Optimizing asset life cycles: from generation to distribution
Our analysis suggests asset performance management is the single most valuable initiative for the electricity industry over the next 10 years, at an estimated value of $387 billion
In this article, we look at a number of initiatives related to asset life cycle management that have the potential to extend the life cycle or improve the operating efficiency of assets. Some utilities have projects underway and are deploying technologies such as smart sensors on generation and distribution assets. However, many assets still lack the capacity to collect and transmit data and are not connected to a central platform.¹ A marginal improvement in operating efficiency of generation, transformers or power lines will have an exponential effect once scaled across the industry.
The incentive is clear: the US Department of Energy found that 75% of breakdowns are eliminated by energy companies that have implemented predictive maintenance.²
Operational recommendations can be generated in real time by using data captured from connected devices, plant equipment and sensors, and applying algorithms to this data. Plant managers can immediately identify actions that decrease production costs, and can predict and prevent unplanned downtime. Engineers can be more productive by making better-informed decisions; this can eventually lead to a smaller, more skilled workforce. As an example, real-time analytics help a business better understand the trade-off between asset life and revenue generation, as there may be times when it makes sense to work a machine harder if a generator can take advantage of scarcity pricing.
Asset life cycle management is one of four themes that we believe will be central to the digitization of the electricity industry over the next decade. The other themes we examine are grid optimization and aggregation, integrated customer services and beyond the electron.
We focus on three asset life-cycle management related initiatives below: asset performance management, digital field worker and smart asset planning.
Asset performance management
This digital initiative includes condition monitoring, predictive forecasting and reliability-centered maintenance, all enabled by analytics and robotics. Asset performance management has the greatest value potential among all the digital initiatives, to the tune of $390 billion over the next ten years (see Figure 1). Utility firms across the value chain are likely to enjoy margin expansion from lower repair and maintenance costs, lower downtime of assets and fewer critical breakdowns.
In 2003, Iberdrola deployed a technology to monitor and operate renewable generation facilities from a single dispatch center called CORE, located in Toledo (Spain). CORE centralizes the operation and control, in real time, of 7,000 megawatts (MW) of installed power, from 220 wind farms, 70 mini hydro power plants and more than 6,000 wind turbines, spread across nine countries.³
Information from sensors is fed to the central control center, which monitors in the region of 2 million operational signals. With improved insights into fault detection, events and breakdowns in turbines and control systems; the reactive and active power regulation; and the voltage in the connection point, both the quality of renewable energy and the management of the grid is improved. In addition, by taking preventive measures remotely, both operational risk and maintenance expenses are significantly reduced.
Digital field worker
The focus of this digital initiative is to use digital technology to improve field workers’ performance and productivity by empowering them with data and tools to drive operational efficiencies. Electronic work packages can transform the end-to-end work cycle, from the planners and schedulers to those responsible for data entry and reporting. Up to $60 billion of value could be realized, with software and hardware service providers for this infrastructure potentially profiting most significantly. This initiative will improve productivity for field workers and associated staff; we estimate technology could result in savings of five to eight hours of work per week across the value chain.
Advances in mobile technology have led to a number of solution providers emerging to digitize field operations. Avoka TransactField, a field data collection system, moves slow paper processes to an application featuring audit and compliance processes that work both online and offline on any device. The solution was deployed by Ausgrid, a state-owned Australian electricity infrastructure company that owns, maintains and operates the electrical distribution network of 1.6 million customers in New South Wales. One of its tasks is to do site checks at the company’s more than 250 power stations, and 500,000 power poles, 30,000 small distribution substations and almost 50,000 kilometers of below- and above-ground electricity cables in the region. Using the software, information can be gathered in remote locations, improving responsiveness and data quality. In 2014, 22,000 field workers in the energy industry were digitized by the Avoka system, with the company estimating that productivity had improved by an average 72%.⁴
Smart asset planning
Smart asset planning covers the use of predictive analytics, machine learning and robotics to improve capital project execution, including site and asset selection, installation and decommissioning. Smart asset planning offers the potential to better commission assets, optimizing capital expenditures. Estimated at $30 billion, societal benefits here are greater than those of all other electricity industry digital initiatives. Carbon emissions can be reduced by almost 6.3 billion metric tonnes, driven by improved planning.
US Department of Energy
The US Department of Energy’s SunShot initiative seeks to make solar cost-competitive with other forms of electricity by the end of the decade.⁵ The initiative funds innovative projects by organizations, universities and national laboratories that drive down the cost of solar technology. As hardware costs continue to fall, a key part of the cost of deploying photovoltaic (PV) systems is in site selection. The SunShot program has made a number of mapping applications open-source to assist in siting decisions. PVMapper is an example of a geographical information system that takes into account site location, time zone, sun path and nearby weather station data, among other variables, to optimize the decisions on location and commissioning.⁶ Since SunShot’s launch in 2011, the average price per kilowatt-hour of a utility-scale PV project has dropped from approximately $0.21 to $0.11, of which some value can be apportioned to better siting. SunShot has achieved 70% of the program’s goal after only three years of the 10-year timeline, demonstrating the initiative’s impact.⁷
1. GE, Powering the Future: Leading the Digital Transformation of the Power Industry, 2015. http://www.ge.com/digital/stories/Customer-Story-Powering-the-Future-Leading-the-Digital-Transformation-of-the-Power-Industry
2. US Department of Energy, Federal Energy Management Program, Operations & Maintenance Best Practices: A Guide to Achieving Operational Efficiency, Release 3.0, August 2010.http://www1.eere.energy.gov/femp/pdfs/omguide_complete.pdf
3. Iberdrola CORE Dispatch Centre: case study kindly provided by working group
4. Avoka Technologies, http://www.avoka.com/energy-companies-boost-productivity.
5. Energy.gov, Office of Energy Efficiency & Renewable Energy, US Department of Energy, “SunShot Initiative: Mission”. http://energy.gov/eere/sunshot/mission
6. See: PVMapper.org.
7. Energy.gov, op. cit
Electricity is one of six industries (along with automotive, consumer, healthcare, logistics and media) that have been the focus of the World Economic Forum’s Digital Transformation of Industries (DTI) 2016 project. An overview of the DTI program can be found here.
Our in-depth findings about the digital transformation of the electricity industry are available in a white paper, which can be downloaded here.
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