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The Industrial Internet (IIoT) in the Management & Optimization of the

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The Industrial Internet (IIoT) in the management & Optimization of the Electrical
Grid

Jorge Cardenas David Menéndez

GE Grid Automation GE Distributed Grid Solutions
Spain Spain
jorge.cardenas@ge.com david.menendez@ge.com
“To make the machines more intelligent, more emotional, more spiritual” (Vishal Sikka, ex-CEO Infosys)

Abstract
The “Internet of Things” is the “new revolution” [1]: During the last decades we have
observing major changes in the energy industry. The increased implementation of renewable
generation, together with a greater use of electronic power elements in the network, such as
HVDC links and the use of FACTS, and new market requirements, introduce new challenges
and a need for more intelligent assets monitoring. With this we need to optimize its use,
achieving a better balance in the combination of different energy sources and thus
guaranteeing the reliability of supply and quality of energy; together with the identification of
new business models that allow the integration of new technologies, neutralizing cyber threats
and ensure an adequate dissemination of knowledge to new generations.

In this dilemma, companies are migrating to a more digital model based fundamentally on
three pillars: Communications, Big Data and Artificial Intelligence. The right combination of
these three pillars will optimize the operation of the electrical system, reducing costs and
polluting emissions, accelerating the adoption of non-polluting energies and renewable
energies, while maximizing economic performance and a closer way of interacting with users.

The Industrial Internet of Things (IIoT) and/or Industry 4.0 has been identified as one of the
technologies with most potential impact in the next ten years and which will bring new
applications for Business to Business (B2B) and specifically in our Energy Sector. IIoT must
be seen as an enabler for a Digital Business Transformation, new business models, processes
and services will appear and utilities will have to identify new ways for capturing value from
this disruption.

We are in a new tipping point in an era of energy transformation and utilities will face new
threats and challenges (i.e. cybersecurity) during this journey while the have to ensure the
security and continuity of supply under the quality conditions required by the regulations.

Starting from conclusion from report in [1], paper develops the scheme and interactions
between the different actual and new needs in the Electrical Grid, in order to improve the
transmission and distribution networks so as to reduce losses and leakages that are now a
major cause of inefficiencies, showing how a combination of sensing, analysis and Industrial
Internet could accomplish the goals and bring a new dimension in the Monitoring & Network
Control and substantial savings.

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1. Evolution of Electrical System [4]
The trend of making use of alternative energy resources is resulting in the restructuring of the
electric power grid as we know it today. It is estimated that, over the next 20 years, millions
of windfarms and multi megawatt photovoltaic plants will be connected to transmission
networks and that tens of millions of Distributed Energy Resources (DER) – both renewable
and non-renewable - will be connected worldwide to the grid – both to transmission and
distribution networks. Existing storage technologies, like pumped storage schemes, will be
complemented by new technologies such as batteries and flywheels. Distributed Energy
Resources will be connected mostly at the lower network voltages, many of which were not
designed to cater for embedded generation.

There are also Technological Drivers for the evolution of the network of the future.
Power electronics in general temrs and technologies based on them as: FACTS, SVC and
HVDC devices aim to provide solutions to some of the problems encountered in transmission
networks such as mitigation of faults or enhanced transmission of power, but they also raise
their own protection and automation issues and must be interfaced to the wider network.

This will create stability and power flow reversal issues requiring new solutions. With these
additions and the changing face of generation, transmission and distribution, the network of
the future poses a number of challenges and opportunities.

There are also societal trends and governmental and international polices which will have a
huge impact on the future grid:
 Environmental considerations and agreements (Kyoto/Paris) are limiting options for
generating type construction.
 Disengagement from nuclear power in some countries.
 Regulations (prioritization of RES, tariff incentives (production tax credits), interface
requirements for DER [5].
 Energy Market [Feed-in Tariff, Auctions, Exchange clearing authority, energy exchange
trade, market for system services (voltage and frequency regulation, peak load
generation and peak supply management].

At the same time, there is an increasing demand for higher reliability of electric supply (cities
and industrial consumers) and a tendency for small entities or communities to be "energy
independent" by developing micro-grids (rural areas).

