© 2014 IBM Corporation Does your Cloud have a Silver Lining ? The adoption of Cloud in Grid Operations of Electric Distribution Utilities Kieran McLoughlin.

© 2014 IBM Corporation

Does your Cloud have a Silver Lining ?The adoption of Cloud in Grid Operations of Electric Distribution Utilities

Kieran McLoughlin

© 2014 IBM Corporation

One can tailor cloud delivery models to meet clients unique needs

Private cloud Public cloudHybrid cloud

3rd Partyhosted and operated

Shared (community) private cloud

Enterprise

Hosted by 3rdPty

3rd Partyhosted and operated

Public cloud services

Hosted by 3rd Pty

Users

3rd Partyhosted and operated

Dedicated private cloud

Enterprise

Hosted by 3rd Pty

Managed private cloud

Enterprisedata center

On customer premise

3rd Partyoperated

Private cloud

On customer premise

Enterprisedata center

Customer operated

Business Processas a Service

Softwareas a Service

Platformas a Service

Infrastructureas a Service

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The energy industry has unique considerations with a cloud approach

Energy providers are subject to tight regulations which govern compliance in both data security and privacy• Critical infrastructure protection• Rules which govern Personally Identifiable Information (PII)• Physical Security, User Access Control, Data Encryption and network

security

Many providers in the utility industry prefer capital expenditure investment for their IT needs • Many regulated utilities receive a rate of return on capital investment

Gradually changing regulations and market pressure will increase cloud value and activity• Regulators increasingly scrutinize rate cases • Vendors increasingly moving to ‘as a service’• LoB owners often seek solutions to technology needs outside of

corporate IT

Capital Recovery Model

Changing Attitudes

Security & Data Privacy

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Grid operations system have the following characteristics

Process AutomationGrid management processes will be automated to address complexity, speed and greater efficiency Model & AnalyzeIncreased modeling and analytics capabilities for historical analysis, real time operations, forecast, planning and risk assessment. ControlHybrid management system with both centralized and distributed control functions Distribution AutomationIncreased feeder and substation intelligence and automation. IEDs moving towards ‘Internet of Things’ MonitorMore remote measurements from devices added to the network monitoring grid state, condition, demand and supply points

Future

DGCrews Feeders SubstationsEV Meters Roof PV Customer

GridOperations

CustomerOperations

MaintenanceOperations

Model & Analyze

Automate

ControlM

onito

r

The Distribution Network

DGCrews Feeders SubstationsEV Meters Roof PV Customer DGCrews Feeders SubstationsEV Meters Roof PV Customer

GridOperations

CustomerOperations

MaintenanceOperations

GridOperations

CustomerOperations

MaintenanceOperations

Model & Analyze

Automate

ControlM

onito

r

The Distribution Network

Historic Real-Time

Forecast

Time

Dimen

sion

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Grid Operations applications range from mission critical to non-mission critical, from real-time to non-real time

Can Cloud be of Value to Electric Utilities in the Grid Operations Domain ?

SCADA

© 2014 IBM Corporation6

The Large Utility, multiple Grid Operations Centers

Acting Thesis:

Utilities will increasingly see the benefit of a common and consolidated grid operations design featuring common and consolidated design, software footprint and infrastructure. Business processes and rules can be standardized. This is about efficiency and cost take out

Have one grid ops software footprint in a data center and the actual grids ops center have use of it under an architecture to be determined

Deployment would be a private, on premise cloud OR hybrid cloud where dev test environments are stood up in a private, off premise environment. Failover and backup in appropriate environments.

Benefits:– Reduced overhead and administration costs through software standardization– Reduced operational cost through higher utilization of existing infrastructure – Reduce software run costs due to standardization – Reduced training costs– Cost reduction through common, cloud based dev / test– Reduced time for change implementation through cloud based dev, test

Deployment Model: 1) Private, On Premise 2) Private, Off Premise

© 2014 IBM Corporation7

Mid-sized Utilities, Cooperatives and Growth Markets

Typically do not have the budget to access advanced capabilities of modern grid operations capabilities (aDMS, OMS, mobile). Do not have the ability to continuously upgrade capabilities and benefit from new releases. May not have the resources to support an on-premise grid ops solution.

Acting Thesis:

This is a relatively open market for advanced DMS capabilities. The right combination of capability, standardization, and convenience will open doors of new opportunity.

May require some degree of customization for rules, configuration, but standardization in the software capabilities and infrastructure capabilities. Or, more likely, a custom set to processes for a community of customers (e.g., NRECA)

Deployment would predominately be a private, off premise cloud OR off premise, community model.

Benefits:– Greater functionality at a lower cost– Cost efficiencies offered by cloud and SaaS– Benefit from new releases– Likely improved security– Benchmark functionality against other utilities

Deployment Model: 1) Private, Off Premise 2) “Community”, Off Premise

© 2014 IBM Corporation8

Utilities in Emerging Markets MEA

Typically minimal infrastructure and the utility has been privatized as part of a government restructuring of the electric industry. No existing DMS capabilities therefore these are ‘born on cloud’ targets

Acting Thesis:

A SaaS model will be the best way emerging markets can acquire modern grid mgt capabilities

Completely standardized offering in it’s functionality, processes, rules and services. .

Deployment would predominately be community, off premise OR private, off premise.

Benefits: having access to basic up to advanced grid ops capabilities without the overhead, support costs, etc.

Additional Thoughts

We see this in Turkey and Nigeria at present, where these utilities have to have complete revamp and/or new grid operating infrastructure. It is important to point out that Turkey is far advanced of a country like Nigeria, where the grid is in poor state and there is a lot of diesel generation and private power plants associated with industrial enterprises

Anticipated Deployment Model: 1) “Community”, Off Premise

© 2014 IBM Corporation9

Conclusion

Cloud will have the most initial impact with Utilities in Emerging Markets, followed by Mid-Sized utilities and then Large Utilities

Utilities in Emerging markets will use Cloud just as they have done with Wireless communications to springboard to the latest capabilities, and take advantage of SaaS models to lower upfront capital investments

All three types of utilities can use cloud to their advantage as an additional ‘how’ to achieve their business and social objectives

All Utility Industry application providers are working to see how best to take advantage of cloud to offer new solutions and services