1. 50 Years of Growth, Innovation and Leadership
Smarter Computing in Energy and Utilities
The IT systems infrastructure that enables Scalability, Resiliency and Security
A Frost & Sullivan
White Paper
Juan Fernandez and
Brian Cotton
www.frost.com

2. Frost & Sullivan
Abstract................................................................................................................................... 3
Navigating an Uncertain Future in the Energy and Utilities Industry.............................. 3
The Business Need for Smarter Computing in the Energy and Utilities Industry.......... 7
Introducing Smarter Computing.......................................................................................... 7
Transform the Utility Network............................................................................................. 9
Transform Customer Operations......................................................................................... 10
Improve Generation Performance....................................................................................... 10
The Business Value of Smarter Computing in the Energy and Utilities Industry............ 11
Oncor:Transforming the Network to Support a New Business Model............................. 11
Bluewater Power Transforms its Customer Operations with a
Smarter Computing Approach............................................................................................. 12
Vestas:Turning to Big Data to Improve Generation Performance..................................... 13
Building the Intelligent Utility Network to Support a New Business Infrastructure...... 14
References................................................................................................................................ 15
CONTENTS

3. Smarter Computing in Energy & Utilities
ABSTRACT
As energy and utility companies around the world face challenges, they are changing business
models to remain relevant in a smarter energy value chain. Shifting climate patterns and
environmental concerns are bringing renewable energy sources into energy producers’
portfolios. More stringent regulatory mandates and increased security concerns are changing
the way businesses operate. At the same time, markets are opening up to new competitors,
threatening the traditional stability of the industry. Energy and utility companies are faced with
the challenge to adapt their models in this new era, and many are now turning to a Smarter
Computing approach to meet the challenges and stay competitive.
Smarter Computing can help turn energy and utility companies into leaner, more responsive
competitors, while helping ensure adherence to regulatory compliance objectives. It can
guide the companies’ IT departments to transforming IT systems to support the imperatives
of a scalable, secure, and resilient business infrastructure. A number of progressive energy
and utility companies around the world are implementing a Smarter Computing approach,
including Oncor, Bluewater Power, and Vestas. With IBM’s help, they are beginning to realize
the benefits of Smarter Computing and are better able to meet the demands of operating in a
rapidly changing, competitive environment.
NAVIGATING AN UNCERTAIN FUTURE IN THE
ENERGY AND UTILITIES INDUSTRY
Energy utilities around the world are entering into a new environment, where risk and
opportunity are disrupting a 100-year-old industry model. The energy and utilities industry
is going through a phase of rapid transformation in a period of expanding global demand
and significant changes in a number of areas. In what was traditionally a predictable and
stable industry with a one-way value chain, from generation, transmission and distribution, to
customer energy and information flow, new challenges are forcing energy and utility companies
to transform themselves to remain relevant and competitive.
One significant challenge is the emergence of new entrants and disruptive technologies into the
value chain. The increasing complexity of the value chain, which includes competing retailers
and wholesalers, and the end-clients’ capability to create their own electricity, is compelling
utilities to evolve their relationship with their customers beyond their historical role as a
monopoly supplier. The transformation of the relationship between utility and customer is
further complicated by new technologies around telecommunications, renewable energy,
electric vehicles, and home automation that can blur the lines between a supplier of energy
and the consumer. The resulting new value chain enables a bi-directional flow of energy and
information among the various participants.
Another challenge lies with environmental concerns that put pressure on traditional energy
sources that contribute to climate change through carbon emissions. Estimates by the United
States Energy Information Administration indicate that the demand for energy will grow by
53 percent between 2008 and 2035.1 The vast majority of this growth (85 percent) will come
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4. Frost & Sullivan
from countries outside of the Organization for Economic Cooperation and Development
(OECD), making this issue globally relevant. Meeting that demand will require expanding
“In the 20th century
energy generation, particularly with sustainable sources, but it will also demand increasing the
the goal was universal efficiency of consumption, highlighting the impact of every watt consumed. Climate change and
access to electricity… environmental awareness have become fixed points in consumers’ minds and in the wider area
in the 21st century of public policy, and will continue to drive new regulations.2
it will be about
modernization.” This challenge can have profound effects on the industry, and is related to another challenge
around the ability to control grid stability in the presence and growth of distributed renewable
Jim Rogers, CEO, generation resources. As wind and solar energy sources are added to the generation mix,
Duke Energy their impact not only on local loading but also on the overall ability to balance the network
is immense, driving a clear need for modifications in the utility network’s capabilities. As Jim
Rogers, CEO of Duke Energy sees it, utilities have to change because “in the 20th century the
goal was universal access to electricity…in the 21st century it will be about modernization, and
by 2050 all our existing plants but hydro [electric] may be closed down or changed because of
environmental regulations.”
