Internet of Things in power industry and subsequent market change

By Mikhail Andronov, RUSENERGOSBYT President

At the moment, strategic changes are taking place in Russia’s power industry. The main direction of the change is a shift towards digital management mechanisms, IoT technologies implementation, and development of new types of the digital power industry market.

Globally, the number of interrelated devices is expanding on a high pace. According to analysts’ assessments, their number will exceed 30 billion pieces by 2020. Smart devices may with no human involvement get connected to a network and establish a remote communication with other devices and DATA centers to transfer data for its storage, processing or analysis.

Implementation of IoT (Internet of Things) in power industry will dramatically change the rules of the game in the sector. There already exist some digital technologies for the power industry, such as smart grids, demand response, various user applications which help in managing energy consumption.

New technologies will help in significantly limiting energy losses while energy is transmitted from power generators to ultimate consumers, in ensuring a manifold improvement in power supply reliability, in redistributing energy flows in the best possible manner and thus reducing peak loads. Finally, that will allow an ultimate consumer to take part in the energy transmission and sale process thus turning a consumer into a prosumer, or a proactive consumer.

How will a fully digital energy system look like? As for the generating power stations, there will appear a possibility to monitor status of every site, forecast fuel supply, check needs for maintenance and repair, measure system load, etc.

Due to connection of a great number of decentralized sites, power supply grids will also face significant changes. Smart grids will allow integrating various power generation sites, including renewable sources of energy, and distributed generation. Renewable energy sources are yet insignificant in Russia whereas distributed generation makes just about 5.5% of installed capacity (a bit under 13 GW), but the other countries’ experience demonstrates the figure will only grow.

Digital technologies will enable end users to remotely manage their energy consumption and return excess energy back to the grid. Some examples can already be seen when settlements of smart homes are built where inhabitants are able to save a lot of energy but also to generate it at their own renewable energy sources and then sell to other consumers.

In my view, new technologies are of special significance for Russia with its vast centralized power supply system including 2.5 mio kilometers of energy transmission lines, some 500K transformer plants, 700 generating stations of over 5 MW. Still, the IoT is only at an initial stage of its implementation in Russian power industry.

Smart grids require supply of energy from a variety of distributed sources, ranging from huge nuclear power stations to small home plants of renewable sources of energy. Implementation of smart metering systems will help collecting information on all energy sources within the system in order to remotely operate them and get all metering values. A smart distribution model would allow terminating some inefficient power generation and partially resolving the problem of surplus production of generating capacities. Besides, smart meters would help consumers in saving resources through employing differentiated (daytime and nighttime) tariff rates and remote operation of the devices.

Nevertheless, the coin has a reverse side as well. From the security viewpoint, the data transmitted among the IoT devices, is most vulnerable. In case these technologies are applied to such a strategically critical industry as power supply, the information security issue will be of utmost importance.

Nowadays, there is just one way of disengaging a transformer plant, namely, by visiting the site and activating a circuit breaker. But what will happen if the entire power supply system becomes an interconnected network which can easily be tapped to by a hacker from overseas? We are yet unready to ensure an adequate level of security in that respect. And that will not be possible until laws on full localization of equipment for Russia’s smart power industry are enacted.

Besides, important issues are the lack of a single protocol and generally accepted standards of interreaction among IoT devices, the growing energy consumption, and society’s psychological disinclination to accept new technologies which will monitor people’s lives on a 24/7 basis.

It hence may be concluded that the smart power industry development in Russia will be impossible unless there is a comprehensive approach focused at amending legislation towards broader democratization in the operating environment for producers at all levels, and opening opportunities for Russian innovative equipment manufacturers.