Impact of Industrial IoT (IIoT) on Global

Power Industry

A Frost & Sullivan Briefing

February 2020

2

Exponential Growth is the Common Strategic Imperative for Organizations

Geo-Political Change

Transformative

Mega Trends

Diversified Organization

Vision & Mission

Competitive

Intensity

Innovative

Business Models

Industry

Convergence

Technology Disruption

DISRUPT

COLLAPSE

TRANSFORM

Customer Value Chain,

Dynamics & Application

3

Frost & Sullivan’s Research Framework Innovation Kaleidoscope

Industry

Mega

Trends

Disruptive

Technologies

Prepare

for the

Future

4

Mega Trend Universe Transformative, global forces that define the future

Image Source: Flaticon.com Source: Frost & Sullivan

Top Technology

Buzz For The Future

Examples

Blockchain I Quantum

Computing I

Connected Vehicles I

Sensorization of

Devices | Wearable

Devices | Digital

Currency | Personal

Robots | Flexible

Electronics | Powered

Exoskeletons |

Nanobots I Bio-

Batteries I

CONNECTIVITY &

CONVERGENCE

Augmented Reality/

Virtual World

Big Data

Connected Living

Space Jam

3D/4D Printing

Machine Learning

Quantum

Computing

Neuromorphic

Computing

COGNITIVE ERA

Integrated Omni-

channel Marketing

New Retail Logistics

Models

Interactive Stores

Digital Kiosks

BRICKS &

CLICKS

SMART IS THE

NEW GREEN

Smart Cities

Smart Technologies

Smart Products

Gen Y

Reverse Brain Drain

Heterogeneous Society

She-economy

Middle Class

SOCIAL TRENDS

Co-creation

Circular Economy

Personalization &

Customization

Sharing

value for Money

NEW BUSINESS

MODELS

INNOVATING TO ZERO

Zero vision at work

Carbon Neutral Cities

Zero target by Cities

ECONOMIC TRENDS

Future of resources

Africa as the Growing

Market

Next Game Changers

URBANIZATION: CITY

AS A CUSTOMER

Mega Corridors

Mega Cities

Mega Regions

Mega Slums

Transport Infrastructure

Deep Sea Mining

Future of Water Infrastructure

High-Speed Rail

FUTURE OF INFRASTRUCTURE

DEVELOPMENT FUTURE OF ENERGY FUTURE OF MOBILITY

Micro-Mobility

Autonomous Cars

Car Sharing

Telematics Based Insurance

Integrated Mobility

Connected Cars

Digital energy

Energy Harvesting

Smart Grids

Renewable Mix

Energy Storage

Virtual Power Plants

Non Invasive

Surgery

Mind, Body, Soul

E-Health, M-Health

Gene Therapy

HEALTH WELLNESS

& WELL-BEING

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IIoT Fundamentals—What Does IIoT Bring to the Table? IIoT provides optimization by leveraging on digital technology. This includes the aspect of digital security as well.

Source: Frost & Sullivan

Augmented Reality (AR) and

Virtual Reality (VR)

Big Data

Connectivity

Edge Intelligence

Sensors 4.0 Cyber Security—End to End

Biometric Security

Surveillance

Emerging technologies in the IIoT

space

Emerging security themes in the IIoT

space

The technological aspect forms the first

backbone of IIoT, as multiple

technological concepts are combined

to achieve capabilities and,

consequently, efficiency.

Technological

As the transition from analog to digital

takes place, security becomes

fundamental to protect information.

Cybersecurity and physical security,

therefore, will become pivotal as the

adoption of IIoT surges.

Security

When a process consisting of different

digitally tracked assets is analyzed to

derive actionable intelligence, it gives

rise to new-found capabilities.

Capabilities

New-found capabilities

Remote Monitoring

Predictive Maintenance

Energy Efficiency

Data Accessibility and

Gathering

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IIoT Fundamentals—Bringing Different Digital Technologies Together A combination of hardware and software brought about by custom requirements is what makes the concept of IIoT an

opportunity not to miss.

Source: Frost & Sullivan

Bu

ild

ing

Blo

cks

Valu

e

Gen

era

tio

n

Through advanced

sensing, accessibility to

machine data will

become easier than ever

before. This can be

leveraged on by

manufacturers to

analyze and understand

machine performance.

Big Data can help solve

patterns and,

consequently, provide

relevant information

where analysis of data

holds significant

potential for a process.

