Electric utilities need freedom to adopt cloud and virtualization technologies
September 14, 2020
Electric utilities’ ability to embrace the rapid technology innovations that are disrupting other industries is coming to a head. The advancement of home area networks, electric vehicles and the internet of things (IoT) has created a need for consumer usage analytics that exceeds the utilities’ capability. Even more concerning, are the wasted dollars and hours on building IT infrastructure insufficient to defend against today’s threats, let alone tomorrow’s.
In response to this challenging environment, the Federal Energy Regulatory Commission (FERC) in February asked whether electric producers and their customers would benefit by moving to cloud and virtualization technologies – the innovations that are already disrupting other industries. From our standpoint the answer is a clear yes – so long as it’s done right. We believe cloud is safe and can, if architected correctly, provide a platform for secure innovation in utility operating environments.
You read that right. Cloud offers the electric utilities less cost and less risk, along with more innovation, resilience, and security.
Let’s talk money first. As of 2018, utilities’ average annual spend on IT infrastructure was $624 million. Based on Accenture's experience, moving to cloud could result in $70 million to $168 million in annual savings.
That said, saving money doesn’t matter unless it comes with improved resilience and cybersecurity, and when it comes to both, utilities try to defend themselves by building higher walls. However, that solution doesn’t scale and is outdated. The Department of Homeland Security has been warning utility executives since at least 2014 that U.S. adversaries have been targeting them and Russian hackers still broke into “hundreds of victims” in 2017. The threat environment is only getting worse—exponentially. But while they have made significant strides, the utilities’ fundamental strategy should change.
To help achieve expected savings, utilities’ need to embrace new technologies such as cloud at scale and at pace. These benefits must be carefully weighed against the industry’s necessary demands for high-bandwidth, low-latency, and high-availability system requirements. To successfully achieve this balance, we recommend prioritizing four main tenets:
Keeping pace with this dynamic paradigm shift in technology requires the continuous evolution of the North American Electricity Reliability Corporation Critical Infrastructure Protection (NERC CIP) Reliability Standards, giving utilities access to, for example, blockchain authentication of autonomous identity and access management (IAM), the industrial internet of things (IIoT) validation, edge computing, and device-to-device communications.
Certainly, the use of cloud and virtualization technologies entails risk, but our experience indicates the greater risk is the status quo. The upshot: Spending time and money to raise floors and install pipes for IT equipment should not be a priority. Utilities should let a trusted entity do that so they can focus on providing efficient and resilient service. Those electric utilities that act now to seize the opportunity to adopt new technologies for their customers open new opportunities to reduce costs and risk—while enhancing resiliency and security.
Accenture Security is a leading provider of end-to-end cybersecurity services, including advanced cyber defense, applied cybersecurity solutions and managed security operations. We bring security innovation, coupled with global scale and a worldwide delivery capability through our network of Advanced Technology and Intelligent Operations centers. Helped by our team of highly skilled professionals, we enable clients to innovate safely, build cyber resilience and grow with confidence. Follow us @AccentureSecure on Twitter or visit us at www.accenture.com/security.
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