Sensorizing the Grid with a Managed Service Approach

As transmission and distribution (T&D) grids become ever more complex and diverse globally, grid visibility and reliability is important now more than ever. Today’s utilities are increasingly sensorizing their grids, adding standalone and retrofit sensors onto network assets to increase grid visibility, driving network performance improvements. Sensors such as Sentient’s MM3 Intelligent Sensor, SEL’s WSO Sensor, and Siemens’ Transformer Monitoring & Diagnostic System are examples of sensing systems on the market today. The sensor market landscape is discussed in depth in the recent Guidehouse Insights report, T&D Sensing and Measurement Market Overview.

Annual T&D Sensing and Measurement Revenue by Region, World Markets: 2017-2026

(Source: Guidehouse Insights)

A grid sensor deployment project involves a large capital expense to purchase, integrate, and install the sensors and update the communications networks accordingly. Additionally, sensor projects involve a smaller ongoing expense to operate and maintain the new equipment. This has been the standard delivery model for grid assets and for sensors as most current ratemaking methods allow for the cost recovery of capital spending while limiting operation and maintenance (O&M) recovery.

A Different Approach

There is another way for utilities to deploy sensors on their grids, and it is by adopting a managed service delivery method used in the software industry for over 30 years: Sensing as a Service. Under a Sensing as a Service model, a utility would form an agreement with its chosen vendor and pay an initial integration cost and an ongoing subscription cost for the vendors’ sensors to capture data on its network. This model would greatly reduce the capital expense of widespread sensor deployment and allow for upgrades and network improvements without a complete system overhaul. A shift to this model may benefit from the expanded adoption of a performance-based ratemaking model, and utilities would need to recover the O&M expenses or be allowed to capitalize the entire multiyear subscription package for cost recovery. Certainly, there are additional challenges faced by shifting to a Sensing as a Service model, but three key benefits are outlined as follows:

• Decreases utility capital spending: Without the need to purchase the sensors, utilities can save money by utilizing a Sensing as a Service delivery model. Initial integration and installation costs would be significant (as they would with the current purchasing model), but once the process is complete, the utility would essentially only pay for the data collected.
• Simplifies utility operations: By allowing a sensor vendor to install, operate, and own the sensing hardware and equipment, utilities can simplify their operations. Once the sensors are installed and integrated, the utility will simply be presented with data collected from the sensors, and can focus on the analysis and actionable decision-making based on that data.
• Enables more frequent sensor hardware upgrades: A Sensing as a Service model would allow utilities to more frequently upgrade sensors without significant capital costs. As sensing and measurement technology continues to evolve, utilities could use a managed service model to periodically update and upgrade their sensor hardware, improving network performance at a lower cost than if they had to purchase new hardware.

Opportunities for New Partnerships

Nokia currently offers a Sensing as a Service model for its communications network products, and uses blockchain technology to manage data collected on distributed assets. T&D sensing systems could employ similar technologies to greatly enhance data collection and provide significant benefits to utilities through a managed service model. Driven by a potential shift in ratemaking policy and by the benefits outlined in this blog, utilities have a lot to gain with a shift in the sensor deployment model—and sensor vendors should be lining up to help.