The importance of IT/OT convergence is not solely about the technologies themselves. Businesses also need to ensure that the departments and processes are as integrated as possible, argues Lisa Williams
In the power industry, like the rest of the critical infrastructure landscape, the future is meeting the present head on, as a wave of digitalization crashes over industrial control systems that are, in many cases, decades old.
Operational excellence for these companies increasingly depends on how efficiently their information technology interacts with their operational technology. It is important that these two functions aren’t excessively ‘siloed’ – IT/OT convergence is happening and organizational association is the key to its success.
In large power companies, this kind of inter-departmental alignment is difficult enough. However, there are also external factors that make it even harder.
We have seen multiple real-life examples in the last decade of cyberattacks dealing damage to thermal and nuclear power facilities. In 2016, cyber criminals targeted multiple power distribution centers in Ukraine – the first confirmed hack to take down a power grid – leaving more than 230,000 of the country’s residents in the dark.
But this wasn’t just an opportunist attempt; it is reported that the attackers were “skilled and stealthy strategists who carefully planned their assault over many months, first doing reconnaissance to study the networks and siphon operator credentials, then launching a synchronized assault in a well-choreographed dance”.
Some security experts pointed out that the outcome could have been much worse had it happened in the US, where many grid control systems do not have manual backup functionality. This means that if a similar attack was successful then Americans might be without power for much longer than the six hours their Ukrainian counterparts faced.
Even though the US federal government had been taking steps to enhance critical infrastructure security for some time previously, with regulations necessitating a certain level of security from industrial companies, the Ukrainian event was a stark warning to power organizations across the globe.
In February 2013, US President Obama issued Executive Order 13636, ‘Improving Critical Infrastructure Cybersecurity’, which sought to provide a “prioritized, flexible, repeatable, performance-based, and cost-effective approach for assisting organizations responsible for critical infrastructure services to manage cybersecurity risk”. President Trump followed this up with another cybersecurity executive order in May 2017.
Because power generation and the utility industries tend to be regulated, they are more mature in terms of Industrial Internet of Things (IIoT) security than the oil and gas industry. The latter has environmental and related regulations to contend with, but there are not the same robust cybersecurity policies and standards in place for them to follow. One would be hard-pressed to think of any power company, in the US at least, that isn’t seriously addressing the issue of cybersecurity, from the plant to distribution and all the way up to the home – it is federally mandated and, in addition, there are local laws.
Critical infrastructure organizations face the double challenge of conforming with security protection requirements to a very high degree while at the same time maintaining their operational integrity and reliable performance.
In addition to having to cope with cyber threats, today’s grid management is a more complex task than ever. Integration of electric vehicles, smart meters, renewables and a host of connected devices provides utilities with an unprecedented challenge. And the energy flow is bidirectional – end users are not just consuming power, but also generating and feeding into the grid, through solar for example.
Operational technology is ubiquitous throughout energy, utilities and manufacturing. However, the power industry in particular represents a huge opportunity to foster operational excellence through the alignment of IT and OT functions. It is, after all, an asset-heavy industry on a vast scale with monitors and sensors that track and control both generation and delivery to the end-user.
As the use of smart meters and IoT devices is adopted widely, power companies are increasingly looking to employ analytics and digital mapping in order to allocate resources to the right place at the right time. All these initiatives must demonstrably link to increasing plant efficiency and operational excellence since they are seeking to lower their cost per MW or at least keep it the same.
Analytics for maintenance is a key tool in improving efficiency and keeping costs down – utilities can increasingly predict what’s going to fail and react to it quickly so capacity isn’t lost. They can also plan for outages and make their turnaround much more efficient.
The importance of IT/OT convergence is really in how it enables monitoring and control of sensors and connected systems on a huge scale. It also makes analyzing the data that these complex systems produce much easier, and can be done anywhere in the world, particularly by harnessing cloud technology.
However, it’s not solely about converging the technologies themselves. Businesses also need to ensure that the departments and processes are as integrated as possible.
One of KBC’s recent successful projects was with a major US power utility, integrating IT and OT systems across the business by converging operational data with advanced analytics and visualization tools.
The utility selected a common real-time data platform (the PI System from OSIsoft) to securely integrate real-time generation and transmission data into easily accessible applications available throughout the enterprise. The project objective was to gather data, provide context, and deliver these advanced applications.
