Many Transmission & Distribution (T&D) utilities still use a spreadsheet-centered approach for their asset management decision-making. Even though off-the-shelve Asset Investment Planning & Management (AIPM) systems have been on the rise, adoption at T&D utilities has been remarkably limited.
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Having said that, why should you implement AIPM systems? What are the benefits to your organization? Which vendors are out there with a proven track record? And what are the requirements for successful implementation?
Challenging industry trends for utilities
In today’s volatile market environment, T&D utilities’ capital effectiveness is increasingly challenged by a range of industry trends, such as:
- Aging assets and network infrastructure, resulting in increased capital expenditures because of replacement and refurbishment programs.
- Increased complexity in balancing supply and demand due to a rise in energy consumption and distributed generation.
- Local peak loads increase due to the increased adoption of EV, PV and heat pumps. This leads assets to approach maximum tolerance levels and forces asset managers to increase the capacity of transformers and power cables. To plan the right investments, T&D utilities must know — at a street level — the impact of adoption.
- Scrutiny of regulators mandating the T&D utility to start investment projects to stay compliant.
Reversing the trends
Industry leadership is fully aware that capital effectiveness can be improved by optimizing asset performance, workforce productivity and maintenance planning. That is why T&D Utilities have adopted Enterprise Asset Management (EAM) systems, and to a lesser extent, Asset Performance Management (APM) systems in the past decades. Yet a proper data-driven method and support system, to support and guide asset managers in strategic long-term asset investment planning, is still lacking. This is where AIPM systems ascend the throne. But how? As a part of digital transformation, the systems aim to fill the gap by data-based modeling, investment and maintenance scenario analyses, and data-driven risk management (see figure 1 below).
What are the greatest benefits of implementing an AIPM system? There are several advantages to your organization:
- A 3-5 percent reduction of yearly capital spent on replacement programs through better insights into the value of investments and enhanced portfolio optimization.
- A 10-20 percent reduction in operation & maintenance (O&M) spent to increased focus on asset conditions and customer impact.
- A 25% improvement of SAIDI/SAIFI because of reduced asset outages through better risk management and prioritization.
- Stimulation of the alignment between asset management and the ISO 55000 standard, and creating an environment for data-driven decision-making.
Improved line of sight with AIPM systems
You can considerably improve the line of sight of investments with AIPM systems, from asset risk and need identification to project completion. At the basis of asset investment planning lies the identification of network/asset risks and future needs (10-15 years in advance). These are aggregated into a central repository. Each risk and need is measured, compared and, finally, prioritized.
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The data needed for this stems from multiple existing sources, such as the EAM and APM systems, and typically consists of the asset criticality ranking, maintenance and inspection history, and condition data. Each risk or need can then be simulated to determine the optimal solution: maintain, replace or refurbish. For each of the three options, you can also add costs and timelines to the simulation to see whether the outcome changes. The prioritized risks and needs, including optimal solutions, are then translated into projects used for creating an optimized annual plan. By adding and integrating data in the decision-making process, the maximum amount of network/asset risk is reduced.
Once the annual plan is sent to operations, resources are defined and work is in progress. What’s key here is to regularly check progress, budget and asset conditions, and see whether any changes to the annual plan are needed. In case of any needed additional budget, time or resources for a high-priority project, these resources will be subtracted from the project with the least amount of risk and postponed to next year.
Typically, effective AIPM systems are fed with high-quality data from EAM and APM systems. EAM systems ideally provide data to execute asset management and maintenance activities and resolve outages, while APM mainly delivers data to support processes like condition monitoring, safety and compliance. Organizations that lack high-quality asset health data can still adopt an AIPM system by benefiting from AIPM vendors that offer an integrated asset health database or from data quality improvement initiatives. The figure below gives an overview of the relationships between these systems.
Figure 1. Relationship between EAM, APM and AIPM from a data-driven perspective.
Some APM-related data, such as predictive and simple condition monitoring, can also be found in EAM systems. In case of similar or overlapping data, however, AIPM system need to determine the master data.
Why go for AIPM vendors when you can create your own? Some T&D utilities have tried to build an AIPM system from scratch, using the EAM system as a foundation. While this approach is understandable, these options are costly and lack the full functionalities of off-the-shelve systems. Others have tried to use Project and Portfolio Management (PPM) solutions for managing the work, but these solutions, in their turn, lack the investment planning capabilities that carry most of the benefits. According to Gartner, the AIPM market has shifted from being a market of largely custom deployments to an established software product category, with three dominant vendors. But what sets these vendors apart from trailing companies?
The past couple of years, we have seen an expansion in the number of mature AIPM systems in the market. Though AIPM software vendors typically have experience in their own domestic market, they are now ready to aim for the global market. Besides the AIPM system vendors identified by Gartner above, several other vendors are entering the AIPM domain. Besides Copperleaf, SEAMS and PowerPlan, we also have AIPM implementation experience using software solutions from Cosmo Tech and DIREXYON within Accenture.
AIPM is clearly the way forward for you as a T&D utility. But how can you determine the value case for the future? How can you benefit from the added value AIPM systems have to offer? These factors are key in the decision process.
Capability assessment: develop capabilities on condition and reliability-based maintenance, map a transformational roadmap or refine existing asset management data, such as asset classes, risk matrixes and the asset criticality index.
Software selection: jointly perform a software vendor assessment to find the best fit to your organizations’ requirements.
Data quality: jointly execute a data and process discovery to assess existing data and processes, data quality and criticality and map system integration points.
Current digital technologies enable data-driven decision-making to move up the asset management maturity scale and attain excellence. A necessary step for T&D Utilities that want to unleash their full potential in the digital age. Before embarking on the AIPM journey, perhaps we can pique your interest for an immersive demonstration at one of our NanoLabs or Innovation Centers, where you can experience the power of proven solutions?