Many states have already set aggressive decarbonization mandates with deadlines that set fixed points in time at which greenhouse gas (GHG) emissions from utilities must be reduced by 90% or more, while overall electrical output must be increased by up to 100%. Though utilities are not the only industrial sector under pressure to formulate plans to reduce GHG emissions, they are nevertheless getting much of the attention.
With unrelenting pressure from regulators, customers and the public at large to reduce emissions while keeping rates affordable for all, utilities are facing challenges unlike any seen before. It’s the proverbial perfect storm for utilities. The technology that will be needed to offset these pressures must be implemented in an orderly way, with strategy and architecture integrated in a road map that constrains operational costs while achieving a sustainable grid of the future.
Can utilities benefit from investing in strategy, architecture and integrated road maps for grid-enabling technologies? Our experience affirms that this is true. It’s not only beneficial, but critical to the sustainability of the future grid.
Challenges Facing Utilities
Though many states and other governing jurisdictions have released mandates for decarbonization — often including high levels of electrification— there are also parallel expectations that there must be no slippage in service reliability and grid resilience. In fact, there is a growing concern that reliability and resilience must be improved, especially as transportation fleets convert from petroleum to electrical energy, grids get pounded more frequently by extreme weather events, and natural gas, propane and other fossil fuels are phased out for space and water heating, cooking and a variety of industrial applications.
To accommodate these increasingly high expectations, the power industry’s bill for grid modernization will certainly run into hundreds of billions of dollars. Yet, as reliability is improved and grids are hardened, there is an expectation that rate structures remain equitable. Regulators and policymakers are adamant that people of lower economic means must not face unaffordable electric bills. This is crucial because as energy consumers stop using fossil fuel, society at large becomes even more dependent on electrical energy.
The power grid is moving toward a future in which it will become a highly integrated system, requiring technical architecture and standards that focus on feasibility, sustainability and security.
Unfortunately, utilities are tending to remain in a reactive mode due to pressure from regulators, customers and society at large. This is resulting in implementation of shortsighted solutions without vision, strategies and holistic/integrated planning. The impacts are already being felt and will become even more apparent in the future.
New Opportunities for Cross-Functional Alignment
Utilities are a few years into this journey toward a more responsive and dynamic grid, yet are now facing an inflection point that must be addressed, namely the disparate and uncoordinated efforts to upgrade operational technology (OT) and information technology (IT) networks, applications and supported devices. For many utilities, the planning and design required to integrate technology solutions can be misdirected, resulting in costly programs that either do not deliver optimal results or will become completely unsustainable over time.
It is crucial that utilities’ technology teams be aligned internally so that technology decisions are transparent and result in solutions that benefit the broader organization, rather than making the perfect decision on any one technology/engineering solution or singular project.
Meeting the demands of these external forces will require large-scale operational upgrades. The demands of new generation capacity from renewable resources as well as energy storage needed to counter intermittent power production and to offset grid instability require a whole new way of thinking about power delivery.
The obvious solution is to deploy new OT into the field to better manage the grid. Nearly all advanced devices, components and equipment needed to modernize the grid come with sophisticated technology baked in. These new and advanced devices and components must be cybersecure, not increasing the risk of vulnerability from intrusions into OT networks by malicious actors. Additionally, service reliability must be maintained if not improved, and new technologies must be deployed in an efficient manner that minimizes rate increases. All these activities must be executed while homes and commercial buildings are being increasingly connected to new solar and storage facilities.
What happens, however, if there is no coherent plan and strategy for these projects? The result is often that projects get launched to address only one particular need, and improvement and upgrade programs are rolled out in a disjointed manner. This creates a technology ecosystem that is extraordinarily difficult to manage and maintain. An electric utility with single-use networks deployed among numerous substations can result in a grid that is difficult to consistently manage or secure, perhaps even introducing vulnerabilities to cyberattacks.
