Intelligent Communications Platform Provides Foundation for Clean Technology Solutions to Smart Grid

Since the wake-up call of the 2003 blackout in the northeastern United States and Canada, there’s been a steady push to improve the North American power grid. Legislation in both the United States and Canada has encouraged investments in technologies intended to make the grid intelligent and to solve critical energy issues. The Energy Policy Act (EPAct) of 2005 mandated that each state evaluate the business case for advanced metering infrastructure (AMI). In Ontario, the Energy Conservation Responsibility Act of 2006 mandated deployment of smart meters to all consumers by 2010. And the recent U.S. Energy Independence and Security Act of 2007 expands support from the U.S. government for investments in smart grid technologies while further emphasizing the need for the power industry to play a leadership role in addressing carbon dioxide emissions affecting climate change.

Recent state-level legislation and consumer sentiment suggest an increasing appetite for investments in distributed clean-technology energy solutions. Distributed generation technologies such as solar, wind and bio-diesel are becoming more readily available and have the potential to significantly improve grid operations and reliability.

THE NEXT STEP

Although the full vision for the smart grid is still somewhat undefined, most agree that an intelligent communications platform is a necessary foundation for developing and realizing this vision. Of the 10 elements that define the smart grid as contained within the Energy Act of 2007, more than half directly relate to or involve advanced capabilities for advanced communications.

A core business driver for intelligent communications is full deployment of smart metering, also referred to as advanced metering infrastructure. AMI involves automated measurement of time-of-use energy consumption – at either hourly or 15-minute intervals – and provides for new time-of-use rates that encourage consumers to use energy during off-peak hours when generation costs are low rather than peak periods when generation costs are high and the grid is under stress. With time-of-use rates, consumers may continue to use power during high peak periods but will pay a higher price to do so. AMI may also include remote service switch functionality that can reduce costs associated with site visits otherwise required to manage move-out/move-ins or to support prepayment programs.

Other smart grid capabilities that may be easily realized through the deployment of intelligent communications and AMI include improved outage management detection and restoration monitoring, revenue assurance and virtual metering of distribution assets.

CRITICAL ATTRIBUTES OF AMI SOLUTIONS

Modern communications network solutions leverage standards-based technology such as IEEE 802.15.4 to provide robust two-way wireless mesh network communications to intelligent devices. The intelligent communications platform should provide for remote firmware upgrades to connected intelligent devices and be capable of leveraging Internet protocol-based communications across multiple wide-area network (WAN) options (Figure 1).

Critical for maximizing the value of a communications infrastructure investment is support for broad interoperability and interconnectivity. Interoperability for AMI applications means supporting a range of options for metering devices. A communications platform system should be meter manufacturer-independent, empowering choice for utilities. This provides for current and future competitiveness for the meter itself, which is one of the more expensive elements of the smart metering solution.

Interconnectivity for communications platforms refers to the ability to support a broad range of functions, both end-point devices and systems at the head end. To support demand-side management and energy-efficiency initiatives, an intelligent communications platform should support programmable communicating thermostats (PCTs), in-home displays (IHDs) and load control switches.

The system may also support standards-based home-area networks (HANs) such as ZigBee and Zensys. Ultimately an intelligent communications platform should support a model whereby third-party manufacturers can develop solutions that operate on the network, providing competitive options for utilities.

For enterprise system interconnectivity, an AMI demand-side management or other smart grid head-end application should be developed using service-oriented architecture (SOA) principles and Web technologies. These applications should also support modern Web services-based solutions, providing published simple object access protocol (SOAP)-based APIs. This approach provides for easier integration with existing enterprise systems and simplifies the process of adding functionality (either through enhancements provided by the vendor or add-ons delivered by third parties or developed by the utility).

Finally, the value of an intelligent communications platform deployment is driven by the ability of other enterprise applications and processes to utilize the vast amount of new data received through the AMI , demand side management and smart grid applications. Core areas of extended value include integration with customer information systems and call center processes, and integration with outage management and work management systems. In addition, the intelligent communications platform makes utilities much better able to market new offerings to targeted customers based on their energy consumption profiles while also empowering consumers with new tools and access to information. The result: greater control over energy consumption costs and improved satisfaction.

INTEGRATION OF DISTRIBUTED GENERATION RESOURCES

Deployment and integration of distributed generation, including renewable resources, is an important supply-side element of the smart grid vision. This may include the installation of arrays of solar photovoltaic panels on home and office roofs, solar carports, small wind (3-5kvA) turbines, small biogas turbines and fuel cells.

By integrating these resources into a common communications platform, utilities have the opportunity to develop solutions that achieve much greater results than those provided simply by the sum of independent systems. For example, intelligent plug-in hybrid electric vehicles (PHEvs) connected to a smart solar carport may choose when to purchase power for charging the car or even to sell power back to the grid in a vehicle-to-grid (v2G) model based on dynamic price signals received through the communications platform. By maintaining intelligence at the edge of the grid, consumers and distributed resource owners can be empowered to manage to their own benefits and the grid as a whole.

SUMMARY

Now is the time to embark on realizing the smart grid vision. Global warming and system reliability issues are driving a sense of urgency. An intelligent communications platform provides a foundation capable of supporting multiple devices in multiple environments – commercial, industrial and residential – working seamlessly together in a single unified network.

All of the technical assets of a smart grid can be managed holistically rather than as isolated or poorly connected parts. The power of a network grows geometrically according to the amount of resources and assets actively connected to it. This is the future of the smart grid, and it’s available today.

Smart Meters on a Roll in Canada

Electricity supply challenges in Ontario, Canada, have led the provincial government there to take aggressive action on both the supply and demand sides to meet customer electricity needs. Between now and 2025, it’s estimated that Ontario must build an almost entirely new electricity system – including replacing approximately 80 percent of current generating facilities (as they’re retired over time) and expanding the system to meet future growth. However, just as building new supply is vital, so too is conservation. That’s why Ontario’s provincial government is introducing new tools like smart meters to encourage electricity consumers to think more about how and when they use electricity. By implementing a smart metering infrastructure by 2010, the province hopes to provide a foundation for achieving a more than five percent reduction in provincial demand through load shifting, energy savings and price awareness.

Hydro One owns and operates one of the 10 largest transmission and distribution systems in North America, serving a geographic area of about 640,000 square kilometers. As the leading electricity transmitter and distributor in Ontario, the company supports the province’s goal of creating a conservation culture in Ontario and having a smart meter in every Ontario home and small business. The company’s allocation of the province’s target was 240,000 smart meters by 2007 and the full 1.3 million by 2010.

The task for Hydro One and other local distribution companies (LDCs) in the province is to meet the government time line while at the same time building an enabling solution that provides the most upside for operations, demand management and customer satisfaction. Working with the industry regulator and the LDCs, phased goals were established and allocated among the major utilities in the province.

ADVANCED METERING INFRASTRUCTURE AND SOLUTION ARCHITECTURE

Advanced metering infrastructure (AMI) is the term used to describe all of the hardware, software and connectivity required for a fully functioning smart metering system. To view AMI as just a technology to remotely read meters and bill customers, however, would be to miss the full potential of smart metering.

The core of the solution resides with the requirement for a ubiquitous communications network and an integration approach that provides for the exploitation of data from many types of devices (automated meter reading, load control, in-home displays, distribution monitoring and control and so on) by making it available to numerous enterprise applications (for example, customer information, outage management, asset management, geographic information and work execution systems).

To meet this requirement, the Hydro One team architected an end-to-end solution that rigorously sought open standards and the use of IP at all communications levels to ensure that the network and integration would be available to and compatible with numerous applications.

