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Energy Central 2019 Utility Industry Insights - Grid Modernization

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Grid Modernization

Grid modernization challenges come from increasing societal reliance on electrical energy while evolving regulations, new technologies, and innovative market opportunities impact existing business structures. Many of these challenges relate to distributed energy resources (DER), particularly wind and solar renewables, also electric vehicles, microgrids, energy storage systems (such as those based on large-scale battery technology), smart cities, and the loosely-defined Internet of Things (IoT), as the Electric Power Grid continues its irreversible transition to a Digital Grid.  At the same time, the industry is becoming increasingly reliant on critical cyber assets to deliver electrical energy. Thus, in 2019 and the years to come, it can be expected that utility assets such as systems, controllers, and intelligent electronic devices will continue to exploit technological advances and be deployed in ever increasing numbers to further improve the safety, efficiency, and reliability of the grid, making it environmentally friendlier, more secure, and capable of providing consumers with more energy-use choices. Some of these advances are identified with respect to the following particular areas of interest in grid modernization

Advanced Distribution Management Systems (ADMS)

The heart of a grid modernization program will increasingly rely on the ongoing deployment of Advanced Distribution Management Systems. The past practice of deploying separate D-SCADA and Outage Management System (OMS) platforms to support Distribution Network operations, along with more recent deployments of Distribution Management Systems (DMS) to include enhanced situational awareness, safety, and reliability through automation, has been surpassed by the trend toward more and more single platform deployments in which the functions of the separate DMS and OMS systems are consolidated in a fully integrated ADMS environment.

In addition to SCADA, an ADMS today includes functions such as Distribution State Estimation, Power Flow Analysis, Load Forecast, Load Shedding, and Short-Circuit Fault Calculation. Most of its benefits, however, derive from functions such as: 

  • Volt/VAR Optimization (VVO) – Resulting in the control of voltage profiles to meet statutory requirements, reduce technical losses, and the ability, for example, to reduce energy consumption, especially to avoid load shedding during times of peak load demand. 
  • Fault Location, Isolation, and System Restoration (FLISR) – Resulting in fast-acting autonomous self-healing of the primary (MV) distribution network subject to feeder faults.
  • Optimal Feeder Reconfiguration (OFR) – Resulting in dynamically adjusted MV feeder configurations that meet prevailing load conditions while reducing power losses and ensuring no violation of feeder ratings and load voltages.
  • Outage Management System (OMS) – Resulting in the ability to quickly infer the location of equipment failures on the secondary (LV) distribution network, manage and track subsequent repair activities by line crews, provide outage information such as numbers of customers affected, estimate power restoration times, complete and close outage records, and calculate and maintain historical outage statistics, e.g., System Average Interruption Index (SAIDI) and System Average Interruption Frequency (SAIFI).

Nevertheless, the ADMS will continue to evolve in 2019 along with the trend in greater convergence of IT/OT and IIoT technologies. This evolution will include exploitation of improved communication facilities between the ADMS and the numerous field equipment and devices to be monitored and controlled as well as the benefits to be gained from the increasing trend toward enterprise-wide systems integration, based on standards such as the Common Information Model (CIM), and the greater use of grid analytics and artificial intelligence.

Some recent and increasing trends in ADMS development include:  

  • More precise fault location using information from Advanced Metering Infrastructure (AMI) systems, IEDs, and Phasor Measurement Units (PMUs). This includes information such as customers without power, fault current passage and autonomous switching indications supported by “distance to fault” calculations, and utilization of more time-synchronized real-time measurements.
  • Utilization of “last gasp” messages from AMI smart meters indicating loss of power and the capability to ping smart meters to validate power restoration, resulting in OMS functionality that is much less dependent on the receipt of consumer trouble calls. 
  • Improved Power Quality assessment using root cause information from AMI smart-meter voltage measurements.
  • Utilization of AMI historical load-profile data and near real-time voltage data to support the lack of real-time measurements and thereby improve the accuracy of monitoring and analyzing the distribution network.
  • Support for condition-based maintenance as applicable to substation and feeder equipment, including provision of detailed asset health information such as the level, temperature, and moisture content of transformer oil, the pressure in SF6 dielectric tanks, the number of operations and the contact wear associated with circuit breakers, and the voltage level of auxiliary sources of power such as batteries.
  • Integration of utility and consumer-owned renewable energy resources including the capability to forecast their power output characteristics based on future weather conditions such as temperature, humidity, precipitation, wind speed and direction, and irradiation.
  • Integration of Energy Storage Systems for load shifting as in peak load control and capacity firming as in offsetting the intermittent nature of renewable energy resources.
  • More effective communications and interoperation with consumers and their home appliances including more effective implementation of direct and indirect Demand Response functionality.
  • Integration of DERMS functionality.  
  • On-line capability to check and adjust protection coordination settings.
  • Enhanced distribution network operations including more agile and flexible support of network recovery from unplanned outages, especially widespread outages caused by severe weather conditions. In this respect, greater ADMS utilization of robust mobile workforce technology, supported by a rich suite of applications, to manage recovery activities in the field can be expected. 

