Balancing act

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Franck Blonbou, electrical engineering services manager at Nexans, discusses why power grid asset management must go digital, highlighting how Distribution System Operators (DSOs) can leverage the digital transformation of the energy industry to extract maximum value from their grid assets.

Finding an optimum balance between expenditure and quality of supply has become a tremendous challenge over the past few years for distribution system operators (DSOs). This leaves no doubt that the pressure is on to do more with less in a bid to balance cost, risk and performance. Luckily for power utilities, digital transformation of the energy industry offers new and efficient tools to tackle this challenge.

As the global energy demand continues to grow, the strain on the power grid is becoming higher. The possibility of drastic increases in equipment failures is unacceptable for all aspects of asset management including cost, reliability, and risk. More than ever, operators are facing the growing challenge of providing affordable, sustainable and secure electricity supplies against a background of rapid change in the way that energy is produced, transmitted, distributed and consumed. 

However, operating a power grid is becoming increasingly challenging because of the rapidly changing landscape of the energy industry and stricter market regulations. Furthermore, DSOs also have to face a growing number of internal obstacles, including ageing infrastructure, growing budget constraints, and the loss of expertise as highly-skilled and experienced staff retire – the ‘knowhow’ drain. 

Historically, these aspects have been addressed individually, often in silos. Yet the many facets of network maintenance and renewal strategies – such as finance, quality of service, safety, or human resources – interact with each other in complex ways that cannot be easily understood and modelled by asset managers. This is where digital technologies can become a critical decision-making aid for efficient asset management.

Striking the right balance with data

When it comes to asset management, information is key. For instance, replacing old equipment before it fails often seems wasteful or simply impossible. Think about the US power grid, where almost 70% of power transformers and transmission lines are over 25 years old. In such cases, maintenance and renewal strategies should be designed on the basis of tangible data and realistic forecasts. Otherwise, it is impossible to find the right balance between minimising the risk of equipment failures, securing acceptable network performance, and efficiently managing capital and operating expenditures.

It’s not that the vital information is missing. The information is abundant. But it is distributed across various stakeholders within the DSO organisation, from asset managers to maintenance and engineering teams, from the finance department to human resources. The missing link is the intelligence for collecting and managing this data and then making reliable projections based on it, as there are so many variables to be considered. This is where digital technology can offer asset managers a head start.

There are also new factors to consider, such as the proliferation of renewable energy sources on the one hand and the heavy growth in demand on the other, for example from electric vehicles (EVs). These new factors are having a radical impact on the distribution network lifecycle, particularly on critical components. 

Traditionally, DSOs have designed their network maintenance and renewal strategies according to a siloed approach, with finance, quality of service, safety or human resources regarded as separate functions. Indeed, the complex ways in which these functions interact with each other has historically made it difficult for asset managers to traverse these silos effectively. 

Fortunately, there is light on the horizon. Recent developments in augmented intelligence have resulted in solutions capable of centralising data and generating a digital twin of the complete distribution network. Such a virtual model considers all the constraints imposed by the regulatory environment, business rules, available financial and human resources, and any technical policy in place.  

Why a digital twin is vital for asset management

A digital twin accurately reflects the entire network and the processes used to manage it (including inspections, repair and renewal strategies in place), enables the creation and testing of different scenarios and contributes to fully informed decision making based on clear projections. 

A key aspect of this technology­­ is the unique capability to deliver interconnected insights that allow asset managers to quickly identify and measure correlations between distribution grid performance, capital expenditure and maintenance costs, as well as risks across all silos. These insights enable power utilities to make trade-offs across capital expenditure (CAPEX) and operational expenditure (OPEX) while mitigating risks and reducing intervention conflicts – all in line with their business objectives. 

For the projections to be realistic, digital twins should also factor in the ageing profile and behaviour of electrical assets. Technology such as Nexans’ strategic asset management solution, which incorporates Asset,the complex system modelling platform developed by Cosmo Tech, our technology partner, takes into consideration how external factors affect the overall ageing rate and ultimately, the probability of failure. Such factors include location, temperature, humidity, and stable or transient current load.

To cover most of the choices available, Nexans implemented the British DSO CNAIM framework in combination with its own ‘apparent age’ methodology. Although the CNAIM methodology can measure probability of failure and measure its consequences, the government regulator (Ofgem) recognises the pre-established values and statistics for each asset category and calculation methodology as relevant for a five- to 10-year period only.

Nexans’ methodology however, allows asset managers to circumvent this limitation by using asset ageing profiles for each category and network simulation to reproduce weekly real-life activities, failures and associated repairs or replacement. 

The simulation measures are based on four themes:

1.    Quality of service

Network performance is critical at every point of energy distribution to ensure outage time remains as low as possible. However, planning maintenance for the same assets is mandatory to maintain probability of failure and asset health within the desired range.

2.     Financial performance 

This normally means analysing how much CAPEX or OPEX is required to execute an asset management strategy. However, efficiency of the distribution network has become a target for DSOs. Energy that is conveyed but not sold is lost revenue for the operator and will indicate poor network quality if this reaches high rates. This is determined by comparing CAPEX, OPEX and monetisation of the potential energy that can be sold.

3.     Safety performance

This can be related to several topics such as operational accidents, if numbers of repairs rise, or when the system becomes unbalanced, potentially leading to outages, causing major supply issues for the domestic, business and industrial customers served by the network. Therefore, DSOs must measure the impact of increased failure rate on the network by measuring the potential number of failures per year.

4.     Key HR availability

As skilled and experienced staff performing critical maintenance tasks are getting older, key competencies for repairs and renewal are increasingly harder to secure when establishing long-term strategies. The availability of maintenance technicians and engineers is therefore a key KPI.

The expected benefits associated with innovative approaches to asset management are huge and have the potential to take this crucial area to a new level of efficiency. To achieve this, DSOs will need a bigger toolbox to move from the traditional ‘connect and forget’ concept towards a ‘connect and manage’ one. Those operators that embrace digital asset management as a gateway to better decision-making and a fundamental driver of value will gain competitive advantage and outperform their competitors.