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.
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.
The most important technologies driving smart grids are explained here.
Advanced Metering Infrastructure (AMI), or smart meters, is critical to the development of smart grids worldwide. It enables automated, two-way communication between grid operators and consumers, and provides a more accurate and automatic overview of power consumption. However, AMI can prove to unlock far more opportunities than remote meter readings and precise invoicing, amongst others:
Depending on how utilities use their data, AMI can be just another operational silo, or an invaluable information and insight generator. You can read more about the subject in the following articles:
The radical growth in IoT devices – smart, connected sensors, products and systems that communicate with each other via the Internet – in the energy sector is disrupting traditional infrastructure operations. According to Gartner, the number of IoT devices will increase to 20.4 billion worldwide by 2020. For utilities, IoT creates new opportunities to connect and communicate with customers, gain new insights into grid operation or better service delivery, and optimize infrastructure management.
Over 90 percent of the world’s data was generated during the last two years. As the number of IoT devices increases, the amount of generated data will only grow. According to Forbes, 1.7 megabytes of new information will be generated every second for every human being on the planet by 2020.
Legacy IT systems are completely incapable of coping with the enormous amount of data flowing in from an increasingly IoT-driven and digitalized infrastructure. To cope with this, utilities are increasingly moving to the cloud.
Explained simply, cloud solutions are scalable services that allow the storage and access of data and software over the Internet. For utilities, cloud solutions promise several significant opportunities. Microsoft boasts three essential cloud-service benefits:
Specific prerequisites are necessary to develop a successful cloud strategy. You can read what these are in this article: Cloud only? 5 Prerequisites for a Successful Cloud Strategy
Smart meters, infrastructure sensors, weather data, and social media data provide utilities with tremendous insights and opportunities into infrastructure operations. For the first time, utilities can leverage these insights and opportunities with AI and machine learning.
With AI and machine learning, utilities can handle massive amounts of data intelligently as they recognize normal flow patterns, identify deviate patterns and predict various potential grid situations. Instead of reactive fault corrections, AI and machine learning make it possible to proactively address and potentially avoid faults altogether.
You can read more about the technology in this article: Why AI and Machine Learning are Essential for Next Gen Utilities
An increasing focus on renewable energy has resulted in an increasing number of production sources, greatly altering the traditional one-way model of electricity distribution. Today, consumers are quickly transforming from passive participants into active “prosumers,” able to produce, use and store their own energy. Smart meters enable prosumers with their own solar, wind, or water power facility to feed excess energy into the power grid.
As renewable energy is increasingly fed into the grid, energy demand will vary from hour to hour, day to day, and season to season, creating fluctuating consumption levels. Battery technology allows utilities to store energy for shorter or longer periods of time. Recent developments within battery technology enable utilities to include batteries in their infrastructure operations and unlock several benefits, amongst others:
Transport sector electrification is a considerable concern for utilities faced with massive investments to accommodate increasing electricity demands. Although EVs currently represent only a small percentage of global car sales, several automotive companies are increasingly investing in them. Consultancy McKinsey, estimates that there could be ten to eleven million battery EVs on US roads by 2030. A rising share of EVs on the roads doesn’t have to be a problem. New technology aims to turn EVs into a powerful grid asset.
You can read more about how in this article: Transforming EVs: From Challenge to Utility Infrastructure Asset
Customers have higher expectations than ever before. Yesterday’s passive consumers of are gradually being replaced by engaged, empowered, and well-informed customers. According to an Accenture study, 58 percent want their utility to provide them with recommendations and suggestions for energy savings. Not at least, customers have become digital. According to the same study, 92 percent want to receive personalized digital notifications.
To accommodate this, several utilities have developed mobile apps for invoicing, visualization, payment solutions, and power outage communications. The Norwegian utility Ringeriks-Kraft, for instance, aims to transform from a power supplier into an energy partner for their customers. With the help of cloud-based solutions, they process and make use of smart meter data to help customers take control over their energy consumption through a smartphone mobile app.
Drones are flying in to revolutionize utility infrastructure operations. Drones have already assisted utility operations for some time, but when it comes to next-gen operations, not all drones are created equal. Tomorrow’s utility operations will use intelligent drones. Assisted by sensor technology, artificial intelligence and machine learning, intelligent drones are capable of identifying infrastructure faults and weaknesses.
With the help of real-time analytics, intelligent drones will identify anything from missing components and defective isolators to rotting wooden masts and woodpecker holes, providing utilities with a range of operational opportunities:
You can read more about the benefits of drone technology in infrastructure operations here: Why Intelligent Drones Will Revolutionize Grid Operations
As we move towards a more efficient and financially viable energy supply, utilities are developing into cross-disciplined operations centers. This allows the entire supply and distribution system to be managed and operated together with new services, as well as physical infrastructure for different purposes to be operated from the same geographic location.
Infrastructure can be multifunctional. Multi-utility technology enables utilities to monitor and control different meters under the same communication network. Utilities operating smart electricity and water meters can correlate data from both meters in the same multi-utility system. This enables utilities to manage several services from a single location, either by managing several utilities or collaborating with other utilities. This promises to reduce operations and administration costs and create new end-user services in a 24/7 operation.
By identifying potential business model convergence opportunities and creating multipurpose infrastructure, utilities can position themselves as an essential city partner in the emerging smart city ecosystem. You can read more about the subject in this article: Why Public Utilities Should Help Cities Become Smarter
With the digitalization of the energy sector follows regulatory changes. Several of these will have a profound impact on infrastructure operations. Some of the most important are listed here.
Privacy has always been important. When the General Data Protection Regulation (GDPR) comes into power, it becomes critical. As the consultancy McKinsey explains, GDPR aims to ensure that personal data is protected against misuse and theft, and to give EU citizens control over how their data is used. In the face of increasing customer data, it’s vital that utilities familiarize themselves with the new legislation.
The Norwegian Data Protection Authority provides a valuable summary of the guiding principles of the GDPR:
You can read more about privacy protection and the GDPR in this article: End User Privacy Perspectives in Utility Infrastructure Operations
Drone operations in power grid operations come with a list of legal requirements to ensure safe practice. As drone technology evolves, laws and regulations change. Here’s a brief overview of the main features in Norwegian, UK, and US regulations:
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.
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:
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.
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.
Utilizing the technological opportunities, meeting the demands and trends underlying the smart grid development, and efficiently leveraging smart grid data leads to several costs saving opportunities for utilities:
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:
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.
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?
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.
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:
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:
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:
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.
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?
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.
An optimal system platform for next-gen utility infrastructure operations needs to support the following interfaces:
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: