Enabling Smart Grid

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November 2008, Energy Insights #EI215043

Ensuring That Spatial Data Can't Hide

W H I T E P A P E R

Sponsored by: Microsoft

J i l l Feblowi tz Rick NicholsonNovember 2008

ENERGY INSIGHTS OPINION

Aging transmission and distribution (T&D) assets and mandatoryreliability standards are pushing grid reliability to the forefront. Theaging workforce is causing a shortage of skilled labor and increasingthe need for automation. Climate change is creating a need forconnecting renewable resources to the grid and deploying demandresponse programs. One option many utilities are considering toaddress these factors is the intelligent grid. As the intelligent gridmoves forward, spatially enabling the intelligent grid is becomingincreasingly important. Two key reasons that utilities need this spatialunderstanding are the distributed, yet connected nature of assets andpeople associated with the grid and the fact that the intelligent grid willrequire more personnel to have access to spatial information about thegrid, including customer care representatives, dispatch personnel,managers, executives, and field crews. Not only will more personnelneed to view spatial information, but as less experienced people jointhe workforce, they will need easier ways to visualize and think aboutthe grid. Given the spatial nature of the grid, spatially visualizing and

analyzing data can paint an even clearer picture of the grid and itsbehavior. Additionally, an intelligent grid will need more accurate and precise information about grid assets, including the location andconnectivity of devices, right down to the customer connection.

However, personnel often have difficulty accessing spatial informationbecause this information is siloed and spread throughout the company.Spatially enabling the intelligent grid and the broader utility does notmean that utilities must make substantial investments in newtechnology. Rather, utilities often just need to begin to better leveragetheir technologies. Examples include:

Implementing enterprisewide spatial data quality and integration

capabilities and policies Embedding spatial capabilities into everyday sources of

information, which could include Web-based access, so thatmanagement, executives, remote workers, and even customers canreadily access spatial information

Providing field personnel with the ability to directly update andcorrect spatial information

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Page 2 #EI215043 2008 Energy Insights, an IDC Company

IN THIS WHITE PAPER

This white paper looks at the value of spatial data and access to spatialdata in meeting the business needs of today's utility industry. Inparticular, this white paper discusses:

Key challenges facing utilities

How the intelligent grid can help utilities overcome thesechallenges

The role spatial information plays in the intelligent grid

Where utilities have fallen short in spatially enabling the intelligentgrid and other aspects of their organizations

How utilities can improve access to their spatial data

Recommendations for utilities on next steps in improving access tospatial data

SITUATION OVERVIEW

Before talking about the importance of spatial data, we must considerwhat spatial data is. Spatial data is simply data used to representpoints, lines, and areas on a surface. In most cases, the data relates to a physical location or geography, which is particularly true for utilitycompanies. This type of spatial data is more specifically known asgeospatial data. This document uses the term "spatial" so as not tolimit the types of spatial data utilities need to provide access to, but inmost cases, utility companies will be using geospatial data.

W h y I t I s I m p o r t a n t t o P r o v i d e A c c e s s t oS p a t i a l I n f o r m a t i o n

To help readers better understand why spatial data and access to thedata is important, this section reviews key factors shaping the utilityindustry and the role of the intelligent grid. The key factors discussedin the following sections are shaping the utility industry and drivingthe industry to more seriously consider the intelligent grid.

Increasing Capital Expenditure

With aging infrastructure and growing demand, utilities are increasingtheir capital investment. According to data filed with the U.S. Federal

Energy Regulatory Commission (FERC), utilities started to increasecapital expenditures for construction across generation,transmission, and distribution in 2005, and that trend continued into2007. More recently, Public Utilities Fortnightly editor in chiefMichael Burr stated that "The Fortnightly 40 companies spent more oncapex in 2007 than they earned from continuing operations. The utilityindustry's big build officially has begun." Increasing capitalexpenditure is also a strong driver outside the United States, especiallyin the growing economies of the Asia/Pacific region.


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2008 Energy Insights, an IDC Company #EI215043 Page 3

Climate Change

In terms of climate change, several U.S. states and regions alreadyhave voluntary and mandatory carbon cap-and-trade programs inplace, and a national mandatory cap-and-trade program for greenhousegas emissions is expected to be enacted by the new administration. The

European Union is already operating a mandatory carbon cap-and-trade market. Renewable portfolio standards (RPSs) are also on the books in many U.S. states, which would require increased use ofrenewable generation sources such as wind, solar, biomass, andgeothermal.

