For roughly 75 years, the utility industry in the U.S. has been set in its ways: big, centralized power plants and high-voltage transmission lines that send power to substations which then distribute that power to homes and businesses. But the times are changing. And that means CIOs at utilities are feeling the pressure to bring about digital transformation that can deliver greater efficiencies and enable the integration of new, innovative technologies.
Those big power plants and high-voltage transmission lines are still part of the equation, but so are community solar power, wind farms, microgrids, battery storage and more. Connecting these technologies to the existing grid — handling settlements in an enclosed market, linking up transactions between energy producers and buyers (perhaps via blockchain technology) — requires a serious IT overhaul.
"The utility industry is undergoing a transformation," says Ken Lee, senior vice president and CIO of the New York State Power Authority (NYPA), the largest state public power organization in the U.S., which operates 16 generating facilities (including two plants powered by Niagara Falls) and more than 1,400 circuit-miles of transmission lines.
"From a New York State perspective, we've got what I would call very progressive leadership from the governor on down in terms of really getting in front of distributed energy sources: microgrids, neighborhood solar, that sort of thing."
That leadership takes the form of Governor Andrew M. Cuomo's comprehensive energy strategy for New York, Reforming the Energy Vision (REV), which, in the wake of Superstorm Sandy, seeks to rebuild, strengthen and modernize New York's energy system while making climate change mitigation a priority. Its 2030 goals are the following:
- A 40 percent reduction in greenhouse gas emissions from 1990 levels (in 2013, New York, with a population of 19.6 million people, already boasted the lowest per capita carbon dioxide emissions of any state in the union)
- A mandate for 50 percent of New York's electricity to be generated from renewable sources
- A 23 percent reduction in energy consumption of buildings from 2012 levels
New York reacts to Sandy
Following the devastation left by Sandy, Governor Cuomo tasked the New York Public Service Commission (PSC), the New York Energy Research and Development Authority (NYSERDA), NYPA and the Long Island Power Authority to work together to make REV a reality, while spurring energy innovation, bringing new investments to the state and improving consumer choice.
NYPA, which operates hydropower plants and low-emitting natural gas plants, is typically responsible for 15 to 20 percent of the state's daily electricity output. To fulfill the governor's vision, NYPA is taking the lead on many of the grid and transmission modernization and reliability efforts across the state. The Industrial Internet of Things (IIoT) is at the center of those efforts — the process starts with the merger of the physical and the digital, connecting energy-producing machines (like gas and hydro turbines) to analytics software via sensors.
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