Podcast: How Everything as a Grid defines a simplified energy future

Mike Longman is senior vice president, Global Product lines, Strategy and Business Development. Named to this role in July 2019, Longman has overall responsibility for the Electrical Sector’s global product lines and overall business development strategy.

Immediately prior to his current role, Longman was senior vice president and general manager, Residential Products and Wiring Devices in the Americas, where he was responsible for all aspects of Eaton’s circuit protection and electrical connectivity solutions business for residential markets in the U.S., Canada, Mexico and Central America.

Before that, Longman served as the senior vice president and general manager of the Power Quality and Electronics Division, Electrical Sector, Europe, Middle East and Africa. 

He joined Eaton in 2002 as the vice president, Global Sales and Solutions, Performance Power Solutions, and has since held roles including senior vice president, Marketing, Electrical Sector; vice president, Strategy and Business Development, Electrical Sector; and commercial integration lead, Moeller.

Prior to joining Eaton, partner at McKinsey & Company, a leading global consulting firm, where he was a consultant for 14 years and co-led the firm’s Business-to-Business marketing practice in North America.

Longman holds an MBA from the Harvard Business School and a bachelor's degree in Applied Math and Economics from Brown University, Rhode Island where he graduated magna cum laude. 

INTRODUCTION: Welcome to Eaton's 10 in 10 podcast, where we focus on industry trends shaping the future of power management. In this series, our expert answers 10 questions about one of today's most talked about industry topics in 10 minutes or less. From the energy transition to digital transformation and beyond, we explore trends and discuss strategies for delivering safer, more efficient, and reliable power. 

HILARY SPITTLE: Hi. I'm Hilary Spittle, global director of marketing communications for Eaton's electrical sector. Today, more and more businesses and communities are focused on the transition to renewable energy and ways they can optimize power generation, storage, and delivery. In this episode, we're asking our own Mike Longman, senior vice president of Global Product Line's strategy and business development for our electrical business, about how Eaton is advancing low-carbon solutions and making the energy transition a reality through our everything-is-agrid approach. We've got 10 minutes for 10 questions, so let's get started. Mike, thanks for joining us. 

MIKE LONGMAN: Thank you, Hilary. 

HILARY SPITTLE: First of all, how do you define the energy transition?

MIKE LONGMAN: Energy transition is a increasingly used industry term that covers three related macro trends. The one we talk least about is the increasing electrification of buildings and transport. That means moving from other sources of primary energy to electricity, for example, cars that move from using petroleum to being plugged in and using electricity. But the same thing is happening in building systems, as well, as functions like heating and cooking move from natural gas to electricity.

The second part of the energy transition definition is that within electricity, we see a major shift in the fuel source that creates that electricity from coal and natural gas to renewables such as solar and wind. And then finally, the structure of electricity generation is changing, with a dramatic rise in distributed energy resources, for example, solar at your home or in the office building, which you sit, rather than traditional methods of larger centralized units of generation. 

HILARY SPITTLE: So at Eaton, we say everything is a grid. Help us understand what that means. 

MIKE LONGMAN: Everything as a grid is our way of saying that many different types of facilities or types of players will play a role in generating, balancing, storing, and distributing electricity. All activities historically done by utilities.

We're moving to a world where something as small as your home might generate electricity with solar panels, store it in a battery storage system, utilize software that decides when to use the electricity from solar, when to charge the batteries, when to release the charge from the batteries, and optimize that whole process and determine when to sell things back to the grid.

That type of balancing at any size is really what we mean when we say everything is a grid. That same function is true as you get into larger facilities, like commercial buildings, data centers, or industrial sites. For example, in a data center, you'll have to coordinate multiple sources of electricity supply from the diesel generators there to on-site solar to the utility feed. And they then use the batteries connected their UPS to provide a variety of services back to the grid.

HILARY SPITTLE: So power really flows two ways. What are some benefits and drawbacks of that bidirectional flow?

MIKE LONGMAN: Yeah, the big advantage of a more advanced network with bidirectional flow is, utilities can avoid significant capital investments that they would otherwise have to make. Instead of investing in large power plants or peaker plants, they can tap into the capacity and the capability of distributed generation resources or energy storage resources owned by customers.

And the fact that the utility avoids that cost means they can pass some of that savings onto commercial, residential, or industrial customers who are looking for ways to offset the investment they need to make in order to put renewables on their site. I guess the one drawback, which is a drawback, potentially, for customers but is really an advantage for us, is, the whole system gets a bit more complex and needs more safety assurance when there's bidirectional flow. The good news is we have the technical capability and the application capability to help customers with that. 

HILARY SPITTLE: What role does this new reality and our everything-as-a-grid philosophy play in the decarbonization of power? 

MIKE LONGMAN: Yeah, everything is a grid supports the growth of renewables in two ways. Renewables often make sense at much smaller scale than traditional generation, and the fact that these decentralized installations can be linked into the grid and get some monetary benefit from doing that will help advance their deployment.

