Meeting the utilities challenge in the Middle East


By Bastian Fischer

For the past several years, Middle Eastern economies and businesses have undergone rapid expansion. Over the past five years, for instance, average annual growth rates in the Gulf/North African countries have hovered between 5.9 and 8.5 percent.

A concurrent boom in real estate development in many of these countries placed a severe strain on utilities to expand services to serve both the rising expectations of existing customers and the anticipated needs of new ones. This development boom “went bust” in late 2008, when falling oil prices sent a shudder through the economies of virtually all oil-exporting states. But few expect either current low prices or economic contraction to persist. Granted, many new real estate projects are being delayed or even cancelled. But projects underway are expected to be completed and to attract new businesses and investors to the region — though at a slowerthan- anticipated pace.

Richard Thompson, editor of MEED / Middle East Business Intelligence, points out that a hiatus in real estate projects could actually benefit the Middle Eastern utility sector, “allow[ing] its overstretched infrastructure to catch up”. Indeed, many utilities are welcoming a brief respite from constantly escalating construction needs — a respite that will give them time to explore and implement multiple routes to increasing efficiency.

This emphasis on efficiency is vital. In much of the Middle East, economic growth has not kept pace with population increases. That means utilities must extend services and infrastructure to customers increasingly less able to pay for them. Growing populations also force utilities, each year, to find additional ways to stretch scarce water resources. And while domestic petroleum resources can provide the air cooling on which businesses rely, increasing utility efficiency lets countries raise GDP by exporting more.

It is no surprise, then, to find technology-savvy utility executives examining both local and global sources for efficiencyenhancing technology and software applications. They are placing a priority on applications that:

  • Maximise the delivery of electricity, water, and cooled water. That means not just minimising obvious waste like leakage and theft. It also means minimising resources consumed by the delivery process. Utilities are demanding that pipes, wires, valves, transformers — every part and every piece of equipment that goes into a utility’s infrastructure — are sized correctly and geared for expansion when demand rises.
  • Minimise the need for human resources to perform routine operations. This permits a utility’s staff members to focus on dealing with exceptions to the routine, giving them opportunities to innovate in support of both the utility and its customers.

Software vendors are responding to these demands. A new generation of real-time business software applications for managing customers, infrastructure and the workforce is helping Middle Eastern utilities and their customers achieve their objectives. The best of these applications are architected for flexibility so that they will remain capable of meeting not just today’s challenges but also those that only the future will define.

Here are some of the efficiency-driving applications being implemented today:

Power grids around the world are largely based on technologies perfected 30 to 50 years ago. Digital technologies that have revolutionised other economic sectors have been slow to transform electricity infrastructure. As a result, many power grids suffer from avoidable blockages and outages.

Middle Eastern utilities are eagerly examining emerging Smart Grid technologies, which offer ways to dramatically increase reliability and throughput, thus spurring economic growth. Here are some of the software applications helping utilities increase grid efficiency:

  • Distribution Management systems use signals from advanced sensors to detect and remedy problems on the electrical grid before those problems cause an outage. By analysing demand at various points in the grid and by reading equipment signals, Distribution Management can detect potential problems, diagnose their causes, and generate the work orders that dispatch work crews with the right skills and equipment to the scene.
  • Distribution Management technologies also significantly shorten outages that occur as a result, for instance, of accidents or windstorms. Fault Location, Isolation, and Restoration applications are just one example. They detect an outage, assess which customers are affected, and switch them, within minutes, to alternative sources of power.
  • Mobile Workforce solutions respond to data from Distribution Management or other sources to speed permanent grid repair. They route repair crews with the right skills to the site of the problem via the fastest and most fuel-efficient roads.
  • Outage Management takes over once crews arrive. It monitors and directs crews’ work to ensure both safety and speed of repair.

What are the results of these advanced, integrated Smart Grid applications? Instead of a power outage that might have idled thousands of workers for hours, those workers experience only a minor power disruption so short that many may never notice it.

Smart Grid technologies have many additional uses critical to Middle Eastern power delivery. They are crucial, for instance, in helping utilities supplement petroleum-fuelled power with the region’s plentiful renewable resources like solar and wind — resources that require sophisticated technologies to compensate for their weather-driven variability. And taking full advantage of these abundant resources is a cornerstone for the sustainable future that the Middle East seeks.

