White Paper - Smart Grid for Utilities

7/27/2019 White Paper - Smart Grid for Utilities

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White Paper

All contents are Copyright 1992-2008 Cisco Systems. Inc. All rights reserved. This document is Cisco Public Information. Page 1 of 8

Utility companies are rapidly advancing into a new era. Driven by a complex

interaction of pressures, a higher level of operational control and systems

manageability has become paramount for electricity, natural gas, and fresh or waste

water companies. These sectors depend partly on assets that may be half-a-century

old and more. Yet the time-honored ruleNever Touch a Running Systemnolonger guarantees a smooth ride.

The new world in which utilities find themselves is shaped by multiple factors, some

almost unimaginable a generation ago, which are now combining to accelerate the

pace of transformation. This White Paper will take as its primary focus the electricity

supply industry; but while each utility sector differs markedly in its specifics, there

are clear common themes, and emerging new imperatives, that cut across them all.

How Ciscos Real-Time IP SCADA Enables

Utilities to Adopt a Smart Grid Approach

and Master New Challenges in Control and

Manageability


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White Paper

The Search for a Holistic Strategy to Manage Distributed Systems

As anyone with senior operations management experience in the utilities will be aware, SCADA

(Supervisory Control and Data Acquisition) caught on in the 1960s, to monitor and control

remote systems more efficiently. It proved superior to the slow and labor-intensive traditional

approachsending out engineers to make on-site checks and, after reporting back, carry outspecified operations as directed by remote central managers.

SCADAs success generated many applications, including large-scale industrial and utility

automation. Early systems were built on centralized, hierarchical models, largely dictated by

mainframe computer technology. They diversified along non-standardized lines, proliferating

into literally hundreds of proprietary protocols, and had the drawback of requiring a high level of

human decision-making and information support.

Todays SCADA systems combine legacy and modern technologies in the monitoring and

control of numerous vital functionsto reset switches, start or stop motors, open or close valves,

switch pumps on or off. They use both Ethernet and Internet technologies. Yet the concomitant

Internet Protocols (IP) have arrived in much the same piecemeal fashion as was evident in the

early days of SCADAs development.

Ciscos Role in Raising the Potentialities of SCADA to a New Level

Until recently, these hybrid systems have functioned quite well. Yet there are clear signs that the

trusted methodologies of SCADA are coming under unprecedented strain. The causes include

a number of high-profile, large-scale power outages in the electricity sector; diversification

into new supply sources, coupled with new peaks in demand; regulatory changes, tailored to

international markets; post-privatization commercial imperatives; and mounting pressure to

reduce the carbon footprint.

This has led to the emergence of the Smart Gridan intelligent electricity/communications

infrastructure that can monitor its own health, alert officials immediately when problems arise,

and automatically take corrective actions to prevent a local failure from escalating out of control.

Cisco has therefore drawn on an unrivalled technical expertise, and its vision of the network

as a platform, to offer the kind of real-time information monitoring and management control thatare becoming mandatory in an era of accelerating change. After intensive study of the evolving

needs of the sector in the 21st century, Cisco solutions help enable modern utility companies to

handle such demands comfortably.

A simple but key insight underpins Ciscos approach: It is impossible to react to things we dont

know; therefore, real-time information is a must in the modern utilities world.

To develop practical solutions incorporating this truth, Ciscos starting point is to build on its

market-leading expertise in converged IP networks. Its overriding aim in the utilities is to extend

the granularity of SCADA monitoring and control systems to the fullest extent possible, like

a nervous system reaching out to sense the bodys smallest skin-changes. And it is working

closely with partners to ensure that all its solutions are fully aligned with the technologies and

skill-sets of other major vendors offering specialized solutions, also tailored precisely to the

requirements of utility customers.

Based on a clear understanding that the utilities have distinctive characteristics and needs,

Cisco has developed specialized products and solutions of its own. They range from

ruggedized switches, capable of standing up to extremes of weather and temperature, to a plug-

in device that converts more than 300 SCADA protocols, thus making all devices in a complex,

multi-protocol system equally recognizable over a converged IP networkincluding equipment

which may have been embedded in that system for decades.

After building in the high levels of security required, utility companies can thus gain all the

benefits of real-time IP SCADAwithout the trouble and expense of stripping out large

quantities of legacy plant immediately. They can then upgrade their systems as and when

budgetary or operational constraints determine, while taking full advantage of todays long

term, continuing impact on Return On Investment (ROI)impossible in the old days of public

ownership, with its cyclical, cost-plus formula for calculating permitted returns.


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Electricity Supply and the Broader Picture for Utilities

To the experienced eyes of senior utilities managers, charged with rising to the challenges of the

21st Century, an overview of the pressures now facing electricity companies should suffice to

reveal a number of significant parallels. In the electricity sector, they include:

A series of cascading blackouts in the last five yearsin the US, Italy, France, Germany, and to

a lesser extent Austria, the Netherlands and Australiawhich have brought close scrutiny of

reliability issues from regulators and customers

Regulatory changes in the wake of large-scale privatizations, which may in time entail both

significant financial penalties for failure to meet preset targets and potential reward to those

companies efficient enough to exceed them

Enlarged transnational markets, coupled with rapid company growth by merger and

acquisition, operating across more complex, heterogeneous environments

Electricity demand rising at between four and seven per cent a year, with bigger demand

spikes from power-hungry consumers making load-balancing a more demanding,

unpredictable taskespecially when operating at higher capacity

A shift away from the old unidirectional power transmission and distribution (T&D) model: asmultiple sources, from wind turbines to domestic solar panels, feed power into a bidirectional

network, balancing the grid grows more complex.

Mounting public and governmental demand for greener energy from sustainable sources,

and for a reduced carbon footprint among electricity suppliers

A mounting focus on ROI from private shareholders, requiring more effective and efficient use

of network capacity as well as full optimization of asset lifecycles

A growing need for fully traceable audit trails, with respect both to more rigorous compliance

requirements and the commercial need for shareholder disclosure.

European Markets: A Signpost for the Worlds Energy Future?

Efficient transmission and distribution of electricity is a fundamental requirement for providing

European citizens, societies and economies with essential energy resources. The need to

renew Europes electricity networks, meet growing electricity demand, enable a trans-European

electricity market, and integrate more sustainable generation resources (including renewable

sources), presents major challenges. Research and development have an important role to play

in addressing them.1

The imperatives of the new era have been succinctly put by the European Commission. While

Europes traditional electricity networks have provided the vital links between electricity

producers and consumers with great success for decades, the fundamental architecture

of these networks was developed to meet the needs of large, predominantly carbon-based

generation technologies, located remotely from demand centers.

But the energy challenges that Europe now faces are transforming the electricity generation

landscape. The drive for lower-carbon generation technologies, combined with improved

efficiency on the demand side, will enable customers to interact far more with the networks.

More customer-centric networks are a key element in the way ahead.

These fundamental changes present new opportunities and new challenges. In order to

maximize the potential gains, operations directors in the electricity industry, in common

with other utilities, need to look very closely at their communication networks. A new level of

information and responsiveness is required. In a world of complex variables and changing

demands, the ultimate prize will be to manage and control the grid in real time.

In the classical early example of a transmission and distribution (T&D) network shown in Figure 1,

the core backboneknown as transmissioncan be clearly identified as the most critical part

of the network. In most settings, there would be connected several power plants (the ring) within

a restricted area, linked in turn to the distribution branches (the tree). This architecture made for

a simple, easily controlled infrastructure.

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1* Source: Janez Potocnik, Commissioner for Science and Research, European Technology Platform


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As networks evolved, more local networks became connected to one another and a large,

often heterogeneous electricity patchwork developed. Serious problems were frequentlyencountered at the edges of such interconnected systems, as the component networks had not

originally been designed to carry high, or very high, voltages and currents.

Another frequent challenge to the process of enlargement was to synchronize the variable

frequencies of alternating current across larger areas. In a third stage, peak demand began

to rise more steeply and to spike more savagely, in consequence of the growing economic

prosperity in the developed nations. Changing demand profiles added further uncertainty, and

balancing the grid became a very complex issue indeed.

