Supervisory control and data acquisition systems gained popularity in the power sector in the 1990s as means to automate industrial processes.
It was an early version of the IoT. Its functions included supervision of the operation of programmable logic controllers (PLCs) by collecting data about the underlying process, analyzing the data, and sending commands to control the processes. Smart meters are another early example of IoT, with its ability to deliver near real-time consumption data and connect and/or disconnect customers, both without visiting the customer location. In the continuum of IoT maturity (Figure 5), both solutions do monitor and control. Often, operational technology like SCADA and smart meters have to be complemented with information and communication technology (ICT) like geographic information systems (GIS) and enterprise resource planning (ERP) systems for an IoT solution to move up to a higher level of maturity. A few examples of IoT solutions with a higher level of maturity are described next.
An example of an underlying process controlled by SCADA is burning of fuel, generating steam, and generating power using a turbine. Until recently, it was costly to put enough sensors, transmit high frequency data, store the large volume of data, perform smart analytics on the data, and tune the process for optimal performance. These constraints are being overcome and a “full digitalization” of the process is being unleashed by IoT.
Continuing with this example, examine the entire generation to consumption process in the power sector:
(i) The generation process can be made flexible by IoT and hence it can support efficient operation at various capacity factors as opposed to always operating in baseload mode. This flexibility is essential to integrating higher amounts of renewable power.
(ii) IoT with advanced analytics can accurately forecast solar and wind generation, which would allow conventional generators sufficient time to ramp up or down thereby reducing emissions of the power sector.
(iii) Advanced metering infrastructure with automated demand response would allow utilities to reduce demand and as a result, minimize use of expensive and highly polluting peaker plants, and maximize the penetration of renewable energy.
(iv) When there is a generator trip, ICT can provide data about which customers will be affected (through a geographic information system [GIS] and a customer information system), how much energy should be bought from neighboring utilities versus from peaking generators and if there is need for repairs, what is the level of the spare parts inventory.
The convergence of IT and operational technology therefore provides significant opportunities for optimization. Consider a second example of work management, in which a truck with crew rolls out to fix a problem at a pole (Figure below):
(i) Operational technology components like smart meters and other line sensors provide near real-time information, which can be combined with IT accessories like GIS to pinpoint the location of the problem.
(ii) IT systems can inform the crew of spares and sensors that are required but not on the truck to complete the job.
(iii) IT applications on a tablet or laptop can provide locations of assets like switch gear, relays, and other equipment on a map that need to be managed before work can begin on the line.
(iv) Operational technology can provide direction of flow of power and voltages in neighboring buses to the IT system (GIS-based map on tablet).
IoT can therefore enable the crew to efficiently and safely repair and restore the circuit.
IoT has enabled a transformation in which much more than supervision and control of the process associated with generation and delivery of power is accomplished. Consider the following three applications:
• Increase the efficiency and reliability of assets. This can be accomplished with IoT-enabled operation and maintenance (O&M) on generation, and transmission and distribution (T&D) assets.
On the operations end, IoT can reduce fuel consumption and emissions, and increase flexibility of generation by lowering minimum capacity factor and increasing ramp rate. In the Asian context, the following are examples of IoT projects that can lead to meeting the double objectives of lower cost and lower emissions:
(i) automatic generation control that takes into account economics and emissions;
(ii) reduce technical losses in T&D network through active voltage management, installation of actuators on smart transformers; and
(iii) reduce nontechnical losses using a network of smart meters. On the maintenance end, IoT can play an important role in condition monitoring and predictive and proscriptive maintenance of assets. In the Asian context, IoT can help by moving a utility to transition from running assets until failure or performing schedule maintenance (see Figure 7: bottom two levels of the pyramid) to conducting predictive and proscriptive maintenance to reduce cost and improve reliability
• Grid optimization with large penetration of renewables and storage. In Asia, utility-scale wind and solar plants are being curtailed because of inflexibility of generation and demand. IoT can accomplish flexibility in generation and demand thereby reduce the amount of curtailment of clean power sources like wind and solar, thereby increase the ability to fully realize reduction in greenhouse gas emissions from higher penetration of variable generation.
• Enable consumers to be energy-efficient. IoT can significantly improve the efficient use of electricity while enhancing the level of comfort, by providing customers access to near real-time information about usage and peak events; and, machine learning algorithms to make smart decisions.
Within a home or building this can enable customers to manage time of day consumption; turn on or off devices; and make decisions about buying, selling, or storing energy; all of which may occur with limited or no involvement of the established power utility.
General Electric (GE) predicts that in the electricity value chain $1.3 trillion of value can be captured during 2016 to 2025 globally by IoT. This value is from deployment of smart devices, cloud computing, advanced analytics, advanced dashboard, and the overall integration of all these services into a platform.
According to GE, the $1.3 trillion value will be derived from the following three areas:
(i) Asset performance management would contribute $387 billion in value. This is derived from lower repair and maintenance cost, lower downtime of assets, and fewer critical breakdowns.
(ii) Operational optimization and aggregation would contribute $445 billion in value. This
is derived from real-time supply and demand platform, real-time network controls, energy
aggregation platform, and connected and interoperable devices
(iii) Comprehensive customer services would contribute $438 billion in value. This is derived from digitizing customer interactions and smart energy management services.
In addition to the $1.3 trillion value capture by the industry, more than $2 trillion in societal benefits will be realized through IoT, which include reduction in carbon emissions, new job creation, and value creation for consumers.