Hydro One’s AMI solution is based on standards (ANSI and IEEE) and open protocols (Zigbee and IP) to ensure maximum flexibility into the future as the technology and underlying applications such as in-home energy conservation devices (two-way real-time monitors, pool pump timers and so on) and various utility applications evolve.

Smart Meters

The “smarts” in any smart meter can be housed in virtually any meter platform. Meter reads are communicated at a frequency of 2.4 GHz by a radio housed under the meter’s glass. In essence, the hourly meter reads are transmitted by hopping from one meter to the next, forming a self-organizing network that culminates at the advanced meter regional collector (AMRC). This type of local area network, or LAN, is known as a mesh network and is known for its self-healing characteristics: if communication between meters is interrupted for any reason, communication paths between meters are automatically rerouted to the regional collector to ensure that data is delivered reliably and on time. The installed smart meters also have a “super capacitor,” enabling the meter to send a last communication to the utility when there has been a power outage.

Repeaters

Repeaters provide a wireless range extender for the meters and are used in less densely populated areas in the province to allow data to be transmitted from one meter to the next. Typically, repeaters are needed if the hop between meters is greater than 1 to 2 kilometers (depending on a number of factors, including terrain and ground cover).

Advanced Metering Regional Collectors

Typically installed on poles at preselected locations within a local area network, advanced metering regional collectors (AMRCs) gather the meter readings in a defined area. Most importantly, the AMRCs provide access to the wide area network (WAN), where data is sent wirelessly back to Hydro One. The AMI solution is designed to accommodate either wireless cellular or broadband WAN to backhaul hourly meter reads to the advanced metering control computer.

Advanced Metering Control Computer

The advanced metering control computer (AMCC) is used to retrieve and temporarily store meter reads from the regional collectors before they’re transmitted to the meter data management repository (discussed below). The information stored in the AMCC is available to log maintenance and data transmission faults, and to issue reports on the overall health of the AMI system.

Meter Data Management Repository

MDM/R is the acronym for the province-wide meter data management repository. The MDM/R provides a common infrastructure for receiving meter reads from all LDCs in Ontario, processing the reads to produce billing quality consumption data, and storing and managing the data. The Ontario government has entered into an agreement with the Independent Electricity System Operator to coordinate and manage implementation activities associated with the MDM/R.

Billing

Time-of-use “bucketed” data is sent from the MDM/R to Hydro One for any exception handling that may be required and for customer billing. Hydro One prepares the bill and sends it to the customer for payment.

Web Presentment of Customer Usage Data

Customer electricity usage data will be available to customers by 9 a.m. the day after they use it via a secure website. This data will be clearly marked as preliminary data until the customer has been billed.

GOALS, OBJECTIVES AND KEY ACCOMPLISHMENTS

To successfully deploy the smart metering solution described above, the Hydro One team set out to accomplish the following goals and objectives (which are enshrined in project governance plans and daily project activities):

  • Balance investment with the regulatory process to ensure that smart meter investments don’t get ahead of changes in regulatory requirements.
  • Design, test, prototype and pilot prior to buying or building – a rule that applies to all aspects of the smart meter solution architecture, from the meters and communication network to the back-office systems.
  • Delay building solution components until line-of-business requirements are locked down. Solution components that are unlikely to change will be built before other components to minimize the risk of rework.
  • Test smart meter deployment business processes, technology and customer experience throughout the process.
  • Ensure positive customer experience and value, including providing customers with information and tools to leverage smart meters in an appropriate time frame.
  • Use commercial, off-the-shelf (COTS) products where possible (as opposed to custom solutions).
  • Include estimation of total cost of ownership (one-time and ongoing costs) in architectural decision making.
  • Enable commencement of time-of-use (TOU) billing in 2009.

Key project accomplishments to date have included:

  • Building an in-situ lab using WiMax and meters in rural areas to test and confirm open protocols, wireless broadband interoperability, and meter performance;
  • Conducting a community rollout of about 15,000 meters to develop and successfully test and optimize meter change automation tools and customer communication processes;
  • Mass deploying of just over a quarter of a million meters across the province;
  • Designing and beginning to build the communication network to support the collection of hourly reads from approximately 1.3 million customers.

METER AND NETWORK DEPLOYMENT

Meter installation teams surpassed a notable milestone of 250,000 installed smart meters as of December 2007. Network deployment began in 2007 with a planned ramp-up in 2008 of installing more than 2,000 AMRCs province-wide.

Meeting these targets has required well-coordinated activities across the project team while working in parallel with external entities such as MeasurementCanada and others to ensure compliance with regulatory requirements.

Throughout meter and network deployment activities, Hydro One has adhered closely to three primary guiding principles, namely:

Safety. The following initiatives were factored into the project to help maintain a safe environment for all employees and business partners:

  • Internal training was integrated into the project from the inception, establishing a thorough yet common-sense compliant safety attitude throughout the team.
  • No employee is permitted to work on the project without a full safety refresher.
  • Safety represented a key element of incentive compensation for management and executive personnel.

Customer service. Given the opportunity to visit literally every customer, the success of this project is being judged daily by the manner in which the project team interacts with customers.

  • Every customer is provided with an information package within 15 to 30 days of the meter change.
  • Billing windows are scrupulously avoided through automation tools and integration to CIS in order to eliminate any disruption to the size, look and feel of the customer bill.
  • All customers receive a personal knock at the door before meter change.
  • All life-safety customers are changed by appointment or have positive contact made prior to meter change if they cannot be reached for an appointment

Productivity. Despite Hydro One’s rural footprint – which includes some areas so remote they must be accessed by all-terrain vehicle, boat or snowmobile – the installation teams maintain an average of 39.6 meters per installer-day with a peak of 97 per installer-day. They have achieved this through automation and a phased ramp-up of installers, including training and joint fieldwork with Hydro One’s partners.

IN-HOME CONSERVATION AND DEMAND MANAGEMENT

Testing will soon be underway using third-party devices for residential demand response programs that operate on the mesh network, including two-way realtime monitors, automated thermostats and load control devices. Optimally for customers, meters will serve as the key head-end device, connectable to numerous other devices within the home as illustrated in Figure 2.

While much of this technology is still in its infancy, North America-wide AMI deployments will rapidly accelerate resulting in greatly enhanced customer service opportunities going forward.

LEVERAGING THE SMART NETWORK TO INCREASE UTILITY EFFICIENCY

Hydro One is also looking ahead to applications that will leverage the smart metering communication network to increase the efficiency of its operations. As illustrated in Figure 3, these applications include distribution station monitoring, enhancements to outage management, safety monitoring, mobile work dispatch and work accomplishment, and asset security. All of the above applications have been tested in a proof-of-concept environment, and individual projects are planned to proceed on a business case basis.

Opportunity Ahead: The Aging Workforce

Conventional thinking has it that the utility industry’s aging workforce represents a critical problem demanding a call to arms. But is an aging workforce really just a human resources dilemma? Or can it be viewed more broadly as a window through which utilities can examine ways to foster positive change for the future of their organizations? When viewed in this light, the exit of a large cohort of skilled workers may represent the most significant opportunity a utility will ever confront – one that could fundamentally alter the way it does business and upgrades financial performance.

At most utilities, little or no opportunity exists for significant revenue growth (a situation that’s persisted for some time) at the same time that personnel-related expenses have continued to increase and squeeze profit margins. To achieve the annual earnings improvement targets of 10 to 15 percent that stakeholders have come to expect, utilities have had no alternative but to reduce ongoing operational expenses dramatically – and often that’s meant cutting staff.