Utilities are also facing challenges that are more internal in nature, concerning their aging
assets. An aging infrastructure, as well as an aging workforce, stresses a utility’s ability to
maintain service reliably. This is compounded by the business need for higher efficiency from
existing assets, reduced waste and increased return on capital investments, and the related
drive to implement new strategies for improving energy delivery, efficiency and utilization. In
an increasingly competitive environment, utilities have to deliver higher-quality services and
more reliably, while keeping rates low.
Perhaps the challenge that is most concerning is a change in the nature of the customers
themselves. Customers are empowered by the shifts in the industry, are enabled by technology,
and emboldened by social media.There is a growing desire for customers to have an active role
in their own energy management, through interfaces such as mobile phones and tablets, and
to manage their energy usage and control the devices that use energy. Some customers are
also making supplier selections based on lifestyle choices, including those supplying renewable-
sourced electricity. This is an epic change in the industry, which is forcing utilities to treat
customers as more than ratepayers or “meters” of energy consumption; they are now powerful
sources of revenue that can control both their level and pattern of consumption.3
The traditional business model of utilities does not lend itself well for meeting the demands
of the future. Enabling the partnership with the customer requires significant communications
resources—something that many utilities often lack in both human and system resources.
The new paradigm demands constant generation and data processing to enable actionable
responses by both provider and consumer. The implementation of smart grids is essential to
the success of shifting onto the new paradigm. However, because creating the smart grid is
taking place while the older power grid remains fully operational, it requires development and
implementation of new control mechanisms and security innovation to protect all players in
the value chain.
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5. Smarter Computing in Energy & Utilities
The market forces in today’s energy and utility environment have shifted market power to
the consumer, which is forcing utilities to change business models to become more customer-
centric. Utilities are searching for new strategic approaches to adapt to different industry
dynamics that have added new participants, technologies, and business models. Utilities must
become more agile to compete in a rapidly evolving ecosystem.
Therefore, the challenges and complexities of the new energy and utility industry are requiring
utilities transform their business models, and the technology that supports them, to succeed.
Utilities undergoing this process are shifting from the traditional energy value chain that is based
on a one-way network, to a smarter energy value chain based on an intelligent utility network
(IUN). The transformation process is guided by three vital imperatives, as shown in Figure 1.
Transform the utility network from rigid, one-way systems to dynamic, automated, and
reliable information networks that are orchestrated to enable all participants to gain value in
proportion to services delivered on them.
Transform customer operations to empower customers, facilitate more choice, and
improve customer satisfaction by providing access to information, products, and services that
can increase efficiency, reduce bills, and address energy needs.
Improve generation performance by changing the generation portfolio to optimize the
supply mix to meet regulatory requirements, while continuously improving the efficiency of the
current assets and maintaining financial viability.
Figure 1: Imperatives Guiding the Transformation of the
Energy and Utility Industry
Transform the Utility Network
• Single View of Grid Data and Information
• Meter & Grid Data and Information Management
• Enterprise Data and Information Management
• Risk and Regulatory Compliance
• Risk and Scenario Modeling
• Fraud Analysis and Reporting
• Dynamic Resource Reallocation and Response
• Unified Smart Grid Strategy
Transform Customer Operations
Energy and Utilities • Single View of the Customer
Industry • Customer Care and Insight
• Dynamic Rating and Billing
Transformation • Enterprise Data and Information Management
• Customer Relationship Management
• Monitor Usage in Real-Time
• Integrated Demand Management
• Customer Information Applications Strategy
Improve Generation Performance
• Predict Energy Resource Availability
• Risk and Regulatory Compliance
• Asset Performance Management
• Enterprise Data and Information Management
• Plant Information Lifecycle Management
• Power Generation Maximization and
Operational Cost Reduction
• Market Trading Management
• Generation Strategy
Source: Frost & Sullivan analysis and IBM
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The imperatives shown in Figure 1 revolve around how a utility can transform its business
model to be more attuned to the customer, using modern, multi-functional transmission and
Key Infrastructure
delivery networks, while broadening its generation and operational assets to meet regulatory
Requirements and financial goals. The transformed model equips the utility with tools to listen to its customer
• Big Data Capable and develop services that fit their needs, while remaining relevant and competitive, and opening
• Scalable the ecosystem to partners who can help increase the value of the network to all participants.