Distributed Energy Resource Management Systems (DERMS)

Undoubtedly, with the challenges and opportunities that come with the ever-increasing grid-edge penetration of renewable energy resources, 2019 and beyond will see the deployment of more and more DERMS systems. Moreover, whereas DERMS in one form or another has already been deployed by several utilities, it can be expected that future demand will drive significant development of the functional capabilities and features associated with DERMS.

This development will lead to capabilities and features that are more standard and therefore more amenable to greater deployment throughout the electric utility industry. In addition, the trend is likely to lead to DERMS deployments not in the form of a separate computer platform, provided by a vendor specializing in DERMS technology and interoperating perhaps as a “bolt-on” addition to a separate ADMS platform, but as a suite of applications fully integrated with the applications that run on an ADMS platform provided by the more widely-known vendors offering SCADA, DMS, and EMS products.

It is within this context that DERMS functionality will continue to evolve, to provide for example:

  • Improved DER modeling capabilities and features including the requirements associated with DER aggregation as well as DERs as individual units. 
  • DER monitoring and control including, where applicable, their smart inverters and battery energy systems, thereby using DERs as valuable assets supporting volt/var optimization.
  • Detailed wide-area DER power output forecasts taking into account, for example, DER dependency on variable area-by-area weather conditions.
  • Enhanced visualization of grid-edge DER operations.
  • Enhanced DER scheduling and dispatch capabilities.
  • Integrated DER analysis, planning, and study functions. 
  • Accommodation of microgrids and electric vehicle charging/discharging facilities.
  • Integrated Demand Response (DR) functionality. 
  • More amenable systems integration capabilities including integration within ADMS systems and support for standard and secure interfaces with external as well as other enterprise-wide IT/OT systems.  This will include support for grid-edge interoperability and distributed intelligence using, for example, the Open Field Message Bus (OpenFMB) standard.

Industrial Internet of Things (IIOT)   

In 2019 and beyond, implementation of the Industrial Internet of Things (IIoT) will lead to more and more people, resources, and assets being connected. Connected people means additional data sources can be leveraged to support the grid. Connected resources and assets enable service providers and system operators to generate values and reduce costs by building intelligence into the edge of the grid, enabling remote monitoring and diagnostic capabilities and promoting proactive maintenance services and problem resolution.

These are just some of the promises made by IIoT vendors and solution providers in a situation where, despite the major industry push that started in 2015, IIoT applications in many industries are still in the early stages. Many vendors and startups focused on developing platforms with the vision to become the cross-industry platform, from sensor networks to analytics. They started to offer products across a range of industries, but a survey of IIoT clients indicates that most of the projects stalled in the pilot phase. Some of the underlying reasons are as follows:

  • Technology risks and product immaturity.
  • Lack of quantifiable benefits leading to a viable business case.
  • Security and privacy concerns.
  • Difficulties in bridging the gaps between Operational Technology, of which IIoT is a part, and Information Technology, including its associated enterprise applications.
  • Lack of understanding of the industry and its needs.

It is interesting, however, that the utility industry has embraced the benefits of this nascent yet promising market. Electric utilities are not new to Industrial IoT solutions and, in some respects, are further along with the implementation of connected resources and assets. The electric utility industry, for example, has been an early adopter of IIoT technologies as part of implementing AMI and smart meters. Nearly 80 million smart meters have been deployed by US utilities, and the AMI systems implemented in the last 5 to 10 years have helped streamline the utility metering business, reduce operation and maintenance costs, improve outage management processes, and attain the promise of energy efficiency initiatives.

The reason behind its success and high-adoption rate is that AMI/Smart Metering is more of a solution addressing specific needs of the industry rather than a general-purpose IIoT technology or platform. AMI not only solves real operational problems but can be fully integrated into utility business processes and their enterprise IT systems. In addition, the vendors and solution providers in this space are all from the utility industry with deep knowledge and understanding of the challenges and issues.

It is within this context that some of the new areas and business functions that utilities are exploring to achieve the potential benefits of IIoT solutions are summarized as follows:

  • Asset Management and Optimization, including conditioned-based and predictive asset management.
  • Management of behind-the-meter resources (e.g., rooftop solar, Electric Vehicles, Battery Energy Storage Systems).
  • Mobile Workforce Management, especially during emergency response and storm management.