2. IIoT overview
What is IIoT?

It is revolutionary evolution of today´s Internet and its characteristic to be present everywhere

making interconnection of objects that not only interacts with the physical world, but rather
uses the present Internet standards providing processed information and transferring them to
analytical applications [3]. So, to achieve the real interoperability between people and people,

2
people and objects, objects and people, and objects and objects, we must build a reasonable
business model and technology in front which bases on habing demand all parties [2].

IIoT is composed of 4 layers:

 Sensing layer
 Communication layer
 Application layer
 Management layer

Figure 1. Cycle of IIoT.

What is the goal of IIoT?

Figure 2 summarizes the goal of IIoT. In business, this figure is called "spider web" and it
serves as an indicator of our regular Operation Level and the maximum theoretical potential
we can achieve with our assets. What IIoT (Industrial Internet of Things) seeks is to try to
reach the maximum potential. How do you do it ?: By creating what is so called "digital twin
of each machine and process"; and instead of just using analytical tools to evaluate the
boundaries of each object, it uses big data at the same time (that's the reason for the cloud,
because otherwise as soon as we get into these kinds of processes our hw could be
overpassed). With this, and using approximation methodology, (we can call them intelligent
systems, experts or whatever name we want) and comparing with other assets, processes or
similar objects, we can go, in a controlled manner to the possible limits of our particular
device. This allows us to create a great digital "brain" that we can use for whatever we want.
For example: if we have a field engineer without much experience, we can give him an
augmented reality glasses and when he connects to this "brain", he would be able to solve
almost immediately issues that usually could take long time. Decisions of operation: a bit of
the same. Predictive maintenance more approximate to the equipment itself, rather than the
current statistical criteria used, etc, etc.

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 Figure 2, Goal of IIoT

IIoT is one of the essential eight breakthrough technologies [1] together with
Augmented/Virtual Reality, Blockchain, Artificial Intelligence, 3D Printing, Drones and
Robots that will impact the Energy Industry during the next 10 years.

But, how did we get here?

Our world today is in the middle of a big evolution under the digital economy and this new
transformation called Digital Transformation is supported by faster and cheaper computing,
reliable interconnectivity and cloud access.
Basically, this is all shaped by the joint of
three different laws. They're not physics
laws or natural laws, but they're trends that
have become very important to those of us
who are studying digitization, Moore's Law,
Metcalfe's Law, and Bandwidth Law.

Or to easily remember, compute, connect,

and cloud, creating the digital future that
we're going to live and work.

Moore's Law: In 1965, Gordon Moore, who co-founded Intel, made a prediction that has set
the pace for our modern digital revolution until now.
Based on very careful observations of an emerging trend at that time, Gordon Moore
extrapolated that computing would dramatically increase in power with decrease in relative
cost at an exponential rate.

Metcalfe's Law: Metcalfe's Law attributed to Robert Metcalfe, who invented ethernet and
founded 3Com, simply states that the value of a telecommunications network is proportional

4
to the square of the number of connected users of the system (n2), such as smartphones or
Facebook users, is the square of the number of nodes in the network.

Bandwidth Law: Bandwidth Law attributed to George Gilder, is an observation that

bandwidth speed grows at least three times faster than the computing power. While computing
power doubles every eighteen months, communication speed doubles every six months and
has allowed for widespread reliance on cloud computing. There has been a five hundred-fold
increase in wireless bandwidth deployed over the last decade.

3. IIoT as Integral part of Grid Modernization

As we said, IIoT is a mechanism where several devices are connected into a network dealing
with everyday activity related to consumers or business equipment. The primary objective of
IIoT is to gather useful information in order to manage and improve efficiency of such devices
by increasing the software efficiency and provide grouwth in the fields of Science,
Environment, and Engineering and bring in benefits to society [2].

But, what are the actual applications and how will affect the Energy value chain?
Let’s focus now on understanding what is the potential of IIoT and its applicability within the
whole Energy value chain.

3.1 IIoT in Generation:

Generation trends will likely change from predominantly large base load power plants
connected at the transmission level to a mix of large dispatchable plants at transmission level
along with a large amount of embedded generation with varying degrees of dispatchability,
much of it from DER (including energy storage). These embedded DER devices will provide
opportunities, or problems, depending upon one's viewpoint such as islanding of parts of the
network under certain conditions. However, many DER devices do not possess the fault ride
through capabilities of conventional generators and may compound stability issues during
disturbances and faults. This may also imply more constraints for the fault clearance times of
the existing network. Despite the limited dispatchability today of many DERs, the main
control centers need their actual status to have a complete picture of generation connected to
the network. This need will drive Distribution State Estimation which may require
synchronized measurements (synchrophasors) to implement due to the vastness and single-
ended-ness of the distribution system.