• Optimal Performance It enables the utility to accommodate new power generation modes and improve the efficiency
• Security and Resilience and sustainability of its operations. Finally, the new model empowers the customer to take
• Flexible control of their energy consumption, and helps integrate the intelligent utility network to value
incubators in the communications, consumer electronics, and transportation industries. The
utility that embraces these imperatives will become an active participant in a smarter energy
ecosystem, able to accommodate new partners and compete against new entrants, and take
advantage of disruptive technologies. However, the transformation requires a common plan
for IT and operational technology (OT) to support a utility data and information management
strategy, so that IT systems and architecture can support and enable utility business drivers.
The critical element of success is a scalable, resilient, and secure IT infrastructure to handle the
demands imposed by these imperatives.
Utilities are struggling to capture value from their operational and IT investments.To profitably
grow and prepare for the IT complexities that are expected from the dramatic data and
information growth across grid and various lines of businesses, they will need to modernize
the IT infrastructure with scalable, reliable and secure systems that are workload optimized.
Rather than engaging in a rip-and-replace exercise, IT managers need to carefully administer
technology investments and reduce the total cost of IT ownership. Historically, the utility IT
infrastructures were built to support the traditional business model, which made their IT
systems sprawling and isolated from each other.This limits their scalability and agility. Moreover,
new computing or storage capacity was often bought based on requirements of separate line-
of-business (LOB) projects. This led to redundancy across a utility, and can inhibit IT managers
from being able to deliver hardware capacity and performance optimization. It also limits the
ability of the network to contribute to regulatory monitoring and adherence.The transformed
infrastructure must be scalable to address the ever-changing demand and to enable potential
new partners or services. The system must also support multiple workloads to accommodate
large volumes of customers’ and operational data. The infrastructure also needs to bring a
high level of automation to help adapt to changes in pricing and new applications, enabling
IT managers to direct resources where they are needed most, and it must be reliable and
robust to ensure constant uptime. Finally, it is crucial that the infrastructure be standardized
and support interoperability to close gaps in the existing architecture, governance rules, and
process management simultaneously across units and to support newly added businesses, such
as merged or acquired partners.
Energy and utility industry leaders are beginning to seek advanced IT solutions to help
them deliver new value to customers, partners, and shareholders; support intelligent utility
networks; and increase the efficiency of their operations. Forward-thinking CIOs are starting
to transform their IT infrastructures to respond to the imperatives driving innovative business
models that deliver increased business value and improved overall smart grid return on
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investment (ROI). To successfully deliver on the promise of increased business value, utilities
need modern IT infrastructures. These IT systems must be capable of processing a constantly
updated stream of information from customers and the supply network, and provide high
application availability. They must enable powerful analytics providing insight into changing
customer service preferences and operational conditions. They also need to perform at
optimal levels and be secure and resilient to any disruption. Finally, they need to be flexible
to support different types of business models to keep costs down. Smarter Computing is an
approach that can help energy and utility industry CIOs transform their IT infrastructures to
address these imperatives.
THE BUSINESS NEED FOR SMARTER COMPUTING
IN THE ENERGY AND UTILITIES INDUSTRY
Introducing Smarter Computing
Smarter Computing is a new approach to transform IT infrastructures to enable utilities to
build and support an intelligent utility network. The Smarter Computing paradigm builds IT
infrastructures that are:
• Designed for Data, meaning that the IT infrastructure is capable of harnessing all available
information, including real-time streaming data from smart meters and devices on the grid,
to unlock insights for better decision-making. It is about extending beyond traditional
sources of data to generate insights by leveraging new forms of information, which can be
incorporated into a utility’s grid operation management systems (like OMS or DMS) and
enterprise systems (like supply chain management systems) to reduce operational costs,
master a single version of a customer’s profile, enhance data security, and get insights from
huge volumes of complex data.
