M2M is nothing new to utility companies, which have been using the technology since long before the term gained prominence. Today, these same companies are at the forefront of adoption with an eye on the future.
For the vast majority of public and private utility companies, M2M must seem like a late arrival to a party that’s already started. Power-generation companies, among others, have been moving forward with M2M technology for quite a while and many are showing solid results for having done so.
According to Ray Fasnacht, director, strategic product and business development, Sierra Wireless Inc., www.sierrawireless.com, Richmond, B.C., "The need to communicate to remote infrastructure is not new to the utility industry. Utilities have had telemetry/SCADA (supervisory control and data acquisition) systems and automated metering solutions deployed for many decades, long before data networks, as we know them, came into being".
He adds, "Host systems have been communicating with remote infrastructure over wire lines (leased and dialup) for many years. Furthermore, utilities were among the early industry adopters of wireless communications solutions when they became available."
With standard protocols and off-the-shelf hardware, computer-networking technology has created a major challenge for utilities, Fasnacht believes.
He says, "The opportunity is to enable realtime communications to remote and unmanned places previously unreachable, resulting in more efficient operation and improved customer service the challenge is enabling the legacy infrastructure to communicate over TCP/IP networks."
Fasnacht finds the factors driving adoption of advanced M2M technology include:
- Increased compliance requirements by regulatory agencies.
- Increased demand for realtime energy management and load shedding.
- The need for redundant connectivity to critical infrastructure.
- A desire to improve customer service outage isolation and notification.
- And on-demand disconnect/reconnect.
"Utilities are very cautious, but the returns in both cost savings and operational efficiencies are compelling enough for them to be early adopters of new communications options," Fasnacht admits.
Guiherme Spina, CEO, V2 Telecom, www.v2telecom.com.br, São Paulo, Brazil, adds, “It’s no surprise that utilities are among the early adopters of machine-to-machine technology.
“Disruptive technologies have different impact levels in different business segments, and although they could be used in almost all economic models, they can introduce profound changes in strategy and business models in certain verticals. The Web changed the media and entertainment industry ecommerce changed the retail industry and M2M is changing the utility industry.”
By Spina’s thinking utilities have three fundamental characteristics that make it ideal for M2M: geographically distributed assets, failure-sensitive operation, and out-of-premises cash registers.
“Therefore, utilities benefit from reduced detection, decision, and action cycles that M2M provides.” He explains, “Water utilities can more quickly discover leakage and repair it. Electrical utilities can detect energy theft and eliminate it faster. All utilities can offer ‘time of use’ billing and apply demand response initiatives.
“At the end of the day, M2M technology can provide utilities with reduced operational costs due to faster maintenance action, better customer service due to faster failure recovery, and better ROI (return on investment) for shareholders due to faster fraud elimination.”
Spina adds, “Indeed, M2M allows online, realtime contact with each service delivery point, expanding the utility company storefront to each customer’s doorstep.”
But why has M2M caught on so heavily in this segment? “The pervasiveness of the Internet and wireless networks is the key,” claims Steve Hodges, president, M2M Communications Corp., www.m2mcomm.com, Boise, Idaho.
“There was time when utilities didn’t trust a product that relied on ‘that new Internet thing.’ Now that it’s become a way of life, they use it everyday and it’s no longer an issue,” he says.
“There was also a time when a utility could successfully argue that it was more reliable or cost effective to design and maintain its own private wireless network. The wide coverage and reliability of the commercial cellular networks has completely changed that.”
AMR’s Predecessor
SCADA systems have been around for a while. What’s new, perhaps, is the realization that these large systems are also M2M. Larry Simpson, president, Everwild Enterprises, www.everwildenterprises.com, Webster, N.Y., recalls, “SCADA is really M2M and it’s been around for 30 years. The utility industry (led adoption) because their assets are distributed—be it generation, transmission, distribution systems or even customers—they’re all over the place.
Simpson points out utility companies really were the early adopters of SCADA, which has driven that industry forward. “If you look at AMI (advanced meter infrastructure) or AMR (advanced meter reading), I don’t know how many meters are connected worldwide, but it’s certainly in the hundreds of millions, so they’ve been in the forefront of doing M2M when compared to any other industry.”
According to Simpson, the eventual standardization of today’s new technologies will encourage a broadening of application offerings. “As cost comes down and technology infrastructure is put in place, like Internet, paging, cellular, etc., new applications are opening up and the utilities are familiar with the process of being able to connect with remote assets or data points like a meter.”
