Category: Articles by Charles Newton

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Preview our Research Topics – Plans for 2011

***************  2011 Plans Announced  ***************

We have outlined an aggressive research agenda for the coming year, based on fourth quarter 2010 discussions with our clients and industry contacts:   Of course, we will also concurrently be conducting multiple proprietary studies for clients old and new on many electric power infrastructure and automation topics. 

The Newton-Evans’ multi-client study topics and report prices for the coming year include:

First Quarter:  2011 Annual Outlook for CAPEX and OPEX in the World’s Electric Utilities.  (Fourth Edition) (Price:  $495.00)

Second Quarter:  The Worldwide Smart Grid Market in 2011: A Reality Check and Five Year Outlook Through 2015: Four Volumes: (Price:  $3,750.00)

Third Quarter:  Global Study of Data Communications Usage Patterns and Plans in the Electric Power Industry:  Four Volumes (Price: $4,500.00)

 Fourth Quarter:  8th Edition of The Worldwide Study of the Protective Relay Marketplace in Electric Utilities: 2011-2013: Four Volumes (Price: $5,750.00)

 Other Titles Likely (as resource availability permits): 

 IEC 61850 in North America….Gaining Traction?

 Global Outlook for Synchrophasor Programs: 2011-2015

Demand Response:  North American Market Outlook: 2011-2015

T&D Equipment Markets in North America: 2010-2015

*******  Cautious Optimism remains the byword to the outlook for 2011-2012!

See Chuck’s Composite viewpoints at http://www.newton-evans.com/?page_id=799

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“2010 U.S. Smart Grid Vendor Ecosystem” The new DOE Report Substantiates Newton-Evans’ Findings and Insights

Newton-Evans Research studies and findings have figured prominently in domestic U.S. energy policy reporting and analysis over the past decade and longer. This time, the U.S. Department of Energy’s latest smart grid publication titled 2010 U.S. Smart Grid Vendor Ecosystem authored by the San Francisco-based firm The Cleantech Group LLC includes a substantial amount of Newton-Evans’ recent research findings.

More than a dozen Newton-Evans charts depicting the firm’s recent findings on substation automation, distribution automation, energy management, SCADA systems, communications and CAPEX topics form an integral part of this newly released 91 page report on the companies and market dynamics shaping the current U.S. smart grid landscape.

In the acknowledgments (page 18) of the Cleantech report the authors state:

“We would like to thank Chuck Newton, from Newton-Evans Research, whose work is referenced in numerous sections of this report for his contributions and insights into the market particularly around distribution and substation automation….”

The new DOE report can be downloaded here: http://www.energy.gov/media/Smart-Grid-Vendor.pdf

Over the past 18 months, Newton-Evans reports have figured prominently in the U.S. government’s intensive investigation into the potential of the development of the smart grid. Our company’s findings have been used or referenced in congressional hearings and reports as well as serving as the basis for the recent report produced by Idaho National Labs titled: National SCADA Testbed Substation Automation Evaluation Report.

This substation automation evaluation used research conducted by Newton-Evans Research Company for some of its observations and results. The Newton-Evans Report aided in the determination of what is the state of substation automation in North American electric utilities. Idaho National Laboratory cyber security experts aided in the determination of what cyber vulnerabilities may pose a threat to electrical substations. This report includes cyber vulnerabilities as well as recommended mitigations. It also describes specific cyber issues found in typical substation automation configurations within the electric utility industry. National SCADA Testbed Substation Automation Evaluation Report, released in October 2009, can be downloaded here: http://www.inl.gov/technicalpublications/Documents/4374057.pdf

An additional 2009 report from INL entitled Study of Security Attributes of Smart Grid Systems – Current Cyber Security Issues provides good coverage of key cyber security issues confronting smart grid systems and components. Reference to Newton-Evans’ collaboration with INL on substation automation cyber security research is noted in this report. The study can be downloaded here: http://www.inl.gov/scada/publications/d/securing_the_smart_grid_current_issues.pdf 

On the international scene, Newton-Evans has recently conducted worldwide surveys of power utility engineering managers that have proven useful in providing guidance for CIGRE working groups on topics including wireless (Wi-Fi) Protected Access for Substation Protection and Control (WG B5.22)and for The Impact of Implementing Security Requirements for IEC 61850 (WG B5.38).

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In the News . . . Mid-October Update

On October 12, 2010, IBM Corporation and Kyoto Publishing announced the publication of the IBM report titled Generating Insights: Accelerating Into a New Era in Energy. The report explores how the global electric utility industry continues to be reinvented through new technologies and confronting opportunities regarding business strategy, technology innovation, customer interface, regulation, security and consumer demand.