By shifting computing to

the edge, processing

reduces and creates the

flow of processed data

directly from the edge or

data source. This

eliminates any need for

additional processing of

data.

Augmented reality can

help the user to

experience current

reality more effectively,

while virtual reality can

expose the user to a

completely different

reality from his current

position.

An

cilla

ry

Blo

cks

Connected

Drones Industrial Cloud Connectivity

Artificial

Intelligence

Sensors 4.0 Big Data Edge Intelligence AR and VR

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The Core Elements of Digital Transformation The digitalisation of energy technology and systems is generating new customer centric business models leading to

democratisation of energy

Source: Frost & Sullivan

Traditional

World: From …

Digital

Future: To … Future of Energy

Products

Analog

Closed

Compete

Niche

Vendors

Own

Individually Optimised

Services & Outcomes

Digital

Open

Collaborate

End-to-End

Partners

Share

Overall Optimisation

Savings as a Service, performance

contracting

Smart grid, demand response,

automated trading

Open innovation, co-creation,

compatibility

Partnership, collaboration,

skill sharing

Integrated energy solutions, generation

optimisation

Digital platforms, managed services,

personalisation

Energy sharing, peer 2 peer models,

democratisation

Business Outcomes, Smart city, Society

5.0

Transformation

Enablers

Digitisation

Data

Connectivity

Artificial Intelligence

Cloud

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Business Challenges Faced by Power Utilities Conventional forms of generation are being directly challenged by renewable energy, and a declining electricity demand trend is

adding to their woes

Source: Frost & Sullivan

Challenge About Threat Level

RoI Issues

Energy utilities are facing a threat of decreasing economic return due to a combination of factors.

These include, weakening demand for power, competition, certain electricity market obligations,

and lack of inhouse innovation.

Weak Demand

Organisation for Economic Co-operation and Development (OECD) countries are facing a

situation where the demand for power has been stagnant or decreasing, a clear negative for

energy utilities operating from the OECD region.

Competition

Threat from competition exists in power generation, which is illustrated by the decline in orders for

conventional generation turbines, owing to the flourishment of renewable energy across the globe.

Market Challenges

Certain power generation markets are quite challenging to sustain owing to enforcement of

regulations, one of the factor which energy utilities ought to tackle.

Lack of Digital

Innovation

Lack of digital innovation in power generation utilities is not a negative but puts them at a

disadvantage in the longer run, as they are missing out on cost optimization off running their

power plants.

1 2 3 4 5

High

1 2 3 4 5

High

1 2 3 4 5

High

1 2 3 4 5

High

1 2 3 4 5

Medium

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Where Can the IIoT Concept be Applied in the Power Sector?

Source: Frost & Sullivan

Power Generation

When it comes to making a power plant smarter, connected devices that have the capacity to monitor, analyze, and provide useful information with minimal maintenance to plant operators, will be interesting from their standpoint. Proof of future economic incentive to do so must be showcased by solution providers. 1

Consumers

The advent of smart metering and other smart home based energy products offers retail-based IIoT solution providers a ripe proposition to target at.

3

Consumer Applications

Electrification of transport and distributed energy provides IIoT solution providers an opportunity to investigate, plan, and develop solutions, as the retail landscape continues to evolve.

4

Transmission and Distribution

IIoT-based solutions that help in the maintenance of transmission and distribution lines with minimal manual intervention is likely to be interesting, as it reduces manual oversight but increases the overall efficiency of the maintenance process by continuous monitoring.

2

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How Can IIoT Help Tackle These Challenges? Power plants, imbibed with digital capabilities, supported by a combination of advanced hardware and software, will lead to

digitally agile, flexible, and highly efficient power plants in the future.

Source: Frost & Sullivan

Power Plant 4.0, 2018–2030

4.0 Hardware

• IoT Application

• Enterprise Application

• Middleware

• Device Management Platform

• Application Enablement Platform

• Network Management Platform

• Embedded Operating System

Software

• Sensors

• Scanners

• Transceivers

• Displays

• Gateways and Monitors

• Robotics and Drones

• Wearable's

• Automated Systems

Combined Approach

Agile digital mechanisms designed for

monitoring and analyzing power plant

equipment are installed across the plant.

Digital Agility

Better ability to respond to flexibility

needs of the electrical system due to the

support provided by digital systems

installed across the power plant.

Flexibility

The potential efficiency range of 65% to

85% of plant operation is enabled due

digital systems.