3.2 IIoT in Transmission:

We are seeing how IIoT is becoming mainstream in the retail and residential sectors and how
one of these technologies for smart homes is popping-up for potential energy efficiency
applications. Smart thermostats are one of the key IIoT devices which are being implanting in
our homes today. There are some interesting use cases, from simple replacement and use of
AI in order to improve our energy use for heating till the implementation of Demand Side
Management and Demand Response programs and use them as actuators in order to modify
the temperature setting of our HVAC system during peak hours.

Can you imagine what a Smart Thermostat could do in your transmission system?

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 We are talking about the implementation of the DLR concept, Dynamic
Line Rating in overhead lines. By the installation of different devices
(weather stations, current and temperature sensors) along the overhead
line, operators can increase the ampacity of the line in a controlled way.
System provides flexibility in cases where wind is blowing, wind
turbines are increasing its generation power but we are in a constrained
area with limited transmission capacity but the cooling effect and the
monitoring of certain variables can keep the cable working under thermal
limitations.

One of our pilot projects executed together with

Viesgo Distribución and the University of
Cantabria has reported interesting outcomes.
System has been installed in a 132 kV line and
during the operation of the system in 2015 and
2016 has facilitated the transmission of 6,96
GWh and 9,36 GWh respectively while reducing
the wind farms hours constrains at 1,7%.

3.3 IIoT in Distribution:

A clear example of a distribution IIoT application has been the development in many
countries of the Smart Metering, a new energy meter with communications capabilities which
enables new business models for retailers and improve the operations and processes of
distribution companies.

Nowadays, a consumer can access to its load curve and check which has been its peak
consumption during the last day, weeks, months analyze during which hours is using and get a
reduction in its energy bill by the change to new tariffs or by modifying its energy habits.

Figure 3. My own daily load curve.

Other concept that links with spinning reserve in generation is the so called: “virtual battery”.
Power producers usually keep turbines spinning at a few offline plants, so they can ramp up

6
production if demand spikes. Or they maintain coal-fueled backup generators that can be fired
up quickly. But these approaches are either costly, polluting, or both.

In theory, the grid could employ a battery to keep supply and demand in balance, but existing
battery technologies offer no cost savings over power production. In paper [19], however,
MIT researchers argue that “smart appliances” in homes and offices, such as thermostats
that can be adjusted remotely and electric cars that plug into the grid, could, collectively, act
as a massive battery, offering a lower-cost, lower-emission alternative to backup power
generation in the grid.

But there are some challenges between today and the day that this will become a reality from
cybersecurity aspects till the complexity and growing number of devices connected to our Wi-
Fi networks at home.

3.4 IIoT in Operation and Maintenance.

IIoT adjacent technologies as wearables and AR (Augmented Reality) can bring additional
value and optimize the way we operate and maintain our assets within our portfolio. By
providing accurate data and information in a simpler a quicker way, our field service
technicians and engineers could improve their performance.

One of the multiple values added by AR is to

drive performance improvement across
manufacturing and supply chain operations.
AR Software platforms can improve: first time
quality by reducing errors, tact time for tasks to
drive worker productivity a new employee
training and ramp-time. Our GE Renewables
has seen a 32% performance improvement by
adopting an AR platform with smart glasses in
the wiring and assembly of cabinets for wind
turbines. Our technicians can now use voice to quickly identify a wire and determine correct
locations, cutting time and need to reference paper manuals.

4. IIoT Architecture and functional blocks in the Electrical Grid:

The basic architecture of IIoT in the Electrical Grid can be described as follows:

4.1 Sensing Layer

Sensing is a key aspect because it is from where we will get all the information required for
process. Data provided could be composed by different magnitudes: current, voltage, energy,
power, temperature, vibration, variable changes, etc.