A series of IBM authors and contributors from Oracle, Juniper Networks, Black & Veatch, Southern California Edison, the Global Intelligent Utility Network Coalition, and the Newton-Evans Research Company make up this compilation of white papers in the tenth annual Energy & Utilities project. The project includes papers on topics such as: Collaborating for a Smarter Grid; The Impact of Smart Grid on Climate Change; Smart Grid Security and Architectural Thinking; The New Era In Distributed Generation; Smart Nuclear Power; Keeping the Lights on While Transforming Electric Utilities; and the Newton-Evans contribution, Re-Investing in Electric Power Utilities to Build A Smarter Grid. 

The full IBM report can be downloaded (after sign-up) at http://www.generatinginsights.com/

Also, Chuck’s article, Sailing the Seven “C’s” With CISCO and Itron has been featured in the October 2010 issue of PowerGrid International magazine. Click here to read the October 2010 issue.

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Sailing the Seven “C’s” With CISCO and Itron

by Chuck Newton

The September 1, 2010 announcement of a formal collaboration between CISCO and Itron was notable in several respects. First, the simple announcement was termed “collaboration” instead of “joint venture” or even a formal “partnership.” It was also described as non-exclusive, but was a very important step forward nonetheless for both companies, especially for Itron, and serves as a good omen for the AMI portion of “smart grid” communications in general, thus likely to benefit other AMI market participants that offer communications solutions as part of their go-to-market strategies.

CISCO is a $35 billion company, with an estimated $2-3 billion (Newton-Evans estimate) found within energy-related vertical industry sales of its communications equipment. Itron itself will close in on being a $2 billion corporation again in 2010, with about 50% of revenues derived from electric power industry AMR/AMI sales and services. Continue reading Sailing the Seven “C’s” With CISCO and Itron

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Measuring the Impact of GE Energy’s Acquisition of SNC Lavalin ECS Business Unit

August 2, 2010. Well, it was inevitable that GE would make a play for a larger share of the global EMS/SCADA/DMS market and today the company announced the acquisition of the Montreal-based Energy Control Systems business unit of SNC Lavalin. With this acquisition, Newton-Evans believes GE Energy now ranks fourth in the world in terms of numbers of significant energy management, large SCADA and large distribution management systems. Note that the “GENe” name of the ECS’ offerings might just be an added plus!

A few quick facts about the impact of this acquisition:

Continue reading Measuring the Impact of GE Energy’s Acquisition of SNC Lavalin ECS Business Unit

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January-June 2010 Research Activities: Status Report to Our Clients and Readers

EMS, SCADA, DMS Study. The first volume (North America) of this expansive four-volume study will be released in July. We have already surpassed the levels of participation obtained in the past two studies, with more than 100 mid-size to TOP 10 electric power utilities providing their control systems usage patterns and plans. Meanwhile, the international research effort is coming along well, with utilities from more than 20 countries participating within the first two weeks of commencing this portion of the study. The Supplier Profiles volume is being updated with fresh information from all leading integrators of T&D control systems around the world.

Substation Automation Study. This study is revving up to get underway with client inputs and reviews of the survey questions. The new survey will be fielded worldwide in late September through early November. We again hope to obtain participation from about one half of significant world electric power utilities.

Global Electric Utility CAPEX Report: Completed in the first quarter of 2010, this report has been quoted in business publications and used in briefings by some of the very large management consulting firms around the world. The formal title is Global CAPEX and O&M Expenditure Outlook for Electric Power Transmission and Distribution Investments: 2010-2011 – Funding Outlook for Smart Grid Development.

Continue reading January-June 2010 Research Activities: Status Report to Our Clients and Readers

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Chuck’s Composite (July 2010)

Very Large Power Transformer Industry: Well, wouldn’t you know it, now that EFACEC has opened the first major new transformer plant in the U.S. in decades, there is more to come. First, the leading India-based transformer manufacturer, Crompton-Greaves, has just opened a new large transformer facility in Missouri. Now word is that Hyundai will construct a large power transformer plant in Alabama. Interestingly as well, the GE PROLEC large power transformer business, having recently completed a significant plant expansion in its Monterrey, Mexico facility, has now surpassed the billion dollar level of business in its own right, based on our estimates.

All in all, these are very interesting and important developments that may help drive decisions among North American utility planning staffs to get moving with procurements for a new generation of “smarter” large power transformers to replace the aging fleet of some 50,000 large power transformers now more than 25 years old, and with a good percentage approaching 40 years of service.

Possible Acquisitions: Rumors have reached Newton-Evans about potential acquisition discussions between two giants (one a mega-giant) in the North American electric power T&D equipment and grid automation business. Could be a lot of industry excitement if this actually develops beyond the “whispers” heard recently.

