Dean Oskvig, President & CEO B&V Energy, Black & Veatch Holding Company
Electric utilities are in the midst of a significant business transformation. They must align their power generation portfolios to address increasing air emission and surface water regulations as well as state-mandated Renewable Portfolio Standards (RPS). Many traditional power plants are aging and nearly 60 gigawatts of coal-fired capacity will be shut down by 2020. Yet investment in new generation capacity lags that scheduled for retirement. Utilities are challenged to predict future demand as electric vehicles, distributed generation resources, energy storage systems and demand response programs gain traction.
Outside the regulatory sphere, the industry presses on with a host of challenges and opportunities: consolidation to grow scale; the need to reduce operating costs and improve efficiencies; exploration of adjacent/new markets to further growth; determining how to harness low-cost natural gas; and improving overall disaster response to protect the nation’s vital power infrastructure.
"Adaptive Planning is a dynamic master planning process that uses advanced analytics to address interdependencies within and across activities"
This disruption, propelled by a confluence of market dynamics and shifting technologies, will result in a leaner, more nimble electric utility industry that will be able to better deliver on its primary mandate: reliability. But getting there takes new approaches and smarter tools. The need to do more with less has driven an unprecedented level of utility technology deployments including Automated Metering Infrastructure (AMI), cloud services, and data analytics. These investments are paving the way for “Adaptive Planning” analytics that allow utilities to develop and modify plans in response to changing conditions, enabling them to better embrace a dynamic future with confidence.
Adaptive Planning is a dynamic master planning process that uses advanced analytics to address interdependencies within and across activities. It provides an understanding of the interrelated effects of alternative courses of action, manages a diverse range of planning initiatives and requirements, and enables rapid asset, project and planning portfolio adjustments. Leveraging cloud-based computational capabilities, adaptive planning solutions use data to create, compare and optimize complex planning decisions, including the visual identification of investment priorities using a risk-based approach. Adaptive planning solutions apply a common asset framework across all areas so that interdependencies between asset management, capital prioritization and operational effectiveness can be fully captured while outputs from each planning area can be used as inputs into others.
Adaptive Planning Use Cases
Black & Veatch is using Adaptive Planning analytics to work with utilities make more informed capital investment, asset management, and operational decisions to reduce business risk and save time and money. Some use cases include:
• Asset Management: For evaluating and visualizing asset health issues and risks and exploring the impacts of changing project timing.
• Capital Prioritization: To identify and evaluate capital investment options, such as distributed renewable investments, against many potential future scenarios and impact areas.
• Maintenance Optimization: Working with utilities to do the right maintenance at the right time with an understanding of costs, risks and impacts of different maintenance schedules.
• Emissions Compliance: Tracking regulatory compliance, anticipating potential issues, and identifying strategies to ensure compliance while balancing costs, reliability, and efficiency.
Although more utilities are using analytics to improve operations, fewer are using the more predictive forms of analytics to prepare for an uncertain future. Fewer still are enhancing Integrated Resource Planning efforts with an Adaptive Planning approach that evaluates on an on-going basis any combination of project, technology, investment or regulatory issue. An Adaptive Planning framework enables utility planning efforts to shift from being an annual event to a more flexible, relevant and timely process that is more closely integrated into ‘business as usual’ activities. Benefits would come in the form of significant capital, operations and maintenance expenditure savings.
Deploying Advanced Analytics
Distributed renewable integration is a top electric utility concern. One Black & Veatch client intends to have two-thirds of its generation coming from renewable sources by 2030, including tripling the amount of distributed generation such as rooftop solar, all while lowering its residential customer bills. There are many possible paths to get there and a lot of ambiguity about what the future might hold. In addition to evaluating the technical feasibility of different approaches, it was necessary to explore and compare many options and implications including cost, reliability, future flexibility, and sustainability. Black & Veatch’s Asset360™ Adaptive Planning framework was used to model complex systems, run many different scenarios, and compare options across a wide-range of metrics. Cloud computing made it possible to quickly process and analyze billions of records of data at the necessary level of granularity. This allowed the client to construct tactical plans that identify the steps to transition from current state to desired future state.
Understanding that the world is not static, this framework can continue to be used to explore the impact of changing conditions, and to tie in greater levels of operating information as tactical plans are implemented.
An Adaptive Future
Looking ahead, we envision that many utilities will seek to deploy Adaptive Planning solutions in a phased approach. Due to the declining costs of sensors, actuators, chips, mobile devices, data storage and computing power, Adaptive Planning solutions will rapidly become more robust. Scenario creation and exploration will be augmented with an operational optimization framework in which software will search for and optimize operational results based on algorithms and math. With the reality of limited capital budgets, the ability of these solutions to derive information and value from installed technology is a critical benefit that cannot be overlooked. This allows utilities to test various strategies ranging from managing renewable integration and improving maintenance plans to flood and drought situations.
As these solutions create greater insights into utility operations and plans, data-driven forecasting capabilities and the ability to respond to rapidly changing events will empower utility leaders to maximize the performance of their physical and personnel resources. For organizations that have provided services, in some instances for more than a century, this will represent the greatest transformation in utility operations in decades.