As increasing demand pushes ageing grids to the breaking point, new technology capabilities are making it possible for electricity distribution companies to make informed decisions about asset replacement, upgrades, network security and regulatory approvals for investment.

Jeanette Carlsson, Alistair Green and Colin Sawyer, IBM, UK

Today many distribution network operators (DNOs) find themselves struggling to power a 21st century world using the technologies and management concepts of the 20th century. Under pressure from ageing assets, growing peak demand, the emergence of new power generation technologies and revenue constraints from regulation and theft, DNOs are seeking a new, smarter approach to operating their networks.

Ageing assets are a major concern. In much of the electrified world, grids were built in the 1950s, 1960s and 1970s. Now, many of the assets critical to running these networks are approaching the end of their planned lives. Yet capital spending at DNOs has failed to keep pace with straightforward annualized renewal for these assets. In Great Britain, for example, the annual network renewal investment of the typical distribution company is less than one percent of its asset base. This amounts to a renewal cycle of more than 100 years – well beyond the design life of network assets.

Traditional response

As a result, DNOs face billions of dollars in backlogged investment. The obvious solution is heavy spending. But for the vast majority of distribution companies, and regulatory and political counterparts, immediately doubling or tripling capital expenditures is not a realistic strategy. What is worse, operating assets beyond their design limits represents a growing threat to network reliability and safety.

Distributors must increase the capacity of their networks to keep up with peak demand that is growing in almost every electricity market. If left unaddressed, growing demand can lead to blackouts at times when electricity is needed most.

Meanwhile, the makeup of the network itself is changing to favour small-scale power generation connected to the distribution system. This change is being driven by technologies like solar, wind and fuel cell, and a growth in onsite small-scale, gas fired generators. Small power sources are being embedded in grids originally designed for large, centralized power plants. This threatens to wreak havoc with distribution networks, which are not built to handle the complex power flows that come with distributed generation, such as sudden reverse flows when generators are disconnected.

Revenue threat

The ability of distributors to meet these challenges is under threat from another source: revenue pressures from regulation and theft are constraining investment in new infrastructure. Generally, regulators are reluctant to authorize investment in distribution assets. They have an obligation to protect the interests of customers by ensuring supply, but they also seek to avoid the political ramifications of rate hikes. This gives officials an acute cost/benefit sensitivity. DNOs need to make compelling arguments that renewing the network is money well invested.


Figure 1. Around the globe, network infrastructure is ageing
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Revenue lost to theft is another constraint. Electricity theft is an important issue affecting distribution company balance sheets. India, Dominican Republic, Burma and Bangladesh top the list by percentage of off-meter consumption, but theft in established markets is no small problem. In 2002, UK power theft was estimated at $72.2-$541.7 million and in 1998 in the US at $1.6-$10.9 billion.

Tough choices

Together, these pressures are forcing DNOs to make difficult choices. They have three options.

The first is to do nothing and hope for the best. By avoiding investment in network upgrades, distributors can keep costs low in the short term. But operating capital-intensive network components beyond their design life means eventually something will fail, with unforeseeable results.

The second, more traditional, option is to invest in an over-engineered network. Historically, technological constraints have forced network designers to plan around worst-case scenarios. This approach – prudence based on sparse information – requires DNOs to build components larger than needed and replace them earlier than necessary. Over-engineered networks operate with a high degree of fault tolerance, but always erring toward caution is an expensive strategy.

The third option is to make the network smarter. As sensor technologies decline in price and the industry develops advanced network analytics, realtime monitoring and reconfiguration of the network is a growing possibility for DNOs. Building an intelligent electricity network allows them to escape from the dilemma of risking catastrophe or spending beyond their means.

Intelligent electricity network

DNOs can begin building an intelligent network by adopting advanced network analytics supported by intelligent network enablers.

Sensors and smart meters continuously monitor the status of the network, and distribution companies can store the data they provide in a data warehouse. Then advanced network analytics can be applied to boost operational efficiency. Analytics can ‘mine’ sensor and meter data to support key strategic imperatives, target investment at components that are about to fail or are running near full capacity, enable realtime reconfiguration in the event of a blackout, optimize the configuration of the network and satisfy regulators that prudent investment decisions are being made.

