by William F. Ernzen, Accenture
For electricity and gas companies, this is the dawn of data-driven, geospatially aware utilities.
The original geospatial application, geographic information systems (GIS), has evolved from software for drawing maps to a location-aware, anytime, anywhere, decision support engine. Spatially aware applications are spreading throughout organizations, with benefits to include improved planning and management of utilities’ billion-dollar fleets of assets. Geospatially aware applications provide the advanced tools and analytics that can enable utilities to redirect or save up to 10 percent of their annual operations and maintenance costs, estimated at $500 million to $750 million for a large utility, according to Accenture Research analysis of Federal Energy Regulatory Commission (FERC) Form 1 for electric holding companies that serve more than 3 million customers.
The evolution of GIS systems coupled with the deluge of big data within utilities, including GIS-derived information, create opportunities. As with any kind of massive influx of information, however, a barrier to surmount is making sense of all that data. Utilities are addressing this challenge by leveraging advanced tools, analytics talent and automated systems to sift the wheat from the chaff.
New systems are delivering management dashboards that present vital information for timely insights. As a result, utility managers can receive up-to-date results on spatially aware mobile devices to assist in their decision-making.
Speed of Progress
Spatial technology used to be limited to pockets of the organization, but that is no longer the case because of the proliferation of mobile devices. Sensing a user’s location, spatial applications present information to process events based on data related to specific sites.
Smart phones, tablets and notebooks linked to sensors on operational assets can be integrated and can communicate vital details. Thus, spatially aware systems are in position to improve management of billions of dollars of assets, as well as work crew productivity. Spatially aware systems can be used to cluster jobs and suggest additional projects for dispatchers who are looking for additional work to fill out a crew’s last hour of the day.
The integration of GIS with operations and information technologies can transform utility cost management, capital expense planning and maintenance that customers and regulators notice. A brighter horizon is emerging, but the challenge is determining the starting point for tighter integration–the kind that will deliver clear return on investment for utility stakeholders.
Start With Asset Management
The pressure to optimize operational and capital expenses is increasing. Consumers and regulators seek to keep rates under control despite utilities’ increasing costs for labor, capital and supplies. These pressures are coupled with calls for distributed generation, private renewables, demand management and customer efforts to reduce consumption.
New technologies enable asset-intensive businesses–not only utilities–to leverage information into analytical tools that help decide which assets to refurbish, what to replace, when to consolidate and when to stop maintaining (i.e., run to failure). New systems can help manage risk in the aggregated system and align it with corporate strategies in ways to level out year-on-year capital expenditures.
Greater integration of location information with business intelligence enables organizations in many industries to analyze external characteristics and improve service delivery. Personal navigation systems would not be possible without GIS. Groupon Now suggests local discounts on food and services based on a user’s stated location. In health care, diseases can be tracked by location with extensive data for analysis of health risks. A wide range of business areas can benefit from spatial analytics, including “retail site selection, marketing, financial performance, the supply chain, customer relationship management, service operations and work force management. In each of these areas, location plays a critical role,” according to a Sept. 10, 2012, Forbes article by Steve Milton.
Rather than taking weeks, analyses can be made in hours (see sidebar). An integrated platform helps reduce the time needed for collecting, integrating and analyzing data.
Adopt a Risk-based Approach to Set Priorities
Company leaders must act now to begin realizing the potential gains from spatial integration. The best way is with a pilot that targets quick wins that build the rationale and financial support for wider implementation.
Hydro One Networks Inc. is an example of a utility that leverages analytics-powered solutions to improve planning of investments in transmission and distribution. An asset analytics solution under development is expected to enable the Canadian utility to access and integrate historical asset data and information from multiple databases and applications that either had been inaccessible or not integrated. The emerging information will enable Hydro One to forecast requirements and expenditures needed to optimally maintain the grid.
With this implementation, Hydro One asset management, engineering and planning work forces will have information on the performance of transmission and distribution assets that is locational and time-based. In addition, the integrated asset information will help managers plan for short- and long-term investment scenarios and delivery outcomes.
To Boost Productivity, Use Spatially Aware Systems
Increasingly, GIS is playing a foundational role in the utility business. Recent technologies, for example, can be used to improve work force management, such as recovering lost time at the end of the day. GIS integrated with work management applications show which projects are in the vicinity, thereby helping managers make decisions that can reduce transportation and overtime expenses.