The second way it helps is that renewables at any scale present unique challenges, because of their intermittent nature. The wind and solar generates more electricity sometimes and less other times, and that intermittency creates instability in the grid unless you have a way to link everything together to help balance it out. And the everything-is-a-grid world really helps balance that out and allow the adoption of the renewables. 

HILARY SPITTLE: So tell us what kind of businesses might be the ones to benefit most when we think about democratization of power. 

MIKE LONGMAN: Yeah, it's a term I like, democratization of power. Lots of people have the ability to generate and store on their own. I will say to our everything is a grid perspective, almost all kinds of facilities can benefit from that democratization, whether it's as small as your home to a large factory.

Having said that, the biggest opportunity, probably comes from facilities who have the greatest need and the greatest desire for continuity of operation or resilience of their operation, since those are the places that are most likely to invest in on site generation for their own local needs. And as they invest in that site generation, they can then apply that back to the grid and use that to get paid for and help offset the cost.

But it can, again, work as small as if you want to make sure you keep the lights on at home and you put a little bit of energy storage there, it can work there too. But the bigger the application, the greater the benefit, typically. 

HILARY SPITTLE: You mentioned opportunities for utilities a moment ago. How are utilities employing the new energy model? 

MIKE LONGMAN: Yeah, utilities are one of the big players in this market, along with lots of other players, like us and our competitors, like oil companies, like manufacturers of solar and wind. But utilities, it's very central to them how this model evolves.

And they're really playing it in a couple of ways. Many of them, organically, with the prodding or support of the regulators that oversee them, are creating programs that help foster the adoption of distributed energy resources and renewables. And then in addition to that, many, many of them are getting directly into that game by doing acquisitions and acquiring people in the electric vehicle charging space or in the microgrid space or in the virtual power plant space.

So we're seeing lots of utilities realize this is the future and put their money to move in that direction. 

HILARY SPITTLE: So thinking about data centers and they're such huge consumers of power, how can data centers tap into that power that sits in reserve? And what role do you see the UPS playing beyond backup power?

MIKE LONGMAN: The good news on this is really not talking about the future. We're talking about things that are happening now and that Eaton is at the center of now. So our power quality team around the world is creating new functionality into our UPS products that make them energy aware.

And those UPS products and the vast array of batteries that are in them can be important sources of grid services that go back and help that macro grid stay balanced, even as they try to accommodate more and more of these intermittent generation sources.

So data centers, as the owners of some of the largest stores of batteries, can really play a very big role to help keep things balanced, as you add more renewables. 

HILARY SPITTLE: And how about more extensive infrastructures like manufacturing plants, for example? How does everything as a grid impact their operational costs?

MIKE LONGMAN: The deployment of distributed energy resources can significantly improve the economics and the resilience of manufacturing facilities. We're doing it for customers of ours. We're doing it for our own sites, also. If you think about adding generation and storage assets, what those facilities can do is they can reduce their overall energy usage.

They don't have to buy as much from the utility. Very importantly, they can avoid peak charges because in many parts of the world, those kinds of facilities get charged based on the peak amount they use, not the total amount they use. And they can avoid a tremendous amount of cost connected to downtime if they have disruptions.

So when you add all of those sources of benefits, less purchase of energy, less peak charges, less downtime, those kinds of things can create annual savings in the neighborhood of 20%, some cases, we've even seen 50% And that's what drives the return on the investment on that kind of hardware that they put in.

HILARY SPITTLE: How will renewables evolve in our lifetime and beyond, Mike? And how do you see energy storage growing in the future?

MIKE LONGMAN: Yeah, we're definitely in a period of very rapid growth of renewables and storage right now. So don't even have to look as far out as your full lifetime. But if you just think about 15 years from now, the macro projections are that renewables will generate about 50% of all electricity around the world.

And if you think even sooner than that, just in the next decade, by 2030, we're expecting that installed storage will increase 13 times from where it is today. So we're really at the point where we're on the steep part of the slope of the growth curve on these markets. 

HILARY SPITTLE: So our final question is looking to the future as well. Do you think the traditional grid will ever cease to exist, and might it one day support everything as a grid like a backup system?

MIKE LONGMAN: Yeah, in most markets and in most geographies where it exists already, I seriously doubt the traditional grid will disappear. But in those more mature markets, it's very possible, as you suggest, that that goes from being the primary source of electricity supply to more of a backup source of electricity supply, to more decentralized generation.

I think there are some parts of the world, particularly some that have historically been less electrified, where you may not even have a traditional centralized grid, but you may have more a series of connected microgrids.

HILARY SPITTLE: Thanks for your time today, Mike. 

MIKE LONGMAN: Thank you, Hilary. Energy transition is a really interesting topic, an important one for the sustainability of our planet, and one that creates lots of opportunity for Eaton. 

HILARY SPITTLE: It sure is. And to our listeners, if you'd like to learn more about how we're supporting a low-carbon energy future, visit us at eaton.com/energytransition. Thanks.