But the days of dramatic expense cuts based on typical cost reduction strategies are all but over. With nearly a third of the industry eligible to retire today, further personnel cuts aren’t warranted. Utilities are now confronted with a unique opportunity to make business improvements to reduce future costs. One approach involves using innovative technology to:

  • Lessen headcount requirements and make better use of reduced staffs;
  • Capture the knowledge base of skilled workers before they depart the workforce;
  • Reduce the number of people required to carry out a task by improving data access and communications among operating units;
  • Emphasize availability and use of key skills (rather than number of personnel);
  • Create true “best practices” (rather than continue to rely on “status quo practices”); and
  • Develop a “digital organization” that excites and retains new hires.

The utilities that will be successful in the future – the high-performance utilities – won’t hire their way to success. After all, there will be fewer skilled workers available for hire; recruitment will remain costly; and ongoing personnel-related expenses will continue to escalate. Instead, the high-performance utility will institutionalize its key procedures and business processes (by capturing existing employee knowledge) and exploit documented best practices before employees fly out the door.

Forward-looking utilities must invest in strategic technology, using a variety of partner models to meet their requirements. Technology solutions that solve localized issues will not address the future. Solutions that are able to look at a utility horizontally – as an organization with many parts that need to perform as a single entity – will serve as an important means of dealing with the disappearing workforce.

WHAT ARE UTILITIES LOSING … AND GAINING?

The imminent loss of critical skills and knowledge base caused by an aging workforce approaching retirement represents a demographic tsunami – a force unprecedented in business history. During the next five to 10 years, many utilities will lose as much as 50 percent of their current workforce to retirement. Clerical and administrative staff, as well as field technicians, managers and supervisors, engineers, IT personnel and business executives will all be part of the retirement wave.

The effect of utility workforce retirement is more profound than simple personnel turnover, because it represents a loss of critical knowledge. This knowledge base embodies the art of the organization – not just the information documented in manuals, maps, procedures and databases but also the organization’s culture and attitudes.

As younger workers replace an aging and departing workforce, utilities could witness the fracture of the motivational belief system that once bound the workforce. To meet the utility’s objectives, new workers need to have access to the expertise and knowledge of prior generations of workers. They can then build on this knowledge with their own experiences, helping the utility achieve a new and positive culture for success.

CONVENTIONAL SOLUTIONS

Industry literature suggests a number of solutions to the aging utility workforce problem:

  • Long-term staffing plans;
  • Partnerships with universities and community colleges;
  • Continuing education and training programs;
  • Active involvement in industry organizations; and
  • Internal knowledge sharing programs.

Each of these approaches plays a role in the solution, but collectively they still fall short of truly lessening the impact of the loss of half (or more) of a utility’s workforce. To wit: the number of students enrolled in college math and science programs (with the exception of computer and information science) continues to decline. And in the last 15 years, colleges and universities have seen a 50 percent decline in the number of graduating engineers (one of many skill sets a utility requires). All of which means that as utilities lose their skilled workers, they will not be able to replace those skills by drawing from the current labor pool. Solutions other than hiring programs will be needed to bridge the gap between skills lost and skills needed.

THE ROLE OF TECHNOLOGY

Much of the technology utilities have implemented over the past five to 10 years has taken the form of “point” software solutions. By solving specific and limited problems, this software has tended to reinforce status quo business practices rather than enable innovation or better problem solving.

In many utilities, status quo means a vertical organization – a group of departmental silos that define the utility’s corporate structure. In a vertical structure, each group or department operates as a somewhat isolated entity, and each group “owns” the work to which it is assigned. But the manner in which utilities conduct business is comprised of horizontal processes spanning the office and the field – processes that are driven by the customer, whether commercial, industrial or residential.

Thus, vertical organizations often inhibit the type of change that can reduce headcount requirements and ensure better communication between remaining personnel. But changes that help flatten an organization horizontally – so that operations and procedures are viewed from end to end – can streamline business processes to improve handoffs between job roles and eliminate time-consuming and labor-intensive administration steps.

In the future, high-performance utilities will of necessity implement horizontal business process solutions that involve multiple systems spanning former organizational silos such as customer service and distribution operations. Horizontal solutions represent a quantum change in project complexity that will stretch many utilities’ internal organizations and define the systems integration market in the future.

The major opportunity offered by an integrated, horizontal solution lies in the creation of a strategic technology platform that offers the benefits of positive change and value creation. Such changes will be critical in supporting a utility as it undergoes workforce attrition and cultural evolution due to workforce retirements. The following represent some of the opportunities for change that high-performance utilities should be reviewing.

Business Process Change Opportunities

The term best practices has sometimes been defined as a generic methodology or a detailed scripting of events rather than an organized, documented view of the preferred and streamlined way to carry out a particular procedure. Many major technology initiatives and systems implementations have failed to deliver value to the utility because the true “best” practice is never defined, and therefore the transformation of the business process never occurs. The pressure to reduce costs and the rush to adopt scripts of existing procedures are the primary reasons for this disappointment.

The high-performance utility of the future, then, must commit to accurately defined best practices and a program of continuous process improvement. Such programs reduce costs by simplifying and standardizing business processes, eliminating paperwork and redundant data, reducing personnel interface points and viewing a utility’s operations from office to field as a single continuum. A strong strategic technology platform can support the capture and reinforcement of these standards.

Design Engineering Opportunities

The average investor-owned utility in North America has more than 50 design engineers architecting construction work undertaken by the utility. The design of such work involves significant systems support, including a geographic information system (GIS) and a graphical work design interface that links the GIS to a work management system.

Much of the construction work and underlying design work undertaken by utilities is repetitive. This type of repetitive work – particularly for light or medium construction activities – lends itself to design templates. In fact, design templates could accommodate as much as 80 percent of the design engineering workload. The development of a best practice based on standard designs for discrete types of work (and institutionalizing a standard design as a replicable template for the engineering department) can reduce a utility’s dependence on an increasingly limited supply of talented engineering labor.

Scheduling and Dispatching Opportunities

The average investor-owned utility (IOU) in North America has more than 700 field crews serving trouble response, customer service, maintenance and construction activities. Although job function definitions and responsibilities vary among utilities, the roles that manage the deployment of field crews may be defined as 1) schedulers; 2) dispatchers; 3) administrative personnel; and 4) field supervisors. All of these individuals may actively schedule or dispatch the field workforce, even within the same utility.

The same average IOU also has as many as 60 full-time employees (approximately one for every 12 field crews) involved in scheduling, dispatching, monitoring and providing administrative support to the field workforce. The staff handling these tasks is often functionally, organizationally and geographically dispersed – thanks largely to the point software mobile applications that mirror the organizational silos that acquired the applications. Typically, each piece of software addresses one job type: emergencies, customer service, maintenance or construction. Accordingly, each department employs multiple staff to schedule and/or dispatch each type of job.

This kind of environment spells opportunity for utilities facing shrinking workforces, since a single scheduling and dispatching technology can have immense cost-reduction implications (including reducing redundant job roles.)

The scheduling of field personnel can also be worked into a single dispatch strategy. Utilities need a unified method of work allocation – a kind of utility command and control center for scheduling and dispatching all work. The right strategic technology platform incorporates significant business intelligence, understands job dependencies, employs least-cost routing and continually provides the user with an optimized schedule throughout the workday. As the scheduling software assumes more of the scheduling responsibility, the 60 full-time employees formerly required by an average utility become unnecessary, thereby eliminating a major staffing concern.