However, concerns around the security and integration of IoT data with enterprise systems are some of the challenges still facing wide-spread adoption of Industrial IoT and hence full attainment of its promises. Efforts must include proof-of-concept demonstrations to build a business case based on quantifiable and measurable benefits, both tangible and intangible. On the other hand, if a niche solution delivers its expected business values, it will be able to sustain momentum over time and, with strong market adoption, result in driving further development of electric utility IIoT applications, including those that relate to IIoT/OT convergence.

Cyber Security

In 2019, cyber security will continue to be an increasingly vital requirement for any business, particularly those responsible for critical infrastructures, such as the rapidly evolving electric system. In particular, the energy business must navigate its way through increasingly changing and risky business environments while continuing to provide and improve its services to end users.

At the same time that the energy business environment is experiencing paradigm shifts, the industry has accelerated its evolution toward digitization and is becoming increasingly reliant on cyber assets to manage the delivery of electrical energy. These cyber assets are crucial to the safety, efficiency, and reliability of electrical energy delivery.

Moreover, it is within this context that the industry’s cyber assets present serious challenges. The energy business must determine how to cope with the reality of deliberate cyber-attacks, such as the successful one against a Ukrainian SCADA system, as well as remain resilient to the more mundane but equally critical inadvertent cyber threats arising from personnel errors, the complexity of systems, the multitude of new participants in energy markets, equipment failures, and natural disasters. So, the energy business accustomed to addressing only the system engineering process (design, deployment, integration, procedures, and maintenance) must also address cyber security services and technologies.

In this environment, there are five critical concepts for cyber security that should be understood as the industry struggles to implement the necessary cyber security policies, procedures, and technologies in the coming years. These five concepts, as Cyber Security trends, include:

  1. Resilience as the overall strategy for ensuring business continuity. This includes security measures that can mitigate impacts, not only before incidents (identify and prevent), but also during such incidents (detect and respond), and after incidents have been resolved (recover). Resilience thus involves a continuous improvement process to support business continuity. It is not just a technical issue but must involve an overall business approach that combines cyber security techniques with system engineering and operations to prepare for and adapt to changing conditions, and to withstand and recover rapidly from disruptions.
  2. Security by design as the most cost-effective approach to security. Products, systems, processes and organizations should be designed from the beginning with security in mind. Recognizing that security cannot easily be added to legacy systems, however, it is crucial that, even for these existing systems, transitions to security-based designs should include security controls in all system retrofits and upgrades. Security by design combines business organizational policies with security procedures and supportive technologies. Organizational policies include security regulations, personnel training, and segregation of duties, while security procedures include CERT information sharing, backup and recovery plans. Security technologies include physical and logical techniques, such as physical site access locks, access controls, authentication and authorization for all communications, and security logs.
  3. IT and OT in operational environments as similar but different. The primary reason is that power systems are cyber-physical systems and security incidents can cause physical safety and/or electrical incidents, while such physical consequences are not usually a problem in corporate environments. For IT environments, confidentiality of sensitive business and customer information is usually most important. For OT environments, however, the availability, authentication, authorization, and data integrity of power system information are usually more critical.  At the same time, the OT environment is increasingly reliant on cyber technologies and is inheriting more and more devices and platforms from the IT world, while both IT and OT environments are increasingly converging on the use of well-known and ever-evolving IoT technologies. This is leading to additional vulnerabilities and challenges on ensuring adequate security in the energy environment.
  4. Risk assessment, risk mitigation, and continuous process updates as fundamental to improving security. Risk assessment identifies the vulnerabilities of systems and processes to deliberate or inadvertent threats, determines the potential impacts, and estimates the likelihood that the incident scenarios could actually occur. The strategy for risk mitigation must take into account operational constraints, as well as looking to engineering designs and operational procedures for improving resilience, while also evaluating the cost for implementing such a potential risk mitigation strategy and the degree to which it mitigates the risk.
  5. Cyber security standards and best practice guidelines as support for the risk management process and the establishment of security programs and policies. Key cyber security standards and best practice guidelines have already been developed for different security areas and purposes (e.g., NIST Cyber Security Framework, ISO/IEC 27001/27002/sector-specific 27019, IEC 62443 series for industrial automation, IEC 62351 series of cyber security for IEC 61850/60870-5/60870-6) to determine security requirements, security procedures, detailed security controls, and specific security technologies).

Enterprise Integration/Interoperability

Enterprise Integration/interoperability is often recognized as a key enabler of grid modernization initiatives, where the objective is to achieve business process interoperability via integration of data and applications among Information Technologies and Operation Technologies: OT <-> OT, OT <-> IT, and IT <-> IT. Thus, in support of grid modernization, almost all new systems, applications, or devices, regardless of physical location, will continue to be required to interact with each other.