Efficiency

Plant Capabilities

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Source: GE; Frost & Sullivan

Case Study— Flexibility and Cost Savings at Irish CCGT Plant The case for plant optimization needs to be addressed by utilities, as they stand to save on

opportunity costs.

Image Source: Pixabay

Key: APM—Asset Performance Management

Whitegate CCGT Plant Smart Sensor

Based in Cork, Ireland, Bord Gais’s Whitegate gas combined-cycle power plant provides 10% of the power to Ireland. With

increase in renewable power generation, it is necessary for the on-demand capacity of this plant to be available. This has

created a case for continuous monitoring of the plant to prevent any downtime. Challenge

Hardware Data Generation Intelligence

Throughout the plant, a total of 141 sensors

have been placed to monitor the hardware.

These sensors transmit hardware

information data to GE’s APM platform

where data is collated and is analyzed to

identify intelligence and provide

recommendations.

Based on recommendations,

representatives and engineers of Bord

Gais take appropriate actions in a timely

manner.

€1.22 million of cost has

been avoided as a result of this

implementation.

Two way

communication

Notification

to operator

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Source: Emerson Automation; Frost & Sullivan

Longview coal power plant in the US has been facing challenges with regard to operational efficiency that posed a threat

to its ability to provide continuous power supply to the grid. Challenge

Case Study— Operational Efficiency Improvement and Stable Base

Load at Longview Coal Power Plant through Digitalization

Emissions

Boiler Mills Fuel Supply

Management

Cooling Tower

Rotating Assets

Accessories

Steam Turbine

Generator Electrical

Implementing automation and devising new architecture has

improved the overall efficiency by 15% to 20% which is a positive.

Throughought the plant, existing controls were replaced with

fast-track controls.

Hardware Controls

Emerson devised a new automation system architecture and made

efficiency improvements, both hardware and software wise, to

existing plant operation strategies.

Automation Architecture

Efficiency

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Source: Frost & Sullivan

Can IIoT Help in Making T&D Grids Smarter? Driven by a combination of factors, such as distributed energy, smarter grids, and asset optimization, transmission and

distribution will require efficient co-operation between IT and OT for optimal functioning.

Image Source: Pixabay; Siemens

Distributed Energy Smart Grids, Including

Micro Grids Asset Optimization

Increase in the number of

distributed assets that require grid

connectivity

Enables widespread real-time

communication of data across the

grid

Makes T&D assets function smartly

and efficiently

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Source: Frost & Sullivan

Frost & Sullivan’s Approach to Framing an IIoT Solution for T&D An effective end-to-end approach is essential to monitor transmission and distribution infrastructure. This also requires the

flexibility to monitor separate equipment that are a part of the network.

Challenge End-to-end Monitoring

(ETE) Line Monitoring Infrastructure Monitoring

Sub-network

Monitoring

Approach

Starting from point A

(generation plant) till the

last-mile endpoint B (distribution

substation), the entire line of T&D

infrastructure is monitored using a

combination of IIoT-based solutions.

It involves monitoring of

transmission lines through

IIoT solutions. This involves

monitoring multiple nodes

between point A and point

B.

It involved monitoring of

transmission infrastructure (e.g.,

transformers) through IIoT solutions.

This involves monitoring multiple

nodes between point A and

point B.

It involves monitoring of micro-

grids and networks that

consume power locally, in

addition to centralized power.

This involves monitoring of

nodes connecting point A and

point B.

Aspects

Hardware Deployment:

Deployment of sensors and communication devices at key strategic locations

Analytics:

Deployment of analytical infrastructure to analyze incoming data

User Platform:

Devising a user platform and interface for the end user to process information and act on it

Cybersecurity:

Devising a cybersecurity strategy in order to keep the assets protected and invulnerable

15

Source: MIR Innovation; Frost & Sullivan

Case Study - MIR Innovation and New York Power Authority (NYPA):

T&D Inspection and Maintenance Leveraging advanced robotics and technology to analyze and monitor transmission and distribution assets.

Key: 1. MIR Innovation is the marketing arm of Hydro Quebec. Product research and development is undertaken by Hydro-Quebec Research Institute.

2. NYPA is evaluating LineScout and is considering licensing.

The New York Power Authority, is the largest state

public power organization in the US. It operates more

than 2,253 circuit km of transmission lines.

MIR (stands for maintenance, inspection and

robotics), a subsidiary of Hydro Quebec, specializes

in efficient electrical utility asset management by

employing technological innovations.