Wireless Opportunities

For the last two years in North America, utilities have issued more RFPs for mobile workforce management than any other application domain. All of the top 100 North American IOUs employ some form of mobile deployment. However, these applications are point software solutions that address one job type, such as trouble reporting; they do not currently support a horizontal dispatching and scheduling function. Furthermore, many utilities lack an overarching, dedicated wireless strategy to fully mobilize the workforce.

Utilities require a plug-and-play wireless communications architecture that 1) manages the fl ow of data between office and field; 2) maximizes the bandwidth and throughput of existing utility RF radio, wire line and wireless networks; 3) assigns priorities to time-sensitive data; and 4) provides least-cost routing (network choice). This represents a complex undertaking – and one that no utility has yet mastered. There is no generic plug-and-play platform that manages field workforces in this way. Indeed, a universal communications platform (dispatch) that manages all types of work has been the holy grail of the network connectivity business. No utility has this capability today.

Once it is achieved, however, a universal architecture will allow the utility to plug-and-play back-office and mobile applications to broaden the footprint of work conducted wirelessly in the field. A universal mobile application controller that manages all types of work will power the future of mobile computing for the industry – but no utility has this capability today. In addition to application and network independence, the utility’s wireless enterprise strategy must accommodate the management of multiple field devices, and the supporting server and communications hardware/middleware environment.

An integrated universal communications platform must be viewed as the next technology that will enable utilities to lessen their dependence on headcount. The technologies that support such a platform are being created now; in order to blunt the impact of a disappearing workforce, high-performance utilities need to begin partnering with systems integrators that can bring these technologies to the table.

THE FUTURE OF TECHNOLOGY: SOLUTION OPTIMIZATION

The next significant strategic technologies implemented by utilities will be those that optimize solutions and processes. These systems will help the utility institutionalize the knowledge of seasoned employees and incorporate that knowledge into documented, sustainable best practices. In addition, new strategic technologies will help the utility evolve best practices over time through a program of continuous process improvement. Furthermore, these new technologies will provide the utility with ways to most effectively use both new and existing applications to perform work across the entire horizontal utility organization.

Instead of tactically buying enabling technology such as software, utilities will strategically partner with organizations that can deliver technology that creates value within the utility. Utilities will increasingly seek partners who own the business result, not simply the process or the IT infrastructure. Such partners will share utility risk and reward in a program of continuous process improvement, as they and the utility constantly refine and optimize solutions.

CONCLUSION

What will the high-performance utility look like in 10 years? For starters, it will have fewer employees and more new faces. It will have lost much of the culture it relied on to drive its business forward. But if it makes the right plans today, it will ultimately gain a new culture that takes advantage of the best of the old knowledge combined with the advantages of a new strategic technology platform. The new platform will unite all segments of utility operations within a single set of business goals. A workforce that is disappearing due to retirement doesn’t need to spell disaster if a utility takes steps now. These steps include applying conventional hiring approaches, embracing new technology and seeking out vendor partnerships to help unite and optimize the utility’s work processes.

Policy and Regulatory Initiatives And the Smart Grid

Public policy is commonly defined as a plan of action designed to guide decisions for achieving a targeted outcome. In the case of smart grids, new policies are needed if smart grids are actually to become a reality. This statement may sound dire, given the recent signing into law of the 2007 Energy Independence and Security Act (EISA) in the United States. And in fact, work is underway in several countries to encourage smart grids and smart grid components such as smart metering. However, the risk still exists that unless stronger policies are enacted, grid modernization investments will fail to leverage the newer and better technologies now emerging, and smart grid efforts will never move beyond demonstration projects. This would be an unfortunate result when you consider the many benefits of a true smart grid: cost savings for the utility, reduced bills for customers, improved reliability and better environmental stewardship.

REGIONAL AND NATIONAL EFFORTS

As mentioned above, several regions are experimenting with smart grid provisions. At the national level, the U.S. federal government has enacted two pieces of legislation that support advanced metering and smart grids. The Energy Policy Act of 2005 directed U.S. utility regulators to consider time-of-use meters for their states. The 2007 EISA legislation has several provisions, including a list of smart grid goals to encourage two-way, real-time digital networks that stretch from a consumer’s home to the distribution network. The law also provides monies for regional demonstration projects and matching grants for smart grid investments. The EISA legislation also mandates the development of an “interoperability framework.”

In Europe, the European Union (E.U.) introduced a strategic energy technology plan in 2006 for the development of a smart electricity system over the next 30 years. The European Technology Platform organization includes representatives from industry, transmission and distribution system operators, research bodies and regulators. The organization has identified objectives and proposes a strategy to make the smart grid vision a reality.

Regionally, several U.S. states and Canadian provinces are focused on smart grid investments. In Canada, the Ontario Energy Board has mandated smart meters, with meter installation completion anticipated by 2010. In Texas, the Public Utilities Commission of Texas (PUCT) has finalized advanced metering legislation that authorizes metering cost recovery through surcharges. The PUCT also stipulated key components of an advanced metering system: two-way communications, time-date stamp, remote connect/disconnect, and access to consumer usage for both the consumer and the retail energy provider. The Massachusetts State Senate approved an energy bill that includes smart grid and time-of-use pricing. The bill requires that utilities submit a plan by Sept. 1, 2008, to the Massachusetts Public Utilities Commission, establishing a six-month pilot program for a smart grid. Most recently, California, Washington state and Maryland all introduced smart grid legislation.

AN ENCOMPASSING VISION

While these national and regional examples represent just a portion of the ongoing activity in this area, the issue remains that smart grid and advanced metering pilot programs do not guarantee a truly integrated, interoperable, scalable smart grid. Granted, a smart grid is not achieved overnight, but an encompassing smart grid vision should be in place as modernization and metering decisions are made, so that investment is consistent with the plan in mind. Obviously, challenges – such as financing, system integration and customer education – exist in moving from pilot to full grid deployment. However, many utility and regulatory personnel perceive these challenges to be ones of costs and technology readiness.

The costs are considerable. KEMA, the global energy consulting firm, estimates that the average cost of a smart meter project (representing just a portion of a smart grid project) is $775 million. The E.U.’s Strategic Energy Technology Plan estimates that the total smart grid investment required could be as much as $750 billion. These amounts are staggering when you consider that the market capitalization of all U.S. investor-owned electric utilities is roughly $550 billion. However, they’re not nearly as significant when you subtract the costs of fixing the grid using business-as-usual methods. Transmission and distribution expenditures are occurring with and without intelligence. The Energy Information Administration (EIA) estimates that between now and 2020 more than $200 billion will be spent to maintain and expand electricity transmission and distribution infrastructures in the United States alone.

Technology readiness will always be a concern in large system projects. Advances are being made in communication, sensor and security technologies, and IT. The Federal Communications Commission is pushing for auctions to accelerate adoption of different communication protocols. Price points are decreasing for pervasive cellular communication networks. Electric power equipment manufacturers are utilizing the new IEC 61850 standard to ensure interoperability among sensor devices. vendors are using approaches for security products that will enable north American Electric Reliability Corp. (nERC) and critical infrastructure protection (CIP) compliance.

In addition, IT providers are using event-driven architecture to ensure responsiveness to external events, rather than processing transactional events, and reaching new levels with high-speed computer analytics. leading service-oriented architecture companies are working with utilities to establish the underlying infrastructure critical to system integration. Finally, work is occurring in the standards community by the E.U., the Gridwise Architecture Council (GAC), Intelligrid, the national Energy Technology laboratory (nETl) and others to create frameworks for linking communication and electricity interoperability among devices, systems and data flows.

