DRIVING MARKET DYNAMICS WITH TECHNOLOGY
05 September 2002 - GE Industrial Systems

A number of competitive factors are compelling the utility industry to rethink its approach to just about every aspect of doing business - from hardware, software and communication needs to management of services, support and asset management. While each may appear to constitute a separate challenge, the convergence that is taking place is leading companies to adopt a more integrated, enterprise-wide approach. It is now acknowledged that integration is crucial for utility operations to meet the ever-growing challenges facing the industry today.

The need for this overall integration of business operations has been driven in large part by industry de-regulation. Now utilities and business are forced to operate more competitively (and profitably) while satisfying an ever-growing consumer demand for reliable service. At the same time, all this must be achieved without increasing the cost of doing business. The enabling technology that is available today is playing a critical role in bringing these challenges under control. Equipment is more efficient and 'intelligent', communications more open, and bandwidth at the point where one can more easily network resources and engage in remote monitoring and control at an affordable rate.

The customer speaks
At the heart of this need for integration is cost. While customers have always demanded reliable delivery of services, their financial stakes have increased significantly. The cost of even the briefest of outages has proven to be crippling for organizations and can quickly have a major impact on their bottom line. For example:

A 72-hour outage for E-trade translated into a 22 per cent loss in market capitalization.

One hour of downtime can cost a semiconductor manufacturer US$1 million in lost revenues.

For a pharmaceutical manufacturer, a one-minute outage can mean one lost batch of high-value product.

A single minute of outage can cause a pulp and paper operation the loss of the production value of one full shift.

The challenges ahead
For the utility industry, keeping up with this customer demand is increasingly complex, as it faces a huge surge in generation needs coupled with a lag in traditional transmission and distribution capabilities. The load growth is putting more and more strain on existing infrastructures and driving circuit utilization beyond their existing capabilities. The infrastructure as it stands today is aging, and transmission and distribution reliability is questionable at times. Transmission investment is flat, despite the increased distribution requirements. In addition, the utility industry workforce is declining, leading to an increased reliance on automation.

In an effort to instill efficiencies into their operations, many industries are looking to move distributed generation closer to the load. Hospitals, schools, manufacturing facilities, residential and other customers are seeking alternative energy technologies such as fuel, wind, solar cells and micro-turbines to improve energy efficiency and reduce cost.

While distributed generation promises to deliver a number of compelling advantages to end users, this will place a significant onus on the utilities to find more efficient ways to monitor and control usage.

Traditional over-current relays that allowed for easy coordination with downstream devices, such as fuses or re-closers, are simply not capable of providing the same level of control over a distributed network. Utilities now need to examine ways to track and match loads for protection and generation over multiple devices, extract information in various forms and access timely information to ensure overall stability.

Enabling technology throughout the system
The key to effective management is applying enabling technology throughout the entire system ? from power generation, to transmission and distribution to the end user. By linking the enterprise from end to end, utilities can maximize the impact of the entire system. This approach entails a number of areas, from applying highly engineered physical equipment and embedded intelligent sensors to developing a robust communications infrastructure and enterprise level applications to tie it all together.

The hardware and sensor technology now being developed is integral to the successful design and operation of an enterprise-wide system. More portable, powerful equipment allows for better management of resources and helps facilitate distributed generation for a broad range of industrial applications, while eliminating critical bottlenecks.

Intelligent sensors embedded in today?s equipment can play an instrumental role in the design and operation of equipment. Sensor integration allows an organization to monitor systems more proactively both on and off-site, ensuring that a potential problem can be pinpointed and resolved before failure occurs. This translates into reduced system cost and increased reliability.

Monitoring and diagnostic capabilities have also been evolving by leaps and bounds. Monitors, transformers and other intelligent devices can be programmed to ensure early fault detection and remote diagnostics. Many of these functions can be performed remotely, thus reducing the demands on manpower.

The relay and communications revolution Among the critical factors, which are significantly changing the utility landscape, are the advances that have been made in relay and communications technology. It was just over 12 years ago that microprocessor-based relay technology was introduced to the market. The availability of this technology has revolutionized the way utilities and industry can manage their transmission, generation and protection needs. Devices such as GE Multilin?s Universal Relay family are based on open standard technology and open communications capabilities.

Microprocessor-based relays have opened the doors to a level of flexibility and communication that was unheard of products of the previous generation.

Now, devices can be programmed, monitored, modified, configured and expanded to serve any number of functions over an enterprise network.

Advances in communications have played an equally significant role in the past decade. In the last half a century, we have seen the industry move from leased phone lines to an array of microwave and fiber-optic communications that allow for the delivery of data over Ethernet or any other protocol of choice at unprecedented speed. It is now feasible to link every element of the enterprise over a network of virtually any size to enable automated and/or remote protection, monitoring and control of devices on a geographically dispersed network.

Next generation communications
Managing an enterprise over a network has become a matter of course for many utilities and industrial operations today. This has been particularly effective in reducing the total cost of ownership, improving substation automation functionality and alleviating the demand for on-site manpower.

With this inherent connectivity, the industry is now focusing on the next steps: wireless connectivity and Internet-based monitoring and control. Today?s wireless networks are achieving network speeds to 128Kbps, making them much more feasible for advanced monitoring and control applications. Satellite, DSL and cable services are providing broadband connections entering the Mbps range. At the same time, personal digital assistants (PDAs) and other handheld computers are becoming a mainstay for field technicians and other workers. As a result, users are now able to access every point on a utility network, regardless of the communications medium, from just about any PC-based device they may have in hand.

Given the openness and flexibility of the communications choices, the Internet promises to become an increasingly prevalent factor in substation automation. Some companies are now embracing the concept of subscription-based, Web-enabled services that are designed to deliver monitoring and administrative functions for a fraction of the cost of more conventional SCADA systems. These services, such as enerVista.com from GE Multilin, are based on an application service provider (ASP) model that allows a secure means to network existing sites, and perform a range of administrative and substation engineering functions using a simple Web interface.

Unlike SCADA systems, Web-based monitoring systems can be set up in matter of days, and these services can be had at relatively low per-site prices. Because the incremental cost of each substation is equally low, users achieve return on their investment at a very early stage without having to wait for a 'critical mass' of substations to achieve economies of scale.

A new game
With the technology and connectivity capabilities available today, the market dynamics are changing rapidly. In order to remain competitive, utilities must move beyond traditional boundaries and think more broadly when implementing their technology strategies. They must look to integrating their hardware, software and communications systems in such a way that information systems will become their productivity weapon of choice in the years to come.

The rules have changed considerably, and the way to win the game is through technology.

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