• Tuned to the Task, meaning that organizations consciously match workloads to IT
systems that are optimized to the workload characteristics, ranging from monitoring asset
performance and database management, to business intelligence and analytics, to managing
energy source integration. Optimizing the IT systems to the workloads enables greater
performance and efficiency, helping CIOs enhance application availability and maintain a
lean operational profile.
• Managed with Cloud Technologies, meaning that the IT infrastructure delivers
virtualization, self-service provisioning, and other technologies that enable greater
efficiencies out of existing IT assets, and supports the deployment of resources and new
services in a flexible, dynamic, and cost-effective manner.
The Smarter Computing paradigm supports business transformation by creating a technology
framework to enable business operations that realize the business imperatives, and generates
business value in an increasingly competitive, cost-conscious environment. The Smarter
Computing approach in the energy and utilities industry revolves around how generation,
transmission and distribution, and customer data is collected, processed, analyzed, saved, and
shared across lines of business in a utility, and with customers and partners on the intelligent
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utility network. The IT infrastructure that supports business operations in the IUN delivers
business value by using data to guide decisions, using optimized systems to maximize efficiency,
and leveraging the cloud to transcend administrative silos and legacy system limitations.
Figure 2 illustrates the application of the Smarter Computing approach to energy and utilities
transformation to an IUN.
Figure 2: Aligned to the guiding imperatives, Smarter Computing in
Energy and Utilities enables the industry transformation
Energy & Utility Organizational Transformation
Transform the Utility Transform Customer Improve Generation
Network Operations Performance
Business • Single View of Grid Data
and Information • Single View of the Customer • Predict Energy Resource
Imperatives • Customer Care and Insight Availability
• Meter & Grid Data and
Information Management • Dynamic Rating and Billing • Risk and Regulatory
• Enterprise Data and • Enterprise Data and Compliance
Information Management Information Management • Enterprise Data and
• Risk and Regulatory • Customer Relationship Information Management
Compliance Management • Asset Performance
• Risk and Scenario Modeling • Monitor Usage in Real-Time Management
• Fraud Analysis and • Integrated Demand • Plant Information
Reporting Management Lifecycle Management
• Dynamic Resource • Customer Information • Power Generation
Reallocation and Response Applications Strategy Maximization and
• Unified Smart Grid Strategy Operational Cost Reduction
• Market Trading Management
• Generation Strategy
DESIGNED FOR DATA CLOUD ENABLED WORKLOAD OPTIMIZED
Smarter
Computing Process Automation Business Analytics Business Process Management
Infrastructure
Supporting Messaging & Web
Business Event Customer Business Transaction
Services/Data &
Processing Intelligence Intelligence Processing
Operations info Presentation
Data Processing, Storage, Collaboration & Sharing, Data and Information Management
Data Acquisition and Physical World Interfaces
SCALABILITY, RESILIENCY AND SECURITY
Grid Orchestration Customer Satisfaction Generation Optimization
Business
Value Reduced Risk Lower Total Cost Faster Response
of Ownership
Reliable Utility Service Higher Efficiency
Source: Frost & Sullivan analysis
Energy and utility CIOs can use IT infrastructures that incorporate Smarter Computing
principles to carry out the operations underlying their transformation imperatives. Using an
infrastructure that is designed for big data and scalability, executives and IT managers can
uncover insights into system performance and customer demand patterns, helping to achieve
efficient balances between supply and demand. The new business models emerging in the
industry require a business infrastructure that can support new customer services, as well as
accommodate multiple new generating and retailing partners. A utility IT infrastructure that can
be managed in the cloud can deliver these new sources of business value in the industry. Finally,
the Smarter Computing approach gives CIOs control over capital and operational expenditures
because existing IT infrastructures can be transformed and need not be completely replaced.
Smarter Computing can help turn utilities into lean, agile competitors, while helping ensure
adherence to regulatory compliance objectives.
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Transform the Utility Network
The Energy & Utilities industry is changing its business model to accommodate a smarter
energy value chain and a substantial part of this activity is based on transforming the traditional
one-way utility network into the IUN. The ultimate goal of this imperative is to provide more
reliable utility service with improved operational and financial efficiency, which will hinge on
collecting, integrating, processing, and storing data from the meters, devices, and sensors on
the grid. The business value of a transformed utility network will come from automation and
ability to use the insights from the network to anticipate changes in demand, and supply energy
and utility services efficiently, while managing grid and utility assets to handle both normal
and peak loads. At the same time, regulatory compliance and risk mitigation strategies will
depend heavily on grid and fulfillment information availability, security of the grid and critical
information, and robust fraud monitoring and reporting capabilities.
