This article was first published in the Spring 2015 issue of OnWindows

In 2008, there were already more ‘things’ connected to the internet than people. By 2020, the amount of internet-connected things will reach 50 billion, with US$19 trillion in profits and cost savings coming from the IoT over the next decade, according to Cisco Systems. Among these connected devices are smart meters, which are projected to reach an installation base of nearly 800 million globally by 2020.

Smart meters and smart grid technology play an integral role in making the internet of things (IoT) possible in the utility sector. Today, these technologies are delivering tangible benefits to both utilities and consumers; however, while smart grid networks and devices do a fine job of moving data around today, will simply connecting devices be enough to meet the needs of a modernised grid tomorrow? With increasing demands of the grid, including electric vehicles, renewable energy and distributed generation, we are moving away from a centralised generation and delivery model to a dynamic, distributed collection of ‘micro-grids’ that will need to be synchronised, monitored and maintained in real time.

Beyond being smart, the grid needs to be active, meaning it also needs to have the inherent capability to respond in real time. Today, metering and grid systems collect reams of data and make sense of it in the utility’s back office. The active grid leverages data to make real-time changes in the field. The active grid harnesses the power of the IoT to improve efficiencies and create value for both utilities and communities. With this approach to the grid, utilities can capitalise on the potential of these connected devices that have the computing power to not only measure and communicate, but solve problems on the grid in real time.

Imagine data analysis and decisions taking place where it makes the most sense – at the edge of the network rather than only in the utility back office. Imagine using devices that dynamically detect theft situations or transformer overload before it happens–improving safety, reliability and ultimately, profitability. This is true edge intelligence.

Distributing intelligence across the smart grid network allows utilities to economically solve problems that couldn’t be feasibly solved before, greatly increasing the significance and timeliness of smart grid analytic applications as well as network capacity use. To achieve this potential, meters, grid sensors and other types of intelligent devices require a common set of technology attributes, namely: locational awareness; multilingual devices; and in-field processing power.

The ability for edge devices to know exactly where they are, process and analyse data independently and communicate with other types of devices creates many new possibilities for improving the accuracy, resolution and timeliness of analytic applications. In addition, a secure, reliable and cost-effective cloud computing and infrastructure platform, such as Microsoft Azure, helps utilities better harness the value of the data generated by their smart grid and smart distribution investments. With these capabilities, a clear opportunity exists to deliver new business value in areas such as localised demand response/load control, asset monitoring and management, outage detection and response, renewables integration and diversion detection. This approach allows utilities to put intelligence where it makes the most sense, whether that’s in the field area network, in the edge device itself or at the enterprise level, meaning analytics no longer must always take place in the back office where tomorrow or next week is no longer good enough.

In addition, utilities need a reliable, cost-effective and flexible communication network to help ensure the fastest and most reliable communication path for every message based on location, network operating conditions and the nature of the application or data. This is best achieved using standard protocols, such as IPv6, which make leveraging existing investments possible and drive industry momentum. For example, Itron and Cisco have taken a leading role in combining these capabilities and IPv6 standards to create, in essence, an extension of the functionality we have all come to expect from the IoT.

Many utilities throughout the world are in a good position to leverage these recent and significant advancements in network architecture, edge intelligence and analytics as they implement their grid modernisation strategies and connect to broader opportunities beyond operational efficiency to smart cities and IoT.

There is absolutely no doubt that the convergence of information technology and operational technology in the global utility industry will continue and accelerate, and that technology advancement will continue to outpace the asset lifecycle paradigm utilities have so long operated within. Nevertheless, thresholds are reached that warrant a shift in thinking about how to approach and solve problems. For tomorrow’s grid, that time is now.

Simon Pontin is chief technology officer at Itron

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