Does your Cloud have a Silver Lining ?
The adoption of Cloud in Grid Operations of Electric Distribution Utilities
Kieran McLoughlin
© 2014 IBM Corporation
One can tailor cloud delivery models to meet clients unique needs
Private cloud
Private cloud
On customer premise
Enterprise
data center
Customer
operated
Infrastructure
as a Service
Hybrid cloud
Managed private
cloud
On customer premise
Enterprise
data center
3rd
Party
operated
Platform
as a Service
Dedicated
private cloud
Hosted by 3rd Pty
Public cloud
Shared
(community)
private cloud
Hosted by 3rd Pty
Hosted by 3rdPty
Enterprise
Enterprise
3rd Party
hosted and
operated
3rd Party
hosted and
operated
Software
as a Service
Public cloud
services
Users
3rd Party
hosted and
operated
Business Process
as a Service
© 2014 IBM Corporation
The energy industry has unique considerations with a cloud approach
Energy providers are subject to tight regulations which govern
compliance in both data security and privacy
Security & Data
Privacy
Capital Recovery
Model
• Critical infrastructure protection
• Rules which govern Personally Identifiable Information (PII)
• Physical Security, User Access Control, Data Encryption and network
security
Many providers in the utility industry prefer capital expenditure
investment for their IT needs
• Many regulated utilities receive a rate of return on capital investment
Gradually changing regulations and market pressure will
increase cloud value and activity
Changing
Attitudes
• Regulators increasingly scrutinize rate cases
• Vendors increasingly moving to ‘as a service’
• LoB owners often seek solutions to technology needs outside of
corporate IT
© 2014 IBM Corporation
Grid operations system have the following characteristics
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Future
Forecast
Real-Time
Historic
Model & Analyze
Monitor
Grid
Operations
Customer
Operations
Maintenance
Operations
Control
 Process Automation
Grid management processes will be
automated to address complexity, speed
and greater efficiency
 Model & Analyze
Increased modeling and analytics
capabilities for historical analysis, real
time operations, forecast, planning and
risk assessment.
 Control
Hybrid management system with both
centralized and distributed control
functions
 Distribution Automation
Increased feeder and substation
intelligence and automation. IEDs
moving towards ‘Internet of Things’
 Monitor
More remote measurements from devices
added to the network monitoring grid
state, condition, demand and supply
points
Automate
The Distribution Network
EV
Meters
Roof PV
Customer
Crews
Feeders
Substations
DG
© 2014 IBM Corporation
Grid Operations applications range from mission critical to nonmission critical, from real-time to non-real time
SCADA
Can Cloud be of Value to Electric Utilities in the Grid Operations Domain ?
5
© 2014 IBM Corporation
The Large Utility, multiple Grid Operations Centers
Acting Thesis:

Utilities will increasingly see the benefit of a common and consolidated grid operations design featuring
common and consolidated design, software footprint and infrastructure. Business processes and rules
can be standardized. This is about efficiency and cost take out

Have one grid ops software footprint in a data center and the actual grids ops center have use of it under
an architecture to be determined

Deployment would be a private, on premise cloud OR hybrid cloud where dev test environments are
stood up in a private, off premise environment. Failover and backup in appropriate environments.

Benefits:
– Reduced overhead and administration costs through software standardization
– Reduced operational cost through higher utilization of existing infrastructure
– Reduce software run costs due to standardization
– Reduced training costs
– Cost reduction through common, cloud based dev / test
– Reduced time for change implementation through cloud based dev, test
Deployment Model: 1) Private, On Premise 2) Private, Off Premise
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© 2014 IBM Corporation
Mid-sized Utilities, Cooperatives and Growth Markets

Typically do not have the budget to access advanced capabilities of modern grid operations
capabilities (aDMS, OMS, mobile). Do not have the ability to continuously upgrade capabilities and
benefit from new releases. May not have the resources to support an on-premise grid ops solution.
Acting Thesis:

This is a relatively open market for advanced DMS capabilities. The right combination of capability,
standardization, and convenience will open doors of new opportunity.

May require some degree of customization for rules, configuration, but standardization in the software
capabilities and infrastructure capabilities. Or, more likely, a custom set to processes for a community of
customers (e.g., NRECA)

Deployment would predominately be a private, off premise cloud OR off premise, community model.

Benefits:
– Greater functionality at a lower cost
– Cost efficiencies offered by cloud and SaaS
– Benefit from new releases
– Likely improved security
– Benchmark functionality against other utilities
Deployment Model: 1) Private, Off Premise 2) “Community”, Off Premise
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© 2014 IBM Corporation
Utilities in Emerging Markets MEA
Typically minimal infrastructure and the utility has been privatized as part of a government restructuring of
the electric industry. No existing DMS capabilities therefore these are ‘born on cloud’ targets
Acting Thesis:

A SaaS model will be the best way emerging markets can acquire modern grid mgt capabilities

Completely standardized offering in it’s functionality, processes, rules and services. .

Deployment would predominately be community, off premise OR private, off premise.

Benefits: having access to basic up to advanced grid ops capabilities without the overhead, support
costs, etc.
Additional Thoughts
 We see this in Turkey and Nigeria at present, where these utilities have to have complete revamp and/or
new grid operating infrastructure. It is important to point out that Turkey is far advanced of a country like
Nigeria, where the grid is in poor state and there is a lot of diesel generation and private power plants
associated with industrial enterprises
Anticipated Deployment Model: 1) “Community”, Off Premise
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© 2014 IBM Corporation
Conclusion
 Cloud will have the most initial impact with Utilities in Emerging Markets,
followed by Mid-Sized utilities and then Large Utilities
 Utilities in Emerging markets will use Cloud just as they have done with
Wireless communications to springboard to the latest capabilities, and
take advantage of SaaS models to lower upfront capital investments
 All three types of utilities can use cloud to their advantage as an
additional ‘how’ to achieve their business and social objectives
 All Utility Industry application providers are working to see how best to
take advantage of cloud to offer new solutions and services
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© 2014 IBM Corporation