Traditional utility pilots have delivered mixed results. They can be slow to get off the ground and take years to complete. But as utility leaders know, today’s most pressing energy challenges—meeting decarbonization goals, ensuring grid resilience, and delivering solutions that satisfy evolving customer needs—demand a faster and more effective way to test new ideas.
Innovation is essential, but it's also important to avoid “death by a thousand pilots.” How can you move beyond ad hoc piloting and learn to innovate quickly?
Tune into our inaugural episode of “Energy in 30” to hear from Kevin Duffy, an ICF energy innovations guru who leads boundary-pushing pilot programs that pave the way for the utilities of the future. The conversation covers topics such as:
- How embracing an Agile approach to pilots allows you to shorten timeframes, accelerate ideas, and capture learnings to let data drive decisions
- An overview of ICF’s Innovation Incubator, a data-driven utility pilot accelerator that contains 360 ideas and 40 in-flight projects
- Creative ways to navigate funding challenges and identify small-scale, inexpensive tests to learn from and pursue
- Examples of emerging technologies that utilities are using to innovate programs and advance their goals
Full transcript below:
Joan: Welcome to episode one of “Energy in 30.” We'll use the next 30 minutes to explore how utilities and the industry are reacting to forces that are shaping new offerings for customers in order to meet decarbonization goals.
David: If you're a utility manager, consultant, technology provider, or just curious about energy, we hope to push your thinking about the changes that are happening in the energy industry with me, David Meisegeier.
Joan: And me, Joan Collins.
David: So Joan, why are we doing this podcast?
Joan: Well, David, because I think the trends or forces are more dramatic now and the timelines are getting shorter to act. It's something that's really on my mind more than it ever has been in my career. And I think it's just really important to create platforms like this where we can bring like-minded innovators together, virtually, and deconstruct some of the issues around this and maybe activate how we're going to move the needle quickly. But what do you think, David?
David: Well, I feel that too often we get stuck with our heads down delivering programs. But there are big things happening and we wanted to use this opportunity to bring in others from the industry to discuss some of the big trends. And in doing so, help us lift our heads up above the day to day. And Joan, why do you think anybody would want to listen to us?
Joan: I know you don't think anyone wants to listen to us, David.
David: I'm questioning it.
Joan: We will be having some compelling guests on, so that'll help. But in all seriousness, the two of us have a lot to share. We've been in the industry a really long time. And I think we have an incredible network of thought leaders that we can pull in for these kinds of discussions that we're going to have today. I mean, David, haven't you been in the industry for like 30 years?
David: I have. In fact, my first project out of college was doing energy modeling that led to the creation of the Green Buildings Program. And that turned into Energy Star. I also helped develop and implement the Energy Star New Homes Program, which now has over 2.3 million certified homes. So really tremendous success. And it's been great to be part of that history and to have worked with utilities on innovating new solutions and offerings.
And Joan, you've got a diverse background beyond energy too, right?
Joan: I do. I mean, I have a solid 20 in energy, so a little less than you. And by the way, your background is incredible. But before I worked in energy, I was in manufacturing and telecom. And I've seen a lot. I've seen a lot of successes and I've seen a lot of failure.
And in manufacturing, I saw a transformation from data, going from the plant floor up into the ER systems, or ERP systems. And this really transformed the industry, being able to customize products and move them to market faster. And in telecom, I watched the wires and satellites create basically a customer craze through communications. And then the telecom community decided to get into households and build meters. And that was my bridge over into energy. So —
David: That's awesome.
Joan: I know. And they moved so quickly. In my opinion, it felt like there was true transformation in both of those stints, which weren't very long. Of course, there's probably a lot of history behind those, but here we are. It's like 20 years later, 30 for you, and I feel like we maybe share the same level of frustration like, this has to happen now. We have got to get customers to adopt some of these initiatives to get to some of these goals that we're trying to reach. And —
David: That's true. Very true.
Joan: Yeah. Yeah.
So today's episode is focused on innovation, which I know is something that you and I really love to talk about. And to do that, what better way to ask the why do we need to innervate, the how, and what new things are coming down the pike, than our very own Kevin Duffy who's today's guest.
Joan: Kevin is an urban planner by trade, energy innovations guru by choice. And he's been working with utility clients throughout North America on finding customer solutions, especially as the industry faces unprecedented challenges. Kevin's the ICF lead on our innovation incubator. He's going to talk more about that today.
And Kevin, we really thank you for joining us. Welcome.