From a technical perspective, the key development that will determine the shape of things

to come in the electricity sector is the rise of distributed power generation. Today, power is

fed in from multiple sources and in variable amounts, which may be injected into the grid at

unforeseen times, as shown in Figure 2. This also creates a network in which power flows two

waysupstream as well as downand this, in turn, raises a whole new set of complex grid-balancing, management, and control issues. The newer power sources include:

Solar cells: More and more installations are being made at domestic premises, offices and

factories; likely in future to be grouped on extensive photovoltaic cell farms, which may be

situated in other countries with longer sunshine hours

Wind Turbines: An increasingly popular approach to power generation on grounds of

sustainability, wind-turbines are located on wind farms both on- and off-shore; in fact, wind-

power has been used to produce electricity for 100 years

Fuel Cells: Like batteries that never run down as long as they are supplied with a fuel source

and an oxidizing agent, fuel cells are coming into greater use because they avoid the pollutant

effects and inefficiencies of combustion-based generation

White Paper

Power

substation

High voltage

transmission lines

Transmission

substation

Power plant

Transformer

Powerpoles

Transformerdrum

Houses

Electricity T&D Network

Figure 1: The traditional system for generating electricity and distributing it to customers


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Combined Heat & Power: A highly efficient way to use both fossil and renewable resources,

CHP generates usable heat and power in a single process. It can be combined with cooling

(CCHP) and contributes to improved sustainability.

Electricity Storage: While electricity has a shelf-life of zero, sub-surface hydro-installations

are being developed to store energy generated at off-peak times for later use, wheneveradditional power is needed in the network.

The combined effect of such additional power generation sources and new storage techniques,

along with others that may come to prominence in the future, is to produce a vastly more

complex infrastructureand a corresponding leap in the number of variables that have to be

juggled simultaneously to maintain the critical state of grid balance.

All of this points to a need for fresh thinking on management and control issues. Yet because

electricity networks developed slowly, over decades, many companies did not see a compelling

need to achieve total control and manageability of their assets. Hence the saying, Never touch

a running system. For in spite of far-reaching changesin their business models, in patterns

of ownership and regulation, in the nature and size of their marketselectricity companies still

have one overriding goal: to Keep The Lights On, 24/7.

Unsurprisinglyand, on the face of it, not unreasonablymany have traditionally believed they

could not afford to be frontrunners in technology, in case they jeopardized the stability of their

operations. Why spend money if the ROI was not clear? In the old days, there was next to no

competition, and no mandatory regulations forcing electricity providers to make fundamental

changes. In the absence of such pressures, little changed.

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Figure 2: Multiple power generation sources and bi-directional networks usher in a new era

Central power plant

Offices

Houses

Storage

Micro

turbines

CHP

Fuel cells

Industrial plant

Wind turbines

Virtual power plant

Electricity T&D Network in a New World

Source: European Commision, European Technology Platform


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Why the Electricity Industry Is Being Forced to Rethink Information Use

During the last five years, the loudest and most high-profile wake-up call for European electricity

companies has been a series of major cascading blackouts (in which the failure of a single sub-

station quickly overloads neighboring facilities, gathering an exponential momentum). In some

cases, large areas were left without power for more than 24 hours.

Such events have occurred in the US, as well as in Italy, Germany/France, Austria and the

Netherlands. New European Union regulations will require improvement of management and

control standards to prevent cascading outages, including an effective back-up solution. All

European countries need to have a plan in place by July 2008.

Both North American and European regulators also wish to ensure that utilities are running their

entire infrastructuresfrom generation, to transmission and distribution, to customer delivery

as close to full capacity as they responsibly can. Both European regulation and the European

marketplace are acquiring increasingly pan-European dimensions, with the advisory European

Regulators Group for Electricity and Gas (ERGEG) set up in 2003, and the Single European

Market in Electricity gathering pace.

The forces of cost control, performance-based rates and deregulation have become anirresistible combination, driving the need for improved operations management. Today, as a

result, IP-based SCADA is viewed as a vital tool that will enable utilities to take control of their

distribution networks as never before.

IP SCADA meets a pressing need for more accurate monitoring and measurement, yielding full

management and control of utility networks of many different kinds.

For the electricity companies, only this will enable them to initiate the swift and timely sequence

of actions needed to prevent further cascading outagesevents that happen so fast that

human response times can rarely keep up. In short, they need to incorporate the current control

systems they use in substationsoften SCADA-basedinto unified, real time, central control,

at the same time as handling complex, bidirectional energy flows and updating the accuracy of

their accounting and billing to 21st century standards.

