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How IT/OT Convergence is Beginning to Manifest in Demand Side Management

Arrows in cloud

As the United States and countries across Europe cope with mothballed coal and gas-fired power plants, nuclear phase-out, and the integration of renewables into the energy mix, the problem of decreased available peak generation capacity will continue to escalate. Demand Side Management (DSM) will continue to be essential for creating grid flexibility as more renewables come online and utilities aim to cost effectively manage peak loads with demand response, smart grid technologies and energy efficiency programs. In fact, this past year companies raised $1.3 billion for grid edge investments from private equity firms and venture capitalists and demand-side management and data analytics markets were the second largest group of those invested in. DSM operations solutions are enabling hundreds of GWhs in electricity savings for utility customers and millions in annual operational savings for utilities. The Consortium for Energy Efficiency (CEE) reported that US and Canada combined electric and gas DSM program budgets reached $9.6 billion in 2013.

To date, Demand Side Management operations data has been cumbersome to access through various siloed business systems, often built atop outdated IT infrastructure, thus limiting savings and operational efficiencies. Now, secure, cloud-based platforms are cost-effectively managing these programs and as a result, more and more utilities, like Pacific Gas and Electric, Commonwealth Edison, Xcel Energy and Con Edison, are efficiently integrating and aggregating energy data, tracking project costs and quantifying savings in a meaningful way using a streamlined DSM platform which includes cloud enterprise CRM.

Utilities are looking to capitalize on the new operational efficiency savings afforded by seamlessly integrating data from operational technology (OT) systems with their back-end information technology (IT) to improve customer and partner relationships, save money, offer new services and products and manage internal changes within an organization. It’s now beginning to manifest in the world of DSM.

Until now, the two worlds of IT and OT have been largely decoupled; companies are now better able to link business processes to operational technology systems. For instance, the IT/OT convergence is beginning to take root where big data derived from advanced metering infrastructure (AMI) and other building data sources, provide a more transparent energy efficiency landscape. In some cases a “soft audit” can replace boots on-the-ground-energy-audits in the field altogether, and help identify specific measures. Through big data analytics, derived from OT, hidden energy efficiency opportunities are now exposed; digitized Evaluation, Measurement and Verification (EM&V) operations are able to confirm claimed energy. Thus, the IT/OT convergence is leading to a reduction in operating costs, while enhancing greater customer engagement.

Still, there is a lot of data being collected from smart meters and substations, but true IT/OT convergence is still only beginning its journey. A recent survey by Zpryme shows that we’re only in IT/OT convergence infancy: 38% of utilities say they can share data across their entire organization and only 14% of respondents say that that they are collecting terabytes of data every month.

While the industry recognizes the benefits of an IT/OT convergence, the process doesn’t come without its challenges. An organization is tasked with collecting, mining and managing massive amounts of OT data -- for instance, from substations, smart meters and SCADA -- for actionable insights to expose inefficiencies, trends, anomalies and opportunities. Once data is mined and “normalized,” insights must be linked into systems that enable the necessary execution of energy efficiency measures to reduce consumption and peak demand, but ownership and responsibility questions arise -- who owns which parts of the relevant technology and who is responsible for information format and delivery?

Processed OT data, well coupled from IT systems, enables the utility to act upon exposed efficiency and DSM measures, leading to better execution and greater energy savings. Overall, the benefits exceed the challenges and by synchronizing operational technology systems with cloud-based information technology (IT), utilities can:

Reduce Costs:

  • - Reduce EM&V, audit, in-house software development and energy efficiency project costs
  • - Eliminate hardware costs; all computing capacity is cloud-based

Improve Performance:

  • - Transparent, real-time, on-demand reporting, always reflecting reality enables better decision making and alignment to achieve energy savings goals
  • - Process optimization and efficient field work operations

Increase Strategy:

  • - Improved alignment between operations and business goals
  • - Realistic, timely information enables stronger decision making and greater energy efficiency opportunities
  • - Greater customer satisfaction from active progress and engagement

A lot of progress has been made on the grid edge, but accommodating and streamlining evolving needs cost-effectively up and down the energy efficiency supply chain for sustainable IT/OT integration will require coordination from many stakeholders.

Udi Merhav's picture

Thank Udi for the Post!

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Ferdinand E. Banks's picture
Ferdinand E. Banks on Mar 16, 2015 6:00 pm GMT
Nuclear phase out and mothballed coal and gas fired Power plants.

I presume that you mean Germany, which will be the most nuclear intensive country in the World by mid-Century, along with Japan.

As for the promised land of wind, Denmark, they get about 26 percent of their Power from wind, THEY SAY, and the rest from coal and imports. If the Swedes did what they should do, Germany and Denmark would get no electricity from them. And by the way, in Sweden no phasing our or mothballing is taking Place, and the same is true in France and England and probably the rest besides Germany.

´Let me suggest some Reading for you: ENERGY AND ECONOMIC THEORY by Ferdinand E. Banks. Fred makes mistakes too, but not certain kinds.

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