How can utilities move to a smart grid and beyond? That is the top concern among operations executives in EMEA power utilities, according to a survey conducted by market research and consultancy firm Longitude.
As they look for inspiration, utilities can learn from companies in other sectors, who have ushered in the first wave of digital transformation. Information economy markets and IT-centric industries such as financial services are already benefiting from digitalisation and automation. As a result, they are enjoying nearly four times faster productivity growth.
Now, power utilities and other asset-intensive industries, such as oil and gas, and mining, are forming a second wave of digital transformation. Managing the distribution grid is increasingly complex with the growing distributed energy resources (DER) and government regulations. By using digital technologies to control physical assets, utilities can drive better operational outcomes. To do that, they must be able to sense, analyse, optimise and control their grids. Data alone is not enough: it needs to be turned into action. Closed-loop automation that uses the wealth of information about the status of the grid will increase efficiency, minimise failures, and maximise productivity.
Connecting the grid
The priority is to securely connect everything in the grid for communications purposes. Without deep network reach and dedicated connectivity, it’s simply impossible to get a full picture of what is happening everywhere, and equally difficult to control the necessary systems in a timely and reliable fashion. Connecting everything enables insights gained through analytics to be applied for execution with greater precision.
To analyse and optimise complex operations that are highly interactive and have very little tolerance for delay, computing needs to be extended to the edge and local environments. The ability to compute wherever it is needed is essential for providing the precision required for automated grid operations and for enabling the increased efficiency, reliability and safety they offer.
Ubiquitous broadband connectivity will foster new applications and services to deliver greater productivity and richer customer experiences. For users of actionable data derived from analytics and machine learning, connectivity is going to enable better-informed decision making, and reduce the time spent consuming data that’s been collected.
To support mission-critical applications across the distributed assets and workforce, the communications networks must have:
- Enough reach to connect a vast and growing variety of sensors;
- Extremely low latency and high bandwidth;
- Mobility to support both assets and workers on the move;
- Exceptional reliability to avoid disruptions; and
- Security to address threats across a larger attack surface.
Digitalisation and pervasive broadband communications connectivity efforts can not only help to optimise core operations to improve performance and reduce cost. They can also play a role in transforming to new business models. These business models can be broadly divided into supply-based models, such as new distribution services, and service-based models, such as new consumer services. According to 45 per cent of senior EMEA executives in the Longitude survey, new distribution services represent the most potential. New service-based models were named by 26 per cent of participants as having the most potential.
Many utilities are more comfortable with digitalisation initiatives geared toward optimising core operations and therefore focus much of their effort in that direction. Today, it is rare for new business model initiatives to have reached the stage of large-scale deployments. However, that’s expected to change. As the core utility business model is increasingly disrupted by DER at the grid edge, and new competitors with new digital business models arrive, utilities will need to focus more on digitalisation for business model transformation.
What path are you and your utility taking to be empowered for the new energy future? Nokia Bell Labs Future X architecture for power utilities offers a framework that enables utilities to both optimise operations and transform to new business models.
About the author:
David Christophe, Nokia, Director – Utility Solutions Marketing
Dave’s major areas of focus are WAN and broadband communications applications during the past 15 years. He served as the Broadband Forum and MPLS Forum marketing working group vice-chair focusing on industry education through tutorials for 10 years.
Watch the interview we conducted with Nokia Bell Labs at DISTRIBUTECH earlier this year.