The challenges utilities face
Kevin: Joan and David, thanks for having me. I have to say, I am honored to be your very first guest. And I also want to say that this is really critical that we have these discussions. I'll echo what you were saying earlier because I think the cards are stacked against utilities right now.
David: What do you mean? What do you mean the cards are stacked against the utilities?
Kevin: Oh, let me count the ways. We have increasing goals for energy efficiency and DR and we have goals for decarbonization. We need to provide a reliable grid. We need to focus on resilience moving forward. We also have digitally-savvy customers that are becoming even more savvy with each and every new device that comes out onto the market. And they're expecting to have more power over the way they use energy and where their energy comes from.
With the increasing penetration of solar, the declines in battery costs, it's critical that utilities start thinking about ways to partner with their customers. And then on the other side of the equation, you have regulators and interveners. And those directives have not slowed one bit. So we're really in the utility space in between a rock and a hard place.
Joan: So Kevin, I think it's interesting to hear your take on why you think the cards are stacked against [utilities] and really the need to innovate, but what are some of the methods around the hows of how to innovate? Because it seems to me like there's...sometimes we get tripped up around things like piloting and initiatives like that.
Fail fast, succeed faster: The Innovation Incubator
Kevin: I agree, Joan. We have to be innovating more quickly because right now time is of the essence. You mentioned it earlier. Gone are the days of ad hoc piloting. No more three, four-year pilots spending an exorbitant amount of resources with little to show for it at the end, right?
David: I have heard people say death by 1,000 pilots before.
Kevin: I know. It's so true. It's so true. And you asked about how we're supposed to do that. Well, at ICF we have a philosophy. Fail fast, succeed faster. And I'm sure a lot of folks have heard the phrase, fail fast. And the way that we do that is the Innovation Incubator. We currently have over 360 ideas in the Incubator. And right now, we have over 40 projects in flight.
And what the Innovation Incubator is, is it's a nine-step process where you can terminate, you can accelerate ideas. And this is all based on metrics and reporting mechanisms that reflect our utility clients’ specific priorities. We take every step to identify and validate whether an idea can offer new information.
And then we also want to make sure that we can quickly pivot, whether it's a worthy idea or not, and reduce risks in the process. But at the same time, we want to make sure that whether we're failing fast or succeeding even faster, we're capturing all those learnings so we can let data drive the decisions that we make on future projects.
David: So Kevin, I hear what you're saying and I'm trying to reconcile that with death by 1,000 pilots. So how is what you're talking about different than the traditional way that utilities might have conducted pilots in the past?
Kevin: It's a great question. So typically in the past, a utility will have filed with their respective public service commission and then waited until the next fiscal year comes around or the next cycle comes around. And then they start a pilot that's been very well scoped out and month by month, maybe even week by week. And they spend the next several months, a few years measuring and validating and measuring and validating.
And then at the end, sometimes the results either don't prove out or nobody knows who owns the results or whoever was leading the pilot may have moved on. And so what we've done is we've really tried to squeeze that into just a more agile project management structure.
An Agile approach to utility pilot programs
David: Can you explain what that means? I've heard the term more with regards to IT projects, but what does that mean to you with regards to pilots?
Joan: Oh, yeah. I mean, I feel like we hear agile all the time.
Kevin: I know. I know I hear it all the time too. It seems like everyone I talk to throws the word agile around. And I think a lot of times it is just jargon. But I think it's important to recognize that a lot of organizations have really good intentions when they set out to do innovative things. The problem is, is when you have one innovation group within a very large organization with many business practices and many different...just a lot of bureaucracy, you get lost in the shuffle.
And so a lot of times innovation in large organizations becomes innovation theater. And what I mean by that is that every now and then a group of folks will organize a design sprint or some type of design thinking exercise, but then real work doesn't get done. So it's really just the theater of agile.
What I mean by Agile methodologies and Agile mindset is using actual project management that...well, let me take a step back. I mean, really this started with software developers. And we've had to—obviously, we're not software developers by any means. But we do have to be innovative. And that's one way that startups and software developers manage their products from the beginning.
And so what we've done is we've customized Agile methodologies to meet our needs for the industry. So we've combined Scrum and some other methodologies. And it takes out a really well-defined overarching vision and basically just breaks it down into really, I guess, palatable chunks.
So it empowers all the members of the team to take a ball and run with it. So we do these sprints that are part of a story and perhaps even part of an epic, what we call it. And so it breaks it down to chunks. And then all the members of the group are capable of running with the ball.