Reliability and Security

As part of the EPAct 2005, the North American Electric ReliabilityCorporation (NERC) became responsible for developing and enforcingmandatory grid reliability standards. Fines of up to $1 million per eventper day are possible. In addition, state regulators are also imposing finesfor failures to meet reliability standards. Also included in the NERC

standards are the Critical Infrastructure Protection (CIP) standards forcybersecurity. Although these security standards are in effect, they arealready under criticism by a number of federal agencies.

For gas utilities in the United States, the recent Distribution IntegrityManagement Program issued by the Department of Transportation(DOT) is driving additional needs for spatial data. Indeed, ininterviews with multiple U.S. utility companies, when asked aboutnew initiatives requiring access to spatial information, all of thoseutilities with gas distribution assets mentioned the new DOTregulations.

One of the most recent policy and regulator developments relative toreliability and security was the passage of the U.S. EnergyIndependence and Security Act of 2007, which included a section(Title XIII) on the smart grid. Although this legislation will helpimprove the organization and coordination of intelligent grid efforts,the bill lacks true incentives to push utilities and regulators forwardwith large-scale intelligent grid deployments. Many other countries,particularly in Europe, have enacted or are considering similar steps toincrease grid reliability and security.

Restructuring Rollback

As rate caps expire and some U.S. states roll back their restructuring

initiatives, some energy regulators are rethinking the regulatory modelto provide incentives for energy efficiency investments by"decoupling" utility sales from profits. Traditional rate-of-returnregulation focuses on setting prices (i.e., rates). Consumption-basedrates by nature link sales to profits the more energy a utility sells,the more money it makes. By decoupling sales from profits, theregulator tells the utility how much money it will be allowed to keep,on average, for every customer it serves, thus removing the incentiveto increase sales.


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The Aging Workforce

The utility industry in most developed countries is facing an agingworkforce crisis, with many utilities expecting half their workforce toretire in the next 510 years. Engineers and skilled technical and craftlabor pose the biggest problem because utilities depend on these

occupations to maintain a reliable system. This crisis raises issuesaround both labor replacement and knowledge retention. Most utilitieswant to hire fewer, but more productive replacement employees.However, current employees have extensive knowledge of companyassets and processes, which they must transfer to both existing andnew employees to achieve desired productivity goals.

I n t e l l i g e n t G r i d C a n H e l p U t i l i t i e s D e a l

w i t h T h e s e F a c t o r s

Aging T&D assets and mandatory reliability standards are pushinggrid reliability to the forefront. The aging workforce is causing ashortage of skilled labor and increasing the need for automation.Climate change is driving a need for connecting renewable resourcesto the grid and deploying demand response programs. One optionmany utilities are considering to address these factors is the intelligentgrid. As the intelligent grid moves forward, spatially enabling it isbecoming increasingly important. First, though, we need to define theintelligent grid.

What Is an Intelligent Grid?

Many terms are floating around today, but they all describe the visionof an electric T&D network that through the use of informationtechnology is "smart" enough to predict and adjust to network

changes. Therefore, an intelligent grid could recognize a potentialproblem, such as an abnormal operating condition, and communicatethis problem to a decision maker (i.e., computer) that wouldautomatically work to correct the problem.

Since many utilities today do not have this enhanced visibility into theirdistribution networks, accomplishing this vision requires that utilitiesimprove three basic technologies: communication networks, sensors,and analytics (see Figure 1). For example, say a utility has an outage onits distribution network. More network sensors such as smart meters collecting information means that a utility can better pinpoint a problem's location. Communication networks installed along the

distribution grid would enable these sensors to communicate this problem to the utility. Improved analytics can efficiently processinformation and automate responses to the problem such asdispatching the field crew closest to the area. These analyticsincreasingly rely upon an accurate and complete network data model toensure the analytics provide decision makers with actionableinformation.


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F I G U R E 1

B a s i c T e c h n o l o g i e s f o r t h e I n t e l l i g e n t G r i d

More sensors

Improvedanalytics

Bettercommunication

networks

Source: Energy Insights, 2008

Why Spatially Enabling the Intelligent Grid Is Important

Utilities need to not only understand their grid but also buildintelligence about their grid in a spatial context. Two reasons thatutilities need this spatial understanding include the distributed, yetconnected nature of the grid and the types of decisions that utilitieswill make as they gain more intelligence about the grid.

