The Infosys Utilities Blog seeks to discuss and answer the industry’s burning Smart Grid questions through the commentary of the industry’s leading Smart Grid and Sustainability experts. This blogging community offers a rich source of fresh new ideas on the planning, design and implementation of solutions for the utility industry of tomorrow.

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April 2, 2015

The Utilities Data Dilemma

Increasingly utilities are being directed to big data, and all the benefits that appears to offer. However such calls miss a fundamental issue, in that asset data is an expensive element for utilities, both to obtain and to maintain. Most utility physical assets are geographically widely spaced, sometimes in locations difficult to access. Costs can be quite high, for example a manhole survey can average >$100. The EPA estimates 12 million municipal manholes in the US, so a 5% validation survey would cost circa $60 million! Surveys can also have complex health and safety risks that need to be managed. For these reasons asset data is often limited, and of dubious quality. Sensors and instrumentation are improving, being both cheaper to install, run and maintain, and more robust, nonetheless they are still relatively expensive items.

With asset data being limited, suspect, and costly to improve, and sensors and instrumentation expensive to deploy, smarter utilities are looking to make better use of the information they already hold. By using a combination of engineering knowledge coupled with effective analytics, trends can be mapped and normal asset behaviour determined. Where data is readily available such analysis is relatively simple, however where asset data is limited engineering knowledge and understanding can be used to define relationships between the seemingly unrelated data sets. The key is in understanding how data sources can be meaningfully linked.

Large Business Information systems may thus be of limited value to utilities in terms of managing their assets. Of more value is the effective linking of dispersed data sources, coupled with an effective, easily configurable analytics engine. Such tools have already been used to answer many asset related questions, such as the viability of rainwater harvesting in differing regions and climates. It is indeed possible to answer many of the asset related questions posed by utilities, even with the limited asset data many hold. Each question is however individual to the specific situation, so only those who can understand both the engineering and system elements will be able to successfully deliver beneficial results.

May 22, 2013

UK Parliament All Party Parliamentary Water Group Innovation event May 2013

Yesterday I went to the UK Government All Party Parliamentary Water Group evening meeting on securing sustainable water resources for the future. This short event was chaired by Nia Griffith, Member of Parliament for Llanelli, with talks by Dr Dan Osborn, NERC (National Environment Research Council) and RCUK (Research Councils UK) lead at Living with Environmental Change and Chris Phillips, Chief Marketing Officer, i2O Water.

Dr Osborn talked about the World Economic Forum identifying water supply crises as one of the largest global risks, thus with many new challenges and markets appearing: this from a global market of £500 billion, and about £120 trillion in assets. UK research bodies had budgets of £120 million in this area, with for example Councils spending £13 million on drought research.

Mr Phillips described the world wide success i2O were achieving with their innovative pressure management solution and their close links to research (they are based in Southampton Science Park). He felt that, if properly established, UK water industry competition could lead to a boost in research funding.

A number of interesting discussions were then held. A large number felt that the cyclic, and sometimes short term, nature of work in the UK water industry made innovation difficult for the supply chain, as with tight margins and fluctuating workloads such investment was not feasible. Many felt that the UK needed to increase innovation, and learn from other countries, however generally it was perceived that UK expertise was still valued. Others highlighted the achievements of SMEs in the world water market, indeed UK SMEs, as well as contractors and consultants, were quite successful in the other countries. One gap identified was that the UK was not always as successful in turning research into effective solutions for the market, and more government and industry support was needed in this area. The only negative note was when Nia Griffiths asked if anyone from the utility companies had any comments: no-one from a utility had attended the event!

The official event concluded promptly as Nia Griffiths had to vote, however informal discussion carried on for some time. Overall I found the event very helpful, and believe such meetings should be encouraged in the industry.