And as the work force ages, utilities can make better use of geospatial data to help bridge the impending knowledge gap. As seasoned savants of the transformers get ready to retire, analytics systems provide a fact-based safety net for less mature managers. Quantitative data, equations and other measures–along with visualization tools, dashboards and alerts–graphically show patterns in vast amounts of relevant data. Spatial relationships learned over a career within a utility can be incorporated easily into standard decision-making reports.
Growing amounts of data can “get us out of our current mode of decision-making by HiPPO–the Highest-Paid Person’s Opinion,” The Wall Street Journal quoted Andrew McAfee of MIT in a March 14, 2013, article. “As we have more pieces of data–more facts–and better tools to analyze them with, we’ll need to rely on gurus, pundits, graybeards and oracles a lot less.”
In addition to enabling better data-driven decisions, GIS applications are proving to be time-savers, particularly in restoring power after weather-related disasters. Engineers can make design decisions in the field and communicate sketches to field crews. On well-integrated systems, crews can review asset information on a tablet, for example, which helps them understand the assets they need to repair before arriving on-site. In addition, the ability to access spatial information in the field allows engineering assistants on job sites to coordinate efforts with vendors and subcontractors to restore power sooner.
High-level View of Technology Platforms
Realizing the full range of benefits, however, depends on integration of GIS with enterprise asset management (EAM) and other technologies and information systems. The new spatially enabled asset information platform has several key elements, but at its heart is an application architecture that integrates the EAM and enterprise GIS.
Considering all the recent technology advancements, utilities also need a platform that enables rapid development and deployment of spatially aware applications. The basic steps to deploying GIS as a spatial platform for integration:
- Upgrade GIS systems to the latest technologies and build solutions in which spatial functionality can be embedded in applications that are non-GIS-centric;
- Assess existing data, rationalize obsolete implementations and implement the requisite data-improvement initiatives; and
- Build an enterprise asset data model that embraces an integrated view of the asset. The model will require a composite register in which all assets participate and a common nomenclature for asset primary key and foreign key relationships.
GIS Integration for High Performance
The benefits of GIS are clear to many in operations and maintenance. The emerging benefits will become increasingly evident to planners, managers and executives throughout utility organizations.
For leaders of utilities, it is time to start thinking differently about how and where GIS information can be used. Business leaders must define technology strategies for big data and make a case for how analytics will supply real-time information to help achieve their business objectives.
Knowledge is power, and data is an asset. The power will grow by integrating enterprise GIS with the EAM platform, which provides real-time data and insights about better ways to operate the business overall.
Well-integrated, spatially aware utilities will possess capabilities for improved asset management and better Opex and Capex planning. For utilities, the dawn of this data-driven, geospatially aware era promises new opportunities to deliver improved availability, efficiency and affordability.
The author would like to acknowledge the contribution of Sterling Blake and James Weaver for this article.
Spatially Aware Systems Can Lead to Better Decisions
A transmission line planner considers the best time to replace a line that connects transmission stations that serve heavy power users. Sensors show structures, U-bolts and insulators have deteriorated and have replacement dates from five to seven years. Records on the conductors, however, show they are estimated to last 15 years.
A geospatially enabled system can give planners up-to-date details that help analyze segments as aggregated components, as well as the line as a composite entity. If the combined Capex and Opex spend is $750,000 annually, for example, the utility would spend $11.25 million in 15 years before undertaking line replacement.
Consider, however, total replacement would cost $80 million with a life span of 65 years with maintenance costs at $200,000 for each of the first 10 years. For each year replacement is moved forward, simple math shows the utility would save $550,000.
Reviewing an automated analysis of return on invested capital, planners instead recommend line replacement in seven rather than 15 years. Why? The utility can suspend nonemergency Opex/Capex for the line for three years prior to scheduled replacement.
Making this decision would reduce spend by $300,000 annually, meaning the utility could save $1.3 million. Add to this $3.8 million for five years of normal Opex/Capex spend (i.e., the difference in costs to maintain the line for 12 vs. seven years based on an accelerated replacement), and the total savings would reach $4.1 million.
William F. Ernzen is a managing director in Accenture’s utilities industry group. He concurrently leads the work, field and resource management and enterprise asset management groups for Accenture Smart Grid Services. He is located in Detroit.