Phevos Skalidis, a research manager for IDC Energy Insights, looks at how innovation within the IT industry is helping energy stakeholders to optimise the operation, management and efficiency of distributed energy resources.
With worldwide renewable power capacity additions of almost 180GW yearly during the last couple of years, demand is growing for comprehensive management capabilities of dispersed fleets of renewable power plants. An ecosystem of diverse players promises to tackle the unique challenges for these kinds of assets.
The growth of renewables has been nothing but spectacular during the last 15 years. A result of targeted policies liberalising energy generation, advances in the underlying technology (especially in wind and solar generation) and last but not least a consistent call in favour of decarbonising the economy starting with the power sector. The corresponding fall in the levelised cost of energy (LCOE) — a measure incorporating both initial investment and operating costs — has been phenomenal and hence renewables have attracted significant capital, accounting for approximately two-thirds of power generation spending in 2017.
A less appreciated factor facilitating the energy transition is the IT and its industry-specific applications. Be it sophisticated energy forecast software helping to reduce the inherent unpredictability of wind and solar power or a geographic information system (GIS) allowing geospatial analysis around the potential location of future generation assets, IT has played a major role in enabling widespread deployment of renewables.
In this context, several companies have seen an opportunity to develop software that combines functionality that makes asset management of renewable power plants more efficient and straightforward. Unlike the management of large and complex centralised assets, renewable generation companies are demanding lightweight solutions that unify most (if not all) aspects of asset management. This is especially true of small- and mid-sized operators, which have smaller market capitalisation and employ fewer personnel with the deep expertise of utilities’ staff. The decentralised nature of their renewable fleets are often scattered across countries or entire regions, and the comparably short time of construction are additional reasons for choosing a slim solution that scales fast with small, geographically dispersed power plants.
Alongside technological change, another fundamental shift has taken place during the last years. Established utilities have ceased to be the sole owners of renewable power plants.
Companies with a more diverse corporate background have entered this rapidly growing sector. Be it investment funds, engineering, procurement and construction companies (EPC) and even oil and gas companies, all these players seek to keep the operational expenses of their new investments low.
To increase energy production and maximise the returns of their renewable portfolio they are keen on deploying the latest technology integrating asset supervision and financial and operational management.
These are precisely the capabilities that modern renewable asset management software offers, centralising on a single platform what would otherwise require multiple, highly specialised (and costly) solutions. SCADA-like features allow for control room monitoring of all productive units and give operators remote control of their assets. Beyond real-time monitoring, software solutions in this domain also offer operational analytics and automate the creation of reports with both pre-configured and customisable KPIs. Some of them also integrate fully-fledged maintenance capabilities like work order management.
Preventative maintenance scheduling, on the one hand, and smart alerts based on reliability indicators and component failures, on the other. These help users tackle the challenges of mobilising field workers and plan asset downtime in the most efficient way. Last but not least, the financial aspects of running a renewable power plant portfolio, production, revenues and costs are supported and tracked on the same platform, thus enabling informed financial decisions and compliance to regulatory obligations. Some solutions go a step further by incorporating invoicing functionality and even financial forecasting, thus simplifying the work of additional users within the company.
Turning their software into data platforms that can serve a diverse set of users within the company has been a major aim for vendors and an important area of development of renewable asset management solutions. To cater to their customers who, as mentioned, are often new entrants in this space, vendors have often focused on expanding their products’ functionality horizontally. The implied objective is to cover more and more of the functionality required, in a single solution capable of delivering an end to end set of functionalities. Many of the platforms available in the market can support control room operators, maintenance supervisors, field technicians, asset managers and business executives – albeit with varying degrees of functional depth and maturity.
Aside from expanding their process coverage, renewable asset management solutions have evolved to offer fully-featured mobile applications or extensions. Especially useful for mobile workers, these apps also address the needs of other types of users, as their functionalities converge with those offered by the main cloud or on-premise solution.
Closely related to the delivery model (cloud vs. on-premise), the growing availability of OPEX-based licensing is another distinctive feature. Installed power plant capacity, the number of plants, yearly support fees and installation/configuration costs are therefore some elements potential buyers should carefully consider when making a choice.
Luckily, the market offers a good deal of choice among different solutions and vendors, which fall into one of three categories: plant control system vendors, speciality software vendors and IT service providers.
Plant control system vendors are normally large, established vendors carrying deep expertise in plant control and automation.
They normally have a comprehensive portfolio of adjacent solutions and can cover a broad range of market geographies.
Speciality software vendors are small, flexible companies focusing specifically on renewable asset operations processes and a design-oriented approach.
Finally, IT service providers are usually companies with an international presence and experience in system integration and IT consulting for the utility sector. Over the years they have developed or acquired an IP portfolio which they offer on top of their services to renewable energy generators.
As far as renewable generation technologies are concerned, managing wind or hydro assets is very different from managing stationary assets like a solar PV plant. This is especially true from an operational perspective, where rotating assets need sub-second data acquisition and control. While many providers continue to specialise in a single asset class or have developed separate solutions for different classes, a growing number have opted for developing a unique platform supporting multiple energy sources.
Beyond support for wind, solar, and to a lesser extent hydro, only selected vendors have a proven track record working with biomass, geothermal or combined heat and power plants.
Integrating electricity storage facilities and electric vehicle charging networks is the current frontier, with some vendors offering basic capabilities and working on related pilot projects.
Fast-forward two or three years and battery storage, as well as EV charging, may no longer be a nice-to-have, but rather a prerequisite to keep afloat in this rapidly evolving market. SEI
About the author
Phevos Skalidis is a research manager for IDC Energy Insights in Europe. In his role, he works with vendors and end-user clients to address how technologies innovate and transform the energy and utility industry. His main areas of focus include digital transformation, customer experience and more broadly business and IT trends relevant to the utility industry. Phevos is based at the IDC Italy office in Milan. A Greek native speaker, he also speaks Italian, English, German and some Spanish.