Streamlining digital transformation across utilities
Many regional utilities are embracing the digital revolution as massive opportunities await those able to transform themselves ahead of the curve. As the transformation builds momentum, it should open deeper prospects for smart solutions providers.
Recent technology trends around the world have set the GCC grid on a path for a complete overhaul. While the utilities industry has for long been notorious for resisting changes, even as everything else around it succumbed to them, the growing push for diversification of energy sources is inspiring a paradigm shift.
New industry realities are pushing regional utilities to reassess their positioning for the digital future in a world of fast changing consumer tastes and ubiquitous interconnectivity.
A new generation of utilities’ customers has enthusiastically embraced technology such as mobile internet and social networking, which enables them to be connected 24/7.
This trend in technology is already creating new demand, with customers seeking to create their own microgrids, generate their own energy and trade it with each other to balance supply and demand across their communities, and even make a profit while they are at it.
The challenge now for regional utilities is what they ought to urgently do in order to stay relevant. Utilities are already navigating a course through a changing landscape with the ongoing push for smart grids, rooftop solar, energy storage, connected homes and businesses as well as operational efficiency.
“In most parts of the world, mobile, social and web interfaces are giving customers a better view of their energy use and are enabling richer two-way communication between the utility and customers,” says Alaa Elshimy, managing director, Enterprise Business Group, Huawei Middle East.
“They are also improving utilities’ abilities to test and deliver new capabilities such as customised rate plans based on individual customer usage and needs. The challenge is how this trend can be fully entrenched in the region.”
Increased use of data and analytics in the energy sector could save power companies close to $20bn per year and also save $270bn of investment in new electricity infrastructure, according to one of the conclusions of a new report on digitalisation from the International Energy Agency (IEA).
The report, Digitalisation & Energy, states that digitalisation was blurring the lines between demand and supply, adding that digital technologies are set to transform the global energy system in coming decades, making it more connected, reliable and sustainable. This will have a profound and lasting impact on both energy demand and supply, says the report.
It also predicts that more than one billion households and 11 billion smart appliances could participate in interconnected electricity systems by 2040, thanks to smart meters and connected devices.
“This would allow homes to alter when and how much they draw electricity from the grid,” the IEA says, adding that demand-side response in building, industry and transport could provide 185GW of flexibility, and avoid $270bn of investment in new electricity infrastructure.
With the help of smart thermostats, the IEA report finds that smart lighting and other digital tools, buildings could reduce their energy use by 10% by using real-time data to improve operational efficiency.
The ongoing digital transformation within the region’s utilities industry has over the past few years progressively attracted a wave of international solutions providers who are now giving priority to developing solutions tailored to the utilities sector.
Digital solutions are enabling utilities to have full visibility of the entire electric power eco-system, right from generation to the end-user point, without having to overhaul their existing physical infrastructure.
For instance, China headquartered Huawei has invested more than $500mn in the manufacture of proprietary chips through its 2012 Laboratories. The chips are enabled with artificial intelligence (AI), and can be integrated into meters to make them smart.
“We work with meter companies, we insert our chip into their meter to convert it into a smart meter, and then the meter become smart. We are not doing only the connectivity, we have also worked with meter companies to make this chip for them,” says says Alaa Elshimy, managing director, Enterprise Business Group, Huawei Middle East.
“These chips come in different types depending on the type of communication, whether WiMax, WiFI or direct connectivity. We provide all options for all types of communications to connect all kinds of meters via gateways, all this at the end is connected to the utility company and then linked to a customer relationship management (ERP) programme.
“The utility is able to determine every user’s consumption and their available balance. The utility is also able to detect power theft where there is a significant contrast between the power generated and that sold to the final user. The system can be programmed to automatically shut down whenever such anomalies are detected.
“By deploying digital automation solutions, utilities are also able to prioritise power supply to areas or facilities that require more power at specific periods during the day without affecting other power consumers. This makes it easier to control distribution, reduces operational and management expenses, controls production and boosts customer satisfaction,” says Elshimy.
As power demand in the GCC reaches unprecedented levels, regional governments are rapidly embracing renewable energy and have set ambitious targets that will see renewable energy contributing a significant share of their power generation sources.
Besides the solar photovoltaic and concentrated solar power (CSP) power plants being built in the UAE, Saudi Arabia and Kuwait, rooftop solar is also rapidly taking off, allowing individuals to generate their own power. Nearly 100GW is expected to be generated from renewable energy sources in the GCC over the next few years.
While an increase in decentralised energy generation comes with its own benefits in terms of enhanced power supply, the challenges of power intermittency due to lack of adequate energy storage are common and can only be addressed through a robust smart grid infrastructure.
“Millions of people depend on electricity for almost every aspect of their everyday lives. It is therefore extremely important to ensure availability, reliability and efficiency” says Claudio Facchin, president of the Power Grids division, ABB.
“It is a top priority for every utility to have a dependable transmission grid and distribution network by deploying world-class technologies and driving innovation with the help of the technology providers.”
With end-to-end transparency of distribution and transmission, utilities and operators will be better able to understand both grid performance and customer behaviour. That insight can be used to optimise OpEx (operational expenditure) and CapEx (capital expenditure) and create new business services.
“The challenge will be not just to gather and secure data from a hugely diverse range of sources, but also to make sense of a wide variety of structured and unstructured formats. Moreover, it’s not just the quantity but the quality of data that counts.” says Facchin.
According to a recent Transparency Market Research report, by the end of 2018, the global market for smart grid technologies, which includes sensors, management and control technologies, communication networks, and software, will be worth $80.6bn, a growth of 28.7% from 2011. By 2020, the global smart grid market is forecast to exceed $400bn as utilities seek more operational efficiency.
As power grids evolve, they must be capable of adapting fast to rapidly fluctuating conditions, serving a complex power generation, supply and demand landscape. This will rely on digital technology at a deeper level in electricity substations than ever before.
The approach is already central to Dubai Electricity and Water Authority (DEWA) for its research and development drive at the Mohammed Bin Rashid Al Maktoum solar park, where the operator is conducting research to integrate smart grid technology and enhance the production and efficient consumption of energy.
Digital substations will be a key component of next generation grids as they enable smarter power systems, adds Facchin. This innovative technology concept supports the digital transformation of the power sector. They will incorporate digital communications via fibre optic cables, replacing traditional copper connections using analogue signals. They will also enable greater flexibility, availability and safety, while reducing cost, risk and environmental impact.