2015 Strategic Directions: Smart Utility Report

Founded in 1915, Black & Veatch is a leading global engineering, consulting and construction company, specializing in Energy, Water, Telecommunications, Federal, and Management Consulting. Black & Veatch’s annual Strategic Directions Report identifies top of mind issues based on a compilation of data and analysis from an industry-wide survey. The complete report is available from the Black & Veatch website.

“The annual Strategic Directions report series captures Black & Veatch’s global engineering and thought leadership expertise across key elements of the critical human infrastructure market.… This report represents the evolution of Black & Veatch’s inaugural Strategic Directions: Utility Automation & Integration report, with an expanded focus on automation and integration and utilities’ efforts to harness data to make operations and service delivery more efficient.”

— Black & Veatch 2015

The major sections of the report address:

• Utility Telecommunications
• Utility Automation
• Data Analytics
• Smart Communities
• Perspectives

The report notes that utilities and communities, with the proliferation of smart devices, automation and the use of analytics are transforming development and delivery of key infrastructure services to become more responsive, efficient and resilient.

Especially relevant to Cisco’s engagement with the utility industry and communities around the world is Black & Veatch’s observation that as legacy equipment is replaced or upgraded, IP-based technology is creating new opportunities. Connected devices on utility telecommunications infrastructure is now widely recognized as “…an essential element of the Internet of Things (IoT).”

Advanced metering Infrastructure (AMI) has often been thought of as synonymous with “Smart Grid”, but the expectations of real-time pricing or even time-of-use (TOU) rates and demand side management are far from the top of the list of top areas enabled by increased data management and analytics. The top three listed in the report are:

Asset Management (67%)

Capital Investment (45%)

Customer Service/Engagement (27%)

More than 63% of electric utilities report plans to replace, upgrade or build communications infrastructure in the next 5 years, with IP leading the way as the network protocol standard including SCADA systems.

“Some utilities are completely embracing a converged mentality and running everything over a shared infrastructure, while others are moving more cautiously by keeping protective relaying and other mission-critical applications separate from the converged network.”

The report notes that some utilities are more focused on the cost of maintaining and replacing outdated equipment and are unconvinced that smart grid technologies and automation are critical, but concludes, “Staying on the sidelines carries risk.”

Budget concerns dominate the obstacles to new technology implementation, and convincing stakeholders is key to addressing cost and perception issues.

The report concludes that the adaptive planning enabled by IP communications and advanced analytics allow leaders to effectively address core management functions of Strategic Options Assessment, Asset management and Operational Planning.

“For organizations that provide essential services, this represents the greatest transformation in utility operations in decades. For the smart city, it will facilitate the transformation to becoming a better place to live and a more friendly and desirable place to do business for generations to come.”

Black & Veatch and Cisco partner to create architectures for electricity, natural gas, solar and wind customers that provide secure and optimized network integration for smart grid environments. If you’d like to know more about our work together, contact me by commenting on this blog.