Power is a sector that can benefit immensely from digital transformation, and yet it is one where change often unfolds at a glacial pace.
McKinsey & Company observes that “extraordinary inertia” has resulted in many energy companies and utilities, failing to unlock significant value from digital, despite running pilot projects in analytics, process digitization and automation.
Breaking out of that inertia will need far bolder action than these companies have been willing to take so far.
Utility providers that have already overcome the inertia and embraced digitalization have reaped transformative rewards. Just as technology and digital tools are transforming industries — a shift that has been dubbed as Industry 4.0 — a digital overhaul of the power and utilities sector has been underway with Power 4.0. A combination of cloud technologies, the internet of things (IoT), big data analytics, Artificial Intelligence (AI) and machine learning (ML) is delivering enhanced process efficiency, improved asset utilization, centralized visibility, information integration, better regulatory compliance, and acute situational awareness to utilities. For example, smart grids now have access to a treasure trove of data insights that give them the nimbleness to quickly adjust course or respond to changes in supply and demand.
The result is not just improved decision-making, but also significantly lower costs.
Growing reliance of digital tools
A recent AVEVA whitepaper, Digital Acceleration in the Power Industry, finds that a power plant can reduce fuel costs by up to 28%, maintenance costs by 20% and operations costs by 19.5% by introducing new digital solutions.
Moreover, there is growing awareness of, and reliance on, these digital tools. A Capgemini survey of 200 senior executives from global utility companies — they expect improvement from digital technologies to increase by 27% in next 5 years, compared to 21% improvement over the past 25 years.
Process efficiency and resource optimization
One of the biggest impacts of Power 4.0 can be experienced in process efficiency and asset utilization. For example, by leveraging AI and predictive learning technologies, utilities can feed process and asset usage information back to the engineering stage of the lifecycle, enabling a complete digital value loop. Similarly, resources can be optimized, or conserved, by leveraging digital twin technology, which simulates the entire plant before any assets are even built – improving safety, reliability and profitability – and when carbon use is factored in, helping lower utilities’ carbon footprint.
Elsewhere, an array of sensors and IoT devices are feeding data back to a common hub, empowering utilities with centralized visibility and integrated information.
Real-time data is enabling collaboration, both upstream and downstream, with vendors and customers. It also facilitates collaboration across departments and geographical locations within the organization. A unified operations center is a core requirement of Power 4.0, which energizes the whole team with informed, and rapid, decision-making.
When working in silos, teams often waste up to 50% of their time searching for and verifying information. But a system that unifies all data from discrete sources, including 1D, 2D, and 3D data into a single trusted platform, can instantly provide actionable insights.
As a secondary benefit, utilities are alerted to emerging opportunities and possible pitfalls unavailable to organizations without the heightened situational awareness that Power 4.0 tools bring in their wake.
A stable and sustainable future
There is increasing pressure from consumers and regulators for utilities to reduce emissions and accelerate the switch to renewables. Power 4.0 technologies play a crucial role in delivering both sustainability targets and regulatory compliance.
They make it possible for utilities to maintain and interoperate multiple types of assets, including centralized power stations, battery storage facilities, or wind and solar deployments — these will work seamlessly without causing grid instability and imbalance.
Simultaneously, advanced ML-driven processes ensure that corrective measures are taken instantly. This intelligent ecosystem can also predict — and therefore prevent — equipment failure or potential downtime.
CFE: 10x return on investment
Power 4.0 can be seen action in Mexico, at the Federal Electricity Commission (CFE). The organization has leveraged the AVEVA Smart Grid portfolio to overcome the many challenges it was confronted with — including complying with governmental reform standards; keeping up with growing energy demands from within and outside of Mexico; and needing to structure its assets, workforces and operations with the Smart Grid Maturity Model, which is international policymaking standard.
CFE also wanted to implement diverse information technologies and telecommunications like graphical systems and SCADA Systems that integrate mobile workforce operations.
Ultimately, it was aiming for centralized visibility and control of 38 transmission substations and 140 sub-transmission substations throughout Mexico’s Northwestern territory.
Implementation of these solutions has resulted in CFE harnessing operator input to make predictive decisions, mitigate risks, and reduce costs.
It is now successfully generating, distributing, and marketing electric power for almost 35.3 million customers, and roughly 100 million people throughout Mexico and bordering nations. It is also the government provider for 99% of power transmission throughout Mexico.
CFE has created reusable substation templates to reduce re-engineering and enhance standardization.
It is able to orchestrate dynamic energy transmission models, and use archived maintenance data to monitor and benchmark asset health.
Further, by integrating AVEVA Mobile Operator with its SAP system, it can view utilities assets transparently and more effectively and share real-time information with its mobile workforce on demand.
CFE reports the benefit of its digital transformation in terms of return on investment. For every dollar invested, the authority recovers up to $10.
Digital solutions have a transformative role to play in delivering reliable and sustainable electricity while minimizing risks and lowering operational costs.
Consumers in turn benefit from an assured supply that is more efficient, predictable and environmentally friendly.