Power grid: digital nirvana

eo reporter Zhou Huizhi

In 2019, which is about to pass, power grid companies have experienced many highlights in a series of transformation actions. The main theme is the "Internetization" of power grids in multiple dimensions such as technical tools and business models.

This was an exploration "without previous experience to follow". Within a year, the power grid went through a process from the initial stage of communicating ideas and clarifying concepts, to full promotion "from top to bottom", and periodic summary and discovery of problems.

Although the middle-level managers of power grids have a deeper understanding of the Internet model, and platformization and ecosystem are the high-frequency words they often talk about, they are still accompanied by the switching of new and old thinking and the collision and struggle of cross-departmental inertial methods. Of course, there are also confusions and doubts from the outside world and the grassroots.

It seems that there are many difficulties and problems, and perhaps the outside world needs more patience. More importantly, the power grid may need to realize that in the face of this ongoing technological revolution, whether it is the exploration of business models, the replacement of technical tools, or even the gradual filling of policy gaps, the return on investment may be full of uncertainty.

In addition to cultivating Internet thinking in business and "Internet-based" technical architecture to avoid missing out on new tracks, can the power grid, like the leading Internet companies, adhere to long-termism and establish appropriate fault-tolerant mechanisms? This may be a question that needs to be answered urgently in the coming year.

The first year: setting the tone of strategy and clarifying the concept

The national "Internet +" strategy was proposed in 2015. Driven by the macro strategy, the information and communication departments of power grid companies have formulated relevant plans in the past few years and laid the foundation for data governance. However, from the lead of a single information department to the overall business strategy of the company, the starting point for power grid companies to truly fully exert their efforts in "Internetization" was in 2019.

On January 13, the State Grid Corporation of China issued Document No. 1 of 2019 (hereinafter referred to as "Document No. 1"). This document, defined as "reform and restart", sent a clear signal of strategic transformation of the power grid to the outside world, and one of the key words was "Internet".

"Adhere to Internet thinking" is not only included in the four basic principles of "Document No. 1", but the first key task is "to promote the deep integration of power grid and Internet, and focus on building energy Internet." At the same time, "innovating energy Internet business model" and "building an energy Internet ecosystem" are also written into the work priorities, and appear frequently as key ideas in the following year.

Document No. 1 has a preliminary discussion on the "Energy Internet", namely, the "strong smart grid" that carries the power flow and the "ubiquitous power Internet of Things" that carries the data flow, together forming the energy Internet that integrates the energy flow, business flow, and data flow. The concept of the "ubiquitous power Internet of Things" that runs throughout 2019 appeared for the first time in the programmatic documents of power grid companies.

"These three years (2019-2021) may be the most important three years in the history of State Grid, and the three years for the company to achieve its second leap forward." At the State Grid 2019 Annual Work Conference in mid-January, State Grid Chairman and Party Secretary Kou Wei mentioned. And 2019 is the first year of the "three years".

Obviously, top-level design is the most urgent and is also the basis for influencing the subsequent value. On March 7, the State Grid Corporation of China approved the Outline for the Construction of Ubiquitous Power Internet of Things (hereinafter referred to as the Outline).

The Outline analyzes the internal and external environment faced by the power grid, and proposes new construction goals and contents of the State Grid from three aspects: internal business, external business and basic support. There are 57 tasks published in the Outline, 27 of which will be carried out in 2019. In mid-April, a media report showed that 27 provincial branches of the State Grid have formulated plans for the construction of the ubiquitous power Internet of Things.

In the work report of the State Grid Corporation of China at the two sessions of the same period, the "three types and two networks" strategy was officially announced. Among them, the "three types" refers to building the State Grid into a hub-type, platform-type, and sharing-type enterprise. The "two networks" refer to the strong smart grid and the ubiquitous power Internet of Things, which will together form the energy Internet. During the two sessions, the "ubiquitous power Internet of Things" once became a hot topic in the industry.

Also in January, Meng Zhenping, Chairman and Party Secretary of the State Grid Corporation of China, upgraded digital transformation to the company's strategic level for the first time at the State Grid Corporation of China's 2019 Work Conference, and explicitly proposed digitalization as one of the strategic paths to support the State Grid's transformation into "three businesses" - smart grid operators, energy value chain integrators, and energy system service providers.

Four months later, the "Action Plan for the Company's Digital Transformation and Digital Southern Power Grid Construction (2019 Edition)" was released, which is responsible for implementing the digital transformation of the Southern Power Grid (hereinafter referred to as the "Action Plan").

In the first half of the year, State Grid established the State Grid Internet Department and the State Grid Big Data Center to coordinate the top-level planning and data governance and asset management of the ubiquitous power Internet of Things. China Southern Power Grid established the Digitalization Department as the leading department of the digital transformation strategy. Then in July, China Southern Power Grid reorganized and established China Southern Power Grid Digital Power Grid Research Institute Co., Ltd. as its own digital R&D team.

In terms of the new corporate positioning and development strategy, the consensus among power grid companies is to bid farewell to the past economic growth model that relied on heavy assets and high investment, and move towards a more "light-hearted" development model that focuses on the introduction of digital technology and Internet thinking.

Not only the power grid is embracing "Internetization", the signal released by the shift in the power grid ship has also made traditional Internet giants, AI unicorns, and new data service forces try to enter the power grid business in 2019. In the first year of this stage, the outside world fully felt the large number of conferences and forums on related topics. At the same time, the power grid is also constantly sorting out, summarizing and reflecting on the problems that have arisen in order to better promote the process of embracing "Internetization".

Technical architecture VS. organizational structure: Who is 0 and who is 1?

The "Internetization" of technical architecture may be one of the most intuitive impressions that the current round of transformation of the power grid has brought to the outside world.

One of the key tasks of the power grid in this transformation is to form data flows corresponding to energy flows and business flows. The formation of data flows requires processes such as data collection, data transmission, data management, and value creation.

The technical architecture of the ubiquitous power Internet of Things includes four layers: perception layer, network layer, platform layer, and application layer, which correspond to the four steps of data flow from bottom-level collection to value realization. The platform layer specifically includes a full-service data center, an Internet of Things management center, and an integrated "State Grid Cloud" platform. The Southern Power Grid is no exception. In the "4321" project construction released in the "Action Plan", in addition to the four major business application platforms, it also includes the construction of three digital basic platforms: Southern Power Grid Cloud, Digital Grid, and Internet of Things, as well as a unified data center.

This is an architecture that is very similar to a typical industrial Internet platform. Therefore, from a technical perspective, this transformation of the power grid is also seen as a connection with the national industrial Internet strategy.

"The technical architecture of power grid companies we see today is a new type of Internet architecture system," a manager of an Internet company told eo.

Whether it is a digital native enterprise, a government, or a traditional enterprise, they are all using the architectural paradigm of an "Internet" enterprise. Based on the cloud platform, they build AI platforms, big data platforms, and deploy various functional components on the platform, presenting functions and applications in the form of microservices, thereby achieving the effect of IT resource sharing and agile development. This is becoming the standard for many entities to adapt to the development needs of the cloud era.

"Middle platform strategy" is a hot word in 2019 that has swept both the Internet and traditional enterprises seeking digital transformation. When Tencent promoted the "930" organizational structure adjustment in 2018, it introduced the data middle platform. Similarly, power grid companies have included the creation of a data middle platform in their plans. This will help the power grid try to adapt to the rhythm of the Internet and coordinate the needs of traffic entrances on different platforms.