Impact of IoT on utility asset management

The Internet of Things is bringing advances in the technical and financial management of connected grid assets.

A utility’s assets are its wherewithal, essential to every aspect of its operation. They are diverse in nature, often complex and usually spread over large geographical areas and generally costly to install or replace – especially in the event of failure.

In the past asset management relied on little more than suggested age-related maintenance schedules and visual inspection. But this has been steadily changing over the years. Condition-based maintenance, in which maintenance is based on need, has been growing in importance alongside preventive maintenance over the past decade or so. Latterly predictive maintenance has also improved scheduling.

But the Internet of Things (IoT) introduces a whole new dimension to the management of assets to the extent that it is identified by Engerati as one of the top three impact areas.

Asset management is – or at least should be – a “cradle to grave” process, i.e. from the day of purchase of the asset (or even earlier) to end of life at the utility. And it’s not just about maintenance but also about improving the operational efficiency to maximise the returns on those assets. For a customer facing organisation such as a utility this brings additional challenges – but this is also where the IoT comes in, with its potential to transform the business.

In a 2015 survey by Forrester Consulting for SAP, a majority of global enterprises, among them energy companies, viewed IoT as a means to improving operational efficiency, with more than half being spurred to IoT adoption by the pressures to leverage data and deliver a better customer experience.

IoT and asset management data

Ultimately the IoT is all about data – data from sensors and a host of other devices across the network that is timeously analysed and acted upon.

For example, for its monitoring of critical assets such as power quality units, static compensators and transformers, S&C collects data on “hundreds of conditions” in order to determine the ‘normals’ and detect any variations from these, which would trigger an alert for further investigation. The closer to real time such alerts are triggered, the more quickly they can be investigated and any potential failure avoided or damage alleviated.

With edge intelligence, devices can interact with one another, reducing the data burden at the utility central data centre and accelerating the response time. They could also narrow down geographically a portion of the network with an issue and potentially isolate it. An example of such technology is the self-healing network, which is being pioneered by utilities in North America.

Improving operations

The quest to improve operational efficiency was behind North America’s second largest municipal utility, PowerStream’s digitalisation of its asset and maintenance management programme. “The goal was to enable us to improve reliability by performing the right maintenance at the right time with the right resources,” said Vince Polsoni, Station Sustainment Manager at PowerStream, in an interview.

New Jersey utility Public Service Electric & Gas initiated a condition-based maintenance approach in the early 2000s, resulting in savings of “millions of dollars” in equipment failure avoidance. For example, in a single event excessive gassing and overheating detected on a load tap changer in January 2011 saved an estimated $1.5 million in avoiding a potential failure.

These projects and others like them are focused primarily on the operational efficiency of assets from the technical perspective. But as the IoT advances, we can also expect to see a more direct focus on the economic aspects of efficient operations. With the transformation towards a distributed, prosumer oriented network, the market focus of utilities and third parties is expected to shift to products and services, which will be based on optimising the use of the connected assets for the respective parties.

For example, stored energy in a battery could be called on for reuse by the householder, it could be sold to a neighbour or sold to the market for ancillary services, the optimum of the moment varying with the prevailing market conditions.

Harnessing IoT for utility asset management

The growth of the IoT is unstoppable and according to Vodafone’s 2016 IoT barometer interest is higher than ever: at the time of the survey 28% of businesses already had live projects, with a further 35% less than a year away from launch and overall more than three-quarters said IoT will be “critical” to their success.

The Forrester Consulting survey offers some useful recommendations for IoT implementation. Among these are to identify a range of IoT use cases in your long-term strategy, but to implement IoT incrementally based on business priorities, and to explore and plan for customer benefits across both operational and customer-facing IoT use cases.

Many initial IoT use cases focus on efficiency improvements in business metrics, such as increased asset utilisation, reduced maintenance and unplanned downtime. But these efficiency enhancements can also produce customer benefits, if enabled by the IoT implementation. For example, improving asset utilisation or preventive maintenance can save the company money, but it can also lead to fewer outages and shorten the customer response time, thereby improving customer service.