THE TIME IS NOW

These challenges should not halt progress – especially when one considers the societal benefits. Time stops for no one, and certainly in the case of the energy sector that statement could not be more accurate. Energy demand is increasing. The Energy Information Administration estimates that annual energy demand will increase roughly 50 percent over the next 25 years. Meanwhile, the debate over global warming seems to have waned. Few authorities are disputing the escalating concentrations of several greenhouse gases due to the burning of fossil fuels. The E.U. is attempting to decrease emissions through its 2006 Energy Efficiency directive. Many industry observers in the United States believe that there will likely be federal regulation of greenhouse gases within the next three years.

A smart grid would address many of these issues, giving options to the consumer to manage their usage and costs. By optimizing asset utilization, the smart grid will provide savings in that there is less need to build more power plants to meet increased electricity demand. As a self-healing grid that detects, responds and restores functions, the smart grid can greatly reduce the economic impact of blackout and power interruption grid failures.

A smart grid that provides the needed power quality can ensure the strong and resilient energy infrastructure necessary for the 21st-century economy. A smart grid also offers consumers options for managing their usage and costs. Further, a smart grid will enable plug-and-play integration of renewables, distributed resources and control systems. lastly, a smart grid will better enable plug-and-play integration of renewables, distributed resources and control systems.

INCENTIVES FOR MODERNIZATION

despite all of these potential benefits, more incentives are needed to drive grid modernization efforts. Several mechanisms are available to encourage investment. Some utilities are already using or evaluating alternative rate structures such as net metering and revenue decoupling to give utilities and consumer incentives to use less energy. net metering awards energy incentives or credit for consumer-based renewables. And revenue decoupling is a mechanism designed to eliminate or reduce dependence of a utility’s revenues on sales. Other programs – such as energy-efficiency or demand-reduction incentives – motivate consumers and businesses to adopt long-term energy-efficient behaviors (such as using programmable thermostats) and to consider energy efficiency when using appliances and computers, and even operating their homes.

Policy and regulatory strategy should incorporate these means and include others, such as accelerated depreciation and tax incentives. Accelerated depreciation encourages businesses to purchase new assets, since depreciation is steeper in the earlier years of the asset’s life and taxes are deferred to a later period. Tax incentives could be put in place for purchasing smart grid components. Utility Commissions could require utilities to consider all societal benefits, rather than just rate impacts, when crafting the business case. Utilities could take federal income tax credits for the investments. leaders could include smart grid technologies as a critical component of their overall energy policy.

Only when all of these policies and incentives are put in place will smart grids truly become a reality.

SmartGridNet Architecture for Utilities

With the accelerating movement toward distributed generation and the rapid shift in energy consumption patterns, today’s power utilities are facing growing requirements for improved management, capacity planning, control, security and administration of their infrastructure and services.

UTILITY NETWORK BUSINESS DRIVERS

These requirements are driving a need for greater automation and control throughout the power infrastructure, from generation through the customer site. In addition, utilities are interested in providing end-customers with new applications, such as advanced metering infrastructure (AMI), online usage reports and outage status. In addition to meeting these requirements, utilities are under pressure to reduce costs and automate operations, as well as protect their infrastructures from service disruption in compliance with homeland security requirements.

To succeed, utilities must seamlessly support these demands with an embedded infrastructure of traditional devices and technologies. This will allow them to provide a smooth evolution to next-generation capabilities, manage life cycle issues for aging equipment and devices, maintain service continuity, minimize capital investment, and ensure scalability and future-proofing for new applications, such as smart metering.

By adopting an evolutionary approach to an intelligent communications network (SmartGridNet), utilities can maximize their ability to leverage the existing asset base and minimize capital and operations expenses.

THE NEED FOR AN INTELLIGENT UTILITY NETWORK

As a first step toward implementing a SmartGridNet, utilities must implement intelligent electronic devices (IEDs) throughout the infrastructure – from generation and transmission through distribution directly to customer premises – if they are to effectively monitor and manage facilities, load and usage. A sophisticated operational communications network then interconnects such devices through control centers, providing support for supervisory control and data acquisition (SCADA), teleprotection, remote meter reading, and operational voice and video. This network also enables new applications such as field personnel management and dispatch, safety and localization. In addition, the utility’s corporate communications network increases employee productivity and improves customer service by providing multimedia; voice, video, and data communications; worker mobility; and contact center capabilities.

These two network types – operational and corporate – and the applications they support may leverage common network facilities; however, they have very different requirements for availability, service assurance, bandwidth, security and performance.

SMARTGRIDNET REQUIREMENTS

Network technology is critical to the evolution of the next-generation utility. The SmartGridNet must support the following key requirements:

  • Virtualization. Enables operation of multiple virtual networks over common infrastructure and facilities while maintaining mutual isolation and distinct levels of service.
  • Quality of service (QoS). Allows priority treatment of critical traffic on a “per-network, per-service, per-user basis.”
  • High availability. Ensures constant availability of critical communications, transparent restoration and “always on” service – even when the public switched telephony network (PSTN) or local power supply suffers outages.
  • Multipoint-to-multipoint communications. Provides integrated control and data collection across multiple sensors and regulators via synchronized, redundant control centers for disaster recovery.
  • Two-way communications. Supports increasingly sophisticated interactions between control centers and end-customers or field forces to enable new capabilities, such as customer sellback, return or credit allocation for locally stored power; improved field service dispatch; information sharing; and reporting.
  • Mobile services. Improves employee efficiency, both within company facilities and in the field.
  • Security. Protects the infrastructure from malicious and inadvertent compromise from both internal and external sources, ensures service reliability and continuity, and complies with critical security regulations such as North American Electric Reliability Corp. (NERC).
  • Legacy service integration. Accommodates the continued presence of legacy remote terminal units (RTUs), meters, sensors and regulators, supporting circuit, X.25, frame relay (FR), and asynchronous transfer mode (ATM) interfaces and communications.
  • Future-proofing. Capability and scalability to meet not just today’s applications, but tomorrow’s, as driven by regulatory requirements (such as smart metering) and new revenue opportunities, such as utility delivery of business and residential telecommunications (U-Telco) services.

SMARTGRIDNET EVOLUTION

A number of network technologies – both wire-line and wireless – work together to achieve these requirements in a SmartGridNet. Utilities must leverage a range of network integration disciplines to engineer a smooth transformation of their existing infrastructure to a SmartGridNet.

The remainder of this paper describes an evolutionary scenario, in which:

  • Next-generation synchronous optical network (SONET)-based multiservice provisioning platforms (MSPPs), with native QoS-enabled Ethernet capabilities are seamlessly introduced at the transport layer to switch traffic from both embedded sensors and next-generation IEDs.
  • Cost-effective wave division multiplexing (WDM) is used to increase communications network capacity for new traffic while leveraging embedded fiber assets.
  • Multiprotocol label switching (MPLS)/ IP routing infrastructure is introduced as an overlay on the transport layer only for traffic requiring higher-layer services that cannot be addressed more efficiently by the transport layer MSPPs.
  • Circuit emulation over IP virtual private networks (VPNs) is supported as a means for carrying sensor traffic over shared or leased network facilities.
  • A variety of communications applications are delivered over this integrated infrastructure to enhance operational efficiency, reliability, employee productivity and customer satisfaction.
  • A toolbox of access technologies is appropriately applied, per specific area characteristics and requirements, to extend power service monitoring and management all the way to the end-customer’s premises.
  • A smart home network offers new capabilities to the end-customer, such as Advanced Metering Infrastructure (AMI), appliance control and flexible billing models.
  • Managed and assured availability, security, performance and regulatory compliance of the communications network.

