A Light Bulb Moment – Key Factors to Smart Grid Adoption

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In this special guest feature, IBM’s Ron Ambrosio describes how the company is enabling Smart Grids that prevent power outages and enable conservation as the world’s power needs continue to grow.

IDC predicts that the volume of internet data is expected to reach 35,000 exabytes by 2020. Collecting, analyzing and using this data can be complex, time consuming and costly. Yet despite these hurdles, many organizations are investing in data analytics to better understand their clients and make more informed business decisions. For the energy and utilities industry – evaluating and leveraging data has never been so instrumental.

Just think about it – without the electrical grid, business systems wouldn’t operate, public, civil and national defense systems would be compromised, our food and water supply would be greatly affected and there would be no global communication, and no use of modern appliances (see figure 1). The power grid is undoubtedly one of the most significant foundational components of our society. With this need comes demand – electricity is forecasted to grow by 33% in the next 20 years.  According to Lux Research, there will be nine times the smart grid data in 2020 that there is today.

Figure 1

Despite the hype, smart grids are at a point of inflection. Due to shifts in government policies, climate change, new technologies, energy security and consumer empowerment– previous business models have become outdated and are challenged to support current and further demand. In order to address these challenges, utilities must adopt new business models that encompass new architectures, protocols, security measures and communication platforms that encourage consumer participation.

Security and Reliability

As the power grid evolves it brings with it a set of new security challenges. The reality is that the current electrical grid is less resilient in the face of natural disasters or physical and cyber attacks than we need it to be. Due to its highly interconnected nature and increasingly open architecture, smart grids are susceptible to a host of vulnerabilities such as viruses, worms, and recently, targeted attacks. As a result, pervasive security needs to be implemented systematically for monitoring and protection. According to the World Economic Forum, ‘cyber security’ is the number one risk that may have severe, unexpected or under appreciated consequences to smart grids.

Security must become top of mind – an integral part of planning, designing and developing smart grid architectures. Application and data security combined with user or device authentication, privacy protections, role-based network access, enhanced physical security, improved forensics and incident response, modernized SCADA and ICS security controls, and much more are all instrumental in ensuring the success and safety of smart grids. Additionally, security standards and technologies must also evolve to accelerate the arrival of smart grids that are safe, secure and reliable. To help meet these challenges, governments, vendors and energy companies are now investing substantial time and resources to ensure next generation grids are ready.

By providing enhanced visibility into the operations of an increasingly information-centric electricity grid, IBM helps utilities defend against evolving physical and cybersecurity threats.  IBM’s Intelligent Utility Network (IUN) Communications Services and Solution Architecture for Energy and Utilities (SAFE) Framework help utilities develop security and privacy strategies to securely deploy new Smart Grid components like Smart Meters and Advanced Metering Infrastructure (AMI).  IBM’s Energy & Utilities security portfolio includes the most comprehensive set of security and privacy products and services in the industry, including: security and privacy assessments, network and systems hardening, NERC CIP and other regulatory compliance services, application and data security tools, wireless security audits, and much more.

High Performance and Scalability

There is no doubt that next generation smart grids must deliver the high performance and scalability needed to address ever-changing factors such as increasing population, growth in electric car adoption as well as new requirements for energy storage, efficiency and renewable energy.

In terms of the grid, performance can be defined by evaluating the cost-effective performance at scale. Using sensors, smart meters, digital controls and analytic tools, smart grids are being used to monitor and control the flow of energy across various operational domains, locations, and across large geographic landscapes. Today, smart grid networks are connecting millions of end-points – from buildings to individual consumer networked appliances. Therefore, it is imperative that utilities optimize performance to prevent and restore outages quickly to provide unmatched system reliability.

With smart grids, utilities are able to automatically monitor the health of the grid, pinpoint outages, and resolve sensor issues while locating and isolating a failure until personnel are on site. In addition, by evaluating power demands in near real time, smart grids will reassess distribution and scale power according to need. For example, in India the utilities have adopted a Demand Response (DR) approach to manage peak-shortages by remotely controlling and scaling the power load so that it can be shifted to non-peak hours. This creates optimal utilization of generation and transmission capacity; and also reduces carbon emissions.

Consumer Perceptions and Empowerment

The evolution of electricity does not only impact the bottom line for utilities and regulators, it has a significant impact on consumers and their role in power conservation and consumption. With sensors, digital smart meters and controls, consumers have the power to manage energy usage across various appliances such as thermostats and consumer electronics. New energy programs such as demand response, smart meters and smart appliances are providing consumers with more insight into energy consumption and efficiency. As a result, consumers are empowered to make smart choices to increase efficiency and reduce their energy costs.

Consumer empowerment will expand from the home to the car – as the concept of electric vehicles (EV) becomes more prevalent. With the new GM Volt, and Nissan battery-powered Leaf creating a buzz, many consumers are for the first time, contemplating the notion of an EV. Additionally, many local and national governments around the world such as Israel, United Kingdom and Denmark are beginning to lay the groundwork for EV adoption. Yet despite this movement, consumers are still hesitant, asking key questions about security, battery life, cost and overall efficiency – all valid concerns. The industry is responding and acknowledges that consumer uptake is dependent upon developing a secure national infrastructure and implementing a smart electric grid to address increased electricity demand.

Expanding the Reach

Smart meters are no longer an unfamiliar concept. The industry has seen increasing uptake over the years and there is no end in sight – we’ve gone from individual utilities to country-wide deployments. For example, in 2008, the Maltese national power and water utilities collaborated with IBM to design and deploy the world’s first national smart utility grid. The goal is to replace 250,000 analog electricity meters with new smart grid electronic devices and integrate water meters and advanced IT applications to allow for remote monitoring, management, meter readings and meter suspensions. Half way through the project, IBM has replaced 30 percent of the meters to date.

This implementation will allow utilities to better manage power consumption, billing processes and improve customer relations. By creating an end-to end power utility system, the Maltese government along with utilities can utilize data collected by the smart meters to limit outages, drive conservation and empower and educate consumers on energy usage. The system is expected to be completed by the end of 2012.

Ron Ambrosio is the Global Research Executive for Energy & Utilities at IBM, which celebrates its centennial anniversary in 2011.