Gas, O&M, Renewables

Digitalization: Moving from Step Change to Transformation in Power Generation

Issue 7 and Volume 121.

By Thomas Trepanier

You’ve no doubt seen or heard a lot of discussion these days about the terms “digitization” and “digitalization,” as well as some disagreement as to the difference between the two. Digitization seems to be the easier to define – basically taking an analog “thing” like a paper diagram or material safety data sheet (MSDS) and scanning it to make it digital. But, digitalization encompasses so much more than simply scanning paper documents.

Leading industry research firm Gartner, defines digitalization in its IT Glossary as “the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business. This description truly captures the essence of what digitalization is and why it is so important to the power generation industry – and so challenging.

It is one thing to scan a paper work order so that it can be transferred electronically. It is another proposition entirely to redefine workflows, plant- or fleet-wide processes, or entire business models because you have the ability to share critical information in a digital format. That is exactly the possibility that digitalization brings to the table.

This article digs deep into exactly how digitalization can fulfill critical needs in power plants today, as well as drive the evolution of plant operations into the future.

Digitalization helps get the right information to users (and workgroups) that need it – at precisely the time that they need it – to perform their tasks.

What is digitalization, and why do power plants need it?

In its most basic sense, digitalization is the evolution from manual and paper-based processes to digital processes, enabled by the integration of information and operational technology (IT/OT) and analytics. This evolution is not a new phenomenon; it began decades ago as plant owners began digitizing piping & instrumentation diagrams (P&IDs), safety procedures and numerous other critical documents to make them easier to store and retrieve.

As the Gartner definition implies, digitalization must inherently leverage technology to access the information and distribute it to the people and systems that need it. Furthermore, when analytics are applied to the data, the value grows as actionable insight can be extracted from the data and presented in a format that is easily digestible and can be used to make rapid, informed, and most importantly, accurate decisions.

In other words, it helps get the right information to users (and workgroups) that need it – at precisely the time that they need it to perform their tasks. As a result, digitalization can significantly decrease waste and increase wrench time for maintenance, operations and engineering functions. In addition, by enhancing the quality of data and inter-workgroup communications, digitalized operations can increase safety and reliability, reduce unexpected failure, and lead to higher capacity factors and operational excellence.

How does digitalization deliver value?

Old habits die hard, and the processes of the past can be difficult to break. Manual, paper-based processes have created silos of information, resulting in a lack of reliability from non-standard workflows and added costs due to errors and inefficient activities. This segmenting of information leads to gaps in information sharing and an inability to comprehensively analyze information. In turn this has resulted in major component failures in transformers, large pumps and other critical equipment.

Digitalization, on the other hand, breaks down the silos separating plant-wide (and fleet-wide) information flows. Not only does this improve standardization of work processes; it gives the plants’ staff a better chance to analyze the information and predict failures before they happen.

Digitalization will help independent power producers provide flexible, fast-ramping generation to accommodate growing supplies of intermittent wind and solar power.

Digitalization also enables tools like enterprise asset management (EAM) software to bring more efficiency to the work cycle through capabilities like electronic work packages, which enable assets to be taken out of and put back into service more quickly, lowering out-of-service time and increasing efficiency of work planning and maintenance processes. According to analysis by DataGlance, and validated by a major utility in the U.S., enhanced efficiency tied to an EAM system with features like electronic work packages can lead to expected cost savings for a two-unit power plant of approximately $3.5 million per year.

Additionally, EAM software has evolved such that architecture improvements and cloud-enabled technology platforms can also reduce IT costs. In a recent report, “Cloud-Based Alternatives Are Changing the Enterprise Asset Management Market,” Gartner estimates that 50 percent of all EAM deployments will be cloud-based by 2020. Not surprisingly, given the potential for such significant savings. By deploying EAM on a cloud platform, one major international nuclear fleet estimated 25-30 percent cost savings in IT costs alone – exclusive of additional operational efficiency cost savings – potentially millions of dollars.

How does IT/OT integration enable digitalization?

The integration of IT and OT is an enabler of the evolution from manual, paper-based processes to digital workflows, from which digitalization derives its value. This is especially true in utilities’ asset management programs. In fact, ABB recently surveyed more than 200 utility executives from across the globe, and the results indicate that the vast majority (80 percent) believe that IT-OT integration is a key component of any effective asset management strategy. And, 55 percent reported that the importance of asset management has increased over the past 12 months. It’s not a wonder why they ranked the importance as they did. These same utility executives stated that the benefits of asset management empowered by IT/OT integration enable them to achieve their most critical priorities, including (on a scale from 1-5): better long-term planning (4.86), increased staff productivity (4.43), improved safety (3.98) and better use of capital (3.68), among others.

