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Cumulative utility spending on asset management and condition-monitoring (AMCM) systems for the power grid will total $49.2 billion between this year and 2023, according to a new report by Navigant Research.

Most utilities today, the research firm says, handle asset management with what amounts to a run-to-fail strategy. Despite the growing availability of new solutions, Navigant reports that many utilities have not yet incorporated sensing or monitoring technology into their networks.

However, with the advent of the smart grid, the inclusion of sensing and monitoring systems is starting to make compelling economic sense, Navigant notes.

AMCM solutions encompass physical devices (sensors, intelligent electronic devices, smart meters, etc.) that share real-time or near real-time data with operations centers. They also include software solutions, such as asset management systems (AMS) and, increasingly, analytics solutions. Navigant says the ultimate goal is for all of these solutions to work in concert to provide management with a holistic view of the current and expected performance of the grid and its critical components.

Navigant notes that the key trends and challenges of the AMCM market are as follows:

- Sensor penetration is currently very low in the grid, with the exception of transmission substations. Even for high-value assets such as large power transformers, the penetration of sensors that monitor a range of characteristics, including dissolved gases or temperature, is estimated at less than 20% in the U.S. and Europe. In other regions, penetration is even lower.

- Investment is occurring only where the asset being monitored is very high value (e.g., large transformers) or on particularly troublesome circuits/feeders. The business case is not yet clear for the entirety of the distribution network and all of the equipment found there. Yet, as sensor prices fall and reliability and efficiency become higher priority for utilities and regulators, willingness to invest is expected to grow.

- Sensor technology remains relatively expensive, and in the distribution network in particular, a run-to-fail mentality persists. Many utilities today still consider this a valid operating model, especially where communications networks are absent from the grid. As communications capabilities proliferate, AMCM will become more attractive as an incremental, value-add solution.

- Most AMS available now were not designed for condition-based monitoring. New data provided by sensors in the grid, including smart meters and some distribution automation devices, is being pulled into software solutions that were originally designed for a planned maintenance program rather than a dynamic, condition-based maintenance program. In many cases, newly available data is not yet being leveraged to its full potential, although newer AMS support applications such as conservation voltage reduction that can create value. Some installed AMS, however, may not be equipped to handle the volume and type of data provided by new sensors and grid visibility.

- Asset health centers and managed solutions are being offered by a growing number of grid vendors and service providers. Particularly for smaller utilities, such outsourced solutions may prove attractive. Asset management-as-a-service is gaining traction, conceptually if not in practice, although concerns over data security remain.

- Operational silos within utilities remain an obstacle to the full promise of emerging AMCM solutions. In order for utility management to achieve a holistic view, true information and operational technology convergence must occur, with AMS and analytics programs drawing data from and sharing it across departments ranging from generation down to the meter/retail groups.

- Operations staff may not trust the data provided by sensors in the grid. Control room personnel and managers in charge of asset planning, field crews and inventory will have to grow comfortable with the output from both physical sensing and analytics solutions, particularly for predictive maintenance, in order for the full benefits of AMCM solutions to be achieved.

- AMCM is getting much attention in North America and Europe, but other regions have other priorities today. Financial pressures in the U.S. and burgeoning distributed generation in Europe give countries in these regions greater motivation to explore AMCM solutions.

"Emerging sensor technology and analytics solutions have the potential to completely revolutionize the way the power grid is managed and maintained," comments Richelle Elberg, senior research analyst at Navigant.

"The proliferation of distributed generation and electric vehicles means that soon business-as-usual strategies will no longer be viable for effective asset management," Elberg adds. "Fortunately, the price of sensors and solutions is set to fall dramatically over the next few years."


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