THE SMARTGRIDNET ARCHITECTURE

Figure 1 provides an architectural framework that we may use to illustrate and map the relevant communications technologies and protocols.

The backbone network in Figure 1 interconnects corporate sites and data centers, control centers, generation facilities, transmission and distribution substations, and other core facilities. It can isolate the distinct operational and corporate communications networks and subnetworks while enforcing the critical network requirements outlined in the section above.

The underlying transport network for this intelligent backbone is made up of both fiber and wireless (for example, microwave) technologies. The backbone also employs ring and mesh architectures to provide high availability and rapid restoration.

INTELLIGENT CORE TRANSPORT

As alluring as pure packet networks may be, synchronous SONET remains a key technology for operational backbones. Only SONET can support the range of new and legacy traffic types while meeting the stringent absolute delay, differential delay and 50-millisecond restoration requirements of real-time traffic.

SONET transport for legacy traffic may be provided in MSPPs, which interoperate with embedded SONET elements to implement ring and mesh protection over fiber facilities and time division multiplexing (TDM)-based microwave. Full-featured Ethernet switch modules in these MSPPs enable next-generation traffic via Ethernet over SONET (EOS) and/or packet over SONET (POS). Appropriate, cost-effective wave division multiplexing (WDM) solutions – for example, coarse, passive and dense WDM – may also be applied to guarantee sufficient capacity while leveraging existing fiber assets.

BACKBONE SWITCHING/ROUTING

From a switching and routing perspective, a significant amount of traffic in the backbone may be managed at the transport layer – for example, via QoS-enabled Ethernet switching capabilities embedded in the SONET-based MSPPs. This is a key capability for supporting expedited delivery of critical traffic types, enabling utilities to migrate to more generic object-oriented substation event (GOOSE)-based inter-substation communications for SCADA and teleprotection in the future in accordance with standards such as IEC 61850.

Where higher-layer services – for example, IP VPN, multicast, ATM and FR – are required, however, utilities can introduce a multi-service switching/routing infrastructure incrementally on top of the transport infrastructure. The switching infrastructure is based on multi-protocol label switching (MPLS), implementing Layer 2 transport encapsulation and/or IP VPNs, per the relevant Internet engineering task force (IETF) requests for comments (RFCs).

This type of unified infrastructure reduces operations costs by sharing switching and restoration capabilities across multiple services. Current IP/MPLS switching technology is consistent with the network requirements summarized above for service traffic requiring higher-layer services, and may be combined with additional advanced services such as Layer 3 VPNs and unified threat management (UTM) devices/firewalls for further protection and isolation of traffic.

CORE COMMUNICATIONS APPLICATIONS

Operational services such as tele-protection and SCADA represent key categories of applications driving the requirements for a robust, secure, cost-effective network as described. Beyond these, there are a number of communications applications enabling improved operational efficiency for the utility, as well as mechanisms to enhance employee productivity and customer service. These include, but are not limited to:

  • Active network controls. Improves capacity and utilization of the electricity network.
  • Voice over IP (VoIP). Leverages common network infrastructure to reduce the cost of operational and corporate voice communications – for example, eliminating costly channel banks for individual lines required at remote substations.
  • Closed circuit TV (CCTV)/Video Over IP. Improves surveillance of remote assets and secure automated facilities.
  • Multimedia collaboration. Combines voice, video and data traffic in a rich application suite to enhance communication and worker productivity, giving employees direct access to centralized expertise and online resources (for example, standards and diagrams).
  • IED interconnection. Better measures and manages the electricity networks.
  • Mobility. Leverages in-plant and field worker mobility – via cellular, land mobile radio (LMR) and WiFi – to improve efficiency of key work processes.
  • Contact center. Employs next-generation communications and best-in-class customer service business processes to improve customer satisfaction.

DISTRIBUTION AND ACCESS NETWORKS

The intelligent utility distribution and access networks are subtending networks from the backbone, accommodating traffic between backbone switches/applications and devices in the distribution infrastructure all the way to the customer premises. IEDs on customer premises include automated meters and device regulators to detect and manage customer power usage.

These new devices are primarily packet-based. They may, therefore, be best supported by packet-based access network technologies. However, for select rings, TDM may also be chosen, as warranted. The packet-based access network technology chosen depends on the specifics of the sites to be connected and the economics associated with that area (for example, right of way, customer densities and embedded infrastructure).

Regardless of the access and last-mile network designs, traffic ultimately arrives at the network via an IP/MPLS edge switch/router with connectivity to the backbone IP/MPLS infrastructure. This switching/routing infrastructure ensures connectivity among the intelligent edge devices, core capabilities and control applications.

THE SMART HOME NETWORK

A futuristic home can support many remotely controlled and managed appliances centered on lifestyle improvements of security, entertainment, health and comfort (see Figure 2). In such a home, applications like smart meters and appliance control could be provided by application service providers (ASPs) (such as smart meter operators or utilities), using a home service manager and appropriate service gateways. This architecture differentiates between the access provider – that is, the utility/U-Telco or other public carrier – and the multiple ASPs who may provide applications to a home via the access provider.

FLEXIBLE CHARGING

By employing smart meters and developing the ability to retrieve electricity usage data at regular intervals – potentially several readings per hour – retailers could make billing a significant competitive differentiator. detailed usage information has already enabled value-added billing in the telecommunications world, and AMI can do likewise for billing electricity services. In time, electricity users will come to expect the same degree of flexible charging with their electricity bill that they already experience with their telephone bills, including, for example, prepaid and post-paid options, tariff in function of time, automated billing for house rental (vacation), family or group tariffs, budget tariffs and messaging.

MANAGING THE COMMUNICATIONS NETWORK

For utilities to leverage the communications network described above to meet business key requirements, they must intelligently manage that network’s facilities and services. This includes:

  • Configuration management. Provisioning services to ensure that underlying switching/routing and transport requirements are met.
  • Fault and performance management. Monitoring, correlating and isolating fault and performance data so that proactive, preventative and reactive corrective actions can be initiated.
  • Maintenance management. Planning of maintenance activities, including material management and logistics, and geographic information management.
  • Restoration management. Creating trouble tickets, dispatching and managing the workforce, and carrying out associated tracking and reporting.
  • Security management. Assuring the security of the infrastructure, managing access to authorized users, responding to security events, and identifying and remediating vulnerabilities per key security requirements such as NERC.

Utilities can integrate these capabilities into their existing network management infrastructures, or they can fully or partially outsource them to managed network service providers.

Figure 3 shows how key technologies are mapped to the architectural framework described previously. Being able to evolve into an intelligent utilities network in a cost-effective manner requires trusted support throughout planning, design, deployment, operations and maintenance.

CONCLUSION

Utilities can evolve their existing infrastructures to meet key SmartGridnet requirements by effectively leveraging a range of technologies and approaches. Through careful planning, designing, engineering and application of this technology, such firms may achieve the business objectives of SmartGridnet while protecting their current investments in infrastructure. Ultimately, by taking an evolutionary approach to SmartGridnet, utilities can maximize their ability to leverage the existing asset base as well as minimize capital and operations expenses.

Software-Based Intelligence: The Missing Link in the SmartGrid Vision

Achieving the SmartGrid vision requires more than advanced metering infrastructure (AMI), supervisory control and data acquisition (SCADA), and advanced networking technologies. While these critical technologies provide the main building blocks of the SmartGrid, its fundamental keystone – its missing link – will be embedded software applications located closer to the edge of the electric distribution network. Only through embedded software will the true SmartGrid vision be realized.

