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Efficient Power Grid Operations in the Digital Age

Increasing energy demands, complexity and regulations demand much from an industry that has changed little over the last hundred years. New technologies offer much needed solutions as well as exciting new possibilities. Deploying new technology will transform today’s utilities into digitally empowered next-gen energy players, which is a daunting and difficult process for many. This is a how-to guide for utilities interested in not only surviving today’s increasing demands but leading in what will certainly be a very different energy future.

1. Digital Disruption in the Energy Sector: From Traditional Grids to Smart Grids

Built at a time when electricity needs were scarce, utilities are increasingly unable to meet the changing and increasing energy demands of the 21st century.

Powered by radical technological development, a new grid is arising: the smart grid. Smart grids are a network of communications, controls, computers, automation, and novel technology, such as AI and machine learning, working together. Smart grids allow two-way communications where electricity and information move freely back and forth between end users and utilities creating a more efficient, stable, and greener power grid.  Smart grids challenge the traditional value chain, discards aging infrastructure, and takes advantage of digital communications solutions to identify and react to consumption changes.

Although the digital revolution is just beginning, smart grids are developing quickly. It’s only a matter of time before the utility sector is radically reinvented. Utilities will soon find themselves at a crossroads: to either surrender or become smart. 

Read more: Why the Energy Sector Industry Needs a Reset – Now

4. Digital Infrastructure Ops in Practice

Several nations are leading in the race to digitalize in the energy sector. Here we mention a few projects and utilities, which are already well-positioned to face the increasing digitalization of the sector.

Denmark: Smart Grid Projects

With ambitious climate and energy objectives, including carbon dioxide emission reductions by 40 percent by 2020, and long-standing experience with renewable integration into the power supply, Denmark is among the leading European nations in the smart grid development race.

Copenhagen Clean Cluster’s report “Denmark: A European Smart Grid Hub” highlights several cutting-edge projects currently taking place in the Scandinavian country:  

  • EcoGrid: One of Europe’s most ambitious smart grid projects. On the island of Bornholm, EcoGrid aims to demonstrate the efficiency of distribution power system operation with many and variable renewable energy sources. Currently, the island can operate as an isolated energy system and aims to be 100 percent reliant on renewable energy.
  • Edison: Drawing on national and international competencies, the Bornholm-based Edison project develops system solutions for EV system integration, including network issues, market concepts, and optimal energy technology interactions.
  • DFR: The DFR demonstration project aims to use electricity demand as fast reserves, as an alternative to more expensive reserves currently used. It is used to provide reserves and enhance power system frequency control.

Germany: E.ON

The Northeast Group forecasts Germany’s investment in smart grid infrastructure to grow to $23.6 billion between 2016 and 2026, including 44 million smart meters. The private energy company E.ON, for instance, is well on their way to accommodate these changes. As early as 2014, E.ON announced a plan to separate its traditional energy business units into a separate company and refocus their core efforts on renewable energy and distributed customer-facing project development. Furthermore, they have trained nearly 1 000 new smart meter technicians as part of the massive deployment of smart meters, and in 2017 they launched the app E.On See, which enables smart meter customers to view their electricity and gas use anytime, anywhere through an easy-to-use smartphone app.

United States: The Energy Authority

The public power-owned, nonprofit corporation The Energy Authority, help their public power clients thrive in the new data-driven world by offering data analytics solutions and delivering high quality customer-centric services. They have introduced the service TEA Connected Analytics to help its utility clients maximize asset value by reducing operating, costs, lowering capital expenditures, and improving retail customer satisfaction.

6. Barriers to Digital Utility Infrastructure Ops

Based on our experience at helping utilities throughout their digital transformation, we present the most typical barriers utilities face when reaching for efficient power grid operations in the digital era:

  • Legacy IT systems: Data analysts and traditional IT systems will be completely incapable of handling the enormous amount of data flowing in from an increasingly digitalized power grid.
  • Silo mentality: Digitalization makes infrastructure operations more complex. Utilities are required to connect previously unconnected data and identify methods to utilize a shared database, both within and outside the organization. Interoperability is a central term within the smart grid field. This means that different systems can exchange information across each other. Silo mentality breakdown is critical for digital infrastructure operations success.
  • Insufficient utilization of new technology: New technology aims to optimize infrastructure operations. Utilities who procure and install this technology, but fail to fully utilize the opportunities it presents, are unable to achieve efficient digital power grid operations. Utilities who fail to leverage the opportunities in Advanced Metering Infrastructure, for instance, will be unable to profit from digital power grid opportunities.
  • Lack of digital competence: Lack of digital competence is one of the most significant barriers for digitalization. According to a survey published by SAP, 64 percent of the respondents lacked the necessary digital capabilities to complete a successful digital transformation. This is no less true for utilities. To break through the barriers of digitalization, utilities need to attract digital natives or partner up with players familiar with new technology.

7. The Consequences of Remaining Analogue in a Digital Age

Utilities who fail to embrace, invest in, and take advantage of new technology and continue to operate their infrastructure with legacy methods, will be unable to meet increased competition from both existing and new market players who have digitalization at the core of their business. Utilities that invest in outdated technology will lag behind and risk bankruptcy or acquisition from those who successfully reconstruct themselves as digitally-driven next-gen utilities.

