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The T&D Industry and Grid Modernization Efforts in the second half of 2015 – A Middling Performance – So What Lies Ahead for 2016?

While a number of energy industry pundits suggest that the T&D markets for infrastructure equipment and control systems always go up, I will revert to what another Newton stated a few centuries ago in his Third Law of Motion (“What goes up must come down”).

An informal survey of marketing/product managers being undertaken concurrently with the development of this article strongly suggests that we are in a “down” or at best, a “flat” year for much of T&D infrastructure and for the systems that monitor and control distribution networks. There are some exceptions as noted below.

A more formal study of CAPEX and OPEX plans among the world’s utilities will follow in the fourth quarter. The findings from this scheduled study will enable suppliers of equipment, systems and services to plan more appropriately for the coming two years. This will be the sixth edition of the Newton-Evans CAPEX/OPEX report that began with the financial crisis of 2008 and continued through 2013. Now that low load growth and low capital investments have again hampered the bumpy road to grid modernization, the timing for this study will be helpful.

In preliminary discussions with U.S.-based manufacturers, integrators and industry observers, it is clear that we have entered into a period of further uncertainty and limited investment capabilities for utilities, with some major infrastructure and grid modernization projects being delayed or deferred for months or even years. The significant industrial consumers of electric infrastructure products and smart grid equipment and systems are, in some cases, in a more difficult position than are electric utilities. With falling commodity prices, and the widening spread of corporate bond costs versus Treasury bond costs, the ability of many companies and utilities to source capital for investment is not as “low-cost” as current interest rates would have it.

All is not lost however, as a “flat lining “outlook in economic terms (but not in medical terms, however) is not as dismal as it sounds, and is a lot better than actual declines in product shipments or in systems and services. As several market participants and observers have reported to us in September and early October, the T&D equipment market performance this year and the outlook for next year will vary by product type, by voltage ranges, by application and by unanticipated events. Equipment such as inverters, MV cable and MV switchgear equipment related to renewables projects is still likely to show moderate growth. It is our contention that security concerns and related technical and technological solutions remain at the top of the list for near-term investments as well. If the several significant transmission projects on the drawing board receive final approvals from authorities, then sales of HV equipment, cable, towers et al will also benefit.

As the result of recent assignments working on projects related to the role of T&D equipment testing in a laboratory setting and the various commercial, university and utility labs that provide tests for T&D equipment, we have learned much about the vital role played by such facilities. In effect, the commercial equipment test labs serve as harbingers – leading indicators – of new product introductions and relatedly, to the level of market activities. To date, two-thirds of the major labs surveyed have indicated a downturn in lab testing business activities this year.

Maybe we can add this final observation to Sir Isaac’s list of Laws of Motion. The squeakiest grid modernization “wheels” will get the grease (the funding) in the coming year. At this time the squeakiest wheels that resonate with us appear to be the requirement to shore up cyber and physical defenses and the push to keep those renewables coming onstream!
– Chuck Newton

EMMOS Conference Sep. 21-23

by Editor on August 26, 2015

Just a reminder for those planning to attend the 22nd annual EMMOS (Energy Management and Market Operations Systems) user group conference on September 21-23 at the Marriott Renaissance Hotel in Carmel, Indiana can make hotel reservations at a discounted rate until August 27th.

This year’s conference agenda will feature topical speakers and roundtable sessions, technical training classes and a vendor exhibition.

Featured conference and training topics at the 2015 gathering of North American and international control and market systems operations management and staff include:

  • Cyber Security Perspectives in Light of CIPS V5
  • Overview of MISO Market and System Reliability Operations
  • North American Developments in DMS and DA Usage
  • Visualization
  • Situational Awareness
  • Communications Standards
  • Renewables Integration and Management
  • Network Security Applications
  • Next Generation Systems
  • The Future of Energy – Smart Grid and Beyond, and several additional control systems related topics.

The 2015 conference will include tours of the Midwest ISO (MISO) control center on Tuesday afternoon and Wednesday morning. The vendor exhibition will include a cocktail and hors d’oeuvres reception on Monday evening.

The annual EMMOS conference attendees include electric power operations officials involved with transmission, distribution and generation, as well as IT managers, planning engineers, consultants, ISO staffs, and related systems personnel involved with control systems and substation modernization, distribution automation, outage management and geographic information systems.

Further information on the upcoming 2015 EMMOS conference, including registration information and hotel booking arrangements can be found on the EMMOS website at www.emmos.org. Exhibitor opportunity information is available from Ms. Erika Ferguson at EFerguson@osisoft.com

The Role of ADMS/SCADA in Building a Resilient & Reliable Distribution Grid: Part 1

August 7, 2015

This is part one of a four part series on ADMS and Distribution Automation. Part one discusses Advanced DA, differences between Distribution SCADA and ADMS, market participants, usage patterns, challenges, priorities, and comments from users. What utilities have said Based on a mid-2014 study of the market for Distribution Automation (along with multiple earlier studies), […]

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July 2015 Market Trends Digest

July 1, 2015

The July 2015 Market Trends Digest is now available to read on our website. Find out what we’ve been researching for the first half of 2015!

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North American Market for Single Phase Reclosers

July 1, 2015

During the first quarter of 2015 Newton-Evans Research Company studied the North American market for single phase reclosers. This survey based report addressed questions pertaining to purchasing volume by type (kV rating and insulation type), protection for 1-phase laterals, brands used, types of connections for recloser communications, importance of various recloser features, and other topics. […]

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Excerpts from Newton-Evans’ North American Distribution Automation Market Assessment & Outlook: 2015-2017

June 1, 2015

Below are some excerpts from this recent survey of 75 North American electric transmission & distribution companies. Where are the controls located for FDIR/FLISR on your distribution system? As had been observed and reported din earlier Newton-Evans studies of distribution automation, respondents continue to provide a mix of replies to this question. Among the 42% […]

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Substation Automation 2015-2017 Market Overview Series Now Available

April 16, 2015

Newton-Evans Research has just finished updating a series of U.S. market overview briefs on fourteen different substation automation market topics, including: Remote Terminal Units, Programmable Logic controllers, Substation Automation Platforms, Multifunction Meters and Recorders, Inter-Utility Revenue Meters, Digital Relays, Digital Fault Recorders, Sequence of Events Recorders, Power Quality Recorders, Substation Reclosers, Substation Automation Integration Specialists, […]

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First Quarter 2015 Projects Underway at Newton-Evans Research:

March 25, 2015

Study for CIGRE WG D2.38 – Operational Readiness for Cyber Threats. The Newton-Evans staff is conducting an international survey of electric utility IT and OT organizations to learn about the current status of preparations and readiness to minimize the impact of cyber threats. Utilities that participate with us in this “pro bono” study for CIGRE […]

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New Utility Insights on Adoption of Advanced Distribution Automation Applications

February 13, 2015

Findings from the Newton-Evans Research Company study completed in February 2015 indicate that a substantial number of electric utilities are using distribution automation technologies such as FDIR/FLISR and VVC/VVO/CVR, but the number of operating feeders currently configured with these features is still relatively low. These observations are based on a survey of 75 electric T&D […]

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Utility Plans Call for Continuation of Substantial Investment in North American Distribution Grid Automation Programs

February 2, 2015

Findings Corroborate Earlier Newton-Evans Studies Regarding “Mixed” Placement of Controls of Field Devices The Newton-Evans Research Company today released key findings from its newly published study of electric utility plans for distribution automation. Entitled “North American Distribution Automation Market Assessment and Outlook: 2015-2017” the 89-page report includes coverage of more than 35 DA-related issues. Progress […]

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