DONG Energy: Making the most of the intelligent electrical grid

Published on 14-Nov-2007

Validated on 07 Feb 2014

"It turns out that the real key isn’t the fact that we’ve got visibility into the grid, though that was our initial goal. It’s that we now have information available on grid performance that we didn’t have before. We can do a lot with that information." - Peter Vinter, power grid specialist, DONG Energy

Customer:
DONG Energy

Industry:
Energy & Utilities

Deployment country:
Denmark

Solution:
Business-to-Business, Business-to-Consumer, BA - Business Intelligence, Business Performance Transformation, Business Process Management (BPM), Enabling Business Flexibility, Energy Efficiency, Green/Sustainability, Industry Leadership Framework, Information Integration

Smarter Planet:
Smart Products

IBM Business Partner:
PowerSense

Overview

DONG Energy is Denmark’s largest energy company, formed in March 2006 by the merger of six diverse companies in the fields of electrical and gas distribution and sales, power generation, and oil and gas exploration; it is an energy company in the truest sense of the word.

Business need:
Increasing marketplace and regulatory demands along with a need for future infrastructure reinvestment drove Danish utility company DONG Energy to look for a way to better manage and utilize its electrical distribution network in order to respond to outages faster and more efficiently.

Solution:
DONG Energy teamed with IBM to implement an Intelligent Utility Network, installing remote monitoring and control devices that give the company an unprecedented amount of information about the current state of the grid. The new solution also involves extensive analysis of the data provided by the remote devices, as well as re-engineering of DONG Energy’s business processes.

Benefits:
• Potential to reduce outage minutes by 25-50 percent
• Fault search time reduced by one-third
• Estimated capital savings on planned grid reinforcements of up to 90 percent, when fully implemented

Case Study

“It turns out that the real key isn’t the fact that we’ve got visibility into the grid, though that was our initial goal. It’s that we now have information available on grid performance that we didn’t have before. We can do a lot with that information.”

– Peter Vinter, power grid specialist, DONG Energy

company logo image

Business Challenge
Increasing marketplace and regulatory demands along with a need for future infrastructure reinvestment drove Danish utility company DONG Energy to look for a way to better manage and utilize its electrical distribution network in order to respond to outages faster and more efficiently.

Solution
DONG Energy teamed with IBM to implement an Intelligent Utility Network, installing remote monitoring and control devices that give the company an unprecedented amount of information about the current state of the grid. The new solution also involves extensive analysis of the data provided by the remote devices, as well as reengineering of DONG Energy’s business processes.

Business Benefits
• Potential to reduce outage minutes by 25-50 percent
• Fault search time reduced by one-third
• Estimated capital savings of up to 90 percent, when fully implemented
• Provides competitive advantage by improving the quality of electrical service through faster, more efficient response to outages
• Allows DONG Energy to more fully utilize existing assets to respond to surges in demand, helping the company avoid capital expenditures for additional capacity
• Enables more effective long-term capital investment planning based on live data, helping DONG Energy to invest in new infrastructure more wisely

Why it matters
By leveraging the information provided by devices that monitor and help manage the electrical grid, DONG Energy is able to not only respond to outages faster, but also make more efficient use of existing electrical infrastructure assets and plan more intelligently for future improvements. This leading solution, one of the first implemented in Europe, helps DONG Energy maintain a high quality of service for its customers, reduce capital expenses and more effectively plan for the future.

Key Components
Software
IBM WebSphere® Application Server
IBM WebSphere MQ
IBM WebSphere MQ Explorer
IBM WebSphere Message Broker
IBM WebSphere Message Broker Toolkit
IBM WebSphere Eclipse Platform
IBM Rational® Software Architect
JRules software
Services
IBM Global Business Services®
IBM Business Partner
PowerSense

DONG Energy: moving toward the future
DONG Energy is Denmark’s largest energy company, formed in March 2006 by the merger of six diverse companies in the fields of electrical and gas distribution and sales, power generation, and oil and gas exploration; it is an energy company in the truest sense of the word.

The electrical distribution arm of DONG Energy faces a number of challenges going forward:
• Regulations require DONG Energy to meet benchmarks for capital and operating expenditures.
• New regulations for quality of service (outage frequency and duration) will become effective in 2008.
• DONG Energy will soon become a publicly traded company, which means it will have to meet not only regulatory standards, but shareholder expectations as well.

These existing and impending factors drove DONG Energy to look for ways to optimize its operations, specifically with regard to quality of service. The company’s ability to find problems in the grid and repair them quickly had to be improved.

Enter the Intelligent Utility Network
Electrical distribution companies around the world are facing challenges similar to those confronting DONG Energy. The demand for energy is increasing, and electrical grids are being severely stressed. The path forward is the Intelligent Utility Network (IUN), which uses information technology to improve the managementand therefore the performanceof electrical grids.

While companies all over the world are investigating IUN initiatives, DONG Energy has taken a leadership role and is one of the first in Europe to actually implement an IUN solution in a distribution network.

A key limitation of existing grids is a lack of information about what’s going on in the field. While major assets such as generation plants and transmission lines are monitored, electrical companies today have little or no visibility into the current state of the entire distribution gridin many cases they do not know a failure has occurred until customers start calling and complaining that their power is off, and finding the fault literally means sending a truck out to isolate the problem by a process of elimination. In this respect, the way electrical grids operate has not changed for many years.

