Distribution Automation Trends and Outlook in The United States: 2010-2015
Charles W. Newton, President,
Newton-Evans Research Company, Inc.

There are a number of ad-hoc definitions of electric power distribution network automation. The EPRI definition and the IEEE definition are both widely used in the US.

EPRI’s definition of Advanced Distribution Automation: Complete automation of all the controllable equipment and functions in the distribution system, two major components, a flexible electrical (and electronic) architecture and a communication and control system based on an open, standardized communications architecture. Hence, looking into the future, it will be more appropriate to think of it as a “power exchange system”, rather than a “distribution system”.

IEEE Definition of Distribution Automation: According to the IEEE DA Working Group, the definition of DA is changing. DA had been principally concerned with automatic reconfiguration in the distribution network, an approach enabled by earlier generations of distribution SCADA (as differentiated from substation SCADA) that provided remote control of capacitor banks, some switches, some automatic reclosers and sectionalizers. The definition is expanding with newer applications such as fault detection, fault location analysis, volt and var control and power quality measurements.

Newton-Evans Synopsis of DA: DA is not an application but a system of multiple communications-centric applications that bring the information infrastructure more directly in contact or overlay on the utility’s operational infrastructure. Newton-Evans Reseaerch views DA as being the sum of all field-based intelligent electronic components of a Distribution Management Systems, or DMS.
Each side (DA and DMS) needs the other component to be successful and to pave the way to a truly smart distribution grid. The new generation of DA activities and applications is broad-based, incorporating sensor-based technology, multiple types of intelligent electronic devices deployed along feeders and perhaps into customer premises, wave-form analysis, strong communications security measures, and significant increases in information processing capability. In the Newton-Evans report, the reader will see the “explosion” of a new generation of IED’s beyond the substation fence down to the customer premises. These new applications are based on information handling, processing and storage of large quantities of bulk data, in many ways, analogous to the development and implications of advanced metering infrastructure.

Market Size Estimates: The US market for distribution automation of electric power medium voltage networks is currently in the emerging stage. 2009 expenditures for distribution automation activities (in addition to the $575 million value of the smart DA field equipment itself) hover around the $250 to $275 million dollar range at this time. This “adoption” curve provides revenue growth expectations.

DA Market Segments: Newton-Evans Research expects that each of the four key segments of the DA market will grow over the 2010 to 2018 periods. These segments are: (1) broadband communications, (2) smart field devices and equipment, (3) device controllers and (4) DA platforms and applications software. This latter category can be further sub-divided into control-center-based approaches and substation-based approaches to device control.

Telecommunications for DA: Dedicated DA-centric telecommunications spending will likely increase, but because of the shared nature of utility infrastructure communications, only dedicated expenditures amounting to about $53 million in 2009 are included in the above chart. In fact, there will be additional tens of millions of dollars allocated for development of a 21st century distribution network-wide communications infrastructure to serve DA, advanced metering, related customer premises data acquisition and reporting (HANs and NANs), and equipment/device diagnostic information retrieval.

Other Applications That Use (or will use) Same Infrastructure Being Used by Feeder Automation Programs: Three quarters of the 64 respondents to our 2007 study are using or will be using the same telecommunications infrastructure (i.e., communications backbone). Among these utilities, 65 percent indicated capacitor bank controls would use the same infrastructure, while 38 percent cited Volt/Var optimization, demand management or voltage reduction applications, 13 percent indicated load balancing and 25 percent cited other applications, such as AMI, fault location, station alarms, and the like. Importantly, all nine U.S. public power respondents indicated use of the same infrastructure being used in their feeder automation programs with additional DA applications.

The DA communications market segment will move from a serial to broadband approach during the 2010 to 2015 era, and the new communications infrastructure will have strong cyber security defenses as mandated by various federal entities.

The market for broadband communications in a distribution automation environment will be mostly wireless, with a need for approaches that may involve multiple communications technologies and methodologies. The approaches to be taken will consist of utility owned and operated wireless and wire line infrastructure, likely to be supplemented with commercial carrier services.