However, even the best software and analytics cannot be utilized to its full potential without widespread buy-in, cooperation and understanding within the business. The people are just as important as the technology. As such, KBC organized the governance of the entire programme, supported the deployment of the system infrastructure, defined and delivered initial applications, and advised on relevant training of more than 200 users.
So far, KBC has implemented:
• Overall infrastructure and business focused models, providing context for both users and applications;
• Visualization and analytics associated with advanced grid technologies (AMI meters, Fault Indicators, Power Quality Management) and system health devices (Network Protection);
• Monitoring of the power distribution system including overall feeder monitoring and analytics to improve system reliability and performance;
• Monitoring of the power generation fleet including unit and ground water monitoring to improve reliability and economic performance.
By embedding itself as a partner to the client, KBC was able to provide overall programme management and put in place an infrastructure and governance process. KBC also assisted with the definition of the business case for new applications, definition, delivery and turnover. These initiatives were delivered using an iterative process that ensured personnel who would be using the technology (the end users) were fully engaged and educated.
The applications have demonstrated value by reducing the time required to gather information and provide detailed feedback and analytics across the organization, increasing trust in the data and reducing errors. A key element of the overall delivery was working in tandem with end users to generate the required trust in the data to ensure the smooth adoption of the new applications and technologies.
Providing focus on integration of data sources and application of the utility’s PI System has made significant improvements in bringing information from isolated systems together into a single system of record. This integration resulted in a reduction of the time required to gather and analyze data, provided useful insights into situational awareness, and improved overall generation and distribution system performance.
Having a single system of record for data is particularly important. This allows a business to quickly and easily share relevant information and reports with stakeholders and third parties, which could lead to the creation of new business opportunities.
On the back of this particular project, initial improvements in the distribution system were valued at over $500,000 per year through improvements in power quality, capital planning and more efficient use of engineering resources.
In addition, initial improvements in the generation unit performance were valued at approximately $1 million per year through improvements in performance in the Energy Imbalance Market and more efficient use of engineering resources.
However, projects like this don’t always run smoothly. There are power facilities still running ancient technology and infrastructure. In particular, there are plant monitoring systems running with severely depreciated equipment. “If it ain’t broke, don’t fix it” is a thought process that still exists for some.
But this reality means that there is a lot of legacy OT that needs to be integrated with current generation infrastructure and networks. Unless companies are compelled upgrade this legacy technology by regulatory requirements, we are only going to see it upgraded through capital projects that can demonstrate a definite positive financial impact on operations.
Competition or regulators are driving power companies and utilities to continuously reduce costs and to react fast and faster to external business disturbances. The proliferation of huge data sets being generated by these integrated systems and transmitted in real time at ever-rising velocities has compressed the timeline for decision-making. The pressure to deliver immediate results through safe, reliable and profitable operations has intensified.
Further, the energy industry is finding that the demographics of their workforce are shifting. Older employees who know the business well struggle to adopt new technologies; new employees born in the age of the internet and the cloud lack the experience and expertise to make complex decision. It is a challenge for enterprise knowledge to keep pace with the changing technology.
And it is also a challenge to attract new talent – better prospects, more interesting opportunities and early successes for digital innovation and disruption involving data analytics in high-tech and the ‘simpler’ consumer industries are pulling the potential pool of IT-skilled graduates away from more traditional sectors like power and utilities.
In a recent KBC survey across the similarly-affected refining and petrochemicals sectors, industry leaders were asked to rate the importance of certain skills for achieving operational excellence over the next five years. Analytics and data science was ranked the joint second most important skill, behind traditional engineering. In the energy industry, data analytics is just as, if not more, important as it is in oil and gas.
Bridging the gap
Power and utility companies must overcome these obstacles and bridge the gap between IT and OT. Many are already doing so.
As the IIoT revolution continues to gain momentum, further sped up by the soon-to-launch 5G spectrum, there will be a multitude of connected devices, systems and sensors to interact with. Legacy networks simply do not have the capability to deal with this level of demand – instead power companies must look to improve their level of IT/OT integration, if they have not done so already.
Without it, the undoubted efficiencies and cost savings of the IoT and the smart grid cannot be fully maximized, and more innovative businesses will gain an advantage.
But there really is an opportunity here to foster operational excellence throughout the company and encourage a more cooperative approach to digitalization within the business. The strong foundation of IT/OT convergence, while it may be a difficult undertaking in the short term, will put power companies and utilities in a position to field the challenges and opportunities that digitalization will throw at them.
Lisa Williams is manager of US operations (IT and IIoT services) at KBC