Planning for the Future AMI World

By Michael Schulte, IBM Global Energy & Utilities Industry

The evolution of advanced metering infrastructure (AMI) technology continues to accelerate. This pace of change resembles that of the Internet more than the traditional utility world and warrants a re-examination of the approach to AMI technology investments and planning. To adapt to and benefit from this uncertainty and pace of change, utility AMI leaders should focus on three key elements:

1. Ensuring an Adaptable Interface Architecture

Utilities are increasingly insisting on open standards and modern software architectures to foster AMI solution interoperability. Service-oriented architecture (SOA), for example, was developed to support interoperable machine-to-machine interaction over a network via web services. The same SOA concepts that enable machine-to-machine interoperability are being driven down to the device level along the intelligent grid and within the energy-intelligent home.

Adopting architectures and standards that promote interoperability encourages vendors to develop new products that are better-suited to a wider utility market. It also enables the scale of interoperability necessary to transform electric operations into a system that integrates technologies and fast-tracks the industry to next-generation energy delivery. Finally, support of these services-oriented principles needs to extend to the interfaces with the utility’s customer information system and other legacy systems, without which the architecture solution cannot be complete.

2. Reinforcing MDMS Plug & Play Capabilities

Meter data management system (MDMS) vendors’ claims of easy “plug & play” capabilities represent a common aspect of AMI vendor evaluation and contracting. However, AMI decision-makers will need to push the demonstrability of this feature to new levels as a result of both the breadth and unpredictability of the AMI space. The range of challenges to be addressed by current and future AMI systems includes:

  • a variety of territories covered by one utility corporation;
  • a variety of topographies within the service territory;
  • explosive growth in the types and granularity of end-point data, including two-way data and commands; and,
  • uncertainty in the industry choice of backhaul technology.

All these factors point to a future where a premium value will be placed on the ability to manage changing AMI solutions, or even multiple concurrent solutions/vendors for the same energy commodity. MDMS vendors are aggressively pursuing this feature in their new product development and strategic partnerships. However, it remains a recommended practice that extensive prototype testing of MDMS performance with multiple AMI vendors takes place prior to an investment decision-especially given how little real market implementation experience is available.

3. Planning for Unexpected AMI Scenarios

Apart from infrastructure and system decisions, it is also important to examine how utility planning occurs in an AMI environment. Given the dynamic and accelerated pace of AMI technology, utility managers need to embrace a planning discipline that forces the analysis of unexpected, even disruptive, developments in the future market.

“Scenario envisioning,” an inductive, top-down approach to strategy development that hypothesizes future external scenarios independent of the past and present, and then links them to past and current trends, represents such a discipline. The scenarios are used in simulating business outcomes, which are in turn used to assess future strategies.

Such an approach allows managers to experience what it would be like to operate in unexpected yet plausible future scenarios-scenarios in which potential technology breakthroughs (or regulatory directives) could significantly alter the current AMI path. Scenario envisioning is a powerful approach for decision-makers in industries that are experiencing rapid discontinuous change, where the future cannot be neatly extrapolated from the past and present.

Managing in a period of uncertainty presents a unique set of challenges for today’s utility managers. Making the right choice for today, while leaving room for future new options is one of the key issues when planning for AMI. Utility managers need to understand both the current technologies and the realm of the possibilities. This understanding requires the use of the most current planning techniques and an adherence to flexible, open, adaptable architecture. After years of promise, AMI technologies are coming to fruition. Managing the risk and potential rewards requires careful and thoughtful planning.

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Michael Schulte is a managing consultant for IBM’s Energy & Utilities Global Business Services, which provides strategic consulting to clients regarding technology, process and regulatory issues. He has spent the past two years on the project management team for a major U.S. AMI implementation.

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