Energy & Utilities: Transforming in an era of disruption
Energy and utility providers face major disruptions to their business models, revenue streams and regulatory relationships. These challenges are unparalleled in their history. They demand agility on the part of the utilities to survive and thrive through this era.
Industry trends influencing operational and investment planning decisions
As a result of improving technologies and emerging regulatory models, industry financials are changing dramatically. This shift has broad implications across operations, asset management, regulatory, customer and supply chain processes. There are several key factors forcing disruption:
- Decreasing cost of renewable generation and gas-fueled generation to customers
- Entrance of third party aggregators into the distribution market
- Regulators moving toward outcome-based rate making
Changing business models
While utilities must contend with an aging asset base and workforce, new stresses are emerging on assets designed for one-way power flows. For example:
- Engineers must contend with changing load and flow patterns. As customers seek to sell excess generation to their neighbors, or back to the utility, they must ensure power quality within agreed ranges and efficient delivery of that energy.
- Operations must be equipped to understand and react to reverse power flows. Asset management must understand the fleet health and address continued reliable delivery of power on the aging and increasingly stressed distribution grid.
- From an overall financial perspective, the utility must contend with changing capital expenditure (CAPEX) and operating expenditure (OPEX) needs. This is due to asset replacement and maintenance as a result of these new power flows.
Business as usual is no longer good enough
While traditional demands for safety and reliability persist, industry disruptions underway mean that business as usual is no longer good enough. Utilities must deliver new efficiencies to keep costs low and achieve new business agility to participate in new retail-oriented interactions with customers and third parties.
Regulatory pressures on utilities to do more with existing assets and resources threaten the utilities’ financial positions. The old model of a monopoly energy provider, with regulatory financial incentives to invest in and expand the network, no longer reflects the reality. Especially in many regions where the networks are fully built out and expansion potential is limited.
The prospect of declining revenues to support a fixed asset base portends higher rates for remaining customers—driving further substitution with competitive sources and the prospect of an ever increasing rate spiral.
Enterprise asset management can help organizations like yours increase operating efficiency
and enable continuous improvement through data accessibility in order to provide better, more reliable
power-generation services to customers.
Find new opportunities with data
Utilities intuitively recognize they must find opportunities for operational improvements using their existing data. Although utilities collect huge volumes of data, most of that data is used within a narrow context, often providing only a portion of the required information to decision makers throughout the enterprise.
Utilities increasingly rely on accurate forecasts to operate efficiently. However, the underlying assumptions are all changing. Fact-based decisions built from the bottom-up based on all of the available information are critical to transform—for investment planning, operations, maintenance and supply chain processes among others. This is necessary in order to maintain reliability, safety and efficiency as the underlying business model changes.
To stay competitive, utilities must innovate processes with bold, analytics-rich solutions that go beyond operational excellence to unlock new dimensions of value.
Build on a strong foundation of asset instrumentation and connectivity
The utility industry is one of the more advanced in terms of asset instrumentation and connectivity. As a result significant volumes of detailed operational data – from grid instrumentation, meters and connected consumers – is now available to capture, aggregate and analyze. Turning the flood of data into actionable insight can help utilities to improve current business processes, or transform them altogether.
Success in analytics is achieved by using a foundation of common capabilities that can be applied to various utility domains and systems and can help integrate them. That’s why analytics are core capabilities in IBM IoT for Energy and Utilities solutions – embedded throughout to provide accurate, relevant and detailed information. This insight is used to support and advise critical decisions of operations, maintenance, regulatory, field service, planning, reliability and investments.
How analytics can be applied
Here are several examples where embedded analytics in the IBM IoT for Energy and Utilities solutions can be applied:
- Describe past and current asset performance. Display historical asset performance trends, identify underlying factors, such as sensor data or list recent inspections or procedures performed on a specific asset or class of assets.
- Predict potential asset degradation or failure using industry models developed specifically for critical assets.
- Prescribe the appropriate maintenance procedures and determine optimum maintenance schedules for individual or classes of assets.
- Analyze volumes of data associated with utility infrastructure to discover insights hidden within these massive archives. Apply them to improve human and machine expertise that enables better decision-making and improves operational performance.
Enable continuous improvement through data accessibility
Accessibility and sharing of asset data across the organization enables the lines of business to coordinate analysis, planning and execution in context of financial goals and regulatory constraints to continually improve overall performance.
Incorporating as much relevant asset data (historical and current) as possible – maintenance records, operational performance, environmental, financial and regulators – allows lines of business to access and analyze assets in context of their unique business responsibilities and collaborate across departments to effectively respond to market disruptions and regulatory demands and contend with financial constraints.
IBM’s energy and utilities solutions provides a holistic and granular understanding of assets by rolling up data across sources to support financial and regulatory processes spanning multiple lines of business.
Deliver reliability on an aging distribution grid
As operations gain insight into individual and aggregate performance with the goal of improving reliability and availability, utilities are in a better position to efficiently prioritize repair and replacement schedules to minimize impact on downtime and extend asset life.
Using IBM Maximo Asset Management can help providers reliably deliver power on an aging and increasingly stressed distribution grid. By providing a robust set of capabilities – including asset health and risk calculations, predictive capabilities and integration with enterprise asset management systems – maintenance and field service personnel can proactively respond to impending equipment degradation or failure. Here are several use cases where Maximo asset management capabilities can be applied:
- Visibility into a detailed and accurate understanding of maintenance history, reasons for the current problem, recommended actions to remedy the problem and the ability to prioritize maintenance schedules and resources based upon risk, failure probability and consequence of failure calculations.
- Schedulers and planners to gain the ability to optimize scheduling of planned outages, equipment upgrades and supporting resources through analysis and prioritization of repair criticality, estimated costs and even identification of best window(s) of opportunity based upon analysis of historic weather patterns and near-term forecasts.
- Through analysis and identification of factors – endogenous or exogenous – that contribute to equipment degradation or failure, reliability engineers can develop strategies, policies and procedures that ameliorate those problems to promote better asset utilization as they contend with changing load and flow patterns.
- Dashboards and reports provide both overall and highly detailed equipment performance assessments – historical and real-time – of grid, regional, connected and individual assets to help determine where and when resources should be deployed to ensure power quality within agreed ranges and efficient energy delivery.
Achieve analytics-driven operational excellence with IBM IoT Energy and Utilities
The IBM Maximo APM for Energy and Utilities solution enables a user to drill down to assess regional health, individual asset health and connectivity – upstream and downstream – and use this real-time information to help automate outage processes from detection through resolution, enabling information access for improved business and operations intelligence.
Watch the Maximo demo today to learn more about EAM for energy & utilities.