Updated: Aug 18, 2020
Power systems are undergoing an unprecedented transformation era. Besides the soar of renewable energy sources and efficiency measures on the demand side, energy infrastructures are starting a digitalization journey. In spite of the buzz around digital transformation, robotics and artificial intelligence, the electricity grid is still a conservative industry.
Indeed, electricity technologies are still rooted on the same fundamentals: Faraday's law of induction; Kirchoff's current and voltage laws; and Ohm's law. Like in the late XIX century, the electricity value chain encloses generators, transmission lines, power transformers and breakers. Furthermore, system operators, grid planners and maintenance engineers rely in the deterministic-but-so-reliable “N-1” strategy (i.e., plan and operate the grid with at least one backup asset), which combined with extreme supply and demand scenarios lead to overinvestment, under-exploited assets and high electricity prices (since the end-users remunerate the utilities’ CAPEX).
There are several reasons to justify the power system’s orthodoxy when it comes to digitalization and innovation. Firstly, electricity is the cornerstone of all the socioeconomic activity, from manufacturing to “essential goods” like telecommunications and internet (transport is yet to come). Secondly, the middle management of grid companies is dominated by a stereotyped-though-nearly-true profile: grey-haired man, graduated in electrical engineering from a classical university, specialized in power systems and with limited expertise and experience in IT, data science and programming. One could say these senior engineers are the guardians of the electrons, since top managers are mostly financial and business driven (following the privatization of the power sector) and junior engineers lack in-field experience (yet are IT-savvy).
At odds with this outline, the power sector ecosystem gathers the required ingredients for a technological disruption. Beyond the boom of low-carbon power sources, energy storage and electric mobility (which urge innovative software and hardware), regulatory authorities are designing performance and incentive-based models that will raise risk-based and predictive asset management. In this scope, covid-19 pandemic might accelerate asset real-time monitoring (through sensors), robotics and drones for infrastructure inspection, and probabilistic grid operation as a way to mitigate the workforce risk to the system’s security and service quality. Actually, coronavirus will likely turn out positive the still unprofitable business cases of grid digitalization projects.
Despite the relevance of grid digitalization, it could be undermined in the event of lack of data governance and well-structured processes. The utility’s successful transformation depends on developing a comprehensive data and analytics journey, together with thorough workforce reskilling.
In view of these drivers, power grid companies should grip a holistic transformation of their operating model and culture, aligned with the rollout of digital technologies and advanced analytics. From electricity generation to distribution, digitalization will reshape century business models. Electronic, real-time, two-way, cloud-based and open source technologies will replace analogic, offline, one-way, in-house and proprietary solutions.
The good news is that digital investment may slump overall costs while thriving grid reliability.