Utilities face a confluence of challenges as they look to preserve grid reliability while adding new energy resources and modernizing their networks. Rising costs, manufacturing capacity and a workforce shortage are just some of the forces at work. Digital solutions offer a path to a safer, more efficient, more reliable grid, but despite the benefits seen in other industries, the power sector has yet to fully realize the potential that digital offers.
No-Go Status Quo
Optimizing utility operations and maintenance (O&M) spending is vital to make the most of their budgets, and while some companies—typically larger investor-owned firms—have invested in condition-based maintenance schemes, many more continue to rely on time-based practices. This situation must change.
To understand why, consider a study by NASA and the US Navy that found that 82% of electrical asset failures were completely random; only 18% could be attributed to the age of the equipment. That means that a time-based approach is only appropriate 18% of the time. Manual inspection of equipment also requires workforce mobilization and increases safety risks, and traditional paper-based processes are slow and introduce the risk of errors. The same concerns arise during storm response when utility crews rely on incomplete information and customer phone calls to identify and address recovery needs.
It Starts with Monitoring
Most modern components like breakers and reclosers are available with built-in sensors. Bolt-on upgrades are available for most older gear as well. These devices detect and report key telemetry data such as, real-time equipment status and even environmental metrics like temperature and humidity.
The key to turning this data into actionable intelligence lies in analytics. ABB’s experience has shown that condition monitoring devices can track up to 70% of the most common failure causes, such as loose connections, environmental conditions, faulty insulation and defective mechanisms. A condition-based asset management strategy leverages data to decrease maintenance time and frequency by up to 30%, helping achieve a 40% OpEx cost reduction compared to a time-based approach. (source: ABB data)
Predictive analytics can also help grid operators understand when an issue is likely to occur and what is likely to happen before it does. Utilities can then prioritize maintenance activities based the likelihood of failure and the criticality of a failure if one occurs. Digital solution also support field crews by automating responses to routine incidents, and if the utility does need to mobilize, the field crew knows what to expect and be prepared for before heading out.
More recently, utilities have begun to use augmented reality (AR) to bring expertise into the field virtually. Crews can show experts and engineers what they’re working on and get immediate support via a smart phone or tablet.
What’s the Hold-Up?
A March 2023 report by McKinsey found that when utilities apply digital solutions like AI, machine learning (ML), and analytics, they realize:
- 25% to 30% field productivity improvement from AI-powered scheduling
- Up to 80% capital reallocation based on ML insights in asset health
- More than 30% improvement in reliability and resiliency within existing spend levels
So, why haven’t more firms adopted digital? A 2021 study by Ernst & Young offers some sobering findings. For example, while many utilities have invested in digital systems, they don’t necessarily have the expertise to leverage them. In fact, 73% of respondents who said they plan to adopt VR/AR — and 38% of the organizations that are already using it — say that they do not have the skills necessary to leverage the technology. E&Y found comparable results (30%) for AI and machine learning.
One major US utility, like many others, has turned to outsourcing, with 80% of new capital projects being completed by outside firms versus 20% just five years ago. The size and number of projects remained roughly the same over the period, but growth on the network occupied much of the internal teams’ bandwidth.
So, the industry is experiencing a skills shortage at the same time it is grappling with load growth from new sources like data centers and EV charging. In fact, executives at a recent Edison Electric Institute conference were in broad agreement that their networks could expect demand growth of two or three times today’s levels by 2045.
To meet the challenge, a combination of recruiting new talent and training and up-skilling mid-career workers is the ticket, but here utilities find more obstacles. Organizational agility, resistance to change, competing priorities—these will be familiar to anyone trying to affect an organizational shift.
Utilities need to hire more trainers and digital experts, and they need help in developing curricula and assessing employees’ progress. It’s also important that digital technology is intuitive, like the consumer electronics and apps utility workers are accustomed to using in their personal lives. With as much as 60% of the utility workforce estimated to need re-skilling, learning curves need to be as short as possible.
A Mandate for Digital Solutions …and the Resources to Use Them
Utilities must invest in training and re-skilling their employees to ensure their digital investments produce the anticipated results, but automation can’t do it all. Utilities will still rely on humans in the loop. Digital tools allow workers to focus on value-added tasks and less on repetitious manual work.
The industry must also ramp up its recruiting efforts aimed at younger workers. Gen Z employees arrive already fluent in digital technologies, and they expect to work with similar tools when they enter the workforce. Organizations that invest in digital will be more likely to attract (and retain) these workers.
Utilities are competing not just with each other but every other industry seeking to apply digital technology. It is therefore essential that the industry move decisively to address the skills shortage, and to choose the best digital tools, for example those based on open architecture to ensure interoperability between components. Making these investments now—both in technology and culture shift—will position the industry to manage its myriad challenges well into the future.
Mike Hoppe is ABB’s U.S. Product Marketing Director of Digital Solutions. His work focuses on helping customers achieve sustainability through innovative digital solutions and driving business growth through creative strategy and execution.