The electric grid is a network of distributed assets and personnel thatmust connect and interact with one another. Looking at how thesegroups spatially relate to one another provides a way for utilities tounderstand their complex interactions. These components include:

Distributed assets. To deliver electricity, each asset on the grid whether a transformer, meter, or substation component must

cooperate with other assets throughout the system. Assets may bemiles away from one another, but because of their connection, a problem with one asset can impact other assets upstream ordownstream from it. Therefore, it is important to understand notonly where a problem is occurring but also how that problem couldimpact surrounding assets along the network (or "connectedness").


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More intelligent grid assets. As the intelligent grid moves forward,utilities will install even more assets on the grid. From smart metersto distribution line sensors, these assets will not only provide moredetail about the grid's status but also require utilities to maintain and better understand their location, connectivity, and condition. Withmany utilities already piloting the deployment of intelligent gridassets, geographic information system (GIS) managers interviewedfor this white paper mentioned the need to model new devices suchas smart meters and sensors, as well as the need to manage a "thirdnetwork" the communication network supporting the intelligentgrid as significant upcoming challenges.

Distributed people. Along with distributed assets, utilities alsohave distributed personnel working on these assets. So utilitiesneed to understand how personnel spatially relate to assets andother field crews. Understanding these spatial relationships canhave important efficiency and safety implications for utilities. Forexample, crews need to know that they are accessing the asset that

has been disconnected from power, and dispatch personnel need tounderstand which qualified crew is closest to an emergency job.

Decision-Making Needs

Not only does the intelligent grid require utilities to install more assets, but utilities also need to collect more data about distributed assets,more efficiently analyze the data, and make better decisions based onthat analysis. Two types of proactive decisions are:

Very quick decisions (VeQuiDs). These types of decisions aremade in milliseconds by computers and intelligent devicesanalyzing complex, real-time data. Yet this intelligent grid vision

is still a ways off for most utilities especially in terms ofwidespread deployment.

Quick decisions (QuiDs). Many proactive decisions about the griddo not have to take place in milliseconds. Many utilities today canmake QuiDs or decisions to adjust to network changes in a timeframe of months, days, or minutes. Even though these decisionsare not extremely quick, they still enable utilities to predict andcorrect network problems instead of just reacting when the gridfails.

No matter how quick the decision, all of these predictive efforts arebased on the same thing: providing the decision maker with access to

good-quality data. Even though the goal of the intelligent grid is toautomate more decisions about the grid, people will still be theprimary decision makers for years to come. To make these decisions,the intelligent grid will require more personnel to have access tospatial information about the grid, including:

Customer care representatives

Dispatch personnel


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Managers

Executives

Field crews

These personnel may not be "modifiers" of spatial data, but they will

be "viewers" of the information. When asked about the number of staffwith access to spatial data, utilities interviewed in support of this white paper consistently replied that the number of users was expected toincrease from hundreds to thousands over the next few years.

Not only will more personnel need to view spatial information, but asless experienced people join the workforce, they will need easier waysto visualize and think about the grid. Given the spatial nature of thegrid, spatially visualizing and analyzing data can paint an even clearerpicture of the grid and its behavior.

Problems with Spatially Enabling the Intelligent Grid

Many technologies out there already help utilities understand the gridspatially, particularly GIS. Yet, these technologies, as they standtoday, cannot support the spatial needs of an intelligent grid. Assetsalong the grid are already connected, but the real problem withspatially enabling the intelligent grid is connecting people andtechnologies with the spatial information they need.

Traditionally, different solutions using spatial information reside indifferent departments throughout a utility. For example, a utility mayhave:

A GIS department that collects and tracks geospatial informationfor planning purposes

An engineering group that uses network analysis and design toolsfor making additions to the grid

A maintenance department that collects and stores assetinformation

A dispatch group that uses a separate mapping and routing system

As a result of different technologies sitting in different silos, utilitiesmay already collect spatial information but just don't make it readilyavailable across the company (see Figure 2). With this lack ofconnections, utilities cannot develop a rich picture of the grid and theinteractions between different components whether assets or field

personnel. For example, vegetation inspections are often performedwith helicopter flyovers. A system that allows the inspector in thehelicopter to note problem vegetation anchored to a specific locationwould make the deployment of work crews more efficient.