To understand what we mean by the SmartGrid, let’s take a look at some of its common traits:

  • It’s highly digital.
  • It’s self-healing.
  • It offers distributed participation and control.
  • It empowers the consumer.
  • It fully enables electricity markets.
  • It optimizes assets.
  • It’s evolvable and extensible.
  • It provides information security and privacy.
  • It features an enhanced system for reliability and resilience.

All of the above-described traits – which together comprise a holistic definition of the SmartGrid – share the requirement to embed intelligence in the hardware infrastructure (which is composed of advanced grid components such as AMI and SCADA). Just as important as the hardware for hosting the embedded software are the communications and networking technologies that enable real-time and near realtime communications among the various grid components.

The word intelligence has many definitions; however, the one cited in the 1994 Wall Street Journal article “Mainstream Science on Intelligence” (by Linda Gottfredson, and signed by 51 other professors) offers a reasonable application to the SmartGrid. It defines the word intelligence as the “ability to reason, plan, solve problems, think abstractly, comprehend complex ideas, learn quickly and learn from experience.”

While the ability of the grid to approximate the reasoning and learning capabilities of humans may be a far-off goal, the fact that the terms intelligence and smart appear so often these days begs the following question: How can the existing grid become the SmartGrid?

THE BRAINS OF THE OPERATION

The fact that the SmartGrid derives its intelligence directly from analytics and algorithms via embedded intelligence applications based on analytical software can’t be overemphasized. While seemingly simple in concept and well understood in other industries, this topic typically isn’t addressed in any depth in many SmartGrid R&D and pilot projects. Due to the viral nature of the SmartGrid industry, every company with any related technology is calling that technology SmartGrid technology – all well and good, as long as you aren’t concerned about actually having intelligence in your SmartGrid project. It is this author’s opinion, however, that very few companies actually have the right stuff to claim the “smart” or “intelligence” part of the SmartGrid infrastructure – what we see as the missing link in the SmartGrid value chain.

A more realistic way to define intelligence in reference to the SmartGrid might read as follows:

The ability to provide longer-term planning and balancing of the grid; near and real-time sensing, filtering and planning; and balancing of the grid, with additional capabilities for self-healing, adaptive response and upgradeable logic to support continuous changes to grid operations in order to ensure cost reductions, reliability and resilience.

Software-based intelligence can be applied to all aspects or characteristics of the SmartGrid as discussed above. Figure 1 summarizes these roles.

BASIC BUILDING BLOCKS

Taking into consideration the very high priority that must be placed on established IT-industry concepts of security and interoperability as defined in the GridWise Architecture Council (GWAC) Framework for Interoperability, the SmartGrid should include as its basic building blocks the components outlined in Figure 2.

The real-world grid and supporting infrastructure will need to incorporate legacy systems as well as incremental changes consisting of multiple and disparate upgrade paths. The ideal path to realizing the SmartGrid vision must consider the installation of any SmartGrid project using the order shown in Figure 2 – that is, the device hardware would be installed in Block 1, communications and networking infrastructure added in Block 2, embedded intelligence added in Block 3, and middleware services and applications layered in Block 4. In a perfect world, the embedded intelligence software in Block 3 would be configured into the device block at the time of design or purchase. Some intelligence types (in the form of services or applications) that could be preconfigured into the device layer with embedded software could include (but aren’t limited to) the following:

  • Capture. Provides status and reports on operation, performance and usage of a given monitored device or environment.
  • Diagnose. Enables device to self-optimize or allows a service person to monitor, troubleshoot, repair and maintain devices; upgrades or augments performance of a given device; and prevents problems with version control, technology obsolescence and device failure.
  • Control and automate. Coordinates the sequenced activity of several devices. This kind of intelligence can also cause devices to perform on/off discreet actions.
  • Profile and track behavior. Monitors variations in the location, culture, performance, usage and sales of a device.
  • Replenishment and commerce. Monitors consumption of a device and buying patterns of the end-user (allowing applications to initiate purchase orders or other transactions when replenishment is needed); provides location mapping and logistics; tracks and optimizes the service support system for devices.

EMBEDDED INTELLIGENCE AT WORK

Intelligence types will, of course, differ according to their application. For example, a distribution utility looking to optimize assets and real-time distribution operations may need sophisticated mathematical and artificial intelligence solutions with dynamic, nonlinear optimization models (to accommodate a high amount of uncertainty), while a homeowner wishing to participate in demand response may require less sophisticated business rules. The embedded intelligence is, therefore, responsible for the management and mining of potentially billions, if not trillions, of device-generated data points for decision support, settlement, reliability and other financially significant transactions. This computational intelligence can sense, store and analyze any number of information patterns to support the SmartGrid vision. In all cases, the software infrastructure portion of the SmartGrid building blocks must accommodate any number of these cases – from simple to complex – if the economics are to be viable.

For example, the GridAgents software platform is being used in several large U.S. utility distribution automation infrastructure enhancements to embed intelligence in the entire distribution and extended infrastructure; this in turn facilitates multiple applications simultaneously, as depicted in Figure 3 (highlighting microgrids and compact networks). Included are the following example applications: renewables integration, large-scale virtual power plant applications, volt and VAR management, SmartMeter management and demand response integration, condition-based maintenance, asset management and optimization, fault location, isolation and restoration, look-ahead contingency analysis, distribution operation model analysis, relay protection coordination, “islanding” and microgrid control, and sense-and-respond applications.

Using this model of embedded intelligence, the universe of potential devices that could be directly included in the grid system includes buildings and home automation, distribution automation, substation automation, transmission system, and energy market and operations – all part of what Harbor Research terms the Pervasive Internet. The Pervasive Internet concept assumes that devices are connected using TCP/IP protocols; however, it is not limited by whether a particular network represents a mission-critical SCADA or home automation (which obviously require very different security protocols). As the missing link, the embedded software intelligence we’ve been talking about can be present in any of these Pervasive Internet devices.

DELIVERY SYSTEMS

There are many ways to deliver the embedded software intelligence building block of the SmartGrid, and many vendors who will be vying to participate in this rapidly expanding market. In a physical sense, the embedded intelligence can be delivered though various grid interfaces, including facility-level and distribution-system automation and energy management systems. The best way to realize the SmartGrid vision, however, will most likely come out of making as much use as possible of the existing infrastructure (since installing new infrastructure is extremely costly). The most promising areas for embedding intelligence include the various gateways and collector nodes, as well as devices on the grid itself (as shown in Figure 4). Examples of such devices include SmartMeter gateways, substation PCs, inverter gateways and so on. By taking advantage of the natural and distributed hierarchy of device networks, multiple SmartGrid service offerings can be delivered with a common infrastructure and common protocols.

Some of the most promising technologies for delivering the embedded intelligence layer of the SmartGrid infrastructure include the following:

  • The semantic Web is an extension of the current Web that permits machine-understandable data. It provides a common framework that allows data to be shared and re-used across application and company boundaries. It integrates applications using URLs for naming and XML for syntax.
  • Service-oriented computing represents a cross-disciplinary approach to distributed software. Services are autonomous, platform-independent computational elements that can be described, published, discovered, orchestrated and programmed using standard protocols. These services can be combined into networks of collaborating applications within and across organizational boundaries.
  • Software agents are autonomous, problem-solving computational entities. They often interact and cooperate with other agents (both people and software) that may have conflicting aims. Known as multi-agent systems, such environments add the ability to coordinate complex business processes and adapt to changing conditions on the fly.