May 2, 2013

To build or not to build

The recent deal signed by Centrica to source shale gas from the US from 2018 onwards appears on the face of it an assertive step in establishing a continuing strong role for gas in the UK. This comes on the back of the UK government's Gas Generation Strategy and establishing of an Office for Unconventional Gas and Oil for exploration of shale in the UK itself. But beneath the surface of these developments there remains a great deal of uncertainty on how gas consumption will play out in the coming years, particularly in the power industry that uses gas to generate power.

Continue reading "To build or not to build" »

February 27, 2013

Carbon Labelling

Worldwide there is an increased awareness of the need to make lifestyle changes to sustain our environment. With increasing environmental concerns and the state of the world, businesses are being asked to commit to measuring and reducing carbon emissions.

Labelling, or marking of products based on various parameters have been a standard approach to pin down accountability in terms of product content, raw material usage in a product, as health indicators and also to mark energy efficiency. However, environmental concerns have pushed the boundary to businesses being asked for green accounting, in other words accounting for the effect their activities have on the climate, both direct as well as indirect.

'Carbon Labelling' or putting a figure to the amount of CO2 emissions that a product or process emanates is being used by organisations worldwide as a measure of an organisation's emissions management efficiency.  Every aspect that influences a product's life is being accounted for - raw materials, every stage of production activity, distribution and disposal are being precisely measured through the entire life cycle of a product before it is delivered to the end-user.

The debate is on to fix standards across the world as divergent methodologies have evolved over the years to compute emissions. Difficulties have cropped up on how to measure disparate elements, spread across diverse geographies. The complexities involved in measuring, monitoring and collating all the data elements precisely proves to be a back-breaking exercise.

Despite the ambiguities and current difference in approaches, the world is increasingly getting united on the need to regulate emissions. Organisations across the world have voluntarily come forward to commit themselves to measurement and reduction strategies with an increase in awareness of the need to make lifestyle changes to sustain our environment. Governments and private initiatives are deliberating not on the need but on the best approach to calculate and capture carbon data. Most of these efforts revolve around devising methods and agreeing to a common approach to carbon footprint all products and services. Research and application has shown definite benefits in terms of increasing operational efficiency and cost reductions that organisations can achieve over and above emissions reduction.

There is a looming energy crisis worldwide. There is now a significant risk of an 'energy gap', where the supply of energy is no longer sufficient to cope with the levels of demand. Energy outages are becoming a more common occurrence across the world.  In order to tackle the gap, the way we look at energy management has to change. A re-look at existing practices across the product lifecycle becomes imperative. Some of the important areas that could significantly enhance the efficiencies are by revisiting the way the 'Supply Chains' and 'Service delivery and logistics' are handled.

Consumer awareness is accelerating quickly - investors are starting to increase pressure on corporates to take action. Organisations are being put under the scanner and are being asked for environmental accountability in an appeal to their responsibilities as corporate social citizens. Businesses thus have to respond to:

§  Government regulation

§  Business risk mitigation

§  Consumer and market pressure

Emission measurement is based on a Life Cycle Assessment (LCA) of a product. Multi-layered life cycle analysis considers all of the inputs and outputs throughout the procurement, manufacturing, distribution, disposal and recycling phases of a product.

By using the LCA method, an organisation can estimate the carbon emissions at each stage of a product's life cycle, and then target the stages at which large amounts of emissions are happening across the Supply chain. By devising reduction measures tailored for each stage, reductions can be efficiently achieved. Re-aligning processes and supply chain strategies to weed out energy gobbling inputs into the system can result in both cost savings and improving operational efficiencies. Besides improving the organisation's bottom line, operational and management staff can devise appropriate methodologies to switch to alternative sources that can help them gain new revenue opportunities from new low-carbon products and services. Accurate measurement, reporting and reduction strategies also help organisations improve their corporate social responsibility position. These differentiators cumulatively add up to help the organisation stand-out from the competition and also to have increased acceptability in the end-user markets.

