Challenge #1: “Winter (Package) is coming”
If you’ve ever followed the hit HBO show Game of thrones, you’ll have heard the phrase “Winter is coming” numerous times. As well as heralding the invasion of White Walkers from beyond the wall, each time I hear those words it reminds me that the European Commission’s ‘Clean Energy for All Europeans’ package – commonly known as the ‘Winter Package’ – is coming too.
Part of the EU’s wider Energy Efficiency Directive, the Winter Package contains a raft of legislative proposals designed to strengthen, standardize and safeguard the EU’s energy markets. And it comes into force in 2020. All with a view to achieving a target of 20% of energy from renewable sources by 2020.
Principally, the Directive aims to advance energy efficiency, cleanliness, and performance, while encouraging (and enforcing with financial penalties if necessary) greater use of high-efficiency cogeneration and district heating and cooling.
This all sounds great in theory, but if you’re a power distributor, where does this new Directive leave you? In reality, it leaves you with a lot to do – and not much time to do it.
Time to upgrade
If your infrastructure and operational technology (OT) systems haven’t been upgraded in the last decade, chances are you’ll need to upgrade to comply with the Directive. And compliance in this respect means being able to identify, measure and report on more cost-effective ways to achieve energy efficiency – mainly through the use of cogeneration, efficient district heating and cooling, and the recovery of industrial waste heat. Or through other efficient heating and cooling supply options.
If the thought of upgrading your systems brings to mind Sisyphus pushing an awfully big rock up a hill, rest assured the benefits will far outweigh the perceived struggle. If you think of the Winter Package as a stick (is compliance ever anything else?), then here are two carrots to gnaw on.
1. Most vendors are losing interest in supporting legacy systems and end-of-life contracts for power companies. For them, it’s the law of diminishing returns. Simply put, propping up ageing hardware and software with splints and plasters makes less and less commercial sense for them, and for you. Plus the sooner you upgrade, the simpler, less time-consuming, and more manageable your vendor relationships will be. Time and IT resources you can devote to projects elsewhere.
2. You’ll be able to reap the benefits of the latest network, virtualized and hybrid technology. Trust us, it will change your life (for the better) in its flexibility, agility, mobility and future readiness. And once you’ve done it, maintenance, support, updates and upgrades will no longer be the headache they probably are now. And replacing a capex operating model with an opex, pay-as-you-go model will bring with it significant costs savings.
Where to start?
Let’s face it, making decisions based on a bunch of recommendations from different vendors is difficult. It can also be confusing. So how can you cut through all the noise, claims and counter-claims to find the right vendor and the right solution? At the very least, any potential vendor should have a good grasp of the Winter Package, and its implications for power distributors, but here are five other things to bear in mind.
1. Start with the foundations. All your systems are important, but one of the most critical is your infrastructure. Think of both your IT and OT as your backbone. They’re the glue that binds and brings together all your business-critical and not-so-critical systems. So take the time at this stage to better understand what you need from it today and what you might need from it in future. It could save a lot of expense and hassle down the line. An experienced ICT vendor will be able to help you devise a short, medium and long-term strategy, and then work with you to implement it.
2. Small steps are best If you don’t need to transition in one go, don’t. Look for a vendor who can help you make the OT transition in stages and whose equipment can continue to support legacy services natively. In our experience, a gradual transition works best in almost all cases.
3. It’s okay to expect a risk-free transition If a vendor can’t offer a solution with guaranteed performance equal or better than your native equipment, show them the door. If a vendor asks you to update or adapt your services to fit their new equipment, ask them why. And if a vendor doesn’t offer both MPLS-TP and IP/MPLS features, suggest it’s time they became more flexible.
4. Armour on, shield up. No one would claim the risk of IT security breaches is going down. The growth in compliance and regulation paints its own picture. In this day and age, you need to have integrated security systems. Systems that are tailored to your needs, simple to deploy and operate. And which can prevent attacks where they occur, protect your SCADA networks, and detect real threats. But without costing the earth.
5. Future-proof. The power utilities industry has relied on the same legacy infrastructure for decades with great success. But next generation networks, convergence and virtualization mean these legacy solutions are making less and less sense, practically and financially. So when you choose a vendor make sure they have a clear medium and long-term roadmap. Are their solutions both backwards and forwards compatible? If yes, that will mean no forklift upgrades and no need to migrate legacy and current services to new platforms. What you’re looking for is a vendor whose solutions have enough flexibility to develop and change as your needs do.
This blog is the first part of a four-part series of blogs from Marco Berger. Look out on our member voices section for the next installment!