A big portion of electrical energy is lost between generation and transmission. Besides the need for improving efficiency, many other market forces are causing a major transformation in the Energy and Utilities (E&U) industry (E&U), including:

• Climate change and environmental concerns; 
•  Convergence of network management and power distribution;
• Customer’s requirement for more control in energy management and conservation;
• Pressure for flexible energy rates due to the economic downturn; and
• Affinity for green and renewable energy use.

Starting from the organizational structure, the new smart grid is transforming the E&U organizations through new business processes which allow complex and networked management of the power to replace the prevailing centralized management. Intelligent systems spread across the smart grid use complex, software intensive control systems to manage the transmission and distribution of electricity, with unparalleled efficiency.

This transformation will be enabled by implementing a Smart Grid, which is a SOFTWARE-intensive system of systems. Through systems and software delivery best practices, utilities can succeed in migrating to the Smart Grid in a short and predictable timeframe. Some of the common concerns faced during this transformation are discussed here.

Delivering a System of Systems: The Smart Grid
Software is the major controlling entity in the new architecture. Most utilities do not develop much software in house. They typically procure packaged applications such as a meter data management system (MDMS) and delegate the job of customizing the new application into their infrastructure, to a systems integrator. While this model has worked well in the past, the complexity of the Smart Grid puts a significant strain on it and requires the utilities to take special care in managing their delivery partners to ensure successful execution.

Effective communication and collaboration are critical. So is monitoring the execution of the systems integrator’s application. In order to promote the establishment of a common platform between the utility and the execution partner, a collaboration tool together with tools for project management, prioritization, and formal requirements management, a solid architectural vision for the new Smart Grid emerges

Smart Grid planning, architecture and prioritization
Implementation of the Smart Grid inherently is a long-term project undertaking (which may take up to 20 years), that is much more complex than what utilities have typically taken in the past. Successful implementation/deployment requires utilities to do upfront planning, blue printing and investment prioritization before deployment begins.

To initiate the transformation to smart grid, utilities need a clear understanding of the existing and future organization and system-level functions. The key driver is to understand the gaps and redundancies between the business and the application architecture. Project and portfolio management (PPM) tools provide this capability at many different levels of PPM

Given the multiple applications that will make up the Smart Grid, ensuring interoperability can be a serious challenge. 

• The International Electromechanical Commission (IEC) has developed a set of standards to help ease the burden. For Transmission and Distribution (T&D), this includes: IEC 61868 and 61970 and a Common Information Model (CIM) based on 61968/61970. 

•  A common model based on IEC 61968/61970 (CIM) is essential in application integration for the context of transmission and distribution. The implementation of the standards is a crucial stepping stone to ensuring interoperability.

• IBM Rational’s Model-Driven Application Integration, a combination of Rational Software Architect, Rational RequisitePro, Rational Team Concert, InfoSphere Business Glossary, and WebSphere Process Server comprise this solution.

• Rational has incorporated the latest version of the CIM into RSA and has developed services offering consisting of plug-ins that help customer visualize and transform the IEC.

Managing the Security Risks
The Smart Grid inherently contains more software than a traditional grid. Furthermore, the software will be much more tightly integrated in a Smart Grid than in a traditional grid, which often has physical, or air, gaps between various components of the system that help prevent security breaches in one area from spreading the system.

There are vastly more potential entry points into the grid than in the past. 

• The introduction of millions of smart meters into the typical utility’s grid infrastructure, each with its own IP address.

• The increased adoption of customer-facing portals that allow customers to actively monitor and manage their energy consumption. 

Hackers are now becoming more inclined to try to penetrate utility networks than in the past.

• Cyber attacks intended to pull down the grid in a geographic area is a real and growing threat.

• Regulators, like the National Electric Reliability Corporation (NERC), in the US are taking notice and implementing stricter security standards. A good example in the US is the NERC Critical Infrastructure Protections (CIP) standard.

• Utilities face significant financial penalties for failing to pass security audits but they are just beginning to realize the magnitude of the task facing them. Rational AppScan, as well other software tools can help utilities mitigate risk

Migrating to the Smart Grid is a change in paradigm for Energy and Utilities companies. In order to successfully transform the industry, the underlying business processes also need transformation. Additionally, a new set of design and data standards ensure interoperability among the many autonomous nodes in the highly networked Smart Grid. Through formal and automated management of the business and technical requirements and system architecture and design based on standards, a highly transformed energy emerges, which provides its consumers unparalleled savings in energy cost, as well as decrease the significant amount of electrical energy that is lost during transmission and distribution.