Over $1B to be spent on EMS/SCADA/DMS in 2003-2006

Loretta R. Smolenski, Newton-Evans Research Company, Inc.

In the second half of 2003, Newton-Evans Research Com-pany published its five-volume series of reports on the status and outlook for energy management systems, SCADA systems and distribution management systems in electric utilities worldwide. The study includes information gleaned from surveys of more than 350 utilities located in 37 countries, as well as from related Newton-Evans studies of information technology usage trends in electric power operations. This new report increases Newton-Evans’ extensive control center installation database to include profile information on more than 1,500 electric power utilities in more than 110 countries.

Volume 1, the North American study, found a continuing stagnating market for control systems spending. In spite of the recent major outages plaguing the nation and several international locations over the past four years, capital spending among U.S. and Canadian electric utilities has fallen, and operations and maintenance (O&M) spending remains flat. The report does note that many utility control center operations teams are doing more with less, and simply adding required new applications and modifications to older, existing platforms.

Twenty-five specific topics were incorporated in this volume, including: separate outage management systems and generation management systems; utility requirements for warranty and service agreements for EMS/SCADA/DMS (energy management systems/supervisory control and data acquisition/distribution management systems); importance of supplier user groups; vendors to be considered for future purchase of these systems; acceptable operating systems; protocol usage with the substation and from the substation to external hosts/networks; utility participation with ongoing cyber security initiatives; approaches used for reducing vulnerability on T&D operations networks; and current and planned use of more than 55 SCADA, DMS, EMS and distribution analysis functions and applications.

Many utilities now operate outage management systems (OMS) separately from SCADA. More than one-third of the respondents to this question indicated that their utilities had already installed such a system independent from the SCADA system. Another 21 percent were planning to install a separate OMS.

Generation management systems (GMS) on the other hand do not appear headed for that same degree of activity, with only a few sites (six percent) planning to implement a separate GMS over the three year forecast period. Only 13 percent of responding utilities already had a separate generation management system in operation. Most respondents indicate that AGC (automatic generation control) applications are sufficient in their respective environments.

Utilities are using a variety of approaches for reducing vulnerability on the operational networks, with most now using three or more alternative approaches. On the other hand, relatively few are actively involved with cyber security initiatives.

Security issues

Password protection was cited as the most frequently used approach of the 13 listed on the survey to reduce vulnerability on operations networks. Virus protection software was being used by 67 percent of the group, and 47 percent also made use of security schemes that were coordinated with the entire utility’s IT security plans (see Figure 1).

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The good news can be found in that the use of multiple cyber security approaches is growing. At least one-half of the utilities serving at least 250,000 customers were likely to have implemented nine of the listed vulnerability reduction measures. In contrast is the finding that utilities serving fewer than 100,000 customers are using only basic vulnerability reduction tools such as password and virus protection.

As a supplement to this focus on security measures, utilities were asked to indicate their awareness of, and participation in, various ongoing cyber initiatives. These included: EPRI’s Enterprise Information Security Program; the IEC Technical Committee 57, Work Group 15; CERT CC (Computer Emergency Response Team Coordination Center); FIRST (Forum of Incident Response and Security Teams); PCIS (Partnership for Critical Infrastructure Security; and, NERC’s (North American Electric Reliability Council) Critical Infrastructure Working Group.

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The NERC Critical Infrastructure Working Group was the only initiative having even a moderate level of participation, as indicated by 18 percent of utilities currently involved. Only three percent of the respondents indicated participation in either CERT CC or EPRI’s EIS Program.

Awareness was also still low in mid-2003 among a majority of utility officials pleading ignorance to the existence of these initiatives. While investor-owned utilities were more likely to be aware of EPRI and NERC security programs, this was by no means unanimous among the large North American utilities.

International view

Volume 2, the international market study, has found that mature Western and Asian economies are also suffering from a lack of reinvestment in electricity infrastructure, while developing nations are finding sources of funding to proceed with development of large national or regional power control centers.

Many of the issues researched in the North American volume were also examined in this international volume. One such area focused on utility requirements for warranty and service agreements for EMS/SCADA/DMS systems and field hardware procurement. International buyers do want at least a one-year warranty, and a sizable percentage (63 percent for central site hardware, 46 percent for remote site hardware, and 57 percent for applications software) wants multiyear warranties. Note that this is double the rate found in the North American study (31 percent for central site hardware, 23 percent for remote site hardware, and 26 percent for applications software indicating a requirement for multiyear warranties).

Regarding contractual service agreements, more than one-third of the international respondents noted a requirement for or interest in agreements of more than five years (35 percent for central site hardware, 36 percent for remote hardware, and 38 percent for applications software, see Figure 2). Again, these percentages are double the rate noted in the North American study. For contractual service agreements of over five years, 19 percent of the North American group indicated this length of time for central site hardware, 13 percent for remote hardware, and 21 percent for applications software.

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EMS and SCADA user group participation among international utilities continues to increase. Forty-seven percent of the survey respondents place a very high level of importance on these user groups, while another 43 percent noted that these groups were somewhat important to their utilities. Only six percent did not participate in any such group. Correspondingly, 32 percent of the North American group maintained that user groups were very important to their utility and 52 percent noted user groups were somewhat important. Seven percent did not participate. There were no responding investor-owned utilities that did not participate in these user groups.

Volume 3 provides world assessment and forecast of EMS, SCADA and DMS in electric utilities. This forecast is also provided for five major world regions—North America; Europe (East, West and Central); Latin America (Central and South); Mid-East, Mediterranean, and Africa; and, Asia Pacific and South Asia). This Global Market Outlook, forecasts spending for control center-based systems and technology to pick up, albeit slowly over the three year forecast period. Today’s global market for EMS, SCADA and distribution management systems is approaching $ 600 million per year. (see Figure 3). The related market outlook for operational IT systems used by power exchanges and for control systems used by the developing group of regional transmission operators and independent systems operators being established around the world is also covered in Volume 3.

Additionally, Volume 4 is a report profiling suppliers of control systems, software and related field equipment to the electric utility marketplace, and Volume 5 profiles electric power utilities around the world, providing summary descriptions of their control center systems and plans.

Smolenski is manager, operations at Newton-Evans.

Further information on the series is available at the Newton-Evans Research Company website (www.newton-evans.com) or by e-mail (lsmolenskil@newton-evans.com). The company can be reached by telephone at 1-800-222-2856 or 1-410-465-7316. The Newton-Evans Research Company is located at Suite 204, 10176 Baltimore National Pike, Ellicott City, Maryland 21042.

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