Device density, topography, spectrum licensing issues, security, and other communications technologies available will have an impact on the telecommunications decisions for particular DA applications. Routing of DA information itself may become a basis for partial communications network re-design. Alternatives include three key options in DA design (control-center-based, substation-based and field-based) all of which are described in the Newton-Evans study entitled Global Market Study of Fault Detection, Isolation and Restoration.

Plans for Capital Spending and O&M Investments in Distribution Automation: The February 2010 edition of the Newton-Evans Research Company’s report Global CAPEX and O&M Expenditure Outlook for Electric Power Transmission and Distribution Investments: 2010 to 2011 – Funding Outlook for Smart Grid Development includes observations based on feedback from more than 90 utilities.

Findings from this newest CAPEX study are somewhat positive, compared with the most recent tracking study (July 2009). Each of five smart grid component areas, plus transmission and distribution infrastructure development, has been reported by utilities located in more than 25 countries to more likely be either increased or unchanged rather than decreased from January of last year.

Note that for DA, well over one third of all respondents indicated an increase in spending for DA activities, while 50 percent reported no change from year earlier allocations, and only 8 percent reported any decreases in capital budget allocations for DA. Among North American utility respondents, 37 percent foresee an increase in 2010 DA CAPEX budgets, while 54 percent indicated no change and 10 percent indicated a decrease was likely.

O&M Budget Factors: O&M budgets reflect a somewhat different story. Most categories of O&M spending were less likely to see an increase from the budgets of a year ago. Distribution infrastructure appears to be the key victim, with 17 percent of the respondents indicating a lower figure budgeted for 2010 O&M expense for distribution network operations and maintenance activities. Note that as of early 2010, DA O&M spending looks to hold its own or even be increased, with only 4 percent citing any decrease in the O&M budget for DA activities.
Utility Focus on Smart Grid Components During 2008 to 2010: In a new question included in the 2008 survey for The World Market Study of SCADA, Energy Management Systems and Distribution Management Systems in Electric Utilities: 2008 to 2010, this group of utilities was asked to check the two most important components of near-term work on the Smart Grid. A total of 136 North American utilities provided their comments by indicating their two most important efforts during the planning horizon. On a summary basis, advanced metering infrastructure (AMI) led in mentions from 48 percent of the group. However, EMS/SCADA investments in upgrades, new applications, interfaces was next, mentioned by 42 percent of the group.

Distribution automation was cited by 35 percent as a near-term thrust related to smart grid activities. GIS (geographic information systems) followed with a 30 percent mention rate. Fault detection, isolation and service restoration, a very recently developed term, was mentioned by 20 percent of the group. Eleven sites (8 percent) indicated “no plans” for any near-term focus on smart grid activities.

Smart Grid Priorities: There were substantial changes in Smart Grid priorities when the data is reviewed on numbers of customers served basis. The largest utilities were likely to be investing in AMI and distribution automation in that order, while the utilities serving from 100,000 to 250,000 customers placed slightly more emphasis on DA than on AMI activities. Smaller utilities serving from 10,000 to 100,000 customers were emphasizing GIS work during the 2008-2010 periods.

In summary, the DA market in the United States is poised for reasonable-to-strong growth over the 2010 to 2015 period. Newton-Evans Research is forecasting more than $900 million in DA-related spending this year, climbing to $1,360 million by 2015.

Charles W. Newton is the President of Newton-Evans Research Company, a Maryland-based leading researcher of technology trends affecting the world’s electric, gas and water utilities and energy pipelines. Chuck has authored more than 150 feature articles and columns, has designed over 200 professional product studies and the Newton-Evans staff has written nearly 230 market research reports on electric power T&D automation and infrastructure, mission critical IT and related communications topics. Professional activities include IEEE and CIGRE membership and participation on international working groups involving substations, cyber security and data communications.

Since 1978, Newton-Evans has been conducting business-to-business survey research for both multi-client and proprietary studies focused on energy industry automation, information technology and infrastructure topics such as Smart Grid. The firm also provides business consulting services for clients in the computer, communications, control systems and engineered products areas serving energy-related utilities. For more information please visit www.newton-evans.com.

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