CONCLUSION

By incorporating the missing link in the SmartGrid infrastructure – the embedded-intelligence software building block – the SmartGrid vision can not only be achieved, but significant benefits to the utility and other stakeholders can be delivered much more efficiently and with incremental changes to the functions supporting the SmartGrid vision. Embedded intelligence provides a structured way to communicate with and control the large number of disparate energy-sensing, communications and control systems within the electric grid infrastructure. This includes the capability to deploy at low cost, scale and enable security as well as the ability to interoperate with the many types of devices, communication networks, data protocols and software systems used to manage complex energy networks.

A fully distributed intelligence approach based on embedded software offers potential advantages in lower cost, flexibility, security, scalability and acceptance among a wide group of industry stakeholders. By embedding functionality in software and distributing it across the electrical distribution network, the intelligence is pushed to the edge of the system network, where it can provide the most value. In this way, every node can be capable of hosting an intelligent software program. Although decentralized structures remain a controversial topic, this author believes they will be critical to the success of next-generation energy networks (the SmartGrid). The current electrical grid infrastructure is composed of a large number of existing potential devices that provide data which can serve as the starting point for embedded smart monitoring and decision support, including electric meters, distribution equipment, network protectors, distributed energy resources and energy management systems. From a high-level
design perspective, the embedded intelligence software architecture needs to support the following:

  • Decentralized management and intelligence;
  • Extensibility and reuse of software applications;
  • new components that can be removed or added to the system with little central control or coordination;
  • Fault tolerance both at the system level and the subsystem level to detect and recover from system failures;
  • need support for carrying out analysis and control where the resources are available, not where the results are needed (at edge versus the central grid);
  • Compatibility with different information technology devices and systems;
  • Open communication protocols that run on any network; and
  • Interoperability and integration with existing and evolving energy standards.

Adding the embedded-intelligence building block to existing SmartGrid infrastructure projects (including AMI and SCADA) and advanced networking technology projects will bring the SmartGrid vision to market faster and more economically while accommodating the incremental nature of SmartGrid deployments. The embedded intelligence software can provide some of the greatest benefits of the SmartGrid, including asset optimization, run-time intelligence and flexibility, the ability to solve multiple problems with a single infrastructure and greatly reduced integration costs through interoperability.

Using Analytics for Better Mobile Technology Decisions

Mobile computing capabilities have been proven to drive business value by providing traveling executives, field workers and customer service personnel with real-time access to customer data. Better and more timely access to information shortens response times, improves accuracy and makes the workforce more productive.

However, although your organization may agree that technology can improve business processes, different stakeholders – IT management, financial and business leadership and operations personnel – often have different perspectives on the real costs and value of mobility. For example, operations wants tools that help employees work faster and focus more intently on the customer; finance wants the solution that costs the least amount this quarter; and IT wants to implement mobile projects that can succeed without draining resources from other initiatives.

It may not be obvious, but there are ways to achieve everyone’s goals. Analytics can help operations, finance and IT find common ground. When teams understand the data, they can understand the logic. And when they understand the logic they can support making the right decision.

EXPOSING THE FORMULA

Deploying mobile technology is a strategic initiative with far-reaching consequences for the health of an enterprise. In the midst of evaluating a mobile project, however, it’s easy to forget that the real goal of hardware-acquisition initiatives is to make the workforce more productive and improve both the top and bottom lines over the long term.

Most decision-analytics tools focus on up-front procurement questions alone, because the numbers seem straightforward and uncomplicated. But these analyses miss the point. The best analysis is one that can determine which of the solutions will provide the most advantages to the workforce at the lowest possible overall cost to the organization.

To achieve the best return on investment we must do more than recoup an out-of-pocket expense: Are customers better served? Are employees working better, faster, smarter? Though hard to quantify, these are the fundamental aspects that determine the return on investment (ROI) of technology.

It’s possible to build a vendor-neutral analysis to calculate the total cost of ownership (TCO) and ROI of mobile computers. Panasonic Computer Solutions Company, the manufacturer of Toughbook notebooks, enlisted the services of my analytics company, Serious Networks, Inc., to develop an unbiased TCO/ROI application to help companies make better decisions when purchasing mobile computers.

The Panasonic-sponsored operational analysis tool provides statistically valid answers by performing a simulation of the devices as they would be used and managed in the field, generating a model that compares the costs and benefits of multiple manufacturers’ laptops. Purchase cost, projected downtime, the range of wireless options, notebook features, support and other related costs are all incorporated into this analytic toolset.

Using over 100 unique simulations with actual customers, four key TCO/ROI questions emerged:

  • What will it cost to buy a proposed notebook solution?
  • What will it cost to own it over the life of the project?
  • What will it cost to deploy and decommission the units?
  • What value will be created for the organization?

MOVING BEYOND GUESSTIMATES – CONSIDERING COSTS AND VALUE OVER A LIFETIME

There is no such thing as an average company, so an honest analysis uses actual corporate data instead of industry averages. Just because a device is the right choice for one company does not make it the right choice for yours.

An effective simulation takes into account the cost of each competing device, the number of units and the rate of deployment. It calculates the cost of maintaining a solution and establishes the value of productive time using real loaded labor rates or revenue hours. It considers buy versus lease questions and can extrapolate how features will be used in the field.

As real-world data is entered, the software determines which mobile computing solution is most likely to help the company reach its goals. Managers can perform what-if analyses by adjusting assumptions and re-running the simulation. Within this framework, managers will build a business case that forecasts the costs of each mobile device against the benefits derived over time (see Figures 1 and 2).

MAKING INTANGIBLES TANGIBLE

The 90-minute analysis process is very granular. It’s based on the industry segment – because it simulates the tasks of the workforce – and compares up to 10 competing devices.

Once devices are selected, purchase or lease prices are entered, followed by value-added benefits like no-fault warranties and on-site support. Intangible factors favoring one vendor over another, such as incumbency, are added to the data set. The size and rate of the deployment, as well as details that determine the cost of preparing the units for the workforce, are also considered.

Next the analysis accounts for the likelihood and cost of failure, using your own experience as a baseline. Somewhat surprisingly, the impact of failure is given less weight than most outside observers would expect. Reliability is important, but it’s not the only or most important attribute.

What is given more weight are productivity and operational enhancements, which can have a significantly greater financial impact than reliability, because statistically employees will spend much more of their time working than dealing with equipment malfunctions.

A matrix of features and key workforce behaviors is developed to examine the relative importance of touch screens, wireless and GPS, as well as each computer vendor’s ability to provide those features as standard or extra-cost equipment. The features are rated for their time and motion impact on your organization, and an operations efficiency score is applied to imitate real-world results.

During the session, the workforce is described in detail, because this information directly affects the cost and benefit. To assess the value of a telephone lineman’s time, for example, the system must know the average number of daily service orders, the percentage of those service calls that require re-work and whether linemen are normally in the field five, six or seven days a week.

Once the data is collected and input it can be modified to provide instantaneous what-if, heads-up and break-even analyses reports – without interference from the vendor. The model is built in Microsoft Excel so that anyone can assess the credibility of the analysis and determine independently that there are no hidden calculations or unfair formulas skewing the results.

CONCLUSION

The Panasonic simulation tool can help different organizations within a company come to consensus before making a buying decision. Analytics help clarify whether a purpose-built rugged or business-rugged system or some other commercial notebook solution is really the right choice for minimizing the TCO and maximizing the ROI of workforce mobility.

ABOUT THE AUTHOR

Jason Buk is an operations director at Serious Networks, Inc., a Denver-based business analytics firm. Serious Networks uses honest forecasting and rigorous analysis to determine what resources are most likely to increase the effectiveness of the workforce, meet corporate goals and manage risk in the future.

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