8. How to Begin the Digital Transformation

Effective digital infrastructure operations require specific changes. Novel technology demands optimized data management and analytics, and sustainability initiatives increase the number of EVs and consumers storing and producing renewable energy. How, then, should utilities navigate among technologies, trends, laws, and regulations?

Breakdown Silos

Utilities are usually organized in silos based on function. Next-gen utility infrastructure operations require utilities to utilize and juxtapose data from different verticals on a centralized platform. This involves a convergence of operations technology (OT) and information technology (IT). Tearing down the silos between OT such as SCADA and DMS, on the one hand, and IT, such as customer information systems (CIS) and smart meters, on the other, enables data sharing for system improvement, cost reductions, improved customer satisfaction, and efficient utilization of existing infrastructure.

Read more: Making Utility Infrastructure Operations More Efficient

Ensure Cyber Security and Privacy Protection

Despite the new and exciting opportunities digitally empowered power grids are paving the way for, a more connected grid means more attack surface for less desirable players. With today’s digital infrastructure transformation, utility hacking is on the rise. Convergence of IT and OT, third-party vendor access to utility infrastructure, consumer demands for real-time data, and a generational workforce shift to millennials increases this risk.

Optimal care for cybersecurity and privacy protection requires an IT infrastructure that allows you to process, store, and utilize customer-related and sensitive operations data safely. Microsoft highlights several features required for such an infrastructure:

  • Identity and access management.
  • Data access control and encryption
  • Virtualization
  • Isolation
  • Virtual networks and firewalls
  • Secure remote access
  • Logging and monitoring
  • Threat mitigation 

You can read more about the vulnerabilities of a digitally enabled power grid and how to fix them in this article: Utility Hacking: Turn a Vulnerable Smart Grid into a Powerful Defender

To read more about how to maintain cyber security and privacy protection in cloud solutions for utility infrastructure operations, you can read more in these articles: 

Utilize an Overarching System Platform

As IoT and Big Data become indispensable components in next-gen utility infrastructure operations, the number of connections and the amount of data waiting to be processed increases. Legacy IT systems are neither designed for nor capable of processing and analyzing Big Data. Additionally, several utilities lack the necessary IT architecture and processes necessary to transform data into practical operations. 

To handle the changes affecting infrastructure operations in the best possible way, utilities are dependent on an overarching system platform that embraces all and every opportunity inherent in digitalization without dead ends. Such a platform should be able to do the following:

  • Handle and analyze massive amounts of data from various types of sensor technology
  • Handle the future development of various types of demanding data
  • Align with market trends and changes

Apply AI and Machine Learning Techniques

Machine learning and AI are critical to analyzing the massive amount of data collected from sensor technology and IoT devices. By applying data learning algorithms, machine learning finds hidden patterns and delivers new insights without being explicitly being programmed to search a specific place within the data.

Read more: The Acceleration of Machine Learning and its Vertical Realizations

9. The Importance of an Overarching System Platform

Next-gen utility infrastructure operations depend on a top system able to communicate with various professional systems. The optimal system platform uses open standards to retrieve data from professional systems. In effect, this means that multiple systems can exchange data and information across each other to open up new operations and planning opportunities as well as improve customer-oriented processes.

Read more about the subject here: SCADA / DMS / AMI / NIS: Obsolete?

System Platform Flexibility Demands

The number of connections and sensors installed in the power grid and the amount of data collected will only increase. To accommodate this, utilities should acquire a system platform that provides the necessary flexibility to scale up when needed.

Cloud-based solutions allow you to start small with little to no risk and low investment costs and enable you to expand and scale up as the need arises. It helps little, however, to move existing legacy systems over to the cloud. The solution should be scalable, without outdated infrastructure and designed for big data and advanced analytics. 

Interface Requirements

An optimal system platform for next-gen utility infrastructure operations needs to support the following interfaces:

  • Supervisory Control and Data Acquisition (SCADA)
  • Network Information Systems (NIS)/Geographical Information Systems (GIS)
  • Substation Monitoring Systems
  • Advanced Metering Infrastructure (AMI)/Head-end Systems (HES)

10. How to Choose the Right Digital Transformation Partner

Utilities preparing to transform into next-gen utilities could benefit from partnering with a digital technology leader to support their digitalization across the entire value chain. To choose the right partner, ask yourself the following critical questions:

  • Do they have intimate energy sector knowledge and insight into the challenges and opportunities the industry faces?
  • Have they succeeded at helping other utilities with digital transformation?
  • Do they offer solutions that allow you to process, analyze, and visualize data from various business and operations systems?
  • Can they help you cut costs by leveraging new and innovative technology?
  • Do they offer a system platform that allows you to start small and scale as needed?
  • Does their system platform use open standards?
  • Do they have proper cybersecurity and privacy protection strategies?
  • Do they have a network inside the energy sector and access to specialist knowledge from experienced industry players?
  • Are they updated on laws and regulations affecting utility infrastructure operations in a digitalized era?
  • Have they placed artificial intelligence and machine learning at the core of their value proposition?

Contact us for more information