As utilities deal with pressure from regulators and customers to transform, proactive planning is essential in order to be positioned to deal with these new challenges.
OT and Cybersecurity
OT systems connect technology and software to real-world physical systems. They are used in many industries, including utilities that rely on them to monitor, manage and control systems that support power delivery.
This means that cybersecurity conversations are a great deal more urgent now. When you start introducing open architecture servers into OT environments, new pathways become available for malicious actors to gain access into systems that control physical components that are used to manage the grid. This requires more proactive monitoring and managed response plans to deal with threats once they are detected.
Proper design of cybersecurity architecture should aim to eliminate instances of multiple network feeds from numerous devices and equipment such as those installed in substations. This creates more exposure and pathways inside the network, with more endpoints to be secured. The solution is to design centralized services that support security and data needs from disparate locations, allowing security to be managed effectively.
A New Paradigm
Battery energy storage system (BESS) projects are perfect examples of the complex deployments utilities are dealing with. BESS installations may add hundreds of megawatts of storage capacity from banks of lithium-ion batteries, but the amount of technology that must be integrated is adding new layers of complexity unlike anything utilities have faced before.
Until now, the technology installed to support generating plants primarily functioned to monitor operations at an individual plant. These systems provided control room operators with the data needed to see how turbines, boilers and other critical components of the plant were performing and allowed personnel to take care of any issues that might arise within the plant.
With today’s storage and renewable energy systems, monitoring and operational technology has a broader scope, enabling broader grid-scale management of power output, as well as monitoring, dispatch and cybersecurity. In addition, the data generated from OT systems like controls for substations now must be sent into IT environments. Though it’s not a complete overlap, integration of certain systems and methodologies is necessary to optimize the technology.
In the past, the technology deployed to field systems was proprietary. Now, open architecture technologies like those found on Windows or Linux servers are being installed in field locations, including IEC 61850-compliant substations. The days when control systems and other technology could be expected to work with only minimal attention for 20 years or more are over. If servers based on open architecture are placed in the field, regularly scheduled patches and other maintenance become much more problematic. Because critical OT systems cannot be taken down for patch releases on a regular schedule, new plans for necessary upgrades must be formulated. Further, an integrated plan for monitoring and maintenance of OT must be formulated because the same approaches won’t work anymore.
Frameworks like IT Service Management have been in place for years on the IT side to address these challenges and can provide good foundations for building new OT Service Management plans. IT and OT are still very different ecosystems and IT practitioners cannot just jump into OT systems and directly apply the same methodologies. A different level of rigor and testing is needed for OT systems to support the reliability, resiliency and safety needs of OT systems. Utilizing lessons learned in IT space, such as Enterprise Architecture and IT Service Management, can be used as frameworks and tailored well to support OT systems.
No Going Back
There is no question that utilities face a new reality in which electrification, decarbonization and reliability mandates are the new normal.
This makes it essential that robust network communications be installed as the backbone of utility operations. Technology strategies must support the deployment of advanced SCADA, advanced distribution management system (ADMS), distributed energy management system (DERMS), AMI, digital substations, and utility-scale DER while supporting the associated management and security of those solutions. Waiting to build these systems as needed is not cost-effective and leads to disconnected systems that are costly to maintain. Putting a cohesive plan in place proactively, well before a need surfaces, is imperative for successful delivery and ongoing support.
Our goal is to help put together a cohesive plan to get in front of all these issues. Laying out the groundwork and foundation across groups — such as OT support, IT/OT networks, transmission and distribution planning, regulatory, generation planning, field support services, telecom engineering, and network operations, among others — can help deploy upgrades in a standardized, planned, thoughtful manner. This will help avoid maintenance problems, security problems, management problems or the issue of a sprawling network of poorly integrated devices and systems.
A road map that lays out the groundwork and foundation for utilities to build on services they are deploying in a standardized, planned and thoughtful manner will enable them to continue meeting expectations of regulators, policymakers and customers for the coming era.
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