In this respect, however, “Connecting the Dots” between the systems, applications, and devices supporting, for example, Network Operations, Customer Services, Asset Management, Work Management, Operation Planning, Metering, Maintenance and Construction, Energy Trading and Retail, and Operation/Business Intelligence/IoT/Big Data, as well as other Enterprise/Customer services, will continue to present challenges.

Within this context, data gathering, exchange, processing, analysis, and decision-making are performed at levels such as:

  • Enterprise Level
  • Control Center Level (SCADA/EMS/DMS/OMS) 
  • Substation Level (Substation and Distribution Automation IEDs)
  • Device Level (Feeder Automation IEDs)

They can also be performed at an External Level, beyond traditional enterprise boundaries, such as  those involving third-party, cloud, mobile, and IoT environments. Thus, from an architecture perspective, Enterprise Integration/Interoperability can support multi-cloud platforms and frameworks for scalable deployments with a flexibility that allows utilities to choose on-premise, cloud (private or public), or hybrid implementations.

In this respect, however, the following concerns must be addressed:

  • Need for a practical and effective integration/interoperation strategy supported by clearly-defined requirements.
  • Need to provide and consume meaningful, actionable information between various systems across organizational boundaries as well as with external data sources and consumers.
  • Need to define the requisite quality of service for information exchange in terms of reliability, fidelity, security, and manageability.
  • Need for a Model-Driven Integration (MDI) approach with a common semantic model as the logical intermediary, designed to streamline integration development and ensure an unambiguous understanding of the exchanged information.
  • Need to select the most effective technologies to meet the grid’s integration and interoperability requirements as they evolve over years to come.

As elements of an integration/interoperability strategy, key recommendations include:

  • Creation of an OT/IT/IIoT Competency Center (or similar governance body as referenced by Gartner) because grid integration/interoperability initiatives very often introduce organizational challenges that are more important than technology choices. Such a center will help to streamline and lead integration/interoperability activities with emphasis on cross-departmental cooperation, including external actors, to foster enterprise-wide implementation. Over the long term, it will reduce the time and cost required to integrate systems and applications.
  • Utilization of a Model-Driven Integration (MDI) approach that leverages a centralized common semantic model at a utility enterprise level based on one or more applicable standards such as IEC CIM and MultiSpeak. If practical and cost effective, out-of-box solutions may also be leveraged. The MDI approach presents better extensibility and manageability relative to so-called programmed integration where each interface is individually hard-coded resulting in limited reusability and extensibility. Thus, with MDI, data providers and consumers will have the same understanding of the data exchanged.

In case of the MDI approach, the common semantic model can be leveraged:

  • To provide the basis for endpoint design such as interfaces and staging areas between functions, systems, devices, and third parties.
  • To standardize data exchange designs and convert data from a provider to a consumer.
  • To serve as the logical model for all integration patterns (e.g., API/service design such as WSDL), message payload design (XSD), and database design (DDL)).
  • To provide a platform-independent logical model for operational data stores, big data repositories, staging areas, and other data stores.
  • To provide modeled data based on expert knowledge and developed business rules using AI technologies.

From an integration/interoperation technology perspective, the most common solutions used for data and application integration within the context of grid modernization are summarized as:

  • Enterprise Service Bus (ESB)
  • Extract, Transform, and Load (ETL)
  • Managed File Transfer (MFT)
  • API Management (point-to-point data flows)
  • File exchange via SFTP

ESB is still most often used to implement enterprise-wide integration/interoperability within the context of grid modernization initiatives. From an overall OT/IT/IIOT perspective, however, recent advances such as in Cloud, Mobile, and IIoT technologies, as well as the use of micro-services and API management tools, are also relevant. Thus, in 2019 and beyond, all of these technologies, working in concert with AI and Complex Event Processing tools, can be expected to be considered in support of grid-related decision making and analytics.

Editor:                  David Caceres, Executive Consultant

Co-authors:          Dr. Ron Wasley, Executive Consultant

                             Dr. Stipe Fustar, Executive Consultant

                             Frances Cleveland, Associate Consultant

                             Payam Yeganeh, Senior Consultant

ESTA International, LLC (ESTA) www.estainternational.com is a specialized consulting firm providing Intelligence, Strategy, and Technology Advisory Services to the Electric Energy industry worldwide with a focus on Smart Grid, Smart Metering, Automation, and Cyber-Physical Systems. It is a US company registered in the Commonwealth of Virginia.

David Caceres's picture

Thank David for the Post!

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