reasoned and effective path to your destination. A timely example is provided by electric utilities that are developing PPM approaches that will help them create the smart grid.

Smart Grid
Smart grid is, of course, the term used to describe the envisioned implementation of an everexpanding set of computing and communication technologies for automating and improving the control of electricity distribution. Many see smart grid as the key to national efforts to improve reliability and efficiency, accommodate renewable energy sources, further energy independence, and reduce greenhouse gases.

Smart grid is an explicit goal of U.S. energy policy. Thirty states have adopted renewable energy standards, which require a predetermined amount of the state's energy mix (up to 20%) to come from renewable sources by as early as 2010. Cap and trade legislation, if passed, will increase the costs of traditional energy. The Department of Energy has announced the availability of $3.9 billion in grants for modernizing the electric grid. Clearly, there is plenty of top-down momentum for smart grid.