Can IT/OT Convergence Elevate Utilities Once They Remove the Barriers?

A form of farsightedness may be the key obstacle for utilities when it comes to the convergence of information technology and operational technology silos within the companies.

In other words, the imperative for IT/OT convergence seems clearer the farther away you are, proponents say. Up close, it’s complicated or obscured by departmental protectionism and in-house cultural barriers.

A recent survey by grid consulting firm Accenture indicates that 78 percent of distribution companies see the IT/OT convergence as highly important. However, only five percent say that their integration is completed and 15 percent are underway, while a whopping 57 percent say it’s still in the strategy phase or not started at all.

“These parts have all got to come together,” said Dave Shepheard, managing director for Accenture Grid Services, in an interview with Electric Light & Power during the DistribuTECH conference in San Diego earlier this month.

“We finally have the opportunity to really crack the IT/OT nut,” he predicted. “The walls are coming down (because) we are able to identify specific value”because they can deliver a different business outcome.”

Utilities in the developed nations are not growing in the generation sense nor able to justify new power plants and rate cases through customer demand. That demand is stagnant, but customers do want new services that help control costs. Regulators are increasingly open to approving incentives for meeting those efficiency, demand response and grid reliability benefits.

The latest study by Accenture, “The IT/OT Integrative Imperative for Utility Distribution Companies,” argues that the combined data through convergence opens value in smart grid deployment and the potential for new services as utilities shift to becoming technology companies rather than just power providers.

Keeping the grid humming without hitches seems to be job No. 1 for the truly integrated firm, according to the study. More than 50 percent of those companies queried said that unplanned outage management was the area which held the highest priority for convergence, while advanced asset management and distribution connected generation monitoring and control held sway at 49 and 35 percent, respectively.

“Management of unplanned outages can also be significantly improved by more effective automation and planning that is possible by integrating data from multiple sources,” the Accenture report reads. “Advanced switching capabilities in the medium-voltage network would enable utilities to optimize the customer experience, ensuring that many consumers as possible experience little or no downtime.”

Restoration and responsiveness to outages, of course, are primary drivers of customer satisfaction (or lack thereof) for utilities in North America and Europe.

Accenture’s Shepheard pointed out that one of the POWERGRID International Projects of the Year, announced at the DistribuTECH keynote, was ComEd’s AMI Outage Reporting Channel Integration. The ComEd project, which won for customer engagement, integrated a meter ping across all of the utility’s customer-facing outage reporting channels to help determine quickly whether the outage was on ComEd’s delivery network or on the customer’s side of the meter–such as a tripped breaker in the electrical service panel.

ComEd identified customer-side issues more than 26,000 times–or 60 percent of reports–on blue sky days. They then communicated with the customer to check the breaker. These close encounters saved costs by eliminating the need for dispatchers and other outage crews. Accenture was one of the vendors in ComEd’s project.

“It’s all about managing communications,” Shepheard noted. “It sounds simple, and it should be simple, although there’s some technical complexity behind the scenes.”

Without IT/OT convergence, utilities have often handled asset management by simply waiting for equipment to fail or using inexact statistical models trying to predict breakdowns, according to the report. The integration allows companies to handle unplanned outages and monitor asset health in real-time, using switching and sensoring to reroute power, flex output and control voltage, depending on the situation and need.

This allows utilities to budget capital expenditures for what they know they need, not what they think they need.

“In a regulatory regime that continues to reward capital expenditures, you can still spend smart capital dollars or dumb capital dollars,” Shepheard said.

Yet the arguments  persist within the decision-making rooms of utilities. The Accenture report showed that 65 percent of respondents said that overcoming culture and organizational silos was the toughest challenge to IT/OT integration, while 52 percent pointed to making business cases based on cost. Only three percent saw regulatory barriers as a challenge.

And, in many cases, that battle is not up to the C-suite level of leadership yet, Shepherd acknowledged. It may have to start with vice presidents of specific business units, who may want the long-term benefits of IT/OT convergence but don’t want to foot the bill for all of the upfront costs.

 “You’ve got to change the metrics,” he said, seeing the cost-benefits down the road from improved asset management, outage management, cybersecurity and telecommunications.

“If the C-suite hasn’t seen it, you’ve got to start at the next level down,” he said.

Accenture is in its fourth year of looking at trends in the grid adoption of digital technologies.

 

 

 

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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