March 29, 2024

Everything New is Old Again

by By Michael A. Marullo, Contributing Editor



Well, it’s a new year and as we all know, this is the time when we’re supposed to leave the old behind and focus on the new. It’s a time to look toward the future. But the title for this editorial is meant to be more than just a clever twist on an old cliché. I chose this title because it’s a near-perfect fit for the topic that I wanted to spotlight in this first issue of 2008: Reinvention of the grid. Whether you call it the “Smart Grid” or “Intelligent Grid” doesn’t really matter much in the grand scheme of things, but precisely what those terms portend for the electric utility industry over the next decade or so – now that’s something worthy of comment…

Of the many things we’re being told almost daily about this so called next-generation grid, it surely seems that it will be a lot smarter than what we’ve had until now; more ‘intelligent’ if you will. And, although no one has a complete road map for exactly how or precisely when this magical transformation is going to take place – despite the occasional claims to the contrary – there are a few things you can probably count on: 1) It will take a long time, 2) it will cost a bundle, and 3) it will be great when it’s all done. (Moral: Getting smarter is hardly ever quick or cheap, but it usually does pay off - eventually.)

Among the various grid initiatives that will necessarily be undertaken in this new year – and by all indications, for many years to come – is the need for utilities far and wide, large and small, to completely re-think not only their future automation/IT spending plans, but also the vast majority of their existing automation/IT infrastructure. Even some newly installed systems may well be rendered obsolete once the intelligent grid really gets rolling, making what was considered ‘new’ just a few months ago suddenly not seem so avant-garde today. (See how well that title fits?)

A good example of this emerging anomaly is the automatic meter reading business. After nearly three decades of AMR pilots, proof of concept projects and more recently, roll-outs of one-way (i.e., read-only) AMR systems at a cost of millions of dollars, utilities’ worst fears about AMR are being realized; that is, betting on the wrong technology for full deployment. Many of those one-way systems – some of which are only a few years old – must now be re-evaluated and made to conform to advanced metering infrastructure architecture and performance criteria if the benefits of an intelligent grid are to be fully realized.

But reinventing the grid certainly goes beyond just AMR, way beyond. In fact, I believe that automation/IT is at the beginning of a renaissance. After decades of being on the fringes of utility spending, it now seems inevitable that automation/IT is about to go mainstream. The many reasons why this market surge is poised to begin now include, but are not necessarily limited to, the following.

1. Workforce: It is a well-known fact that the most experienced utility staff will be leaving the workforce in droves over the next decade, just at the time when they are needed most. Meanwhile, it is becoming equally clear that there will not be enough new engineers and technical staff available within (or even outside) utility enterprises to replace those who are leaving in a timely or efficient manner. This means that alternative resources must be found to take up the slack, and automation/IT solutions should be at the top of that list. Of particular note is the need for knowledge-based systems to capture at least a portion of the brain trust before it is lost forever.

2. Infrastructure: We also know that a huge portion of existing grid assets are approaching the end of their (statistically projected) useful life. Of course, there is simply no way to replace them all simultaneously, and even if there were, the cost would be astronomical. Therefore, various types of life-extending measures will have to be applied, many of which
will necessarily require innovative automation/IT solutions, particularly in view of the aging workforce challenges described above.

3. Budgeting: Under the traditional utility budgeting model, each component of automation/IT was usually evaluated separately, often with little or no consideration given to the impact and/or benefits projects in other areas might have on them individually or collectively. However, recent research shows that utilities are slowly beginning to move away from that approach, as evidenced by scores of projects in one discipline being delayed or otherwise placed on hold pending decisions and/or outcomes of decisions associated with projects in other automation/IT application areas.

4. Reorganization: Utilities are always reorganizing for one reason or another, but the integration of engineering with IT (information technology) departments is arguably the most complex and far-reaching organizational change to be undertaken by utilities in recent history.

For most enterprises, this organizational merger has certainly not been quick or easy, yet despite the obvious culture clashes and differences in professional opinion as to the best way to plan and execute specific projects, the integration process remains ongoing on both a personal and infrastructure level. In the end, utilities must find better ways to plan, design, implement and support integrated automation/IT programs efficiently and effectively across the enterprise.

5. Compliance: The fall of Enron and the accounting scandals that ensued led directly to calls for more rigorous utility oversight and strict new reporting requirements, culminating in the now infamous Sarbanes-Oxley legislation as well as other changes to corporate governance on virtually every level. Clearly, implementation of these new policies and procedures has proven to be both complex and costly, but many integral parts of the compliance solution set are implicitly automation/IT-centric and simply cannot be satisfied by human assets alone.

6. Reliability: The August 14, 2003 Blackout had the immediate effect of leaving millions of homes and businesses in the Northeast without power for extended periods at a cost pegged in the billions of dollars. However, despite a protracted period of what seemed to be endless investigations and reports leading to little more than ‘analysis paralysis’, there were actually some tangible outcomes resulting from the outage. Key among them was the transition of NERC from the North American Electric Reliability Council – a loosely organized utility body with only a minimal mandate to police reliability and virtually no authority to impose meaningful penalties on violators – to what is now the North American Reliability Corporation, which the Federal Energy Regulatory Commission has given both the mandate and authority needed to tackle the job of electric reliability enhancement and enforcement.

7. Security: The 9-11 attacks and subsequent breaches of security (coupled also with fallout from the 2003 blackout) have caused utilities varying degrees of concern about the security of their operations and assets. During the past several years substantially all utility enterprises have had to not only re-think their operating strategies and how to best protect their assets in the event of another terrorist attack, but also how to safeguard their automation and IT systems from cyber-attacks, whether emanating from inside or outside the utilities’ physical walls and network firewalls. Notably, the resources needed to address and overcome these challenges are daunting and will not be provided by instituting new security policies and procedures alone. Both physical and especially cyber-security will need a big helping hand from automation/IT if there is to be any hope of a truly secure future for utility enterprises.

While I’m sure I’ve missed a few details, I think it’s safe to say that utilities have their work cut out for them and will need all the help the automation/IT supplier community has to offer. Indeed, all of the time, money and resources that have been poured into automation/IT over the past 50 years pales by comparison to what will be needed in the years ahead. However, while it might be discouraging and even more than a little intimidating to envision the massive challenges that are still ahead, it would be pure folly to think that we will see an intelligent grid emerge without substantially increasing the automation/IT infrastructure at all levels of utility operations.

So, even if your enterprise has invested in new technology recently, now is the time to reconsider the future and how you can best prepare for the formidable demands associated with implementation of an intelligent grid, demands that will be placed on utilities and suppliers alike. This isn’t just the start of a new year, but rather the start of a new era: The age of the holistically integrated utility enterprise. And, if that sounds like a new concept, it was – yesterday.

Behind the Byline
Mike Marullo has been active in the automation, controls and instrumentation field for more than 35 years and is a widely published author of numerous technical articles, industry directories and market research reports. An independent consultant since 1984, he is co-founder and Director of Research & Consulting for InfoNetrix LLC, a New Orleans-based market inteligence firm focused on Utility Automation and IT markets. Inquiries or comments about this column may be directed to Mike at MAM@InfoNetrix.com.

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