June 13, 2012

European Gas to Power (II) - squeezing margins

Gas producers across Europe and beyond are today presented with unprecedented growth opportunities. Major supply projects including the operational North stream and proposed South stream, Nabucco and Transanatolian pipelines are evidence of the expected need for gas in the coming decades. Liquefied Natural Gas continues to grow and increasingly exert its position as the key swing gas source across the Atlantic and Pacific basins. And, though it is not yet fully accepted as a primary source of energy in Europe, shale gas exploration in the US is affecting the global gas market and the drilling process may yet in the coming years find a better and safer way to gain public buy-in.  A recent report by IEA suggests that gas could replace coal as the second largest primary energy source (after oil) and world demand for gas could rise by 50% within 25 years. Similarly Exxon Mobile predicts that in Germany gas consumption will rise to 34% of the energy mix by 2040 (from 20% today). But as one of the gas industry's key customers, the gas to power sector is not just keenly aware that gas demand growth means upward pressure on gas prices.

Continue reading "European Gas to Power (II) - squeezing margins" »

June 5, 2012

European Gas to Power - squeezing margins

The European gas to power sector is traditionally made up of asset backed utilities and independents power producers operating combined cycle gas turbine (CCGT) and, to lesser extent, open cycle gas turbines (OCGTs). CCGTs are more efficient and have therefore have historically run closer to a baseload running regime with load factors > 50%, with the gas burned often purchased via oil-linked gas contracts. While these assets owners are increasingly trying to restructure their gas contracts and tap into cheaper market gas (at least for the time being), the load factors they are achieving are under extreme pressure from growth in the renewables sector. The explosive growth of wind and more recently photovoltaic solar in Europe is displacing gas in the 'merit order'. Often these forms of energy, solar during the summer and in the daytime and wind during the winter and at night, together with cheaper to run nuclear and coal sources are sufficient to meet demand and gas fired power plant are as a result left underutilized. Instead CCGTs are forced to perform a load smoothing role to compensate for wind patterns or cloud cover and are burdened by poor response rates to support renewables variability.

Continue reading "European Gas to Power - squeezing margins" »

March 6, 2012

High speed rail lines .........are water Utilities on the same track?

Last week one of the UK newspapers commented on United Utilities' idea to run a 2metre water pipe for over 200 miles from Manchester to London, this was especially topical given the announcement of the drought designation in the same week. I am sure the UK Government are keen to welcome innovative approaches to move water from apparently more plentiful areas to more "restricted" areas. However, how practical and viable would this approach really be?

The underlying fact is that it is extremely expensive to transport water, unless of course the route was all downhill. The amount of water that it is claimed would be transported down the pipe equates to less than 2% of Thames Water's daily supplied water.

However, even besides the physical cost and effort of transporting water, it was pointed out at the Water UK City conference last week in London by water company executives including United Utilities' CEO, Steve Mogford, that to run such a main down the side of the proposed High Speed Two (HS2) rail line would be a highly risky venture anyway!

But the principles of trading water relatively short distances between different water companies is a reality and is being more actively discussed as a result of the government's Water for Life white paper and Ofwat's, the water regulator, consultation document. The attendance of both Defra and Ofwat at the conference ensured active debate on the subject. The point is that whilst rainfall has been extremely low in many parts of the UK for quite some time, we have also experienced too much water, leading to floods in other parts of the country.

This unpredictability moves the debate to discuss the options available for water sustainability-type demand reducing initiatives such e.g. grey water use and more domestic water storage. Should such initiatives be implemented even when there are no actual restrictions in place? This would mean even with today's demand that there would then be surplus for use by other "more needy" requirements for clean water.

There are also other perspectives to be considered. The news article also identified the question of who would ultimately end up paying the cost... the customer of course. The initial cost of installation, as well as the on-going cost to operate (and maintain) such a structure would be substantial and is the price ultimately worth paying?

This topic is unlikely fade away given the changing climate the UK and other parts of the world have been experiencing recently. Thus more innovative thinking is required in terms of how a more sustainable solution to the water supply in the UK, as well as other parts of the globe is achieved.