New advances in sensing techniques by using Fiber Optic and technology associated with
light, have been revolutionized the visibility and sensitivity for monitoring different objects
and processes in diverse fields, as we summarize in Table 1 [9]:

7
 Oil & Gas Civil Energy Industry Aerospace Transportation Healthcare

Reservoir monitoring Bridges Power Plants Jet engines Rail monitoring Blood presure
Downhole P/T Dams Boilers & Steam Rocket & Weight in
sensing Trubines propulsion motion
systems
Seismic arrays Roads Power Cables Fuselages Carriage safety
Tunnels Turbines
Land slides Refineries

Table 1. Optical Sensors application

A key aspect of the concept of all-fiber optic sensors is that the optical fiber acts both as the
sensing element and communication channel, which allows for simple solutions and reduces
the losses in the fiber connections.

This new paradigm will allow to build a “neuronal” structure that allows to develop a “New
Generation of Smart Grids”.

For example, new technologies are allowing to change from the traditional Substation
composed by the classical sensors plus cooper wiring, to digital technologies composed by
optical sensors together with the use of fiber optic.

Advantages of Optical Sensors are multiple and in the electrical industry beside others can be
summarized as follows:

• Immunity against electromagnetic interferences (EMI);

• Electrical isolation (the optical sensors are made of dielectric materials);
• Possibility for measuring AC and DC;
• Absence of saturation effects;
• Low power consumption;
• Small size, lightweight, and relatively low cost.

wireless technology brings also new possibilities of sensing for non-critical or long time
response applications: e.g ambient temperature, wind speed, etc.

4.2 Communication layer [4]

Key to many of the solutions within the Network of the Future will be communications – the
ability to gather information with standardized semantics from remote parts of the network in
order to make real time decisions based on an accurate knowledge of the state of the network.
Many transmission substations already have access to adequate communication networks but
many distribution substations and DER connected to LV or MV networks still have limited
communication facilities. This brings additional challenges if they were to be integrated in the
same way as transmission substations.

The most probable scenario is that the standard IEC 61850 for “Communication networks and
systems for Power Utility Automation” will feature prominently in the solutions employed for
the Networks of the Future – especially its ability to provide self-description and generic
configuration. Originally developed for use inside substations, it has been extended to cover
substation-to-substation and substation-to-EMS communication. It also addresses sampled

8
values of current and voltage in the process bus (new IEC61869-9). This facilitates the use of
new technologies such as non-conventional instrument transformers (NCIT), among other
applications based on Optical Sensors. Other drivers include energy storage development,
zero energy homes, electrical vehicle evolution, home networks and other home automation
developments, next generation communication technologies, etc.

The monitoring and control of the future grid will require fast, secure, and wide-area
messaging. IEC 61850 defines a fast communication mechanism known as the Generic
Object-Oriented Substation Event or the GOOSE As the name implies, the original
application for the GOOSE was envisioned to be inside the substation. A GOOSE message
has no IP address and no transport layer so when this message enters a router, the message is
normally discarded.

As functions such as Synchrophasor Data Streaming, Wide Area Control, Demand Side
Management, Distributed Generation Regulation, etc. become main-stream, there arises a
requirement to be able to perform wide-area publish-subscribe communications. A new IEC
61850 profile, known as IEC 61850-90-5 [12], has been developed to meet identified as well
as future functional requirements.

For mobility, devices: By supporting HTML5, existing desktop browsers, smartphones, and
tablets can be used across the business.

4.2.1 Cyber Security

We have recently heard that the power cut which hit part of the Ukranian capital, Kiev
suffered in December 2016 has been judged a cyber-attack by researchers investigating the
incident. It affected the Pivnichna substation outside the capital, and left people in part if the
city and surrounding area without electricity during the night.

As the communication aspects of the power system evolve, Cyber Secure communication and
user access will become mandatory in ALL aspects of operating the power system. It is to be
noted that Cyber Security is a moving target as evolving computer technologies enable the
cracking of existing crypto implementations. As the power industry adopts crypto
technologies, it will have to evolve with the threats and subsequent changes as they develop.

It is important to look at 3 areas of cyber security: user access to devices, device to device
communication and data security.

9
 Figure 4. Cybersecurity in the Electrical System [18]

4.3 Application Layer

Strategic Distribution
planning planning

Network
design
Corporate syst ems

Corporate
Office
Construction
Execution
Operations
Restoration

Maintenance
& As-Built
Inspection

Figure 5. Source (COSINE group, 2017 & GE Smallword system [6])

10
Operational analytics — Data is analyzed in real time at the source — a wind turbine,
HVDC Link, etc. — to detect problems so that split-second changes can be made in the
operation of the asset to prevent damage and optimize performance.

