Making the case for the value of IoT
By Bradley Williams, Oracle Utilities
While we are only just beginning to understand the full impact and meaning of the Internet of Things (IoT) for the utilities industry, the industry is already changing and transforming because of it.
To be clear, the utility industry is not unfamiliar with the IoT. The smart grid applies IoT technology (such as smart sensors, two-way communications and data analytics) to the electric grid infrastructure. This enables better efficiency, improved reliability, the integration of more renewables and distributed energy resources, reduced emissions and more engaged and empowered customers.
Now, utilities are perfectly positioned to use this solid foundation to take advantage of IoT as it expands, setting the stage for continued business relevance, growth and improvement in the years ahead.
The IoT’s value proposition for utilities
In coming years, the utilities industry is expected to drive exponential growth of new IoT applications to communicate machine-to-machine to new field devices and consumer energy technology devices at the edge of the grid. But even more important than this ubiquitous communication is the sensor data being gathered by these machines, and the ways in which that data can be operationalized for more efficient and proactive utility efforts.
IoT is all about the services: transforming data from disparate devices into valued insights and actions. Its value proposition for utilities is clear.
IoT will allow utilities to:
“- Quickly translate vast quantities of sensor-based information into action
“- Securely connect devices, analyze real-time and historical data and integrate to back-end utility applications
“- Enable the business to deliver innovative new services faster and with less risk
“- Track crew locations and remote parts inventories to more effectively dispatch technicians in the field
“- Transform the business from the edge to the enterprise, including the control and maintenance of new generation assets
Deploying Utility IoT
It’s not necessary to take an “all-in, boil-the-ocean” approach to IoT. Instead, taking a phased approach allows for learning and adjusting along the way.
In the first phase, the focus is on validating the business value of IoT by quickly connecting assets and monitoring them, with the focus being purely on monitoring the devices and reacting to events and exceptions/failures.
In the second phase, the utility’s focus shifts from reactive to proactive decision-making: analyzing the data to predict future events for proactive operational responses, identifying energy usage patterns, etc.
In the third phase, IoT is strongly tied into enterprise processes and applications, to optimize the back office and proactively provide an increasingly engaged customer experience.
What does this look like, optimally? Let’s look at different ways to leverage IoT technologies to enable the vision of the future utility.
Deeper insights into asset performance management
Asset performance management is an integral tool for utilities juggling ever-increasing operating costs with a need to reduce expenses, decrease environmental impact and deliver more customer-centric service. Low-cost, smart field sensors are now providing many real-time eyes all along the grid, enabling utility operators to “keep a close eye” on assets and make decisions about asset replacement and repair before assets break down.
There’s more to it than just keeping eyes on the assets, however. The ability to aggregate all asset data, including work history and condition rating, into a single system, balance the importance of one factor over another, and update in real-time any condition changes as they occur, allows the utility to make more reliable and meaningful investment and work decisions on how to best balance compliance, reliability, safety and risk.
Why is this so important? Historically, this type of insight was based upon intuition and subjective or observed, eyes-in-the-field assessment. In an increasingly digitized utility environment, this type of assessment is being replaced by objective data analysis that is by its nature more accurate, providing utilities with far more actionable insight than before. When this analysis is automated as a core business process, it has already demonstrated significant capacity to affect margin: proactive work has been shown to reduce asset failure rates and drive down the cost to operate each asset, thereby increasing revenue.
Here is a specific example to illustrate: By scheduling proactive work during normal business hours instead of having to react to a failure with an after-hours call-out, you can reduce costs while significantly improving reliability. With smart sensor and control devices-many of which are IP-addressable and wireless connected-along the utility’s infrastructure, you can also add automated, real-time asset analysis to your asset management practices. Advanced asset risk analytics can then correlate the appropriate data from across the enterprise to provide immediate prescriptive maintenance work requests.
Improved grid optimization with new energy resources
Electric utilities recognize the need for new distribution network technologies to accommodate sustainable growth and customers’ growing interest in grid-connected, customer-owned distributed energy resources (DER) such as rooftop solar and on-site energy storage. This customer-led energy evolution is driving change for utilities, too, in terms of the way the modern distribution grid will soon need to operate. These new grid participants want to connect with their utilities in a different manner than we have seen in the past, and become part of the electric distribution system, rather than separate from it. The real-time data these connected DER are also providing offer a means for utilities to change the way they manage the grid.
IoT technologies offer utilities the ability to take a data-centric approach to distribution management, providing a means in which to monitor, control and optimize both traditional distribution and new, consumer energy resources. By treating each DER as an asset, and modeling its generation output profile similarly (by aggregating the asset data, as well as its unique attributes such as location, direction and pitch of panels, condition of use, time of day, etc.), the utility can better forecast how and where within its service territory those DER assets will impact the distribution grid, and use this information to improve long-term resource planning.
Distribution grid operation can be maximized, and real-time information can reduce the capacity for intermittency issues (from solar resources) to cause disruption or safety problems, improve generation output profiling (thereby minimizing customer interruption minutes), and dynamically balance consumer supply and demand of DER, thereby alleviating utility constraint on peak load days without having to shift to extremely costly “peaker” generation plants.
Preparing for a consumer-driven energy market
As consumer-owned in-home devices and DER continue to increase, IoT technologies will be the foundation for an even smarter smart grid, one that can support the transactive energy market that is already beginning to take shape. This will not happen overnight. Some states, like New York, are leading the way in raising the foundation for this future energy platform, and other states are just beginning that journey with smart meters, electric vehicles and DER. But there is no question that the electric utility industry, and the grid upon which it manages and distributes its product, is transforming.
In this transformative period, utilities have a choice: they can view the challenge to their traditional ways of doing business as a threat, or they can turn it into a business opportunity to improve their investment performance, lower operating costs, and provide their customers with ways in which to participate that fit their changing expectations about the ways they use electricity.
The transactive energy construct paves the way for this future vision, and IoT technologies will provide the tools for utilities to effectively manage this new, dynamic market exchange equation, balancing energy supply and demand and monitoring grid asset health in real-time.
Taking the next steps
End-to-end grid visibility, with the ability to manage, analyze and control additional grid-edge resources being added on an often-daily basis, will be imperative for utilities as the work their distribution grids is being asked to do evolves. The IoT enables utilities to create a scalable, flexible and more modular infrastructure that will be much better equipped to face new challenges, and to quickly adapt as markets and situations change.
Bradley Williams is vice president of industry strategy, Oracle Utilities. Williams is responsible for Oracle’s smart grid strategy as well as utility solutions for outage management, advance distribution management, mobile workforce management, work and asset management and OT analytics.