We Need More from Our Energy Management Systems

Transmission & Distribution World July 1999

By Chuck Newton, Automation Editor



During one four-week period this spring, I traveled more than 16,000 miles to attend three major conferences - two of which were focused directly on energy management systems (EMS) issues (IEEE PICA Conference and the EMS User Group Conference) and one on electric power distribution topics (CIRED Conference). After digesting events and offerings, I realized that changes in the industry have placed an extra burden on EMS. These changes have led everyone in the EMS business -- suppliers, consultants, third party contributors and utilities -- to rethink what it takes to thrive as a business and truly understand the value proposition on EMS today.

Although supervisory control and data acquisition (SCADA) systems are installed at thousands of utility sites around the world, only a few hundred sites run the advanced applications of an EMS. In fact, only a few dozen power management systems (PMS) or “EMS-plus” class systems have been implemented to date. As the number of electric utilities continues to decline because of mergers and acquisitions, the number of opportunities for EMS-like systems may actually increase as today’s vertically integrated utility enterprises become several different entities.

The incorporation of large PMS versions of EMS will add 10 to 20 large-scale, multi-million dollar opportunities each year for the next decade. Factor into this mix EMS-like applications that are needed for use by energy marketers and power traders, and the power applications market expands considerably. Consider also the likelihood of requests for proposals being issued by utility holding companies that wish to obtain true “world views” for all of their utility operating subsidiaries throughout the world. Such demands for new capabilities will further add to the mix of systems with roots in the EMS business. We will also see more multi-service utilities begin to operate integrated control centers. As cost-cutting efforts continue, the older practice of large utilities operating regional SCADA systems is moving into an era in which consolidation will leave fewer, larger systems that incorporate EMS functionality.

While the mature, industrialized regions of the world have seen a slowdown in control center related spending during the 1990s, look for spending increases for this new breed of EMS-plus systems to be requested by many entities - traditional utility companies; the new marketing, energy services and trading businesses participating in the electricity market; and, the separate regional transmission operation and independent systems operation entities being established around the world.

The global EMS market for systems and services has ranged between US$325 million to US$450 million in recent years. This amount will expand significantly if only to accommodate the changing definition of EMS to encompass a broader concept of PMS. If we include the independent systems operator and power exchange class of systems into an “EMS-plus) category, then the market increases to as much as US$600 million to US$750 million over the next several years.

The bottom line is this: The world’s EMS suppliers must develop more of a systems integration skill set and realize that a scenario is unfolding in which buyers will seek out systems integrators for increasingly complex operational systems. In turn, EMS firms and other information technology systems integrators will be expected to seek out business partners and be responsible for integrating hardware, incorporating technical and selected business applications and communications, and possibly providing long-term, on-site support personnel in a seamless manner for their clients. EMS Companies will be expected to deliver more technology in a condensed time frame for an increasingly demanding set of business owners, utilities and related energy enterprise clients.