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Preliminary Findings from Mid-2010 Study of Energy Management Systems, SCADA and DMS/DA Systems

June 21, 2010 update. This interim client summary is based on tabulations of 65 survey completions from very large, large and mid-size North American utilities, together accounting for about 20% of served end-users. Bold print indicates a change from the preliminary findings released on June 14. These observations on some of the key topics covered in this year’s study (the 12th Newton-Evans Research world study of EMS, SCADA and DMS/DA over the past quarter century) will continue to be updated for clients as our sample size increases dramatically. The current sample represents about 20% of North American end users of electricity. The next update will feature observations and findings from more leading investor-owned utilities and will represent about 25% of served North American end users.

Smart Grid Initiatives – Funding

  • Most utilities plan to proceed with self-funded approaches to smart grid initiatives. Nearly 80% indicated that they would be making some effort over the next 24-36 months on funding smart grid initiatives.

Control Systems Upgrades and Replacements

  • Several upgrades and system replacements are being planned for EMS (23%) and for SCADA (29%) during the 2010-2012 periods.

Continue reading Preliminary Findings from Mid-2010 Study of Energy Management Systems, SCADA and DMS/DA Systems

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ABB and the Ventyx Acquisition – Why Now, What Next?

By Charles W. Newton, Newton-Evans Research Company, Inc.

(Updated May 7)

The May 2010 announcement of the ABB acquisition of Atlanta-based Ventyx is likely to serve as a wake-up call to the major competitors of ABB in the electric power T&D and operational smart grid market, primarily the likes of Areva T&D, GE and Siemens. This week’s acquisition puts ABB squarely in the heart of “smart grid” activities – both from an operational perspective, where it has been a global market co-leader, and now set to gain a significant market position in the burgeoning enterprise utility “smart grid” software market, a perspective beyond that of any direct competitor.

ABB will now be in a better position for more smart grid-related opportunities than any other of the IT-centric “smart grid” players, none of whom can compete directly in the operational side of “smart grid” with smart field equipment offerings. Overall, this eases the “shopping/procurement” burdens of utilities. The effect of ABB’s acquisition of perhaps the best available and largest independent energy industry applications software provider positions ABB for a larger role in the hundred-billion dollar-plus market for operational equipment and for energy enterprise software.

Continue reading ABB and the Ventyx Acquisition – Why Now, What Next?

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The Potential Role of Technology Transfer for Managing the Emerging Smart Grid…

A Look at Commercial Aviation’s Cornerstone Operations Control System to Provide Regional and Nationwide Operations Management for Electric Power

I want to take this opportunity to provide our web site visitors and our Market Trends Digest readers (upcoming spring 2010 edition) with some summary information about what we believe to be one of the country’s most advanced implementations of something akin to what we have been discussing for the past few years as an emerging requirement for the national’s smarter electric grid operations.  The FAA Telecommunications Infrastructure System (or FTI) is perhaps the best example I have seen of a system of effective management tools for nationwide situational awareness and visualization so vital to the daily operation of a communications-centric community as air traffic.  

Recently I had an opportunity to tour the FAA’s Telecommunications Infrastructure control center.  I came away from this “system of systems” quite impressed,  this after visits to perhaps 60-65 major utility and pipeline operations control centers in several countries in the course of my career.  In fact, this particular system is probably the largest (encompassing the entire United States) and without a doubt, one of the more sophisticated and most complex communications control and network management systems in existence. 

Continue reading The Potential Role of Technology Transfer for Managing the Emerging Smart Grid…

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Utility CAPEX Report Published from the January 2010 Newton-Evans Study of Electric Power T&D Investment

Tracking Study Finds Increased 2010 CAPEX and O&M Budgets for Smart Grid-Related Automation and Transmission Categories

February 25, 2010 —Ellicott City, Maryland. The Newton-Evans Research Company today announced the publication of its third study in the multi-year tracking research program looking into electric power utility CAPEX budgets related to smart grid investments and infrastructure spending plans.
Findings from the January 2010 Newton-Evans global tracking study of electric power transmission and distribution investment are somewhat positive, compared with the two earlier tracking studies conducted in 2008 and 2009. Each of five “smart grid” component areas, plus transmission and distribution infrastructure development, has been reported by utilities located in more than 25 countries to more likely be either “increased” or “unchanged” rather than “decreased” from June of last year. The highest percentages of officials reporting increases were in the areas of protection and control, and transmission infrastructure CAPEX budgets. Continue reading Utility CAPEX Report Published from the January 2010 Newton-Evans Study of Electric Power T&D Investment

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Off to a Fast Start: Newton-Evans tackles 2010’s initial array of assignments

With a warm welcome to our newest report clients from China, United Arab Emirates, Czech Republic, and Japan, along with assignments from several of our long-term North American and European clients, Newton-Evans staff is keeping up with the workload despite two record blizzards affecting day-to-day life and work in the mid-Atlantic region of the U.S. over the past week.