Speaking of SCADA, Pam Ferguson, M2M solutions manager, Rogers Business Solutions, www.rogers.com/business, Toronto, Ont., notes, “Utilities can employ a number of M2M solutions in their operations, which can include the use of wireless communications for smart meters, wireless SCADA monitoring applications, plus workforce automation tools. There are some utility customers that have utilized some or all of these. However, wireless communications for smart metering holds the greatest potential for these organizations.”
Ferguson adds, “Ultimately, this can enhance the utility’s ability to accurately bill for power consumption on a time of day basis, thereby shifting load consumption to off-peak periods and encouraging conservation with customers. She believes M2M’s potential goes well beyond just metering. “Some potential future uses of M2M applications by utility customers may include wireless asset tracking devices for the utilities, fleet vehicles or mobile assets, wireless safety tools for lone worker situations or wireless remote security and video surveillance of essential power distribution assets,” Ferguson explains.
“These M2M applications are all possible today, however adoption of these technologies will be dependent upon each individual utility, though may be encouraged or required through government mandate.”
M2M Communication’s Hodges says, “There are two categories of utility applications, those that are related to automated system operations and those that are not. Automated assets such as line switches, reclosers, and substations should be networked to the utility’s existing SCADA system.
“A good example of this is Telemetric’s SCADA-Xchange system. This allows the utility operators to monitor and control the distribution system from one point. There are also systems that work in a more independent manner. An example is demand-side management (load shedding). In this case, a standalone, Web-to-wireless system is preferable, due to its optimized feature set and ease of use.”
What emerged within the industry were two catch phrases: 'smart grid' and 'advanced metering infrastructure'. Christopher Irwin, director of products, Eka Systems Inc., www.ekasystems.com, Gaithersburg, Md., explains that these developments were the result of utility companies using M2M to solve logistical problems in both operations and data collection.
"Both initiatives are characterized by automation, sensing, and overwhelming numbers. Both initiatives also suffer from the same dilemmas: a one-owner network of massive proportions, almost no human attended elements, highly varied networking topographies and the need for near realtime performance," says Irwin.
"There are probably 160 million electricity meters in the U.S., and 100,000 substations, with each substation comprising dozens of automation candidates. Any amount of human intervention in these operations would ultimately limit the scale of a successful network."
He goes on to say, "The benefits of M2M are great and small. There are new federal standards for power quality. Utilities that implement smart-grid technologies can more actively control and monitor the health of the grid and meet new and future goals.
Irwin emphasizes capabilities will only become more advanced as more of the industry progresses to technologies such as AMI. "On the grand scale, AMI allows utilities to actively curb energy use during peak periods," he says.
"During hot days, for instance, the power company could send a command to a half million smart thermostats in participating households to raise the temperature by five degrees. Such 'demand response' technologies not only save money, they reduce the need for new generating plants altogether. M2M technology on the AMI side also allows for more sophisticated rate structures that more accurately reflect what the utility pays for energy, unprecedented resolution in outage notifications, remote disconnect/re-connect, on-demand meter reads, tamper detection, and many other features."
One other area that M2M can be employed with significant success is in maintenance. Bill Lawler, co-founder and vice president, Intelligent Automation Corp., www.iac-online.com, San Diego, Calif., notes, "Most maintenance programs typically perform maintenance at regularly scheduled intervals, usually in terms of hour usage. The longer maintenance intervals are supplemented by visual and/or hand held vibration data-collectors that perform checks on either on an hour usage or calendar basis. Many machine dynamic components have retirement 'lives' that are also based on hour or calendar time.
"Dynamic components 'lives' are usually conservatively estimated in order to reduce the possibility of a catastrophic failure. Thus, dynamic components are often replaced regardless of their actual condition. These maintenance practices, although effective, cost machine availability, time, and money."
He adds, "The primary benefits a utility company can expect to see by utilizing M2M technology are a reduction in performing routine, time-based maintenance and inspections, reduction in unscheduled maintenance, performing maintenance 'on-condition,' planned maintenance versus reactive maintenance—that is, large dynamic range enables the early detection of machinery faults—and elimination of hand-held data collector philosophy and associated expenses. M2M technology will allow utilities to plan maintenance based on the machine's actual condition, instead of the just using the calendar."
Beyond Metering
Real-world applications of M2M can be found everywhere. Spina from V2 Telecom points to one situation saying, "Ampla, an electrical utility that services 2.2 million customers in the Rio de Janeiro area, adopted the concept of a single M2M platform with the intention to reduce energy theft and prevent fraud.
