The state of the electricity distribution business is at a crossroads. Changes in technology, the business environment, regulatory requirements, and customer expectations are impacting the electricity distribution business today, and those pressures will only increase in the future. The end-use market served from the distribution grid will inevitably change from analog-equipment-using consumers to digitaldependent consumers. The growth of the digital society will demand improved power quality. And if that isn’t enough to keep distribution companies busy, there will also be a convergence of electric and telecommunication technologies such as broadband over power line (BPL) communications.
On the other side of the meter, as more microgeneration technologies reach commercial viability and are connected to the distribution grid, the volume of two-way power flow on the distribution grid will increase. Distributed generation technologies will radically alter the traditional regulated electricity business by bypassing the installed infrastructure and use the distribution system as a backup service.
Distribution automation, automated metering technologies (AMT), distributed generation, and the wired and connected home will radically alter the current electricity distribution business. Distribution utilities will need to adapt to stay competitive in this new environment. To survive, the electricity distribution industry will need to move to managing in real-time, using an intelligent, reliable two-way distribution infrastructure to support a digital society, where the power network of the future will be real-time, responsive, adaptive, eco-sensitive, flexible, price-smart, self-diagnosing, self-healing and interconnected with everything else.
The August 14, 2003 power outage in Ontario and eight eastern US states underscored the need to re-examine the current state of the electricity system, including the distribution network. The report, “The Cost of Power Disturbances to Industrial & Digital Economy Companies” indicated that across all business sectors, the US economy was losing between $104 to $164 billion per year due to power outages and another $15 to $24 billion to power quality phenomena. While there have been incremental improvements in distribution system and equipment, the distribution assets have not had revolutionary changes in the past 50 years.
Many Canadian utilities will face massive infrastructure replacements in their distribution grid serving their customers – residential, commercial, and industrial. Governments at all levels, regulators and stakeholders are continuing to push distribution companies for improvements in reliability, cost of service, power quality, consumer service and safety. Distribution utilities will be operating in a more complex regulatory environment where performance rather than investment drives most of the operating profits. Rather than today’s “one-size-fits-all” service, customers will be able to customize their electricity service to suit their needs including cots, environmental impacts (i.e., green power), and levels of reliability and power quality which will require distribution utilities to offer much more sophisticated tariff structures.
In a report entitled “Electric Distribution Utility Roadmap” (CEA Technologies Inc. & Cap Gemini Ernst & Young) which provides a view of the electricity distribution utility environment 22 years into the future, it is predicted that the future of the electricity distribution industry is secure to 2025 since there is no technology that will replace the grid but that choosing to retain current “design standards and equipment and opting for small incremental changes in the way business is done today will result in an unprofitable future for a distribution utility”. The Roadmap project reviewed more than 150 technologies and placed them on a 22 year (to 2025) timeline. It projects the investment level, the parts of the distribution value chain that would be impacted the most, the costs for finishing the technologies and the opportunities. The top ten (10) critical technologies include:
The key Roadmap findings include:
The electricity distribution automation infrastructure upgrade to an intelligent, reliable twoway system is estimated to be about $2 trillion investment globally by one set of estimating tools. The portion of investment for upgrading Canada’s distribution infrastructure is roughly estimated between $60 billion to $200 billion.
To many in the distribution side of the electricity business, this is the reality, and the environment within which they are planning to deliver the future. As an association supporting the industry, CEA has been crafting its approach to support the changes which will inevitably be required. Central to these activities is CEA’s Distribution Automation and Regulatory Innovation Proposal.
Through this initiative, CEA is seeking to build a partnership alliance among electric distribution utilities, Natural Resources Canada and Industry Canada in order to accelerate innovation and the implementation for electricity distribution infrastructure automation, advanced metering technologies (AMT) technology, BPL communications services and distributed generation in support of Climate Change, Canada’s Innovation Strategy, and Canada’s Broadband Communications deployment. This proposal is the first step in creating the distribution utilitysupplier- government partnership necessary to foster leadership in distribution automation, technology and regulatory innovation as well as strategic partnerships in support of sustainable development and economic opportunities.
On the other side of the meter, as more microgeneration technologies reach commercial viability and are connected to the distribution grid, the volume of two-way power flow on the distribution grid will increase. Distributed generation technologies will radically alter the traditional regulated electricity business by bypassing the installed infrastructure and use the distribution system as a backup service.