Product Overview

Name LineScout

Description A robotic platform designed to inspect and analyze overhead transmission

lines remotely

Scope High voltage transmission and distribution lines

LineScout in operation

Image Source: MIR Innovation

In addition to LineScout, MIR Innovation offers various solutions, such as LineRover, LineCore, and

Drones, in the same segment, indicating that the company is entrenched in robotic innovations that

manage and monitor electrical utility assets.

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Source: Frost & Sullivan

How is the Electricity Retail Landscape Shifting? Surge in uptake of electric vehicles, continued rollout of smart meters, energy contribution from the demand side, and a smarter

grid, together, are setting the groundwork for the future’s electricity retail landscape.

Electrification of Transport Smart Metering

Demand Response Grid Intelligence

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Source: Frost & Sullivan

Electrification of Transport

There has been an increase in electrification of transport year on year. Frost & Sullivan forecasts 86 million new passenger electric vehicles to be on road between 2019 and 2025. This means that its impact on grid supply and demand is likely to increase step-wise, proportional to the increase in EV fleet size globally. Additionally the amount of EV-related infrastructure and management solutions that are required to enable the uptake have to be considered. 1

Demand Response

Demand response is likely to play an increasing role in balancing the electricity system with bi-directional flow of electricity starting to be the norm. With peak shaving and cost reduction being the aim, the market for demand response is increasing year on year. This presents an opportunity for grid-based analytical solution providers to showcase their capabilities leveraging on IIoT. 3

Grid Intelligence

With the trend of smart grids, electrification of transport, and demand response, the importance of grid intelligence becomes a fundamental necessity to efficiently manage the distribution system and identify opportunity areas. Therefore, utilities are increasing their focus on grid intelligence solutions.

4

Smart Metering

With European policy aiming to achieve a smart meter penetration rate of 80% by 2020 and the US heading for 100% penetration rate by 2025, the case for improving grid infrastructure and the focus on reducing non-technical losses is apparent. Smart metering also means that the consumer’s consumption data can be tracked and leveraged on as fit, which is a key positive.

2

Shifting Electricity Retail Landscape The impact of the following trends on the electricity distribution system will be significant toward 2020 and beyond.

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Charging time

Power consumption

Charging station occupancy

Number of charging ports

Amount of time the vehicle

is connected

Frequency of

charging

Electrical asset health

Electrical network

monitoring data

Owner cash

flow data

Source: renewz; Frost & Sullivan

Case Study—IoT-enabled Charging Station: A Data Hub A number of data points in a charging station can be tracked and analyzed, giving rise to a hub of intelligence during the

interaction between the consumer and the charging station.

IIoT in Power: Key Charging Station Data Metrics

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Source: Frost & Sullivan

Digital Energy Innovation Hotspots The highest intensity of innovation is focused on leveraging IoT technology across the energy ecosystem

Generation Trading

Transmission

& Distribution Retail Consumption

Big Data, IoT,

cloud, AI &

machine learning

Connection &

integration

Cyber Security

New business

models

Customer

engagement

tools

Energy Cyber Security

Predictive Maintenance Trading Optimisation

Autonomous Grids Tariff Optimization

Active Energy Management

Storage Smart Metering

Renewables Integration

VPP

Grid

Optimization

Demand Response

Distributed Energy

Automated Trading Micro-

Grids

Peer to Peer Models Electric Mobility

C&I Energy Optimisation Home Energy Management

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Source: Frost & Sullivan

What Should be the IIoT Approach Strategy for Energy Utilities? The business case to implement the Industrial Concept of Things needs to be addressed, as this is a clear opportunity that

needs to be capitalized upon.

Business Case for Digital

Transformation

Adopting A Methodology

Aspects of IoT Coverage

Asset Pooling

Maintenance

Monetization

Identification of Business Case

Presence of a clear business case in asset

sites that are yet to implement any form of

digital transformation

Technology, Security and Capabilities

Monitoring existing hardware through smart

devices, collating and analyzing data,

deriving intelligence, IoT network—security

protected

Operational Maintenance

Maintaining operational supremacy by

consistently carrying out maintenance

activities based on IoT recommendations

Decision Making

Single/multiple solution providers,

application/platform development, approach

to data security and maintenance

Scaling

Scaling the implementation of a single

working solution for an asset to multiple

assets forming a portfolio

Identification of Parties

Identifying parties that are interested in

monetizing data for enhancing economic

return

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Ravi Krishnaswamy

Email : kravi@frost.com

www.frost.com