And I guess I should stop there and thank my team because I do have a rock solid team of project leads. We can call on our data scientists that we have on the analytics team at ICF. We've got marketing and IT professionals across the board. We can call on our call center when needed. So really any wraparound service to deliver projects. So that way, our tech vendors and our subcontractors can just focus on their core competencies.
And it's my humble brag, but I really...I just think that remaining agnostic to tech and vendors has just been a strength of ours. And then that way, we can provide the turnkey solution to make these Agile methodologies and program management effective.
So just to separate the way things have been done in the past to the way that we want to do them now, is in the past, we used Waterfall methodologies. And these project management methodologies were developed by engineers and were very effective back in the '60s and '70s, but we need to move much more quickly nowadays, particularly because of all the market disruptors. And Agile allows us to do it.
David: So is it like moving more in parallel, having lots of things happening in parallel than in series?
Kevin: Yes, exactly. You hit the nail on the head. In Waterfall typically, one thing has to happen before another thing can begin. And in Agile, you can be working on multiple things at once, not having to wait for somebody to approve something and basically always, always moving along.
Solving the funding conundrum
David: So it's really interesting. So you can try and shorten time frames, try and do more things in parallel. That seems like a great strategy. What happens, though, if utilities don't have funding for pilots? Because I know some do, but many don't. So what can those utilities do?
Kevin: Great point. Yeah, we run into this a lot. We are very lucky and fortunate in some situations where utilities do have mechanisms for funding pilots and projects like this. And in others, we're not. And it really comes down to creativity.
The first thing I would say is go to your regulator. Let's start lobbying for the ability to test technologies more rapidly without being penalized. I think that's more of a long game, but it's imperative that regulators get on board with the need to move more quickly.
And then, I think the more aggressive short-term options would really be one of two things. One, either we can conduct really rapid viability assessments that don't cost a lot of money. Find that minimum viable product to test it and just get enough information out of the small scale tests without spending a lot of money to determine whether it should be scaled out. And sometimes this can work, sometimes it doesn't.
Another way to do it, it would be to share. I guess you could call it like an ecosystem investment. This is a really creative way to fund these kinds of projects. You could do it with other utilities that want to learn the same lessons. You can do it with vendors. I've heard of...we work with utilities by using an innovation fund or we share resources across the board, which has been really effective.
Joan: I really like that. What did you call it? The minimal viable solution or product.
Kevin: Yeah, minimum viable product.
Joan: Yeah. I really like that and I'm looking at your statistics and I'm thinking 360 ideas, 40 projects. Is that how you got there?
Kevin: Yeah. Well, it's a good question. Well, I mean, for 40 projects, I should say among several utility clients. And yeah, it really is. I think that if we were doing 40 projects the way that pilots were being done back in the day, it would be nearly impossible and we would need an army's worth of staff to pull it off. But yeah, by determining a minimum viable product, it makes it much more viable.
Promising technologies to propel pilots
David: So what are you seeing as promising technology on the near term radar?
Joan: Yeah, what gets you excited?
Kevin: Well, a lot. There's so much out there. And I think a lot of it really...I hate to even start talking about specific technologies without acknowledging the fact that it really depends on the utility. No utility is the same. And that's why we look at each idea through the lens of our utility clients.
And one project that we're working on right now, actually it's with a couple of different utility clients, is super-efficient all-electric homes. And I bring this one up because, one, the market is driving the demand, which was a surprise to us. When we started working with builders, we realized that there is a market there.
And two, I think that when we start thinking about the way it looks, not just in terms of traditional programs, but the future of partnering with customers and the future of partnering with municipalities, we can start to look at it at a development level or even a community-based level, where suddenly we can introduce components like flexible load management and a number of other community-driven ways to decarbonize and save folks on energy and giving customers the opportunity to play a role in that.
It's going to be really important moving forward for the industry. There's a whole lot more tech too. I can go on and on, and I'd be happy to if you'd like.
David: I do. I'd love to hear some specific examples of some things that you're seeing. Yeah.
Kevin: Well, there are a couple that I'm really excited about. But I would like to plug...I mentioned earlier that it really depends on the utility and what makes sense for them in order to test or whether to make a measure or whatnot. I usually recommend conducting an emerging tech assessment where we take a laundry list of technologies. I think it's like 150 emerging technologies and measure them up against criteria that we establish specifically for a utility client.
And then we scan the market. And based on different readiness levels, we create a ranking just to build a pipeline for any given utility. And some of the technologies that have come out of that has been something as simple as smart plugs. But then there's also like liquid submersion at data centers for servers, which is a really cool one.
