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Uncertainty as to how new information technology (IT) systems should be incorporated into network operations continues to slow the advancement of smart grid technologies and is driving the need for greater collaboration between the IT and operational technology (OT) sides of the business, according to a new report from Pike Research.

The need to support smart meters has already driven significant change in the utility IT landscape with the introduction of advanced metering infrastructure (AMI) and meter data management systems (MDMS) and the replacement and upgrading of existing billing and customer information systems (CIS). However, the report notes, the evolution of the smart grid from the initial deployment of smart meters to a dynamic, intelligent network supporting bi-directional communications between utilities and customers is only just beginning.

Other focal points for IT transformation include distribution management systems (DMS) and the merging of enterprise IT and OT to improve operational efficiencies and move toward the goal of a closed-loop network management operation.

Some of the biggest changes in smart grid IT are being driven by new application requirements such as electric vehicle charging systems, demand-side management applications and distributed generation management, including virtual power plants and microgrids, Pike Research continues.

The infrastructure supporting smart grid applications is also evolving. One of the biggest challenges is the move to more distributed intelligence, which enables in-field systems to understand and respond to events quickly and eases the data-handling demands placed on centralized systems. The report says such systems will allow event processing to be delegated to the substation and/or transformer level.

IT & OT collaboration

The worlds of IT and OT teams have historically been distinct within utilities. IT has been primarily focused on business process and customer management systems. Operational systems for managing and monitoring power networks have been the domain of operational teams, with only limited input from the IT department, Pike Research says.

That situation is changing for a number of reasons. Above all, the smart grid requires a more holistic view of how a utility operates at both a business and field level, which the report says translates to greater cooperation between IT and OT teams.

IT’s part in the rollout of smart meters, including the deployment of MDMS and new customer management and billing applications, has enhanced its standing within the business. Realizing many of the benefits of smart meter deployments - such as more flexible pricing, improved customer understanding, and the deployment of new services - requires a significant investment in IT, according to the report.

Even in core operations systems, such as DMS and energy management systems (EMS), there is a trend toward greater integration across systems. IT capabilities related to system security and large-scale data management and analysis are also required, Pike Research adds.

These developments are driving organizational and cultural changes as IT and OT teams learn to work together to meet common goals. IT and OT are not simply different departments. They also reflect different skills and different priorities, the report notes. The need to define and deploy new IT systems to support the smart grid is driving greater collaboration between IT and OT and is also providing a set of common objectives that can bring diverse teams together.

The prime driver for smart grid IT investment is to realize the maximum benefits of AMI and network infrastructure investment through better use of the large volumes of data that can be accessed on customer usage and network performance. Much has been written about the volumes of data that are generated by AMI systems and other improvements to the intelligence of the grid. However, the quantity of data is likely to prove to be a secondary issue compared to the problems of data quality, consistency and integration with legacy systems, the report notes.

Pike Research says data quality is particularly important where an accurate model of the network is required (e.g., for grid optimization and the implementation of self-healing systems). Inaccurate information on device deployments and asset status will have knock-on effects on additional applications and reduce the effectiveness of other operational improvements.


The importance of ensuring the security of the electricity grid - a key part of any national infrastructure - cannot be underestimated, Pike Research notes. Work done by the industry, in conjunction with organizations like the National Institute of Standards and Technology, aims to ensure that the right standards and frameworks are in place to bolster the security of the grid as utilities move to more intelligent devices, open platforms and integrated systems.

The benefits of open, standards-based field systems are substantial, but their openness means they are potentially vulnerable to cyber-attacks, the report warns. Ensuring the separation between the actual IT and OT networks is, therefore, a critical element of any security strategy. The use of enterprise IT security systems will be particularly important for controlling and managing information flows between systems and managing access to data and applications. Moreover, the use of standard protocols and proven IT security technologies means that advances made in enterprise and Internet security are applicable within a smart grid context.

For more information on the report, click here.

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