A Smarter Computing approach can be an essential enabler of the IUN because it gives energy
and utility CIOs the ability to measure, control, and gain insights from the network data, to
have a trusted “single view” of the infrastructure. By using a computing infrastructure that
is designed to handle large amounts of streaming data, while integrating it with historic data
from a variety of sources, line of business and IT managers can apply advanced analytics to
monitor and predict grid performance. This gives them powerful real-time decision aids, and
supports business applications necessary for efficient performance and regulatory compliance.
When the IUN is built with computing hardware optimized to energy and utility workloads,
the operational system can have high data and information availability in a secure environment,
making it more resilient and resistant to fraud and criminal intrusions. While implementing
aspects of the IUN model in the cloud, CIOs can facilitate collaboration across the operational
pillars of business, and virtualize and consolidate processes and workloads to lower maintenance
and power requirements to support the IUN.
Smarter Computing best practices can also help realize other business values by enhancing
a range of areas from the utility network operations, enterprise applications themselves, and
business imperatives, including:
In a proof-of-concept
• Sustaining linear scalability while lowering the cost per transaction; test of the Smarter
• Automatically setting operational and security parameters to match performance and Computing paradigm,
compliance standards; and IBM and AMT-
• Orchestrating partners across the value chain to assure an optimized, balanced, secure, SYBEX demonstrated
and reliable network. efficient data capture
and processing for up
IBM and its business partner AMT-SYBEX are applying the Smarter Computing approach in
to 100 million smart
transforming the utility network to handle data feeds from large numbers of smart meters.
meters on a single
By using a computing platform specifically designed to capture and process meter data, a test
computing platform.
system was able to load data from 10 million meters in 36 minutes and scale up to handle data
from 100 million meters, on a single server platform.4 This suggests that utilities serving even
very large customer bases would be able to maintain the data processing requirements of the
IUN environment.
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Transform Customer Operations
The transformation of the Energy & Utility industry’s business model also represents a
fundamental shift in the relationship between a utility and its customers. One aspect of this
dynamic is an increasing importance of customer satisfaction to a utility. With more choice
of energy suppliers in a competitive environment, coupled with the spread of social media,
utility customers are becoming empowered consumers. They are able to not only demand
more from their providers, but they are also able to influence others in their communities
to demand more. Another aspect is that customers are able to take a more prominent role
in managing their energy and utility usage, which can be a critical factor in a utility’s demand
management activities. Utilities are realizing that they need to transform their customer
operations in response to the changing nature of their relationships with their customers.
This has implications throughout a utility organization, from customer care and billing, to sales
and marketing, to generation and distribution.
Energy and utility CIOs can employ a Smarter Computing approach to transforming their
customer operations to help increase customer satisfaction and to better integrate customer
usage information into demand management strategies. By implementing the designed-for-data
principle, a utility can integrate a wide range of customer data and develop a master, “single
view” of each customer. Applying advanced customer analytics to this data can yield detailed
insight into customers’ preferences and usage patterns, which can be useful in developing
customized offers and improve the quality of customer care agent interactions. In addition,
systems would be able to collect data faster and reduce billing processing time, and increase
billing accuracy. Moreover, a Smarter Computing-inspired customer operations system could
accelerate the creation, testing, and deployment of new services in the cloud, including those
to enable customers to more effectively manage their energy consumption.
Smarter Computing can also help create additional business value in transformed customer
operations, such as:
• Dynamic rate plans based on intelligent devices and appliances in the home communicating
with the utility through the cloud;
• Improve the efficiency and effectiveness of the contact center performance across all channels,
addressing customer needs, regulatory mandates, and organizational constraints; and
• Provide customers with information, controls, and choices to better manage
their consumption.
Improve Generation Performance
In today’s energy and utility industry environment, generation operations need to be integrated
from generation equipment to the distribution network to the trading floor, for higher efficiency,
lower costs and reduced risks, faster response to changes in demand, and increased control
over carbon emissions. Improving generation performance requires an IT architecture that can
provide a complete, contextual view of all aspects and components of the generation operations,
including the mix of generating assets, considering fuel supply, carbon load, and variability in
renewable sources.The architecture must also be able to support high-performance computing
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operations for generation modeling, forecasting, and simulation to predict performance under
changing generating supply, energy demand and policy-driven considerations.