February 22, 2012

The rain falls mostly on the plains ....and not where we need it

The news this week that many areas of the UK are in drought and at high risk of needing to apply water restrictions is likely to leave many customers asking the usual question "So where does all the rainwater go?". The rainfall charts do show there has been reduced rainfall for a number of years and this accumulative affect is really starting to store up issues. However, I am sure many customers would still ask what can be done to more effectively capture and utilise the rain that does fall.

Of course, supply in the form of extraction of water from the various types of resources such as rivers, reservoirs, or groundwater from boreholes is only one part of the equation. The increasing demand from customers is the other, and in times of water restrictions the demand side becomes the primary area of focus for the water company to maintain its water balance. We are the seeing creative ways to deal with drought such as the  abstractions or water movements, such as using the River Medway which is itself very low to re-supply one of the reservoirs in Kent. However, this is not a sustainable activity and also often requires regulatory approval, e.g. the Environment Agency in the UK.

So, in addition to trying to predict rainfall which is notoriously difficult, the focus needs to turn to reducing demand through various water efficiency measures. It is well recognised that many of the water companies have been progressing initiatives in these areas for many years and that there are some notable examples where the overall demand has remained static even though customer numbers have increased by up to 20% in some regions.

With at least one of the UK national papers repeating water saving measures applied in 1976, such as sharing baths and other garden initiatives, the time for a more holistic Integrated Water Management approach ultimately resulting in a long term sustainable solution may be coming sooner than many expect.

What could this approach look like and what are the opportunities and challenges? Well this is likely to be a topic for discussion at the Water UK City Conference which Infosys will be attending on the 1st March 2012 (http://www.water.org.uk/home/events/events-list/12th-annual-city-conference-2012 ) and one that I will continue to comment on in my next blogs.

 

February 6, 2012

My Bank My Utility

Since Thomas Edison lighted up the bulb, you cannot imagine a life without electricity. It has become as essential as the air to breath. All that said, you still find yourself frowning when you get your monthly electric bill. If the customer is on a fixed monthly income, it becomes even harder.
Utilities thus provide lot of relief to the customer to make payments easier. Payment arrangement can be made before the amount is actually due. Even extension can be requested on the due date of the payment. Budget Billing (Level payments plans) is also available where in a fixed amount is paid by the customer every month.
What if my utility can help me get a loan towards my electric bill?
Loans:  Say the customer is expecting hard time paying the bills for the next whole year. He can very well request for a loan towards his electric bill from the Utility. Utility might have to consider the loan returning capability of the customer, prior to disbursing the loan. The utility can charge an interest on the loan to the customer. The interest rate in this case should definitely be lesser than the late payment charge to make this option beneficial of the customer. This option would be more helpful to the customer in comparison to payment extensions as the number of extensions allowed would be lesser than the loan term period.
Savings Deposit: Now think of the opposite case, when the customer has a surplus inflow of cash. What if he could create a savings deposit with the utility just like his own bank? The utility would then draw money from the deposit periodically and get the monthly payments processed. This guarantees the returns for the utility. The utility in turn also provides interest on the remainder amount. To encourage customers to opt for this, the utility might also provide a lower rate or a discount to the customers in return of pre-payments of the bills. Internally the Utility can get associated with Investments agencies and pass the profits back to the customer. In this case though, the deposit has to be guaranteed. In case of loss in the investments, the customer cannot be penalized.
Challenges
All that said, there has to be regulations to prevent Utility from acting as a profitable organization.
• Unlike the financial sector, the profits needs to be public and the loss should be private. The customer's deposit needs to be protected and insured. Thus the utility might want some support from the government to ensure the same.
• The maximum limit of the deposit from the customer or the maximum loan to the customer should also be restricted to disallow customers from using the Utility as a full-fledged bank or an investment agency.
• The interest rate needs to be controlled and regulated. The investment should be low risk and low gain.
• There are certain regulations which require Utility to get approval prior to engaging in a business not related to Utility. It is also mandated that such non-utility businesses be kept separate from the regulated business. One such Act is the Public Utility Holding Company of 1935 (PUHC), also known as the Wheeler-Rayburn Act, passed by the United States Congress .
• The major piece of financial processing done by a Utility is payment processing. Once loan and deposits options are provided to the customer, it would be an overhead for the Utility to manage and control this. The business rules have to be defined to take care of exception like say pre-payment of loans or early withdrawal of the savings deposit etc. It would be a good option to partner with an investment agency/bank or outsource this piece. This should be seamless to the customer; otherwise it might be a hassle for the customer.
To summarize, this concept can be applied to all kind of utilities and service providers so that both the customer and the utility are in a win-win situation.

