Effective Asset Management is Key to the Utility's New Business Plan

Utilities realising the importance of asset management and condition-monitoring systems for future planning.
Published: Thu 13 Mar 2014

Over the next decade, utilities are expected to spend US$49.2 billion on asset management and condition-monitoring (AMCM) systems for the power grid.

This is according to a new report by Navigant Research which points out that utilities are being forced to invest in sensing and monitoring technologies due to the advent of the smart grid.

While many utilities are beginning to realize that these systems make financial sense, others continue to handle asset management using the “run-to-fail” strategy. This is despite the wide variety of new solutions available to utilities. However, this will need to change if utilities want to harness the full benefit of the smart grid and remain viable in the power industry.

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Management with a holistic view

Asset management and condition-monitoring solutions encompass physical devices (sensors, intelligent electronic devices, smart meters, etc.) that share real-time or near real-time data with operations centers. They also include software solutions, such as asset management systems (AMS) and, increasingly, analytics solutions. Navigant says the ultimate goal is for all of these solutions to work in concert to provide management with a holistic view of the current and expected performance of the grid and its critical components.

Asset management and condition-monitoring market challenges

  • Currently, sensor penetration is extremely low in the grid, with the exception of transmission substations. Even for high-value assets such as large power transformers, the penetration of sensors that monitor a range of characteristics, including dissolved gases or temperature, is estimated at less than 20% in the US and Europe. In other regions, penetration is even lower.
  • Utilities tend to invest mostly in high value assets such as large transformers or circuits that are particularly troublesome. However, as sensor prices decrease and reliability and efficiency become a higher priority for utilities and regulators, more investments will be made.

  • Sensor technology is still costly. As a result, a run-to-fail mentality persists. For most utilities, this remains a valid operating model, especially when there are no communications networks on the grid. As communications capabilities proliferate, asset management and condition-monitoring solutions will become a value-add solution.

  • Most asset management solutions today were not designed for condition-based monitoring. New data provided by sensors in the grid, including smart meters and some distribution automation devices, is being pulled into software solutions that were originally designed for a planned maintenance program rather than a dynamic, condition-based maintenance program. In many cases, newly available data is not yet being leveraged to its full potential, although newer asset management solutions support applications such as conservation voltage reduction that can create value. Some installed asset management solutions, however, may not be equipped to handle the volume and type of data provided by new sensors and grid visibility.

  • Asset health centers and managed solutions are being offered by a growing number of grid vendors and service providers. These outsourced solutions may prove attractive to smaller utilities. Asset management-as-a-service is becoming popular but data security concerns remain.

  • Operational silos within utilities can hinder the full benefits of asset management and condition-monitoring solutions. In order for utility management to achieve a holistic view, true information and operational technology convergence must occur, with asset management solutions and analytics programs drawing data from and sharing it across departments.

  • Operations staff may not trust the data provided by sensors in the grid. Control room personnel and managers in charge of asset planning, field crews and inventory will have to grow comfortable with the output from both physical sensing and analytics solutions, particularly for predictive maintenance.

  • Financial pressures in the US and burgeoning distributed generation in Europe give countries in these regions greater motivation to explore asset management and condition-monitoring solutions. Other countries have different priorities.

New sensor technology and analytics solutions can completely revolutionize the way in which the power grid is managed and maintained.

With the introduction of distributed generation and electric vehicles, effective asset management solutions must form part of the utility’s new business strategy.

Further Reading

Navigant Research-Utility Spending on Asset Management and Grid Monitoring Technology Will Reach Nearly $50 Billion through 2023