The use of technical applications, especially geographic information system (GIS) technology, has transformed the ability of utilities to design, manage and maintain their transmission and distribution networks.
It is interesting, therefore, that data compiled by Cambashi shows the growth in spending on technical applications in the utilities sector in 2014 was significantly lower than spending on comparable applications in other industries, including manufacturing.
The wider definition of technical applications software covers all the software applications used by engineers and designers, including computer aided design, computer aided manufacturing, computer aided engineering and product lifecycle management. So perhaps it is not surprising that the spending on technical applications is higher in industries that use a lot of product design such as automotive and consumer goods.
However, this does not explain away the fact that the growth in spending on technical applications in 2014 is predicted to be similar for utilities as for the depressed architecture, engineering and construction industries (see chart 1, Growth in spending). Technical applications for these sectors tend to be predominantly for building information management (BIM) systems.
The low growth rate is largely due to the nature of broader utility investments. The assets that utility companies maintain have a very long life compared with the constant innovation, as-fast-as-you-can world of high-tech or volume manufacturing.
Accordingly, the geospatial systems that utility companies create and maintain are geared to network operation, maintenance and stability of supply. However, given the UK’s worryingly low supply margin as it enters this winter, there is a greater than ever pressure on utilities to ensure the energy mix is right and robust. This, in turn, should drive investment in technical applications.
While cheap imported coal may be an option to fix the situation in the short term, it goes against the desire for a cleaner energy supply and only delays the necessary investment in new plant and infrastructure to support a more diverse energy mix.
This energy mix is increasingly dependent on renewables. The drive of the European Union 20-20-20 initiative has had all member states exploring solar, wind (onshore and offshore), tidal and nuclear as energy sources, as well as driving investigation into effective ways to capture and store carbon from traditional fossil fuels.
There has also been an exploration of the prospects for new nuclear, although this has varied across Europe depending on reactions to the earthquake and subsequent tsunami in 2011 which destroyed Japan’s Fukushima plant. Caution has been counselled for new nuclear even in France, while Germany has executed a complete turnaround in relation to its energy mix, with chancellor Merkel promising to close all the country’s nuclear plants by 2022.
Opinion differs as to whether these responses to energy security and sustainability are correct. But what is clear is that there tends to be a positive correlation between changing the energy mix and investment in technical applications by utilities in developed economies.
The US, which has seen a sudden growth in shale gas extraction as well as renewables in recent years, has been the biggest investor in technical applicaitons for utiltiies globally in 2014. Utilities in the US have spent around $725 million (£450 million) compared with $632 million in Europe, the Middle East and Africa, and $283 million in the Asia Pacific. The top five spending countries were the US, Japan, the UK, France and Germany.
Why the link? A critical consequence of bringing new energy sources online is the extension of the infrastructure to transport the energy to areas of need, and the decommissioning of the now defunct infrastructure that previously served older generation plant. The design and maintenance of this infrastructure is facilitated by technical applications software used to design and manage power networks.
Utility spending on technical applications is chiefly where these applications move out of the design studio and into the field – that is, to support exactly the network design and asset maintenance needed in transmission and distribution networks expanding to meet the need of new generation sources.
One further aspect driving growth in the use of technical applications in utility companies is the blurring of lines between geographic information systems, used in this context for asset management and network planning, and building information models which maintain records of as-built buildings, substations, water treatment works, generation plant and other sites.
Building information models have perhaps been a solution in search of a problem to date – the investment needed to build a solid BIM is not necessarily to the advantage of the architect or designer. The construction business has perhaps seen greater benefit, capturing data as the construction project progresses to support project management, data sharing among diverse teams and specific activities such as inspection or snagging.
It is the operator of the building or facility that gains greatest benefit and utility companies are ideally placed. They can take greatest advantage of a robust building information model, merging the as-build facility data in the building information management system with the as-build network data in the GIS and forming a data continuum to support operation and maintenance of the entire infrastructure.
As new facilities are commissioned to deliver renewable energy and older facilities are decommissioned, utility companies will be faced with greater demands to ensure a return on investment is realised and sustained, and network operation is efficiently managed.
We can therefore anticipate a significant increase in the growth rate for technical applications in utility industries as the continuing need to plan for the future of energy supply comes to the fore.
Christine Easterfield, principal consultant, Cambashi