With Peter Manos, ARC Advisory's Utility & Smart Grid Expert
In this episode, ARC Senior Analyst Peter Manos shares his insights about the ARC Americas Forum, including an exploration of lessons learned and the contacts made at the 2022 ARC Americas Industry Forum held June 6-9th in Orlando, Florida.
Over 1,000 attendees learned about how transforming factories, plants, and infrastructure benefits technology end users and suppliers alike. Attendees also discovered what peers and industry leaders are doing today and what steps they are taking to prepare for the future.
It is very impressive to see the high power know-how of both our analysts and the solution providers and software vendors that are here, along with equally-impressive members of the user community. Even though I come at this Forum as a utility industry and smart grid expert, I am delighted not only with the great conversations with utility people who are here, but also with all the other exchanges I was able to have with a lot of people in other industries. We're all concerned about a lot of the same things. And the value that's being driven by digital transformation is really amazing.
There has certainly been an explosion of data in all industries, but in my industry, it's history of having originally had its billing systems be based on just one meter reading per month has gone, now, to having meter readings at 15-minute intervals or more frequently. So, that's an enormous increase, right? One a month versus 96 per day. And when you add in electric vehicles and a lot of other real time transactions that are now happening on the electric grid, that explosion of data and how to leverage it is just driving amazing change. So, we see that in all the other industries involved in industrial automation, the data from sensors, it's not merely a 10-fold increase, not even a 100, but rather it's a 1,000 fold or 10,000 fold increase. And the solution providers are just doing amazing things and there are parallel cultural shifts and innovations that are occurring in the user communities. Everyone's learning from everyone regardless of industry.
Another thing I would say is, when you look at COP 26 in Glasgow, this was the first of the 26th annual international efforts where industry specific detailed planning was beginning. And that also includes cross industry things that have to be done. In the energy transition, you're going to have, for example, waste materials from the pulp and paper industry becoming feedstock for creating sustainable aviation fuel or utilizing waste from the food industry as input in an agribusiness, whether in active aquaculture or land-based farm applications. We have had cogeneration for many years but the innovations are increasingly taking one industry’s waste material and having that be feedstock for a facility that generates clean electricity by using carbon capture.
For net zero and even carbon negative processes being developed, the big question is, how will these things scale? That's the big thing because some of them, it's going to take new solutions and new improvements on existing ideas to get these things to scale.
That all dovetails with an interesting vision many people, including myself, have for many decades about what asset owner operators could be doing in the future. It was a vision driven for me by looking at some interesting history with IBM, a history that goes back to the 1970s: IBM was building their IBM 360 mainframe systems, and with such a complex system, and other similarly complex products they were building, they developed a discipline called Component Failure Impact Analysis. And the luxury which that industry has is interesting—basically, with their semiconductor components, you can put all the components that you're going to be working with when you're building a complex system through a rigorous reliability testing process. You can put large samples of each particular component into boards and put them in an oven, heat it up, test it and accelerate the failures. The result is, in a short period of time, such as a few weeks, you can get the equivalent of a year of operation, and you intentionally with these tests chips for every component, complete this so-called “burn in test” process. After you burn them in, you can determine the exact full bathtub curve, showing the full lifecycle performance and when it's going to fail, and component failure impact analysis. As I said, 50 year history with that, they were able to actually allocate accurately the service personnel, when the final devices were built with these complex assemblies, because they could mathematically compute the reliability based on the components reliability, and the build out and design.
The vision has been how can we do that with a fleet of electric grid asset infrastructure? How can we do that with electric transmission, distribution, and generation systems? Well, unfortunately, those devices are electromechanical devices and don't behave, physics wise, the way chips do. So you don't have the luxury of accelerating failures, and then having that exact, really accurate predictive capability. But with the data and models which asset owners are building up, they now have new, really amazing capabilities. Now, in terms of industrial automation, we're going to have the needed simulation capabilities—not just machine learning, but cognitive AI as well. So we're going to be able to do Component Failure Impact Analysis on everything in the future.
I know it sounds like pie in the sky. But otherwise, without this, how do you build out the needed system-wide sustainability economically? Well, you need to be able to model things both from a design digital twin and an operational digital twin in ways where you're building these incredibly revealing models that give you insights on how to do things in new and better ways. So again, I believe in engineering, economics, full lifecycle costing, to a level where what's a so-called “externality” now, such as negative economic or negative health impacts on communities impacted by inefficiencies or even by pollution, where those things which are currently considered “externalities” might not need to be viewed that way in the next five or 10 years. You might have the ability to include things in your calculations on impacts in greater ways and get industries to do things in their supply chains, for their customers and from their suppliers, where they drive business value for their services, products, and brands, by becoming part of a larger circle of responsibility for quality of life in a wider way.
In looking at it this way, it is exciting to realize the greater amount of creativity we're going to be able to unleash. It is creativity which is being unleashed in this conference, for example in the area of digital twins, which I see expanding in the future in ways that are very inspiring
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