What does the future hold for digitalization?

Based on the evidence, digitalization is without question the trend for the power generation industry in the future. But, how exactly will power producers apply digitalization to capitalize on this trend? There are, of course, numerous variables that will impact the answer to this question. However, there are a few prominent trends that we can reasonably expect to continue, or even escalate.

First, as the cost of sensors continues to drop, the number and ubiquity of monitored equipment will continue to increase exponentially – contributing to the continued explosion of the Internet of Things (IoT) across multiple industries. In the research report, “Worldwide Internet of Things Forecast Update, 2016-2020,” leading industry research firm IDC predicts that the worldwide installed base of IoT endpoints will grow at a rate of 16.1 percent through 2020 to more than 30 billion connections. Expect leading solution providers to the power generation industry to capitalize on this trend by delivering products that leverage the IoT (or the Industrial IoT (IIoT) for more asset-intensive industries.

This will prove to be a boon to power plants that leverage analytics to enable predictive maintenance and proactive replacement of assets at risk. In another report, “Business Strategy: The State of Digital Transformation in North America Power in 2016,” IDC analyst John Villali outlined the potential benefits in a recent report, in which he predicted that independent power producers(IPPs) will pursue digitalization in the coming years. “IPPs can utilize digital technology when managing a power plant’s maintenance cycle. Predictive analytics can help IPPs avoid forced outages and identify root causes of underperforming generation assets. Predictive technology sensors and monitoring tools developed by companies that specialize in handling large data sets and analyzing them for decision-ready results can give IPPs an edge over their competitors. In addition, real-time analysis of generation can provide insights into optimizing a number of generators under certain market conditions, which can reduce operating costs and increase a generation fleet’s overall cumulative output.”

In the report, Villali touches on another trend that power producers will leverage to further increase the benefits of digitalization as more distributed energy resources (DERs), such as renewables and microgrids, are pushed into the grid. He writes, “… new requirements are being created because of the increased amount of intermittent wind and solar capacity being added to the grid, which requires traditional fossil fuel generation to have quicker ramp-up and ramp-down times as well as additional spinning reserves. These capabilities are needed for generating supply to meet electric demand as market conditions constantly change.”

Villali uses the California Independent System Operator’s (CAISO) plan for new requirements as an example of this trend. “In anticipation of steep changes up or down in demand due to the growing amount of DERs, CAISO is currently studying potential new requirements and reliability standards, which will be able to handle these large fluctuations in demand without disrupting electric supply. By 2020, CAISO anticipates supply needs of approximately 13,000MW within a three-hour time span as the sun sets and solar generation decreases significantly during certain high-demand days. These types of real-time adjustments will benecessary for traditional fossil fuel generation producers to provide reliability and maintain competitiveness in a market that will require flexible fast-ramping units.” Digitalization will help IPPs overcome this challenge.

The third and final trend that will impact the power generation is the continued demand for greater mobility. Mobility will be a driving force in efficiency for workers in the plant, greatly enhancing work management processes. For example, some plant operations management solutions offer mobile logbook capabilities, which can be used to eliminate the inefficiencies of paper-based logging activities. These mobile logbooks allow plant operators to transfer and receive log entries and associated plant data on their mobile devices. This enables more timely data capture throughout the plant at the time of occurrence, as well as access to key plant activities by enterprise-level decision makers. The results are enhanced performance and productivity, improved communications and efficiency, and greater safety and security.

Digitalization is disruptive!

Digitalization can be described in many different ways. One thing that is consistent in any discussion of digitalization, however, is that it is disruptive. If you are planning to digitalize your operations, but are basing your plans on existing business processes, procedures and workflows; you may want to reconsider. True digitalization will significantly transform your operations! As digitalization of power plants makes more information available to personnel from the plant floor to the boardroom, not only will day-to-day operations be enhanced. The ability to make critical business decisions today, planning for the coming days, weeks, months, and even years will be improved – creating a more productive and successful enterprise overall. It will bring about the kind of disruption we can all stand to see more of.


Thomas Trepanier is Senior VP of the Enterprise Software product group at ABB. He has managed operations at power plants for nearly 30 years.