Machine to machine communication has been a hot topic since the early 1980s and has developed into the dynamic IoT trend which is redefining power utility business strategies the world over.
With the constant change in technology innovation, can the market look forward to a single set of protocols and standards governing device management and communication? Can competing standards achieve widespread adoption? What alliances or bodies are governing innovation adoption, driving standards towards convergence and unifying a seemingly fractured landscape?
This article first appeared in Metering & Smart Energy International issue 2-2018. Read the full digital magazine here or subscribe here to receive a print copy.
Metering and Smart Energy International spoke with Sharon Allan, Chief Innovation Officer from the Smart Electric Power Alliance (SEPA) to learn more about disruption and the tremendous pace of change facing utilities.
SEPA is a North American, non-profit organisation geared to providing its members with resources to assist in their grid modernisation efforts, with special focus on integration of smart, clean energy solutions and associated technology.
Below we explore the factors influencing varying levels of innovation adoption within utilities and how protocols and standards are transforming to meet the needs of a modern grid, utility and consumer.
In order to understand the magnitude of disruption in the power sector, as well as how communication is changing, MSEI started at the beginning, understanding how a humble protocol governs the processes of data exchange.
Communications within the Internet of Things (IoT) is based on the TCP/UDP protocols and associated internet protocols, designed to optimise performance and size while minimising cost.
A protocol refers to the method you use to connect devices to facilitate data exchange, i.e. the rules governing transmission of information, syntax, synchronisation of communication semantics and error recovery methods.
Protocols can become standardised, as they have with WiFi. As devices grow in complexity, more protocols and proprietary stacks are needed to ensure the data is transmitted, received, interpreted and protected correctly and efficiently.
One standard to rule them all
Despite the existence of a number of differing protocols and standards governing data transfer, ubiquitous communication continues to be the goal. However this is a challenging reality to achieve considering technology is constantly changing and device management has to evolve to remain current and relevant.
Allan emphasises the significant challenges thwarting ubiquity. Utilities need to consider a number of variables when strategically deploying new technology across the network – namely compatibility, affordability, security and stability – while achieving the right balance between legacy and emerging communication protocols. With constant advances in technology, this is a monumental task, and system architecture must allow for scalability.
Utilities are increasingly adopting smart meter devices, multifrequency radios, SCADA devices, switches, thermostats and other sensors, which include various standards and protocols that leverage different types of communication and cybersecurity standards – up to seven layers, says Allan, all serving a purpose within the ecosystem.
She further explains that in the energy industry, equipment in the field must be usable for at least 15–20 years. This means there will always be a mix of the old, semi-new and new technologies present, as there is simply no business case for constantly changing technology, software, and protocols.
Influencing factors on innovation adoption
While the fundamentals of the utility function – to deliver safe and affordable electric power to consumers – remain constant, the manner in which this is done is revolutionising. Business strategies are changing rapidly with several utilities exploring partnerships with technology companies to gain exposure to the new technologies while minimising own risk exposure. Others are keen to be more hands on, setting up innovation centres or established groups to understand how to apply some of these technologies in their businesses.
According to Allan, there are a number of factors influencing the current innovation adoption trends within the sector.
Allan explains that since 2017, the industry has upped the innovation ante with the distributed energy resource management market. Solution providers were encouraged to invent software, applications and novel troubleshooting strategies to assist utility businesses to run more effectively in this space.
Larger utility investors took new ways of thinking to the boardroom, recognising the need to understand new forms of technology, as well as the risks and opportunities presented to the utility business.
Investor-owned utilities have begun to create new positions, such as chief of digital or VP of innovation: people specifically trained to keep their fingers on the pulse of innovation and to manage the associated change.
The fact is that there is no one organisation providing a standard or recipe for best practice. It’s a complex system comprising many different layers and components. To move electricity and data, to understand how power is generated and consumed, and to use the data to direct strategic change within the organisation, requires many layers of protocols and standards and many different bodies who assist with and guide integration and rollout.
Bodies such as the International Electrotechnical Commission (IEC) and the Institute of Electrical and Electronics Engineers (IEEE) exist to help guide the digitisation process; however the individual utility together with its growth strategy, digital requirements and state of readiness will determine the uptake of innovation.
According to SEPA, in the United States sector change is accelerated through the Department of Energy within the US government. The government recognises its role at the forefront of grid modernisation, and is actively involved in consortium funded lab projects. Projects bring together multiple national labs and industry stakeholders to tackle a specific area that requires fundamental research and development to move the industry forward.
The greatest change has taken place over the last decade due to increased collaboration and sharing of lessons learned. Even though the market continues to be competitive, these labs prove that a collaborative environment reduces the risk for all. If large utilities or companies with market power are included in the mix as key supporters, momentum is gained more rapidly, pushing quicker adoption or implementation.
Each utility is on a different journey in terms of its ability to transform and digest the pace of change. Thus, according to SEPA, new efforts are most easily adopted and embraced by utilities at a point of readiness to change. For example, even though there is activity and enthusiasm in the space of distributed energy resources (DER), the reality is that very few utilities are ready for that, both in terms of infrastructure and resources. One instance where DER is flourishing is in Hawaii. Hawaii Electric is very motivated to collaborate with anyone who is willing to invest their time and resources into pushing new technologies and standards forward. They seek partners to align with their objectives of energy independence, lower generation and storage costs and greater grid stability in the face of climate change and increasingly extreme weather patterns. Hawaii has indeed embraced the change and maximised the disruption to support organisational objectives.
Allan reminds us however that in North America, 68% of deployed AMI won’t be due for replacement in the near future. This means the balance sheets must be checked before committing to a new form of technology. Understanding if an investment is viable in the long term is an important consideration. Once the commitment is made, the utility cannot merely reconsider or make radical changes when the next new innovation comes along. It is clear therefore, that not all utilities can join Hawaii Electric in its strategic leaps and bounds.
Another variable impacting innovation uptake is that many solutions providers aren’t necessarily building the tailored solutions that utilities actually need. As we have seen, utility requirements vary; however, solution providers must consider what the majority of utilities require in terms of innovation if they intend to move the market.
The market coalesces around common customer expectation and demands. Therefore, as technology, protocols and standards become more mainstream, so vendor solutions grow to be more similar and less tailored to individual organisational requirements.
SEPA aims to be the nexus: facilitating discussion between business innovation, standards and market impact; assisting the sector to navigate this novel landscape; ultimately ensuring that the shift occurs and utilities embrace the transformation. “The movement needs to happen, we have to explore and motivate the change,” says Allan.