One form of the IUN solutionthe one that DONG Energy is implementingeliminates this limitation by deploying inexpensive remote monitoring devices from IBM Business Partner PowerSense out in the grid. The devices employ unique optical current sensors and tell the company instantly not only that a fault has occurred, but where it is. Devices like this can also, in some cases, control other equipment such as substation switches, raising the possibility of remotely isolating the fault, rerouting power and getting much of the grid back up and running in a matter of minutes.

Building a business case with unexpected benefits
The ability to quickly locate and isolate faults was the capability that drew DONG Energy to the idea of an IUN, says Peter Vinter, power grid specialist at DONG Energy. “For a couple of years, we’d been working on ways to introduce measurements on equipment that was previously inaccessible,” he says. “But we needed to know if it would be a cost-effective way to meet our quality of service goals. Would it be better to monitor old equipment or invest in new, more reliable equipment that would go unmonitored? We had to develop a business case that would let us make that decision appropriately.”

DONG Energy engaged IBM Global Business Services to help build a business case that would assist DONG Energy in making the decision. IBM was chosen because it has taken a leadership role in developing IUN solutions, and also has deep industry-specific expertise in the energy sector. Working with DONG Energy, IBM was able to uncover significant additional benefits beyond improvements in operational efficiency, showing how the company could not only improve its asset utilization, but also make far more informed and intelligent decisions about future capital expenditures.

The business case confirmed that DONG Energy’s pursuit of an IUN solution was a good move, according to Vinter. “Our quality of supply will improve considerably. We can reduce minutes of power lost by 25 to 50 percent and reduce our fault search time by one third.”

But the IBM Global Business Services consultants helped DONG Energy see that an IUN solution could do far more. “It turns out that the real key isn’t the fact that we’ve got visibility into the grid, though that was our initial goal,” Vinter says. “It’s that we now have information available on grid performance that we didn’t have before. We can do a lot with that information.”

One of the additional benefits is being able to drive equipment closer to its true limits. All such equipment has a rated capacity, which is set conservatively to ensure reliable, continuous service. It is possible to overload the equipment for a certain time without it failing—but to do so safely, one must know its current status. With remote monitoring technology, DONG Energy now has that information in real time and is able to intentionally drive its equipment safely up to—or even beyond—100 percent of rated capacity when needed to respond to temporary peaks in demand. In this way, the company can defer investing in new capacity and make better use of its current funds.

A second, and far more significant, benefit of the information provided by the IUN is its applicability to long-term planning. An electrical distribution infrastructure has to be designed to handle peak loads. Historically, utility companies have had to estimate these loads based on usage patterns and anticipated growth, and build in enough capacity to handle any eventuality. This means that most electrical grids are overbuilt. “With the information provided by the new solution, we have real peak load data for individual grid components to work with, so we can optimize our capital expenditures,” Vinter says. “It can make those investments far more cost-effectivewe estimate we can save as much as 80 to 90 percent on reinforcement of the existing grid by making use of the hidden grid capacity. It’s an entirely new dimension that’s been added to our planning process, and it’s transforming the way we do business.”

Reinventing the business
An important consideration in the implementation of an IUN is how to handle the flood of new information that the technology generates. To achieve the long-term planning benefits uncovered by the IBM team, a great deal of analysis must be performed using new analytic tools, and the information needs to be integrated with the company’s existing IT systems and applications.

The IBM Global Business Services consultants worked closely with DONG Energy to model the company’s existing business processes, determining what changes would need to be made based on input from DONG Energy. The IBM team then took the new processes and designed service-oriented architecture (SOA) IT infrastructure to accommodate them, integrating it with DONG Energy’s existing systems. SOA makes IT processes far more flexible and scalable, improving DONG Energy’s responsiveness.

Vinter notes that by going beyond DONG Energy’s original goals, the solution has the potential to radically change the business. The company is looking into merging new data with its business processes, to improve outage management, network operation and planning. “The transformational part of this is really the information. The real question is, what can we do with all this information now that we’ve got it? With this solution, we’re able to take that raw data and turn it into actionable business knowledge. That’s what’s going to allow us to succeed in the future, helping us make the best possible use of our existing assets and enabling us to identify where we need to make investments later on.”

For more information
To learn more about how IBM can help transform your business and help you innovate, contact your IBM representative or IBM Business Partner.

Visit us at:

ibm.com/smarterplanet/energy

Products and services used

IBM products and services that were used in this case study.

Software:
WebSphere Application Server, Rational Software Architect, WebSphere MQ, WebSphere Message Broker, WebSphere ILOG JRules


Rational Software Architect is now known as Rational Software Architect for WebSphere Software

Service:
GBS SOA Implementation Services

Legal Information

© Copyright IBM Corporation 2007

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Produced in the United States of America
11-07
All Rights Reserved.

IBM, the IBM logo, ibm.com, Rational, Smarter Planet and WebSphere are trademarks of International Business Machines Corporation, registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the Web at ibm.com/legal/copytrade.shtml.

Other company, product, or service names may be trademarks or service marks of others.

Many factors contributed to the results and benefits achieved by the IBM customer described in this document. IBM does not guarantee comparable results.