Kevin: Yeah. Yeah. It's a really cool one. I mean, I think it's no surprise that it costs a lot of money and uses a lot of energy in order to cool data centers. And one new technology that is getting to the point where it's reaching commercialization across the board is liquid submersion. So they're literally sinking the servers into a liquid. It's not water or anything like that. I don't know exactly the...you have to talk to my chemistry teacher to find out what it actually is. But they submerge the—
Joan: David, did you know about that?
David: I did not. No.
Kevin: It's very, very cool and saves a lot of energy.
There's also...smart homes have been getting me really excited too. And I always preface smart homes by saying, I'm not talking about connected homes. I think a lot of folks have their Alexa or Google Home and they might have a doorbell or they might have a camera or something like that. I'm talking about smart homes are intelligent homes where we're empowering customers through AI to control their energy costs and allow the utility to manage the load through those means as well.
David: That's true. So you're actually able to develop a solution that meets both customer and utility needs at the same time.
Kevin: Yeah. And I think that's the end goal. I mean, the more work we do, it's like we want to be solving for customer problems, but at the same time, it has to be mutually beneficial. And that's one way to do it.
David: What about on the gas side? Any gas technologies that you're tracking?
Kevin: Yeah, I'm glad you brought that up because I would kick myself if I didn't bring up a gas solution. And I think right now, it's a good opportunity to actually talk about readiness, tech readiness. And natural gas heat pumps or absorption heat pumps right now are getting really close to residential commercialization. They've been in the C&I space for some time.
The AFUE ratings have been testing at 120% and more, up to 140%, which is huge savings over traditional natural gas-fired furnaces. So there's a couple of different manufacturers that have been in the C&I space that are now starting to venture into residential space. This is going to be something to look out for. There's more and more interest on behalf of utilities to start looking at this, despite the fact that it's not commercially ready yet. It will be soon.
Joan: So fun. I love talking about all these innovations. I think the three of us have that in common. We're going to switch tracks just a little bit, though. So here you go. This is a big one. Are you ready? Big question.
Shaping the future of the industry
Joan: OK. If you could do just one thing to change the industry, no limits, what would you do?
Kevin: Oh man, I knew this was coming. This is like the—this is like the magic wand question, right? I hope I don't get in trouble for something I say here. Well, I guess...just one?
Joan: Just one.
Kevin: I'll tell you what, I'm going to do two because they go hand in hand. So first off, let's let the regulators deal with the overarching policies with consistency. Like no matter what political party is in office, let's let them work on the big problems we face as a people, like climate change, rather than what fuel a customer is using. And then on the flip side, let's let utilities figure out how best to alter their business model.
And I think that really comes down to the culture changing and then just meeting the needs of their customers. And we're seeing this firsthand solving for customer problems across the board. Let the utilities provide the cleanest, most cost-effective solutions, whether they're supplying the fuel or not, and also while addressing their grid needs. And I think we touched on this a little bit before.
But in terms of this large scale change, it might involve changing the revenue model. And I guess that's a discussion for a different day and definitely above my pay grade. But that would be what I'd really just love to change, just to open up the market on innovation.
David: And there's a lot of cool stuff that New York has been exploring on changing utility revenue models as well, and other states too. So there's definitely some stuff there for sure.
Really, really interesting answers and insights there, Kevin, and great examples of solutions that can address customer and grid needs as well as the needs of our planet's.
And I’ve got to say, Joan, when we started out, I was really questioning what we were doing with this podcast, but now I think I get it. It's cool to talk with people like Kevin and just like we're sitting around the water cooler and back in the office or back at the conference scene and chit-chatting. So this is a really cool format.
Joan: David, I'm so glad to hear you say that. I guess that means you're going to be my co-host going forward. And Kevin, thank you so much, again, for joining us today and sharing your expertise on innovation. It was a fascinating and insightful discussion. We really appreciate having you on.
Kevin: It was so much fun. Thanks for having me.
David: Thank you, Kevin.
Joan: And for the rest of you, if you've enjoyed listening to “Energy in 30,” please subscribe, share, rate, and review our podcast. And you can look to March for our next episode with guest Paul De Martini. Paul's the executive director of the Pacific Energy Institute, PEI, and he has two very new and compelling white papers out with PEI called Customer Resource Management Evolution and Revolution and A Gambit for Grids 1235.
David: We promise to continue to tackle how utilities and the industry are reacting to forces that are shaping new offerings, requiring a continual evolution in customer engagement, including themes like equitable engagement, flexible load management, decarbonization, and electrification.
Joan: OK. Well, David, that's all for now. We look forward to having all of our listeners join us for our next “Energy in 30.”