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F I G U R E 2

A S i l o e d A p p r o a c h T o w a r d S p a t i a l I n f o r m a t i o n

Data manually entered into different systems

Geographic

information

system

Networkanalysis

and design

Outage

management

system

Enterprise

asset

management

Work

management

Decision-

makerDecision-

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makerDecision-

maker

Field crews

Decision-makers haveaccess to different silos

of information

Indirect input ofinformation into systems

Systems operate

relatively independently


D i s t r i b u t i n g S p a t i a l I n f o r m a t i o n

T h r o u g h o u t t h e U t i l i t y

Given these challenges, spatially enabling the intelligent grid and the broader utility does not mean that utilities must make substantialinvestments in new technology. Rather, utilities often just need tobegin to better leverage existing technologies and personnel along withimproving their decision-making processes.

Realigning Spatial Technologies and Applications

Spatial technologies such as GIS and network analysis and designprograms, along with work and asset management programs, alreadyhave a layer of spatial information. To begin spatially enabling theintelligent grid, utilities need to realign this spatial information to provide a solid foundation of spatial data that personnel can accessthroughout the company and on different systems. Utilities need to

develop ways to begin connecting these systems and share spatial dataacross the company. For example:

Organizing spatial information in a way that enables utilities to provide access to consistent spatial information throughout thecompany and the ability to combine the data with other types ofbusiness information


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Embedding spatial capabilities into everyday sources ofinformation, which could include Web-based access, so thatmanagement, executives, remote workers, and even customers canreadily access spatial information

Providing personnel particularly mobile field crews with the

ability to directly update and correct spatial information

Vendor Efforts in This Space

Given the rapidly changing spatial needs of the utility industry, manyvendors are adjusting their offerings to help utilities realign theirspatial capabilities. Many vendors in the geospatial arena, such asAutodesk, are working on developing more utility-specificapplications. Still, many vendors are also focusing on taking spatialinformation and capabilities outside of the GIS or engineeringdepartment to the enterprise. Although some GIS vendors offerproprietary access to data, others are experimenting with open accessto data to enable many different applications to benefit from spatial

information. Database vendors such as Microsoft are providing moreuniversal access to spatial information.

Getting geospatial data into the hands of all sorts of employees at autility does have some benefits. For example, one telecommunicationcompany is involved in a reengineering project, replacing 4,500separate GIS workstations with one online GIS system. Engineersdoing network design and rights of way will have access to thissystem, along with maintenance engineers, call centers, anddispatchers. Altogether close to 50,000 employees will have the sameview of and access to spatial data. Significant cost savings derive from providing information to 50,000 employees that previously was

available to only 4,500. This will be especially attractive for greenfieldinstallations where an asset can be tracked from design to operation toretirement all on the basis of geographic coordinates. The key todemocratizing spatial data is to provide open access to thatinformation. One example of vendors working to build better access tospatial information is the Microsoft SQL Server 2008 and Autodeskintegration.

Spatial Capabil i t ies Added to Microsoft SQL Server 2008

Previous versions of SQL Server (2005 or earlier) did not explicitlysupport geospatial information. However, SQL Server 2008 can nowstore spatial information. This provides utilities with two key

capabilities:

By storing spatial data in relational tables, SQL Server 2008enables utility personnel to more readily combine spatial data withother kinds of business data.

Storing spatial data in one location enables utilities to integrategeospatial information into a variety of applications.


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Microsoft SQL Server 2008/Autodesk Integration

Autodesk is working with Microsoft to leverage the spatial capabilitiesof Microsoft SQL Server 2008 to break down the organization siloscontaining geospatial data, to enhance understanding of the grid, andto provide more people with access to information about the grid.