Advanced network analytics focus on asset life, network design and network operation.

Asset life analytics focus on when components should be replaced and how to nurse them when they begin to fail. Because similar assets fail in similar ways, they can be analyzed based on historic usage patterns. When augmented with realtime sensor data, life span analysis can yield more accurate life span predictions of individual assets. As assets begin to fail, detailed analytics can suggest how to adjust the network to protect the asset and prevent sudden or catastrophic faults.

Network design optimization can also lower the cost of operating networks and help reduce capital expenditure. Without fine-grained information, DNOs respond to growing demand by upgrading the network across the board, as if every customer is the hypothetical ‘biggest consumer.’ Analysing individual customer load patterns can help determine whether and where upgrades are really needed.


Figure 2. Advanced network analytics
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Detailed analysis of load patterns also lets DNOs balance the load on each phase, reducing losses on the network. By incorporating the results of asset life analytics, maintenance planning can be optimized.

Network operations analytics focus on power flows within the network, helping to improve reliability and reduce or defer capital expenditures. With realtime monitoring of contingent fault currents, operators can trigger network splitting and switching to keep fault currents from overloading critical components, defer upgrading switchgear to handle fault overload currents and cordon off exclusion zones around areas where even a low probability of a hazardous fault arises. Data from smart meters allow engineers to be dispatched to fault zones with the right equipment. Realtime control of power flows also enables networks to handle distributed generation.

Four technology enablers

The intelligent network is supported by four technology enablers: automated meter management; remote asset management and control; mobile workforce management; and IP-enabled SCADA.

Smart meters in homes and businesses enable time-of-use pricing, which incentivizes customers to use less energy during peak hours. US studies suggest demand reductions of up to 5.2 per cent for moderate time-of-use changes in pricing. In 1998, Gulf Power of Florida launched a programme, dubbed “Good Cents”, that cut consumption by nearly 45 per cent during peak hours. Time-of-use pricing is also popular with regulators, as it mitigates peak demand growth and allows DNOs to defer network upgrades, keeping prices stable.

Smart meters placed on the network can also help DNOs locate areas where power theft is occurring. For example, if a meter at a low voltage substation indicates that too much power is being drawn, theft may be occurring in the immediate vicinity.

The second enabler, remote asset monitoring and control, can extend the life of critical network infrastructure and improve customer service through fault anticipation.

First, remote sensors can detect whether events on the network are consistent with the network’s capacity and warn operators when a component begins to operate outside optimum ranges. By monitoring whether power flows are within optimum range, operators can load components higher than otherwise possible.

Second, sensors can detect when parts of the network begin to fail. Based on the feedback from these sensors, the control centre can adjust network configurations to reduce the load on compromised assets and warn field engineers when deterioration creates a probability that an asset will be unsafe.

Sensors on transmission wires can warn when foliage grows too close to power lines. The location data of such anticipated faults can be used to dispatch crews to affected points. Similarly, smart end-user meters can boost service levels by remotely identifying where on the network a failure has occurred and providing diagnostic data to speed repair times.

The third enabler, mobile workforce management, boosts the speed and accuracy of maintenance and repairs by electronically streamlining the flow of data from sensors through the central control centre to PDA-equipped field crews. If assets are operating beyond tolerances, or if a fault poses a danger, network operators can issue rapid, detailed repair instructions or warnings to stay clear of danger zones.

The fourth enabler, IP-enabled SCADA, can cut telecommunications costs by 20 per cent or more and offers a robust, fault-tolerant architecture that scales easily to support the deployment of sensors, smart meters and remote PDAs across the network, often in numbers that would stretch existing telecommunications well beyond practical limits.

IP-enabled SCADA replaces proprietary SCADA systems with standard Internet communications protocol. This releases utilities from relying on proprietary communications protocols and offers the higher fault tolerance of a packet-based network. The Internet technology that underpins IP-enabled SCADA can also provide a communications platform for possible future services, like smart home appliances that can be operated remotely via a web browser console.