by Neal Rich, Asset Engineering
Long before the orchestrated attack in February 2013 on the Metcalf substation of Pacific Gas and Electric Co., the complexity of operating hundreds of billions of dollars in transmission and substation assets has placed substation hardening and design at the forefront for many utility decision-makers.
What is the best design for a range of possible scenarios? Which hardening, security and design approaches will work best? What is the optimal substation engineering scheme to address multiple contingencies? Utilities are investing to find out.
In 2013, the top 200 U.S. utilities spent some $9.8 billion for transmission and substation operations and management, making O&M the largest and fastest growing expense among all asset-based power delivery-related expenses. What are they spending it on, and, more important, why?
To better understand these challenges and to better serve our utility design and engineering, procurement and construction clients, Asset Engineering partnered with McDonnell Group to conduct a nationwide utility research study in spring 2014. The study, just completed and distributed to the 30 participating utilities, examines key substation design, security and hardening or fortification-related business and technical drivers for transmission-level substation projects, including new builds, upgrades, electrical studies and other improvements, with a focus on substation assets of 69 kV or higher.
Researchers asked engineering managers, directors and executives for their views on physical security, hardening improvements and related efforts to increase reliability. These included optimization of digital relaying, protection and control systems, as well as designing for higher levels of contingency and real-time monitoring. Respondents provided detailed comments and rankings on a wide range of factors that played a role in project completion, timeliness, budgeting and overall quality and safety.
What’s the Big Deal? How About $9.8 Billion?
The 200 largest U.S. investor-owned utilities (IOUs) (reporting at the subsidiary rather than holding company level) had a total of $894 billion in assets as plant-in-service in 2013, with $158 billion in transmission and substation assets and $53 billion in additional construction work in progress (see Figure 1).
|1 2013 Plant in Service ($ Billion)|
The O&M expenditures associated with this $158 billion in transmission and substation assets were $9.8 billion in 2013, plus additional associated costs reported elsewhere in the Federal Energy Regulatory Commission (FERC) Form 1 data, including a portion of an additional $2.9 billion allocated to outside services. Both of these have grown at higher rates than all other equipment-related O&M expenses; 3.4 percent for O&M and 3.9 percent annually for outside services. Taken together with the related $4.7 billion in costs, these utilities spent on general and administrative salaries, transmission and substation-related O&M, which represents the largest and most rapidly growing of all power delivery-related expense categories.
The 30 participants in this study were among the largest U.S. IOUs. In the aggregate, the high-voltage substation assets of the participating utilities serve 24 percent of all U.S. electric utility customers and represent more than 20 percent of all U.S. high-voltage substation assets.
- The 30 participants consisted of decision-makers or the key decision influencers (83 percent), with the rest being influencers and advisors.
- Fully 73 percent of participants were the utilities’ decision-makers (23 percent) or decision influencers (50 percent).
- All participants were either very knowledgeable (40 percent) or knowledgeable (60 percent) about decisions related to their utilities’ substation projects of more than 69,000 V.
- Participants identified their job roles as engineer or engineering/operations managers (60 percent), engineering/operations directors (37 percent) or executives (3 percent).
What Has Worked? A Look Back Four Years
Participants were asked to rate the relative importance of several factors looking back at their utilities’ prior major substation projects in the past one to four years. The research questions focused on the impact of project on-time and on-budget performance, overall quality, safety and other measures of success.
|3 Looking Back at What Worked|
What’s Ahead? Issues to Address in Next Four Years
Designing scenarios and optimizing work with third-party contractors and firms are a couple of the challenges utility decision-makers face when managing substation projects. Scrutiny of their substation design, security and hardening is another challenge they face when making an effort to strengthen their grids’ cores.
|4 Issues of the Next Four Years|
Physical security and optimizing efforts to replace aging equipment came to the forefront of McDonnell Group’s research as key priorities for utilities to address in the next four years. Improvement areas ranged from physical security and hardening of substation assets to replacements and upgrades of aging equipment to better digital relaying, isolation, remote terminal units and control systems, along with better repair and retrofit decisions.
McDonnell Group’s study revealed a dynamic, yet familiar and trusted utility substation design culture striving to achieve cost-effective fortification amid myriad changes. Those responsible for substations are grappling with new standards, new technology and evolving threats to the industry’s safety and reliability mission. Utilities indicate that improving physical safety of hardening substation assets and replacing aging equipment will need to be addressed in the next four years. Some utilities will also have the foresight to improve their grids’ resiliency by preparing substation assets for the integration of solar and wind generation. An effective system for managing substation O&M is the most effective barrier against failure.
Neal Rich is managing partner of The Asset Co. PLLC. An electrical engineer licensed in 20 states, Rich serves the needs of electric utility substations, independent power plants and industrial power delivery systems.
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