Smarter Computing principles can help CIOs meet this imperative by implementing workload-
optimized systems that can efficiently monitor and predict conditions across generation assets,
and to support analytic applications that forecast changes in demand so that operational
adjustments can be made in real time to accommodate them. An IT system that is designed
for data can feed critical data into high-performance computing applications, reducing the
processing time for modeling and optimization activities. Implementing virtualization and
systems software capabilities enable IT task/processing optimization. Moreover, deploying an
IT architecture within a cloud model can facilitate more productive ways of using technical
resources to accomplish a plant’s operational goals. A high-performance computing (HPC)
cloud solution can move utility computing grids to the next level by empowering end users and
system administrators to schedule, deploy, and manage a virtual pool of technical computing
resources, provisioning and configuring resources based on users’ needs.
Using a Smarter Computing approach to improving generation performance can deliver
additional business value, including:
• Supporting a robust and secure data and information storage infrastructure, which can
ensure adherence to various regulations, aiding emission, safety, and contractual compliance,
for example.
• Bring high-performance computing infrastructure into mainstream technical computing
to enable analytics related to commodity, energy and trading, consolidating scattered
computing clusters to streamline monitoring and control over diverse generation assets.
THE BUSINESS VALUE OF SMARTER COMPUTING
IN THE ENERGY AND UTILITY INDUSTRY
Energy and utility companies are facing a wide range of changes in their industry that is
challenging the foundation of a 100-year-old business model. The traditional one-way value
chain is transforming into a dynamic value network in which energy and information flows
bi-directionally between utilities, customers, suppliers, and partners. Customers are taking a
more active role in managing their energy consumption, regulators are imposing stringent
curbs on carbon emissions, and financial markets have sharp expectations for returns on assets.
The IUN is being built to support new business models developed to take advantage of growth
opportunities in the new industry environment, and leading energy and utility companies are
embracing Smarter Computing principles to enable them to transform the IT infrastructures
needed to support these models.
Oncor:Transforming the Network to Support a New Business Model
Transforming a company’s business model to take advantage of the opportunities in newly
deregulated energy markets is a complicated task. Dallas-based Oncor is an energy services
provider serving more than 7 million customers with more than 3.1 million points of delivery,
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12. Frost & Sullivan
and it is blazing a trail with the IUN to become a leader in its market. Realizing that reliable
electric service delivery is an essential component of success in competitive markets, Oncor
Oncor used a Smarter
made the strategic decision to build an IUN as the backbone of its growth. An early step
Computing approach was to replace its analog meters with advanced digital meters, which will greatly expand the
to transition its digital intelligence with which Oncor can transform its relationship with customers and transform its
infrastructure and operational models. However, the company also understood that its current IT infrastructure
support an aggressive was not designed to handle the flood of data that digital meters provide.
new business model to
grow in a competitive Oncor selected IBM as a partner to help it establish the digital infrastructure on which it
energy market. would base its IUN strategy.5 Because Oncor’s existing infrastructure was not designed to
support the IUN, the team elected to implement a Smarter Computing approach to rebuild
its IT infrastructure. This would not only preserve the value of its existing assets, but enhance
the overall value of its IT infrastructure with new, targeted investments. The centerpiece of
the implementation was an advanced storage system designed to accept tens of millions of
records every day and analyze them quickly, then securely store the data. Even as Oncor’s
system is designed for data, it is built from storage and server components explicitly designed
to accommodate the massive batch processing workloads placed on it, yet retain the ability to
scale out and up quickly.
Oncor’s decision to implement a Smarter Computing approach is returning a variety of business
advantages. The ability to quickly and reliably process and store its customer data enables
Oncor to meet tough regulatory requirements active in the competitive Texan market. The
new system is also helping the company to maintain a reliable service delivery reputation with
deeper insights into its network. By analyzing the information, Oncor can detect when service
interruptions and service restoration occurs. Finally, the Smarter Computing approach is saving
Oncor money with a system that is easier to maintain, which lowers administrative costs.