November 22, 2011

Microgrids, Smaller is Better

In the debate of size, smaller rarely ever wins.776_1_t.jpg However, in the debate of microgrids,one of the fastest trending smart grid arenas, smaller is better. Please check out this featured article in Fierce Energy.

  

http://www.fiercesmartgrid.com/story/it-smarter-be-smaller/2011-11-19

October 9, 2011

Key Take Aways from FOCUS 2011 - Consumer Engagement

Two weeks back, we ran a series of live blog posts from the Itron User Conference (FOCUS 2011). While the posts(Day 1, Day 2, Day 3) highlighted the key proceedings from the event, I plan to share some key take-aways for me from the conference.

There were several interesting and insightful sessions offered thru key notes, panel discussions and presentations. Several leading Utilities shared their perspective on the AMI implementations and their Smart Grid journey including the lessons learned in the process.

786_1.jpgHere are some key take aways from the leading Utilities on their consumer outlook on AMI programs:

1. Walk before you Run: There was an unanimous agreement in multiple sessions that a phase-wise step-by-step roll out of AMI is essential for success. Trying to do too many things at the same time has not yielded results and has delayed many a roll outs. Utilities who have been careful in leveraging the technology with a lot of patience have had relatively higher degree of success in the roll outs.

2. Communicate to the Consumers: At every stage of the program, Utilities need to set expectations with consumers in the right context. It is not about the technology, it is about the process and the associated benefits.

3. Demystify the Truth: In this age of information overflow and digital lifestyle, a small group of extremely vocal cynics can create a huge level of public outcry against technologies like AMI and Smart Grid. This is already visible in several parts of the world. Utilities need to use the same channels (Websites/ Blogs/ You Tube/ Twitter/ facebook/ Other social media platforms) to demystify the truth behind these rumours. In other words, Utilities need to put their Ph.D. holders at work who believe in the technology and who can share the scientific facts with the general public in these channels.

4. Recognize the WIIFM channel: A senior executive from one of the progressive Utilities jokingly said in a panel discussion that his organization realized early on that the most popular FM channel in their territory - WIIFM. Consumers want to know "What is In It For Me (WIIFM) "!. Every consumer wants to know what value he/ she can derive out of this and the Utilities need to address this question.

5. English Please : A lot of positive discussion around AMI/ Smart Grid available in the public domain is technical and full of jargon. It is safe to assume that a large portion of  it is not intended to address concerns of the general audience. At the same time, the negative publicists use plain and simple English to spread their message. Utilities need to adopt a counter strategy to this and communicate in simple English what the AMI/ Smart Grid programs mean to an end consumer.

It was a great gathering of industry leaders and vendors. Thank you, Itron, for putting together yet another great conference.

 

 

June 28, 2011

The 21st Century Grid Policy Framework

Recently I found one interesting report in FERC website. It is being issued in Jun 11 itself by Obama government and is titled "POLICY FRAMEWORK FOR THE 21st CENTURY GRID: Enabling Our Secure Energy Future"

 

Considering Century Grid as a process, report objectives are defined as, not to prescribe particular technologies, products etc but to enable the United States to maximize the available opportunities and address the challenges while transiting the nation to a smarter grid.

Continue reading "The 21st Century Grid Policy Framework" »