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Going all in on digital is not optional, GE executives say

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(Above: Microsoft CEO Satya Nadella, left, and GE CEO John Flannery, right)

Speaking for a company historically known for building engines and power generation tools, GE CEO John Flannery warned the crowd at his company’s Minds+Machines event Wednesday about the irresistible tide of the digital wave. Resist at your own peril.

“The company that just builds things will not survive,” Flannery said in his keynote address before a packed San Francisco crowd at the sixth annual event.

He was speaking to his own historic company’s commitment to change, of course, but the news also translated to utilities and their vendors. Whether its power generation or substations or transmission systems, the world needs the improvements and scale that digital provides, according to Flannery and an array of other speakers during the keynote address at the Moscone West convention Center.

Gil Quiniones, CEO of the New York Power Authority, talked about his company’s stated desire to become the first “all-digital utility in the United States.” The NYPA is made up of numerous New York public utilities which get much of their power from hydro generation running down high-voltage lines.

Going all-in on digital is not only transformative, but absolutely necessary, he said. Quiniones sees the three main disruptors for the grid as decentralization in the form of distributed renewable energy, electrification of every process in the grid operational chain and, last but not least, digitalization of those tools and processes.

“These three trends are really pushing and accelerating the transformation and disruption of the utility sector,” the NYPA CEO added. “To become an end-to-end digital utility, every sector of the value chain must be digitalized.”

Many utility leaders know these disruptors are here, but he boasted that NYPA is acting on them by creating what he called three “digital hubs.” These hubs include something called New York Digital Management Center, which is creating digital twins of the buildings of NYPA’s customer, 10,000 so far with the goal of 20,000 by 2020.

Second of these hubs detailed is the Integrated Smart Operations Center to help maintain cyber and physical security, ratchet up energy efficiency and other protections on the grid. Finally, NYPA is planning its Advanced Grid Innovation Lab for Energy, to build a granular, digital map of New York’s entire grid for use by all its utilities and beyond.

“This is about researchers coming to use our data, and our platforms to innovate,” Quiniones said. “We want to create an innovation ecosystem.”

Digital seems like a no-brainer at GE’s event, but GE CEO Flannery pointed out that what is conceded is not always practiced. Some newly announced company research of all sectors indicated a substantial “digital gap.”

“Eighty-five percent of companies know it’s absolutely critical,” Flannery noted, “but only 13 percent have a digital plan in place.”

Digital Rome wasn’t built in a digital day.

“It’s a journey,” Flannery conceded.

Microsoft CEO Satya Nadella spoke later and seemed to be saying that the making the effort going forward matters more than having a head start in talent or resources. He used a domestic proverb comparing a “know-it-all” child with higher capabilities vs. a “learn-it-all” child with lower capabilities.

“Ultimately the learn-it-all will do better,” Nadella said.

The two-day GE Minds+Machines event will feature company executives and industry thought leaders on nearly every phase of business life, from utilities to rail to shipping, software and manufacturing, among others.

NYPA and GE also announced Wednesday that they will work together on advancing the NYPA’s goal to be the world’s first fully digital utility. The software and professional services agreement brings the two together to explore digitization on all facets of operation from 16 generating facilities and 1,400 miles of transmission to all more than 1,000 public buildings statewide.

The effort should improve reliability, affordability and lower the carbon footprint. NYPA is working to help meet New York Gov. Andrew Cuomo’s goal of going to 50 percent clean energy statewide by 2030.

 

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