Historical analytics — The collection and analysis of petabytes of historical operational data.
From this analysis, it is possible to build predictive models that can be used to more
efficiently operate the grid.

Analytic also can offers data science capabilities that enable a feedback loop between
operational and historical analytics. Operational analytics at the edge ensure the efficient
operation of assets, but those analytics can be improved over time based on historical analysis.
For example, an operational analytic might continually monitor the temperature of an asset
and initiate a shutdown in the event of unacceptable operating temperatures. However, after
collecting years of data across many assets, it could be determined that the threshold should
vary by the physical elevation of each asset. In that case, a new analytic that takes elevation
into account could be created and then be deployed to IIoT system associated with assets of
that type around the world [15].

Figure 6. IIoT Application Architecture

11
Figure 7. Example of a Real Time Electric Power Supervision and Analysis System based on
Synchrophasors [16][17].

4.4 Management Layer [1]

Optimum balance of generation sources: As sources of energy generation are increasingly

diverse; in addition to the traditional generation based on fossil fuels, nuclear and hydraulic,
we have a greater presence of renewable energy based on the energy of the sun and the wind,
and energy storage needs, to maximize the use of these new sources of unpredictable
generation. This produces new needs in the management of assets and a greater and more
detailed supervision in real time, as well as an adequate treatment of the large volumes of data
necessary to have an optimal availability of all generation sources.

Energy with the highest quality and reliability value: The new sources of generation, as
well as the greater introduction of power electronics in the network, impose new needs to
maintain the required quality and reliability standards; likewise, the diversity and greater
dispersion of generation sources requires information systems with capability to create
"digital twins" that faithfully reflect the characteristics of the assets and thus be able to
program them conveniently to ensure the highest levels of quality at the same time, be reliable
enough

Visibility of the level of assets: To achieve the two previous objectives, the level of
information and detail required by the operators of the system increases and, therefore,
complementary tools are needed to simplify the work (despite the increase in complexity). It
is here that the IIot together with the Artificial Intelligence will play a preponderant role in
future networks.

12
New business models: Having more information and its proper treatment allows changing the
traditional model based solely on the sale of electricity. Complementary applications such as
home automation and remote control of loads even at residential level allow to offer
complementary services to the pure sale of electric power. This will help optimize resources
throughout the value chain, encouraging investment and innovation.

Dissemination of knowledge: The aging of the population in advanced economies is

reflected in the aging of the labour force in many industries, and the energy industry is no
exception. The IIot allows creating an environment that facilitates the diffusion of
intergenerational knowledge by capturing the knowledge and accumulated experience of the
most veteran workers.

Technological integration: The separation of specialties in relation to information

technology (IT) and operating technology (OT) is blurring. Now with the Big Data and
Industrial Internet the relationship is increasingly horizontal and with a tendency to join to
improve productivity.

Conclusions
In the energy sector, because new challenges associated with change of the network
configuration (disperse non- predictable generation and more power electronics) and new
market requirements, it is accelerating the merging of assets with data analytics in order to
increase the efficiency, and so allows companies to be profitable in a environment where
governments are pushing to reduce the energy consumption facing the climate change. IIot is
one of the tools that is allowing to get these goals.

IIoT Platform has the ability to manage software assets centrally even though they’re
distributed, but IIoT requires capabilities both at the edge and in the cloud, because some
analytics may be better performed at the edge for a variety of reasons.

Digital Twins play a central role in the IIoT because they provide a foundation for reuse and
containment of complexity. Digital Twins can be simple or extremely intricate. The challenge
for developers is to understand what they do, how they are constructed, and how they are
supported by platforms and ecosystems so that developers can use them as an architectural
component when they imagine applications. In essence, Digital Twins are models that
combine data, analytics, domain knowledge, and various software capabilities to create
applications. In a real sense, a Digital Twin is a learning system [20].

The increase of available information can lead to rethinking some algorithms currently used as
for example, thermal functions: actually, performed on the indirect measurement using
circulating current. Big data analysis could cause changes in the formulation of some
parameters and in the model used for the machine or assets.

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