Bluewater Power Transforms its Customer Operations with a
Bluewater Power Smarter Computing Approach
implemented a
Bluewater Power, a medium-sized utility in Ontario, also embarked on a large-scale transition
Smarter Computing
from analog to smart meters, but its situation was far different from Oncor’s.The utility industry
approach to transform
and government in Ontario acknowledged that the growth in demand for electricity in Ontario
its customer
was growing faster than it could bring new generation capabilities online. Coupled with new
operations to meet
environmental regulations and financial reporting requirements, the government mandated
stringent regulatory
that smart meters be installed in all consumer premises.The smart meters would be part of an
and reporting
initiative to shape consumption patterns with time of use (TOU) pricing schemes, which are
requirements. At intended to move consumer demand for power to less-expensively priced off-peak periods,
the same time it was and thereby help optimize the overall generation capacity in the province.
able to cut costs
and position itself Bluewater faced three immediate business challenges: (1) the mandated introduction of smart
for future growth metering in Ontario, (2) regulatory changes, and (3) new financial reporting requirements. The
opportunities. company evaluated its IT infrastructure capabilities and concluded that its data centers were
not prepared to meet these challenges, so it decided to apply Smarter Computing principles to
help it transform its customer operations to meet these requirements. Bluewater’s transition
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began with enhancing its current Customer Relationship Management (CRM) and Enterprise
Resource Planning (ERP) applications on a Smarter Computing-inspired infrastructure. This
helped the company collect, process, and store the data that would be generated from
smart meters. This gave Bluewater the capacity, flexibility, and scalability to meet the business
challenges it faced.
The transformed infrastructure also gave Bluewater the ability to deliver new services to
its customers using the TOU data, mandated by the Ontario government. By using AMI and
Smarter Grid networks to develop better service offerings and optimize business processes,
the utility can use the business challenges as an opportunity for growth, enabled by recording
and analyzing new streams of customer data. Bluewater is also controlling costs with the
Smarter Computing approach. By implementing an IT infrastructure that is designed to handle
the large volumes of data and leveraging workload-optimized components in a virtualized
environment, Bluewater estimates that storage provisioning time improved by 60 to 70 percent,
cutting physical rack space needs by 50 percent, and avoided the need to hire one additional
IT employee.
Vestas:Turning to Big Data to Improve Generation Performance
Vestas, based in Denmark, is the world leader in high-tech wind power systems. To make wind
a sensible part of a utility’s generation portfolio, placing the wind turbines in locations with
reliable wind is essential to the commercial viability of the technology. The optimal sites not
only equate to improved generation performance, but also to a reasonable rate of financial
return to the utility using wind. The key to placing its turbines in the best sites, and ultimately
to the success of its customers and itself, is Vestas’ wind library, which incorporates global
weather data and data gleaned from its existing, sited, turbines. Using its current library,Vestas
was able to provide relatively accurate assessments of wind flow, but this process would often
take up to three weeks—an unacceptable duration in a highly competitive industry. Vestas
decided that it needed to greatly expand the power of its wind library to increase the accuracy
of turbine siting and dramatically reduce the amount of time to produce the results to support
its customer and its own business cases.
Vestas partnered with IBM to implement a Smarter Computing approach to upgrade the
capabilities of its wind library and siting projections, which would give it a substantial competitive
advantage. At the same time, the company wanted to lower its IT operational and maintenance
costs, and lower its own carbon footprint. Using the approach, Vestas deployed a big data-
capable, advanced analytics solution on a high-performance computing system.This system was
designed to analyze massive amounts of structured and unstructured data, including weather
reports, geospatial and sensor data, satellite images, maps, and weather modeling research
to increase siting accuracy and eliminate a month of development time for a given site. The
high-performance computing system, optimized for the complex forecasting workloads and
managed with cloud technologies, enabled Vestas engineers to distribute tasks, effectively
increasing computational power while shrinking its IT footprint. Results were returned in 15
minutes, compared with the three weeks it used to take, and energy consumption was reduced
by 40 percent.
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The business value of the Smarter Computing approach to Vestas is central to its survival.
