Jeremy Carey, managing director of 42 Technology, highlights the development of new condition monitoring technology and talks about the challenges as an SME of working with distribution network operators (DNOs).
Substation monitoring has been an area of interest amongst distribution network operators (DNOs) for some time, as the way consumers use and interact with the network changes due to the relatively rapid growth of photovoltaic installations, electric vehicles, domestic-level battery storage and so on. Before these relatively new technologies were widely adopted, it was sufficient to manually record a reading from an analogue maximum demand indicator during a physical inspection once or twice a year, but this is no longer considered sufficient by many in the industry who are now interested in annual and diurnal patterns, harmonics and more.
There are a number of commercially successful substation monitoring products on the market, but these can take several man hours or more to install and are not as low cost as the market would like. With over 400,000 substations in Great Britain and an expectation that each one will last many decades before replacement, the dominant industry need is for a low cost, easily retrofittable solution.
FuseOhm is a low-cost technology designed to address the retrofit substation monitoring niche. And it can be fitted in less than three minutes (with no cable connections or wiring required) making it ideal to tackle the large and price-sensitive market for monitoring secondary distribution substations.
The units are designed to fit in series with the fuse to log current, voltage and phase angle from each feeder. With the fuse holder being selected as the installation site because it is one of the few areas of substations that is virtually standard across the majority of distribution substations on the island and the fuses are generally easy to access, remove and replace.
The patent pending technology has been conceived, developed to functional prototype level and field tested using a two-stage grant from the Industrial Strategy Challenge Fund administered by Innovate UK.
42 Technology completed the mechanical, electrical and software design in house, then worked with The University of Strathclyde's Power Networks Demonstration Centre (PNDC), near Glasgow to complete the field testing. This provided a safe, independent and accurate means of field testing this type of hardware both in normal conditions and a range of upset conditions, such as over-voltage, high current, fault current surges and so on. PNDC's expertise was also helpful in designing a focused field test programme that addressed the issues most likely to be of concern to the intended customer, the DNOs. Although the test window was relatively short due to the high pace of the development, all the required testing was completed.
The tests showed that the units were accurate across a large temperature range, referenced to a high-end Fluke device used as the ‘gold standard' and that they survived a wide range of upset conditions including: sufficient current for long enough to blow the fuse, long term exposure at 400 A and fault currents of up to 1600 A for brief periods.
The next step, scheduled for this summer, is the first install of a FuseOhm prototype in a customer-facing substation as part of a trial by one of the DNOs.
Working with DNOs
Getting to the point where there is a prototype interesting enough for a DNO to trial has been an unusual journey for a product development services business like 42 Technology. Typically, clients come to an external consultancy with market insights, challenges and problems - perhaps even a fully developed brief.
The external team would then work with the client through a phased development programme of innovation, design, development and test, helping them to secure ownership of the arising intellectual property (IP) rights and to commercialise the new product or solution.
The networks space, particularly in GB, is unusual in that DNOs often do not want to own IP and so are unwilling to develop and exploit technologies for themselves. This is not unique to electricity networks with similarities in the water industry too.
The current default operating model for DNOs is to take one step towards open innovation by making their high-level challenges known to the market. From there they hope to unearth products already on the market or very near-to-market that they can buy through a conventional procurement process for commercial goods. Where this is possible it presents DNOs (or any other company) with a low development risk approach with a high degree of certainty on price and functionality, at least in the short term.
However, not every solution the DNOs might like to use is on or near-to-market at the price point they need. Consequently, where it is not possible to procure exactly what they want, DNOs are forced to choose between accepting the nearest commercially available alternative - often at increased cost - and persuading a third party to solve their problem. The former is straightforward if potentially costly in the long run, especially if they need the device in large volumes. While the latter involves outlining the problem in the hope that one of their existing suppliers will extend their product range to provide a bespoke, lower cost solution.
Relying on the supply chain to innovate creates a number of risks but three of them are particularly interesting. Firstly, the supply chain company may perceive that the new product will cannibalise existing sales and so delay or even decline to be involved. Secondly, a DNO cannot guarantee it will buy the new product, only that it intends to run a competitive procurement process and the supplier will be invited to take part. This means the supply company needs to fund the development at significant commercial risk. Finally, as the DNO has little or no control over the product, there is the risk that once established in the market and embedded into a DNO's operating culture, the supplier pushes up prices, or discontinues the product (perhaps because sales volumes have dropped off). In industries where assets last such a long time this is of more concern in network business than in many others.
As there are typically a very small number of suppliers seeking to sell to a very small number of GB network operators and GB network infrastructure is often quite different to its European or international counterparts, all of these are very real risks that need to be ‘priced in' by the supply chain on successful products to cover those that are less successful.
Consequently, the ‘persuade your supply chain' approach to innovation does not avoid development cost entirely, it simply moves it off the DNO's balance sheet and amortises the cost over future procurement cycles but with an added premium to cover the supply chain profits and risk. For lower volume products this risk premium may become a relatively significant proportion of the total cost.
Perhaps more importantly, these increased risks act as a brake on the pace of innovation and development in the networks space which leaves cost-saving opportunities ‘on the table'. If the pace of innovation in the industry could be stepped up, there are likely to be significant savings available to consumers as new technologies and cost reductions are implemented.
What's the solution?
In the case of FuseOhm, the risk issue was greatly alleviated by an Innovate UK grant which allowed development at an affordable opportunity cost to 42 Technology and allowed them to retain IP ownership.
However, SME reliance on grant funding to develop solutions for network companies is its own form of innovation bottleneck. One model perhaps worth consideration - although it would require a significant cultural shift - would be for one or two DNOs to collaboratively set up a small, unregulated limited company to develop and own IP rights. This company would pro-actively identify unaddressed cost or performance opportunities in the networks businesses, then work with third parties to develop solutions in a way that it retained the arising IP rights. The new IP company could then produce the solutions through contract manufacturers and sell them to all DNOs through conventional channels; while yielding unregulated profits for its shareholders, some of which could be reinvested in further research.
Perhaps more importantly, finding creative new ways to accelerate innovation at lower risk will reduce the long run cost of network operation, increase network operator margins and ultimately bring down costs for consumers.