How do you put 'Smart' into the smart grid?

Analytics in a new era of power generation and consumption

Just as the advent of the Internet represented a new dawn in personal connectivity and communication, the smart grid infrastructure, including smart metering and demand response mechanisms, is replete with potential benefits for the utilities industry. Consider just a few:

• Improved power grid reliability.
• Reduced waste.
• Efficiency and safety.
• Reduced carbon dioxide emissions.
• Two-way communication with consumers who can benefit from better pricing options.

For utilities executives, however, the challenge is finding the best way to use the huge volumes of smart grid data that soon will be at their disposal.

This article offers views on the most effective ways to integrate, store, manage and analyze advanced metering infrastructure (AMI) and smart metering data. It also explains how to make sure the information that utilities use to make decisions is not only consistent, accurate and timely, but also contributes to operational intelligence and fosters predictive capabilities.

Changing the way utilities operate
The utility sector is facing the prospect of significant change in the way that it does business due to new requirements on production and new consumer interaction with energy production and consumption.

Electricity production will change as jurisdictions around the world require utilities to build and deploy more renewable generation facilities: They will need to work well with fleet portfolio production structures. In addition, jurisdictions are mandating that the utility business operates differently, through emissions regulation or the liberalization (deregulation) that is opening previously closed markets.

Consumers will use power differently as well, deploying software and hardware products that allow them more control over their consumption, like time-of-use pricing or even feeding the grid with surplus generation from rooftop solar panels.

But possibly the most exciting trend is the prospect for AMI, and its related benefits. AMI is the process of establishing a metering infrastructure that enables automated meter reading (AMR). Traditionally, utilities used people or "sneaker networks" to capture the monthly electricity consumption of their customers by reading meters located on customers' properties.

Now, regulators are requiring utilities to implement AMR to reduce the inefficiencies and inaccuracies of manual meter readings. Other utilities are seeing the value of AMR, supported by AMI, as a potential cost-reduction option and are moving toward implementing it without the push of regulators.

Either way, if a utility is not already planning an AMR implementation, it likely will in the foreseeable future. Utilities will spend billions of dollars over the next decade implementing AMR and AMI. It will touch every customer and modify the way utilities interact with their customers.

But utilities will be concerned about the costs of AMI implementation, especially in view of difficult worldwide economic conditions. They'll also be concerned about the ability of their own staff to handle loads of data coming from millions of new devices spread across their service area, surprising unprepared utilities with their speed and quantity. The pace of change in those new devices – and the data they provide – will require planning, flexibility and agility on the part of the utility enterprise.

Operational intelligence: the benefits of AMI and smart grid implementation
Long before utilities finalize their visions for a smart grid, AMR systems will eliminate manual data entry errors, reduce inaccurate bills, lessen the need to access premises and redeploy the number of meter-reading personnel.

AMR systems are viewed as means to assist cash-strapped utility companies. AMR will also enable utility companies to bill using a time-of-use rate structure, charging customers based on the true cost of service when energy is consumed. The expectation is that time-of-use rates will lead to a reduction of at least 5-10 percent in demand, on average, per customer, in less than two years, translating into millions of dollars in reduced energy demand per state or province.

The AMI systems that will manage AMR systems are designed to reduce operational costs and meet the new regulations that make demand response and outage management features necessary. Utility companies expect to save at least as much as the cost of the whole AMI system over the lifetime of the system. Operational intelligence enables these companies to leverage the vast information collected from AMI systems so they can understand consumption patterns and the costs tied to them. This data fuels earnings by taking risk, customer, financial and operational intelligence to the customer level. Utility companies can then target customers, networks and interventions in order to maximize efficiency and overall profitability.

Greater operational intelligence also ensures that there is sufficient capacity to meet peak demand. Depending on where growth occurs within a utility's service footprint, there might not be sufficient capacity to support expected growth. A strong operational intelligence solution can enable the utility to forecast future load growth at ZIP-code level, to enable peak hour growth to be matched to infrastructure capacity.

Operational intelligence also benefits utility companies by helping them to maximize the performance of their assets. Operational intelligence gives utilities the capability to predict and set alerts for equipment failures. It consolidates and reports on the vast amounts of data produced in field service operations so companies can measure the cost and effectiveness of those services. Proactive management of the field service organization reduces unplanned outages and optimizes field service efforts.

Operational data can also alert companies as to when regular preventative maintenance should occur to prevent unplanned repair calls and potential failed equipment situations. Such data also provides information on inventory, tools and skills required of service technicians on each call. That information helps technicians complete their work the first time out.

Overcoming obstacles to AMI and smart grid implementation
As with any major change in the way companies do business, there are many hurdles associated with implementing AMI, especially because utilities are so large and their business so complex.

The implementation logistics alone are astounding to consider, with each utility needing to deploy millions of new devices at their customers' sites. Once all the hardware is out in the field, tested and operating, utilities will be collecting untold quantities of new data about their customers' minute-by-minute consumption of electricity.

For instance, in just the first six hours of operation, an AMI implementation will generate the same amount of data on a customer as produced in the entire year before. In just 25 days, it will generate the same amount of data as the last 100 years.

Utilities so far have been focused on hardware and communications aspects of their AMI rollouts, but now more are trying to get a grip on what they're going to do with all the data streaming in from millions of new devices. They are asking how they can turn the data into meaningful information to gain greater operational intelligence.

Other challenges exist. Security is a key obstacle to moving beyond AMI and toward the smart grid. Large quantities of data will stream in from more types of devices and different networks, and this data will be provided to different types of users on a variety of applications. Regulators will require utilities to understand and enhance their in-place security to make sure it's complete. And data records will need to be maintained so that when something goes wrong and the smart grid makes a dumb move, the utility can find out where the bad decision was made and adjust accordingly. Some analysts anticipate that utilities might want to try to find minute changes in customer behavior using data that is now three, five or even 10 years old to perform long-trend change analyses.

The need for smart changes is endless. AMI offers ample business case justifications for implementation. AMI data will help the utility by:

• Improving reliability.
• Increasing efficiency and measurability.
• Giving utilities the ability to design new rate structures.
• Optimizing distribution assets.
• Detecting fraud.
• Improving forecasting.
• Visualizing trends and anomalies.
• Providing the opportunity for real-time analysis of large amounts of data.

Key success factors to AMI and smart grid implementation
To achieve the benefits outlined above, a successful AMI implementation requires a data management plan that allows the utility to take the data and then warehouse, validate, clean and make it available to all the stakeholders for analysis and reporting. The system will need to be flexible and agile to incorporate smart grid evolutions.

Currently, utilities are dividing into two groups in their observable plans for handling the large quantities of data that will flood in with new AMI implementations.

The first group focuses on where it is going to put the data, i.e., which data warehouse or storage system will be used to store the data. Since the incoming data is more than most utilities have ever generated, the immense quantities of data are a real concern.

This group is dealing with the here and now of AMI data.

The other group takes a completely different approach by acknowledging the need for a near-term plan to store the data, but then it goes a step further. It is focusing on the potential to apply predictive analytics to the data, to create business insights and intelligence that weren't previously possible. For instance, a utility might seek to predict how the users of the grid will respond on degree-day variances. The answers will come from statistics gleaned from the AMI-generated data.