Ciscos Incremental IP Program for Process Control and Communication

When considering the potential benefits of implementing a system capable of managing all

SCADA-enabled devices over a single, converged IP Network, utility companies need to ask a

series of key questions before accepting the case as proven. They include:

How will business processes be enabled?

What are the current vulnerabilities and how will a secure architecture mitigate them?

What are the key business benefits when constructing the value case for change?

How will the change impact command, control and decision rights?

What are the lessons learned from Cisco and from other industries?

In the electricity network, the transmission (high-voltage) networks and distribution (medium- to

low-voltage) networks carry electricity to the end user, domestic or commercial, who is usually

equipped with a metering device. Optimum systems control, offering the highest possible

granularity of information, is attained only when all metering devices and substations are

included in one integrated control system. This requires the large-scale introduction of smart

meters in homes and businesses.

Even if an organizations initial focus extends no further than the control systems used in

substations, however, once all the data from these SCADA-based systems becomes available

in real time, the grid is protected from cascading outages. Automatic shut-offs take less than a

secondat least ten times faster than a human operator; large-scale electrical blackouts should

be a thing of the past. Other streams of real-time information convert into an easily readable

pictorial form for closer monitoring and management.



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White Paper

Many suppliers of Intelligent Electronic Devices (IED) or complete SCADA systems today offer

their products with IP connectivity as standard. Integration of such devices into an IP SCADA

network is usually unproblematic. Yet there are numerous older systems embedded in utility

networks, with many substations using systems and technologies that are more than ten years

oldover 30 is not uncommon. These systems are unlikely to be changed in the short term, on

grounds of cost alone.

Such systems communicate serially, often using proprietary protocols. However, Cisco makes

it possible to integrate these old environments into a converged IP network without making any

other changes. Utilities can reap the benefits of an integrated management and control network

without further upgrades to current environments.

Where investment protection is a key issue, therefore, Cisco delivers a seamless migration

path. It enables operators to carry on using older, non-IP control systems, and at a later stage, to

incorporate new IP based-equipment after renewals or refurbishments, as shown in Figure 3.

Cisco is also keenly aware of IT security threats facing utility companies, from malware or insider

interference to hackers and even, potentially, terrorists. The company has identified over a

dozen key utility company vulnerabilities in order to help its utility customers reduce or eliminate

them. Cisco is also sensitive to the fact that utility companies are understandably cautious of any

inherent weaknesses in their existing configurations of hardware and software. Ciscos holistic,

end-to-end approach to securitythe creation of a Cisco Self-Defending Networkprovides

industry-leading protection against such threats, across all network end-points.

In an increasingly complex world, Cisco has also recognized the need to work with partners to

deliver total solutions. It has formed alliances with leading companies that serve the Utility sector

to offer proven solutions that meet real business need.


Old Sub Station

New Sub Station

Utility CompliantDevice

RTU of SCADA

Access Point

IP Phone

Magnetic

Door Lock

Security Camera

Other Services

X

Figure 3: How Ciscos IP SCADA enables utilities to integrate old and new equipment in one system


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All contents are Copyright 1992-2008 Cisco Systems. Inc. All rights reserved. This document is Cisco Public Information. Printed in the UK ES/10892/1207 Page 8 of 8

White Paper

Conclusion

In the electricity industry, Cisco believes IT has today left the building transforming itself into a

key enabler of vastly improved sense and response capabilities that extend throughout the T&D

network. The transition will ensure that energy companies can connect, collaborate and compete

on a much larger scale than any historically required of them.

Converged, secure and robust IP networks are now the key to delivering full process control,

high safety standards, and essential enterprise information to key decision makers. A converged

information network architecture provisions not only SCADA, with full data and virtual security; it

also potentiates new services such as voice (Unified Communications), video surveillance, and

physical security using automated magnetic locks to keep out intruders.

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For More Information

To find out more about the benefits of the superior management,

monitoring, control and responsiveness enabled by Cisco real-time

IP SCADA, please contact:

Arjen Zwaag [email protected]

or

Stuart Robinson [email protected]

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White Paper - Smart Grid for Utilities