Market Snapshot: Utility Asset Performance Management

The world of asset performance management (APM) technology is expanding rapidly. But what does that mean in terms of how utilities are investing solutions that exist in the marketplace today?

According to Gartner’s IT glossary, APM “encompasses the capabilities of data capture, integration, visualization and analytics tied together for the explicit purpose of improving the reliability and availability of physical assets. APM includes the concepts of condition monitoring, predictive forecasting and reliability-centered maintenance (RCM).”

For utilities, APM offers the ability to increase reliability while potentially reducing operations and maintenance (O&M) spend by transitioning to a performance-based, as opposed to time-based, maintenance strategy.

Technology is disrupting APM

Technology developments are causing a big shift in APM. The most impactful developments today are:

• The growth of artificial intelligence (AI) based applications like machine learning and deep learning
• The rapid development of streaming analytics, enabled by faster communications

There are many applications for AI in utility APM, and there is some intersection between that and streaming technologies.

“AI alone is making a huge impact in video and image recognition, especially in vegetation management via video recognition,” says Mark Konya, Principal Industry Consultant for SAS Global Energy. “This is typically enabled by drones that can ID vegetation encroachment on circuit rights of way…after the relevant analysis is completed, work orders can be optimized for remediation.”

Another big contributor is the consolidation of asset management data into a structured, accessible repository. It’s not as sexy as the other two, and it’s more of a revelation on the part of utilities that value can be delivered and then multiplied by the de-siloing of asset data. But it’s not a straightforward endeavor. According to Debbie Henderson, Principal Consultant at Black and Veatch, “issues with asset data and data quality proliferate, and need to be overcome.”

Where do utilities see the most value in investing in APM?

Utilities are more focused ensuring public safety through reliability and resiliency improvements than they ever have been. In the west, wildfire management and prevention are at the top of the list in the western United States, while many coastal utilities are gearing up for the approaching storm season.

Optimizing vegetation management also presents huge opportunities. “I’ve seen large utilities invest as much as $50 million in annual spend for vegetation management,” says Konya, “with such a deep level of spend, there are great potentials to reduce the O&M cost and to ultimately pass savings on to customers.”

Optimizing substation maintenance continues to be a no-brainer. As the backbone of the distribution system, failures can be disastrous. With good APM technology and workflows in place, utilities can perform online monitoring of substations and predict failures with enough lead time to intervene and prevent failures.

But what about adoption?

Just because there are clear drivers to invest in APM technology doesn’t mean that utilities are going to pull the trigger. Many “first-generation” APM solutions deployed in the last few years have not lived up to expectations. As a result, many utilities have chosen to push back on the market by developing their own sophisticated APM approaches internally.

But for those that are investing, a handful of trends are standing out. The first is that many are accepting and pushing for a platform-based solution for APM. Instead of tying together many different applications, both purchased or developed internally, leadership is seeing the benefit of consolidating and standardizing applications on a single platform.

Second, the use of third-party cloud for APM solutions is growing. That comes as a natural result of utilities and regulators mutually recognizing the cost and operating benefits of the cloud, and security concerns being more effectively communicated about and addressed.

But one final barrier still stands in the way, and that is associated with culture and change management. For many utilities, technology isn’t the problem. Most vendors can solve any technical problem that is put in front of them. Operationalizing the output of APM through effective change management is the challenge, and needs to be addressed effectively by vendors offering solutions.

“Utilities used to take a snapshot of asset health once a year for capital budgeting, APM solutions provide continuous risk analysis on assets where data is available,” says Henderson. “Implementing and relying on APM requires a change in the way utilities have always done things. They now need to think about asset risk like they think about operations and set up diagnostic centers where work can be prioritized and assets can be monitored in real-time.”