The Internet Of Things Will Transform Utilities

Internet of Things connectivity opens the way for new utility services and business models.
Published: Wed 09 Mar 2016

The global number of devices being managed by utility companies is projected to grow from 485 million in 2013 to 1.53 billion in 2020.

Utilities have long used machine-to-machine (M2M) solutions for applications such as the control of power grid communications and remote reading of meters. The industry is the second largest source of M2M service provider revenue, behind the automotive and transport industries.

With the mass deployment of smart meters and the growing need to monitor the distribution grid with sensors and actuators, the number of connections is increasing rapidly.

At the same time the volume of data is also increasing and projected to multiply by at least 100 times over.

From the utility perspective this is evolving grid operations from purely static to highly dynamic. Intelligence for managing the electricity grids is moving from operations centres to the edge of the grid. [Engerati-The Grid Edge – New Utility Opportunities] This will enable distribution network automation and self-healing networks, among other things.

In the longer term energy retailers will become consumer service companies rather than point-of-load administrators. [Engerati-Building The Utility of The Future] At the same time, consumers will increasingly become active market participants as micro-generators, adding value to electricity systems by shifting consumption.

Rise of the Internet of Things

The Internet of Things describes the design and implementation of internet-based systems and solutions that interact with the physical environment. As a concept it builds upon M2M applications and technologies, and it will continue to rely on these solutions to bridge the gap between the digital and the physical.

With the advent of the IoT, devices are capable of sharing data by connecting to the internet, rather than communicating by wire or wirelessly through a specific application to a wide or local area network.

Solutions based on the IoT frequently utilize the existing communication infrastructure, and aspire to create business value and answer complex innovation problems across whole supply chains.

For example, the abundance of new utility meter and grid data will trigger new applications that could benefit grid operators, such as improving grid fault location, identification and restoration in real time; implementing efficient local energy efficiency measures, e.g. local energy loop optimization via monitoring or control of local energy generation and load; or creating more efficient market mechanisms.

Meter data may also allow retailers and energy service providers to design new services around energy efficiency.

IoT platform and M2M service enablement

The industry has always relied on utility-specific protocols for its operational data exchange. It can be inferred that over the past 15 years the industry has been moving towards the digital world internet standards have already largely impacted utility connectivity solutions.

Beyond connectivity, Network Management Systems (NMS) will become a key component of the IoT. Utility providers will have to manage heterogeneous communications systems, i.e. multi-vendor, multi-protocol networks with varying quality of service constraints. The NMS for utilities will benefit from the telecommunications industry, which has already dealt with issues of scalability, the need to support legacy protocol and devices, security, integration with back office and information presentation.

The IoT will rely on platforms that can process a large volume of data and enable the building of applications and services. Here again, the platforms developed for the telecom industry will offer the required functionalities at the lowest cost, using the latest internet technologies for cloud and service offerings.

An advantage of using this type of platform is that energy service providers may, where regulation allows, offer a bundle of services in a similar way.

Utility use cases

Utility companies have started building basic smart grid communications and metering infrastructures, and are now looking at further ways to maximize possible uses for the new data.

Utility use cases include:

• Ausgrid (Australia) – Implementing LTE for smart grid communications: Objectives included unifying communications systems and achieving predictable smart grid applications. Benefits have included economies of scale for modules, devices and equipment, a quality-of-service enabled network with short latencies and a future-proof communication network that can evolve.

• Elektrilevi (Estonia) – Deploying advanced metering infrastructure (AMI): The company was undergoing meter management legislation and undertook a national smart meter deployment with very limited resources. [Engerati-Estonia: The Challenges and Advantages of Relying on Partners] Benefits have included savings through increased operational knowledge and elimination of manual meter reading, revenue protection due to fraud detection and enhanced customer satisfaction.

• E.ON (Sweden) – AMI as-a-service: Objectives included reducing the number of long-term partners attached to smart metering solution and optimizing the company workforce. [Engerati-Ericsson Wins E.ON Big Data Contract] Benefits have included improved efficiency.

• Stockholm Royal Seaport (Sweden) – Smart home services: Objectives included a smart city communication infrastructure, with a primary focus on energy use cases within the Seaport microgrid, and energy use cases, including distribution automation for a self-healing microgrid and active house for energy efficiency. [Engerati-Why don't Energy Management Services take off in the consumer market in Europe?] Benefits have included economies of scale for modules, devices and equipment and a future-proof communications network and IT architecture.

These cases represent the importance of utilizing IoT for new business, as well as using field-proven methods. In order for utility players to transform along with the industry, they must deploy solutions with the ability to evolve. It’s all about building an ecosystem where many different players can share in the overall value created.

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