For Vestas, it means a stronger value proposition and a more efficient business operation. For
“Vestas turbines operate
Vestas’ customers, it means greater business case certainty, increased reliability on their
for decades, and clients investment, and the potential for a faster return on their investment than before. “Vestas
demand to know how turbines operate for decades, and clients demand to know how much energy they will produce
much energy they will and what their return on investment will be before they are installed,” says Lars Christian
produce and what their Christensen, vice president of Plant Siting and Forecasting, Vestas Technology R&D. “Using
return on investment Smarter Computing, we can now answer these questions quickly to identify new markets for
will be before they are wind energy and help our clients meet aggressive renewable energy goals.”6
installed…Using Smarter
Computing, we can now BUILDING THE INTELLIGENT UTILITY NETWORK TO
answer these questions SUPPORT A NEW BUSINESS INFRASTRUCTURE
quickly to identify new
markets for wind energy Energy and utility CIOs and IT managers are being asked to transform their IT infrastructures
and help our clients meet to enable their companies to transform their business models, and themselves, into lean,
aggressive renewable responsive organizations able to compete in a changing industry. Customers are becoming
energy goals.” more empowered and are taking an active role in managing their consumption patterns. New
and more stringent financial and environmental regulations are pressuring companies to be
Lars Christian Christensen, more accountable, while increased competition means customers are free to churn away
Vestas Technology R&D to other service providers. To succeed in this market, energy and utility companies need to
reinvent their business models to transform their network infrastructures and their customer
operations, while ensuring improved generation performance and financial returns.
The application and operational requirements to realize these imperatives come with
substantive IT workloads and dramatically increasing volumes of data. Traditional utility IT
strategies are unable to cope with these pressure points. Moreover, in today’s competitive
climate, utility CIOs have the additional requirement for their IT operations to reduce costs
and IT systems to be flexible and scalable to adapt to business needs that include regulatory,
demand, and energy supply changes in the industry.
The Smarter Computing approach is a holistic solution that can guide utilities’ IT and OT
departments in establishing a common strategy for delivering IT infrastructures to support
scalable, resilient, and secure operations. The efficient utility enterprise is built based on this
transformed network infrastructure. A number of energy and utility companies around the
world are beginning to realize the benefits of implementing a Smarter Computing approach.
CIOs may wish to investigate using a Smarter Computing approach if they are considering:
• Building capabilities to measure, control, and gain visibility over the entire network
to visualize infrastructure availability and performance, while being able to track and
document events to support decisions about all types of utility assets;
• Aligning the utility’s values with the customers’ values, for example around environmental
emphasis versus cost-effectiveness, and providing customers with information, controls,
and choices to better manage their consumption;
14 Frost.com

15. Smarter Computing in Energy & Utilities
• Future-proofing their company against new regulations and requirements, as well as
ensuring that their company can achieve existing compliance objectives; or
• Lowering the cost of operation and minimizing financial and security risks by avoiding
multiple data input or data inconsistency issues.
Forward thinking energy and utility companies, such as Oncor, Bluewater Power and Vestas, are
employing a Smarter Computing approach to help them transform their digital and business
infrastructures to meet the demands of a changing and increasingly competitive industry.
REFERENCES
1
United States Energy Information Administration. “International Energy Outlook 2011.” 19 September 2011.
Report Number: DOE/EIA-0484(2011).
2
Walsh, Bryan. “Talking Energy with America’s Greenest Coal Exec.” Time 02 March 2011. http://www.time.com/
time/health/article/0,8599,2056447,00.html. Retrieved 13 December 2011.
3
Hobbs, C.D. “The Changing Face of the Utility Industry.” Forbes Custom.com. http://www.forbescustom.com/
EnergyPgs/utilipoint/UtilityIndustryP1.html, retrieved 12 December 2011.
4
“Unprecedented Performance and Scalability Demonstrated for Meter Data Management: Ten Million Meters
Scalable to One Hundred Million Meters for Five Billion Daily Meter Readings.” IBM Case Study, September
2011. http://www.ibm.com/developerworks/forums/servlet/JiveServlet/download/548-391263-14685713-373005/
Informix%20TimeSeries%20Affinity%20Meterflow%20Benchmark.pdf.
5
“Oncor Powers Up Storage Capacity and Flexibility, Cuts Complexity.” IBM Case Study, November, 2011.
Document TSC03136-USEN-00.
6
“Helping Wind Farms Grow the Future of Energy.” IBM Technical Computing Insights, November 2011. http://
www-148.ibm.com/tela/servlet/Asset/412299/VestaWind_HR.pdf. Retrieved 27 December 2011.
This report was developed by Frost & Sullivan with IBM assistance and funding.This report may
utilize information, including publicly available data, provided by various companies and sources,
including IBM. The opinions are those of the report’s author and do not necessarily represent
IBM’s position.
XBL03017-USEN-00
Frost.com 15

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