Deloitte Summaries – The power is on: How IoT technology is driving energy innovation – Part 1 of 3

Introduction

The Internet of Things (IoT) has been all the rage in the development of new products in the consumer market and how people use them. But what about IoT applications for manufacturing, or better yet power utilities?

This post is the first in a series of summaries on Deloitte studies. Deloitte is a UK incorporated multinational professional services network. Mostly known for its tax, financial and audit consulting, it also provides reports on technological trends, in this case energy and the Internet of Things. This is a summary of the article The power is on: How IoT technology is driving energy innovation. Key elements of the article are in gray, while my comments are in black. You can download it for free at:

 

https://www2.deloitte.com/insights/us/en/focus/internet-of-things/iot-in-electric-power-industry.html

 

As an electrical engineer or anyone with an interest in power utilities, you will be amazed at how IoT allows engineers to know the exact state of every equipment on the grid, precisely locate faults and even start mapping out predictive power consumption models that are based on data, not educated guesses.

I will first go over what is the Internet of Things and a few of its applications. Then, i will bring out key elements of this article and chip a few comments in. Finally, since IoT equipments can be hacked, i will discuss the issue of cyber security when it comes to energy utilities.

By the end of this post, i hope that you will be as excited as i am at the prospects and challenges the Internet of Things will bring us.

 

Let’s dive in!


What is the Internet of Things

Internet of Things

According to Wikipedia

 

The Internet of Things is the network of physical devices, vehicles, home appliances and other items embedded with electronics, software, sensors, actuators, and connectivity which enables these objects to connect and exchange data.

 

The Apple watch, Amazon Alexa and Google Home are but a few example of objects that are connected to the Internet of Things. And similar to the internet of persons, these objects talk to one another. What might these conversations look like?  Here’s a few examples:

 

What is the temperature of the room?

What time is it and what is the luminosity in the baby bedroom?

 

To which the other device may answer:

The temperature is currently 19° C

Time is 5h32AM and the lighting in the baby’s room is currently 926 lux.

 

And logic statements may also be programmed onto these devices

If the temperature is below 25° C, turn on the heating unit.

If the time is before 7h00AM and the lighting is above 300 lux, close the shades.

 

Finally actions can be taken based on whether those logical statements are true or false.

The heating unit is now ON

The shades are now Closed

 

This is done through the internet as every connected device has an IP address. Therefore, you could control the lighting in the baby’s room from the office. The Internet of Things or IoT offers tremendous potential in turning any physical object into a smart device. And the applications are limitless. More on which sectors will benefit the most from IoT in another post!


Summary of The power is on: How IoT technology is driving energy innovation

1- Throwback

electrical power measurement

 

Historically, utilities have been able to invest heavily in generation and delivery infrastructure because steady growth in demand maintained affordable prices for customers and yielded reasonable returns.

Yet, tighter emission regulations, greater reliability expectations, and the aging transmission and distribution system require more than maintenance; they need expensive upgrades and replacements.

 

That is why many public utilities now turn to private capital for power generation. The Boralex wind farms are an example. This is the opening of a monopolistic market by having private companies build and manage power generating assets. The intention is to induce competition and keep power generation costs low. The opening of the telecommunications market in the 90s and early 2000 is an example of such attempt.

 

The most straightforward response— raising rates—is not always attractive, as both utilities and their regulators are charged with keeping rates affordable, and higher rates increase the competitiveness of alternatives to utility-provided power.

 

Hydro Quebec business model is a great example of this: provide electricity to citizens of Quebec at a low price through the “bloc patrimonial” rate and generate revenues by selling hydro power to business clients and other utilities through interconnexion with other grids in North America.


2- IoT and the Smart Grid

Smart Grid

 

IoT can improve the efficiency and performance of the power grid in three phases: first, by gathering data from sensors to improve the resilience of the grid; then through enablement, where utilities use that data to actively manage resources; and finally, optimization, where all stakeholders are able to make informed decisions about power usage and generation.

 

For example, through IoT measurement of the power consumption of heavy industrial clients such as mines and foundries, it will be possible to build predictive consumer models. These models will not only take into account the power consumption, but also the cost of ore and the selling price of metal bars. Power brokers will be able to buy and sell blocks of power with a greater degree of confidence, rather than going with educated guesses.

 

The grid is evolving from a oneway system where power flows from centralized generation stations to consumers, to a platform that can detect, accept, and control decentralized consumption and production assets so that power and information can flow as needed in multiple directions. This common industry vision is known as the “intelligent grid.”

 

The integration of wind and solar power is a great example of decentralized production. We are seeing now intermittent power generation coexist on the grid with traditional thermic power plants and hydro power generation. The output of the former being fluctuating, while the output of the latter being predictive.

That is, an electricity producer knows how much water he has in his dams and can predict how much electricity he can produce, while wind and solar are subject to the mood swings of the weather. The interconnexion with New England grids and Ontario grids and the selling of power is another example of this multi directional reality.

 

Our view is that the electric grid should modernize in three phases, which we refer to as the resilience, enablement, and competition/ optimization phases.

 

This will be the subject of my next post on IoT and power generation.


Conclusion

 

Through this introduction, you have discovered what is the Intenet of Things, what benefits can it bring to the power grid and how it will transform a traditional grid into a smart one. Next post, i will present the 3 phases Deloitte recommends to make such a transformation, namely the resilience, enablement and competition/optimization phases.

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