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Does digitization mean collecting data online?

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Executive global business developer, 20 years experience in power transformers services , on site operations, condition monitoring. Consultant in market strategy for major WasteToEnergy European...

  • Member since 2020
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  • Jan 10, 2022

Every now and then I think it makes you stop and think without being overwhelmed by the prevailing trends…

In early December we had the great opportunity to participate in one of the most important European Exhibition dedicated to Energy sector  .

It was a very important opportunity to discuss the latest innovative elements in the sector, exchange experiences with other founders and try to grasp what future trends may be. A month after that event, reviewing the harvest of contacts and actions to be achieved, and taking advantage of the "slower" days during the end of year holidays, I can take a few seconds for a general reflection on the dynamics of the current energy sector .  

The risk of "buzzing"

The first impact at the fair came from the enormous number of proposals relating to the digitization of the sector, let's say that the use of so-called buzzwords such as digitalization smart grid smart utilities decarbonization was a little inflated, to the point that I doubted whether our proposal could be well recognized in a sea of ​​solutions that used the same keywords.

But going to analyze several of these with a little calmer, I realized that most of them fell into large categories, now rather inflated, for example the so-called smart meters, or the measurement of consumption in real time, or the measurement of various parameters inherent to electrical substations, in short, we are all quite in the trend "but nothing really disruptive


An inflated market?

I remember that in some exchanges some time ago with two of the gurus of the world Power sector, Brian Sparling and Marius Grisaru, I learned with surprise that on the market there are 55 online monitoring systems of ONLY dissolved gases for power transformers; if we talk instead of Asset Management software in the sector of high-power electrical equipment in the substation alone, we have over 20 different solutions. If we consider that the value of the condition monitoring market is approximately 500 million euros annually with a minimum cost of online monitoring systems of around 20 k and for the software part at least 100 k of installation for each solution, we can probably infer that the added value does not come from selling such solutions, so we may guess that at least in some case, be smart or digitalized is just a way to sell “old good hardware”.

The saturation of the supply redundancy for monitoring input signals, on the other hand, collides with an enormous bottleneck deriving from the difficulty of interpreting these, especially if we intend interpretation systems based on existing standards.

I don't want to talk about our solution here, mine is a simple observation or a desire to start a debate to which I hope others want to join in drawing everyone's attention on the fact that probably the concepts of digitization and smart grid have been used mostly as commercial advertising slogans by the current major companies to maintain control of the market on instrumental components to the detriment of an effective evolution of the sector in the sense of what it is the basis of any digitization process, that is, simplification.


Need for simplicity

In fact, what was the computer revolution of the late '70s if not this? from operations that required planning on punch cards to simple commands that could be within the reach of every user with minimal notions.

Today, on the other hand, more and more often I find myself dealing with asset managers who, once the online monitoring systems and perhaps some software for evaluating the performance of the assets have been implemented, are still looking for the answer, let's say the oracle, to tell them but now what should i do with my asset?

 I have seen some examples of Asset Management softwares and (by the way, I repeat we do not offer this type of solution as we are a startup dedicated to simplification and niche solutions) which at the end of the story require courses of some days to for the full use of all the potential of the dashboards only !!  

Is this precisely the goal we wanted to reach twenty years ago when the concepts of digitization were launched? We find today ourselves stuck with superstructures upon superstructures that require interpretation, training and additional costs.

Will we ever have unicorns in the power sector?

Most likely this situation has a strong impact on the relative scarcity of proposals from new companies that do not depend on the big OEMs and historical names in the sector. Indeed,  there are some interesting attempts to enter by operators from other sectors but for example there are no are still large use case of the application of AI or ML models borrowed from successful cases in sectors such as medical or financial where will to look beyond hardware seems more marked.

The startups in the Power sector in fact, show that they are the most dependent on close relationships with utilities and very often in fact the tendency of these ones to launch calls and challenges linked to innovation, sometimes move to a simple form of "paste and copy" of solutions already proposed in other events, without a real search for substantial innovation.

In essence, the risk is that under the sky marked by trendy words, the power sector will miss the opportunity to see significant technological renewals.



Matt Chester's picture
Matt Chester on Jan 10, 2022

The startups in the Power sector in fact, show that they are the most dependent on close relationships with utilities and very often in fact the tendency of these ones to launch calls and challenges linked to innovation, sometimes move to a simple form of "paste and copy" of solutions already proposed in other events, without a real search for substantial innovation.

Do you think this is common for all solution types in the power sector-- is it really that unique? I would think something like telecom would potentially be a good proxy but there are of course lots of differences

ALESSANDRO CAPO on Jan 11, 2022

Thank you Chester, indeed interesting your comment. I would just follow your example in telecom and, being me Italian so better knowing European telecom landscape that US, I would say that startup in telecom here got advantage of a very wide liberalisation/privatisation of sector. Thus power sector is worldwide much more open than some years ago I feel still some fences are creating problems.. but any thoughts about this is welcome of course.

Michael Spindler's picture
Michael Spindler on Jan 12, 2022

To answer the data collection issue: Yes, that means a lot of data will be collected online by sensors. The challenge is managing that data to result in usable, actionable information and reporting for decsion making and monitoring. Integration and true open source interoperablity will separate the proverbial wheat from the chaff.  It goes with the territory that in order to simplify something on the front end, you most often need to add addtional complexity to the back end processing and integration layers.


In my experience, the complexity and limitations of proprietary software for interoperability is more of a problem than the number of applications that are variations on the same theme or targeted to a specific asset/monitoring function. The startups that survive will have their applications based upon open source, CIM, IEEE, and IEC standards for data and information interoperability as one foundation of the Smart Grid. These are not just buzz words. This in turn requires as a foundation acceptance of common high level data values and interoperable coding going in--the old garbage in, garbage out issue.


In the end, IT support will make or break these on the back end and middle system/network layers in my experience, as proprietary silos are not interoperable by definition. Vertical integration inside "walled gardens" and open source "extentions" more often than not still have proprietary restrictions that block interoperability with other platforms, e.g. see Oracle applications.


The good news is Oracle has now been forced to open up their API's to allow for easier integration with non-Oracle applications on the back end, so that is a good sign for those with Oracle vertical integration committments. This is where new software applications will be successful, or not. It will not remove the need for customization, but the Smart Grid informational interoperability standards do allow for that at the lower levels.

ALESSANDRO CAPO on Jan 20, 2022

Thank you very much for your contribution Michael, I would also add another point to think about? are all those data really meaningfull? I found many dashboards of asset management solution providers that IMHO seemed to make much more complicated the life of the ones they would like to help.

Thank ALESSANDRO for the Post!
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