According to Spina, the utility is seeing benefits in all areas of the company. He explains, "A business-intelligence system can easily correlate data collected via the (machine-to-machine) platform from a large client meter that indicates no energy consumption, with the data of the OMS (outage management system) to discover if there were an outage at that area, with the data from the CIS (customer information system) to asses the relevance of the client, and dispatch an automatic inspection order to the closer filed services unit discovered through the AVL (approved-vendor list) system.
"In two years, the integrated M2M approach contributed to Ampla's reduction of overall energy losses from 25-21%, representing $50 million in savings."
Mark Albert, sales manager, Logic Beach Inc., www.logicbeach.com, La Mesa, Calif., recalls a California utility that provides electrical power via an underwater cable that passes from the mainland under the harbor (for approximately one mile) to a critical use customer.
"With a continuously increasing demand for electrical power by their customer, coincident with seasonal warming harbor waters, it was deemed prudent to gather empirical data on the cables temperature rise to confirm engineering calculations," Albert recalls.
"A data logger was employed with thermocouple sensors to monitor the long-term temperatures along a representative section of the cable. The logger was mounted in an access 'hand hole' near the bank of the harbor. Powered by its internal battery pack for months, temperature data was logged. Cable temperature rise data was collected throughout the year and correlated with metered power, tidal flow and ambient temperature conditions. Resulting empirical data confirmed the engineering calculations."
At another location, Ziphany LLC, www.ziphany.com, North Tonawanda, N.Y., is currently involved directly with GMP (Green Mountain Power Corp.), www.gmpvt.com, Colchester, Vt., to assist with the implementation of their demand response and curtailment programs.
Green Mountain Power will use Ziphany as the IBCS (Internet Based Communication System) provider in which Ziphany is certified via ISO New England. GMP will see an increase in both revenues and efficiencies in its day-to-day operations.
Brian Palka, president, Ziphany, explains, "By using M2M technologies, utilities can expect many benefits. Essentially, utilities that implement AMR/M2M (automated meter reading) at any level can expect reduced operational costs through disciplined growth (e.g. reduced labor/administrative expenses, etc.), which is a direct result of the reduced demand for personnel needed on the field.
"M2M technologies give utilities the option of implementing initiatives such as demand response and curtailment programs with associated incentives to both the utility and the active participant. These programs assist in controlling the power grid in an effort to reduce overall consumption at any given time to prevent brown and blackouts (and other service interruptions)."
Eye on the Future
Other applications of M2M are being implemented with others still coming. Jeff Kischuk, vice president, products and solutions, Incerno Corp., Toronto, Ont., looks out a few years and sees a competitive marketplace.
He elaborates, "In the industrial segment, demand response will really start to get increased exposure as the utilities and service companies that are offering it begin to demonstrate success. (Their progress) will open up the next wave of competition and players in that vertical, while also opening up residential applications."
Kischuk sees a successful future for demand response applications, "Demand response is in my opinion a powerful and fundamental way to maximize and control the use of existing generation assets, where we use what we have, as it's being produced anyway. It should be online this year."
Continuing, he says, "(Machine-to-machine technology) will facilitate a lot more 'conservation' programs in the residential segment where the increased access to information and use will allow utilities and consumers to gain a better appreciation for their consumption patterns and overall use instead of getting a monthly snapshot. This could lead to benchmarking programs, which could then also trigger more meaningful savings programs by the utilities where they are able to truly reward consumers for strategic reductions and demand leveling.
Kischuk does admit, however, it may take some time for these programs to catch on, "It will be at least one to two years before this starts to get some traction in a meaningful way, though with the increased pressures on being 'green', we may see more pushes for this."
When Ziphany's Palka looks into his crystal ball he sees a slightly different picture. He says, "Utilities will be increasingly implementing advanced meter reading and eventually this technology will be an industry standard due to notoriety and the multiple benefits it brings. (M2M) gives the utility the ability to monitor time-of-use meters remotely and viewable via the Internet in near realtime where typically meter data is being collected on a daily or monthly basis, not in realtime."
He explains, "This gives the utility and the customer the convenience of being in a proactive mode rather than a reactive mode, allowing the utility the option of offering the technologies as a value-added-service.
When will this happen? Palka says it’s starting to happen now, "By 2012, we should see about 75% of all utilities in the U.S. using some form of M2M technology in their every day operations."