Autodesk Feature Data Objects (FDO) Data Access Technology,which supports interoperability between Autodesk geospatial productsand many other IT systems, now includes an FDO-based open sourcedriver that enables SQL Server to work with key Autodesk products,including (see Figure 3):

Autodesk MapGuide Enterprise, which can deliver spatial dataover the Web and via mashups with Microsoft Virtual Earth toreach consumers and personnel throughout the utility

AutoCAD Map 3D, which enables CAD and GIS users to workfrom one source of current, accurate spatial information

F I G U R E 3

A u t o d e s k a n d M i c r o s o f t T e c h n o l o g y S t a c k

Database

Microsoft SQL Server

Application/

Application ServerAutodesk MapGuide Enterprise

Application

Feature Data Object

API

Feature Data Object

API

AutoCAD Map 3D

ToolsAutodesk MapGuide

Studio

GeospatialMicrosoft Virtual Earth

BrowserKeyhole Mark-up Language

Transactions

Distribution

Publishing

Database

Microsoft SQL Server

Application/

Application ServerAutodesk MapGuide Enterprise

Application

Feature Data Object

API

Feature Data Object

API

AutoCAD Map 3D

ToolsAutodesk MapGuide

Studio

GeospatialMicrosoft Virtual Earth

BrowserKeyhole Mark-up Language

Transactions

Distribution

Publishing



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The strength of the Autodesk and Microsoft offering is that SQLServer 2008 provides the ability to carry explicit coordinates as a datatype. Once the coordinates are in the database, they can be accessedthroughout the utility, just through an SQL call. The FDO feature ofAutodesk provides an abstraction layer that lets spatial data from SQLServer 2008 and multiple other spatial data sources work consistentlywithin Autodesk. FDO is developed by Autodesk, but it is freelyavailable to developers and solution providers as an open source dataaccess technology. This makes integration simpler and also creates a"system of record" for the asset so that asset managers, maintenancemanagers, field staff, customer service representatives (CSRs), andothers can all use the same coordinates. This type of arrangement alsoreduces licensing costs.

FUTURE OUTLOOK

As the intelligent grid moves forward and utilities introduce moredevices and complex power flows on the grid, utilities will need betteraccess to information to make decisions about an increasingly complexset of distributed assets. In terms of spatial information, utilities willincreasingly turn to spatial information as a way to better understandcomplex grid interactions. More utility personnel will likely demandaccess to spatial information as they become more familiar with thevalue of spatial information through interactions with other consumer-based services from vendors such as Microsoft and others.

As a result of this increased demand for spatial information andfamiliarity with Web-based applications, utilities will likely looktoward Web-based applications and portals as a way to access spatialinformation and break down the geospatial silos. This will mean a

greater opportunity for mashups, where utilities can combine varioustypes of information such as asset location and real-time weather and view the information in a Web-based application such asMicrosoft Virtual Earth.

CONCLUSION

As utilities focus more on understanding the grid and more peopleneed access to information about the grid, access to spatial informationwill continue to become increasingly important. Utilities will need toconsider ways they can better distribute spatial information to their personnel and automated systems so that both can make betterdecisions about the grid.

All of these efforts are important for spatially enabling the intelligentgrid, but since people are involved in the success of these efforts,utilities need to ensure that people will use these technologies. Utilitiesneed to develop business processes that encourage people to look atspatial information when making decisions about the grid. Beyond justbusiness process change, although maps and other spatial displays areinherently more intuitive, utilities also must ensure that personnel are


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comfortable with seeing spatial information and understand theelements that make up a map through software interfaces that arefamiliar and easy to use.

Building stronger connections between spatial information sources notonly will allow for better decisions today but also will provide better

access for more advanced analytics in the future, enabling theintelligent grid of the future.

ABOUT ENERGY INS IGHTS , AN IDCCOMPANY

Energy Insights, an IDC Company, provides energy industryexecutives with research-based advisory and consulting services thatenable energy companies to maximize the business value of theirtechnology investments, minimize technology risk through accurateplanning, benchmark themselves against industry peers, adopt industrybest practices for business/technology alignment, make more informed

technology decisions, and drive technology-enabled businessinnovation.

Energy Insights is based in Framingham, MA, and operates throughoutthe world utilizing IDC's network of global facilities. IDC is theforemost global market intelligence and advisory firm with more than1,000 analysts in 110+ countries. IDC forecasts worldwide marketsand trends to deliver dependable service and client advice. IDC is asubsidiary of IDG, the world's leading IT media, research, andexposition company.

C o p y r i g h t N o t i c e

Copyright 2008 Energy Insights, an IDC company. Reproductionwithout written permission is completely forbidden. ExternalPublication of Energy Insights Information and Data: Any EnergyInsights information that is to be used in advertising, press releases, or promotional materials requires prior written approval from theappropriate Energy Insights Vice President. A draft of the proposeddocument should accompany any such request. Energy Insightsreserves the right to deny approval of external usage for any reason.

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Enabling Smart Grid