Distribution automation, automated metering technologies (AMT), distributed generation, and the wired and connected home will radically alter the current electricity distribution business. Distribution utilities will need to adapt to stay competitive in this new environment. To survive, the electricity distribution industry will need to move to managing in real-time, using an intelligent, reliable two-way distribution infrastructure to support a digital society, where the power network of the future will be real-time, responsive, adaptive, eco-sensitive, flexible, price-smart, self-diagnosing, self-healing and interconnected with everything else.
The August 14, 2003 power outage in Ontario and eight eastern US states underscored the need to re-examine the current state of the electricity system, including the distribution network. The report, “The Cost of Power Disturbances to Industrial & Digital Economy Companies” indicated that across all business sectors, the US economy was losing between $104 to $164 billion per year due to power outages and another $15 to $24 billion to power quality phenomena. While there have been incremental improvements in distribution system and equipment, the distribution assets have not had revolutionary changes in the past 50 years.
Many Canadian utilities will face massive infrastructure replacements in their distribution grid serving their customers – residential, commercial, and industrial. Governments at all levels, regulators and stakeholders are continuing to push distribution companies for improvements in reliability, cost of service, power quality, consumer service and safety. Distribution utilities will be operating in a more complex regulatory environment where performance rather than investment drives most of the operating profits. Rather than today’s “one-size-fits-all” service, customers will be able to customize their electricity service to suit their needs including cots, environmental impacts (i.e., green power), and levels of reliability and power quality which will require distribution utilities to offer much more sophisticated tariff structures.
In a report entitled “Electric Distribution Utility Roadmap” (CEA Technologies Inc. & Cap Gemini Ernst & Young) which provides a view of the electricity distribution utility environment 22 years into the future, it is predicted that the future of the electricity distribution industry is secure to 2025 since there is no technology that will replace the grid but that choosing to retain current “design standards and equipment and opting for small incremental changes in the way business is done today will result in an unprofitable future for a distribution utility”. The Roadmap project reviewed more than 150 technologies and placed them on a 22 year (to 2025) timeline. It projects the investment level, the parts of the distribution value chain that would be impacted the most, the costs for finishing the technologies and the opportunities. The top ten (10) critical technologies include:
- Asset Management IT Systems
- Asset Effectiveness Monitoring
- Automated Fault Detection & Reporting
- Broadband Over Power Line (BPL)
- Device Self-Reporting
- Maintenance – Reliability Centered
- Rates – Market-Based
- Modeling, Real-Time Dynamic Load
- Photovoltaic (solar cells)
- SCADA Network Penetration
The key Roadmap findings include:
- The distribution grid has to become more intelligent;
- The emerging technologies will impact all aspects of the distribution value chain and needs to be planned into the standards and designs for the distribution system;
- Rates, tariffs and operating rules will have the largest impact on the ability of distribution companies to operate. Utilities will be offering much more sophisticated tariff structures;
- The organization itself has to become much more capable to deal with the complexity of the future distribution system;
- The mix of people and skills will change radically over the next 20 years;
- Distribution utilities will be serving more demanding customers;
- The focus will be on affordability, reliability and power quality;
- The electric distribution grid will be selfdiagnosing and self-healing;
- There are a number of technologies that allow for making both regulated and nonregulated income from asset utilization in the future for distribution companies; and,
- Distributed generation will open the grid for more two-way flows of electricity, increase the level of live-line work, and require the greater intelligence to operate.
The electricity distribution automation infrastructure upgrade to an intelligent, reliable twoway system is estimated to be about $2 trillion investment globally by one set of estimating tools. The portion of investment for upgrading Canada’s distribution infrastructure is roughly estimated between $60 billion to $200 billion.
To many in the distribution side of the electricity business, this is the reality, and the environment within which they are planning to deliver the future. As an association supporting the industry, CEA has been crafting its approach to support the changes which will inevitably be required. Central to these activities is CEA’s Distribution Automation and Regulatory Innovation Proposal.
Through this initiative, CEA is seeking to build a partnership alliance among electric distribution utilities, Natural Resources Canada and Industry Canada in order to accelerate innovation and the implementation for electricity distribution infrastructure automation, advanced metering technologies (AMT) technology, BPL communications services and distributed generation in support of Climate Change, Canada’s Innovation Strategy, and Canada’s Broadband Communications deployment. This proposal is the first step in creating the distribution utilitysupplier- government partnership necessary to foster leadership in distribution automation, technology and regulatory innovation as well as strategic partnerships in support of sustainable development and economic opportunities.
Coming soon: The Future…Stay tuned.