Smart Metering technologies build on the Smart Grid. They measure power and water consumption on an hourly or daily basis — or even more frequently. They use on-premises displays to provide real-time feedback to customers, helping them monitor and reduce their own use in response to price rises or other market signals. Smart Meters provide utilities with the basis for efficiency programmes and pricing structures that encourage wise power and water use.

Time-of-use pricing, for instance, encourages customers to shift optional electricity use to off-peak hours. It maximises use of base generation that, by definition, is always “on” and therefore always producing the same amounts of greenhouse gases whether or not the resulting electricity is used. When customers make better use of base electricity, they almost always rely less on peak generation — generation that can be readily ratcheted back in response to lower demand. The efficiency advantage is obvious: more use of base electricity, less need for peak generation.

Time shifting can also help water utilities that pump water to a high point to take advantage of gravity feeds. Today, water utilities universally try to limit pumping to times of off-peak electricity rates so as to maximise use of base electricity. But consumers who use water imprudently during the day can force on-peak pumping, which increases the need for peak power generation that could otherwise be avoided. Smart Metering can provide sophisticated data on water use that enables utilities to identify customers with what appears to be excessive on-peak water use, investigate, and discourage as appropriate.

Incentives and rebates are a time-honoured way to encourage efficiency. Utilities may, for instance, grant rebates to customers who purchase energy-efficient air conditioners or compact fluorescent light bulbs. Historically, utilities have been unable to demonstrate that such programmes actually improve efficiency. Smart Metering, however, makes available detailed consumption data that, when analysed, can demonstrate whether or not customers are using the equipment for which they received rebates to reduce consumption or move it to off-peak hours.

Demand response programmes encourage conservation and off-peak electricity use by increasing electricity’s price during peak periods. They are more sophisticated than time-of-use pricing in that prices can vary with current power use and weather conditions. One type of demand response, for instance — critical peak pricing — raises prices only occasionally, during periods of exceptionally high demand. Another variation permits utilities to control building temperatures during high-demand periods; customers may override those controls, but only by paying higher charges.

Revenue Protection programmes analyse hourly reads to detect unusual consumption patterns that might indicate theft. They also use signals from Smart Meters to identify possible meter tampering and malfunctioning equipment. Such programmes can feed data to Mobile Workforce applications to deploy investigators and stop revenue loss almost immediately.

Prepayment encourages efficiency by reminding customers of the ongoing costs of electricity and water use. In the past, prepayment required special meters, a means to distribute tokens, and unique billing systems. Today, Smart Metering provides a low-cost means to the same ends.

In its simplest form, Smart Metering-based prepayment involves the following steps:

  1. Utilities express rates as a price per kilowatt-hour
  2. Customers deposit money in any amount into an account
  3. Utilities track interval usage and — perhaps once per day — reduce the deposited amount as appropriate. They notify customers of the remaining deposit amount via an outgoing voice or text phone message, mailbox, email, or website
  4. When accounts reach zero, the meter — following jurisdictional regulations programmed into the software — automatically restricts or disconnects service. Utilities can remotely reconnect the meter when they receive a “top-up” payment.

Smart Metering creates partnerships between utilities and their customers. It helps deliver the maximum amount of water and power with the minimum amount of infrastructure. It also rewards building owners who invest in efficient on-site equipment and who keep that equipment in good repair.

On-Line Help and training tools help maximise worker productivity. With them, utility workers address tasks more quickly, with fewer errors, and with increased safety. Checklists and access to on-line manuals — in the office, in the plant, and in the field — help ensure that knowledge passes quickly and accurately from those who design business processes to those who implement them.

Office-to-field collaboration tools expedite scheduled maintenance operations and help resolve unexpected problems in the field. With them, field crews and in-office experts can view and annotate design documents, spec sheets, and repair instructions.

Technology, of course, is constantly evolving. To keep pace, many Middle Eastern utilities are developing partnerships with global software vendors that provide suites of utility-specific applications. When required, local consulting companies can tailor applications to local needs. This approach grows local technology talent and companies, helping utilities modify and expand IT strategies to meet emerging needs and opportunities.

Today and tomorrow, the expanding partnerships between Middle Eastern utilities and global utilities software companies help ensure that, as the region’s economies rebound from the oil price crashes of 2008, communities and countries can rely on an efficient utility structure to underpin strong economic growth.