Our client-focused research activities over the first six weeks of 2010 have included topics ranging from distribution automation, to DMS, an update on demand response, plans for substation automation, a review of apparatus monitoring and diagnostics, to a synopsis of legacy electric utility application software market size and shares.  In addition, the company is focused on two multi-client studies:  First, the newest round of CAPEX studies, with participation and assistance now obtained from utility officials in more than 25 countries. Secondly, a new study of transmission planning in the USA and Canada will soon be available.

Some interesting electric power marketplace facts uncovered during the early weeks of 2010 include:

  • Size of the global installed base of large power transformers
  • Number of large power plants in countries around the world – to accompany our country-specific substation counts
  • Extent of Industrial power delivery micro-grids
  • Extent of intelligent electronic devices being deployed for distribution network automation.

Continue reading Off to a Fast Start: Newton-Evans tackles 2010’s initial array of assignments

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Areva T&D Apparently To Remain in French Hands After All

After months of internal debate and consideration of proposals from GE and Toshiba, Areva’s top tier of executives have decided to keep the $7 billion-plus T&D business under French control. AREVA’s Supervisory Board met on November 30, 2009 to examine the bids. After review, the Supervisory Board asked the Executive Board to begin exclusive negotiations with Alstom/Schneider.

The consortium offered 2.29 billion Euros in equity value, i.e. 4.09 billion Euros in enterprise value. The bid does not include any requirement for a seller’s warranty but includes a buyer’s commitment to maintain all European sites for a 3-year period.

To ensure that all AREVA T&D team members are integrated properly, Alstom/Schneider have also agreed to offer to all European employees a similar position in the same geographic area, at an equivalent qualification level and without loss of compensation or seniority.

Finally, unless the economic environment deteriorates significantly, the buyers made a commitment not to implement any layoff program except for voluntary terminations. There are still many unresolved issues including these: Continue reading Areva T&D Apparently To Remain in French Hands After All

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Potential Synergies of an Areva T&D Acquisition by General Electric: Why Alstom-Schneider and Toshiba are Also in the Bidding

As many regular readers of Newton-Evans’ reports already know, there are three major contenders for the $7 billion Transmission and Distribution business units of Areva Corporation. These are the American firm General Electric, the French corporate combination of Alstom and Schneider Electric, and the Japanese company, Toshiba.

Newton-Evans Research believes the greatest benefit to the electric power industry may result if General Electric’s offer becomes the winning bid. The reason: Areva T&D fills several product/equipment gaps in GE’s T&D product line and related automation offerings. A successful acquisition by General Electric would provide the firm with world-leading combined market shares in substation automation, protection and control and T&D control systems (energy management and SCADA). GE would become a major player in several growing portions of the transmission equipment business, establishing a stronger foothold in the North American and international transmission market segments described below. Together these segments are worth $25-40 billion on a worldwide basis. Areva T&D earned about $3.5 billion in HV equipment sales in 2008-2009. Continue reading Potential Synergies of an Areva T&D Acquisition by General Electric: Why Alstom-Schneider and Toshiba are Also in the Bidding

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Thinking Smart: The Outlook for Spending on Smart Grid Technologies in 2009 and Beyond

An article by Newton-Evans CEO Charles Newton titled Thinking Smart: The Outlook for Spending on Smart Grid Technologies in 2009 and Beyond was recently featured in Volume 9 of the Energy and Utilities Project magazine, an mThink publication sponsored by IBM. The majority of the article summarized the spending outlook for eight major components of the smart grid: control systems, smart grid applications, substation automation programs, substation IEDs and devices, AMI/AMR, protection and control, distribution network automation, and telecommunications infrastructure. Additionally, Mr. Newton provided a general picture of the types of initiatives that need to be taken by individual utilities on a case by case basis to put smart grid technology to work for them:

“I have often compared the evolution of the smart grid to the iterative process of building the international space station: a long term strategy, a flexible planning environment, responsive changes incorporated into the plan as technology develops and matures, properly phased.What function we might need is that of a skilled smart grid architect to oversee the increasingly complex duties of an effective systems planning unit within the utility organization.”

To obtain a copy of The Energy and Utilities Project 2009 visit www.UtilitiesProject.com and sign up for online membership.

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A Good Day in D.C. – The 2009 Annual Energy Conference

For two days (April 7 and 8) this week, The U.S. Department of Energy’s Energy Information Administration held sway at the Washington DC Convention Center. This year’s 2009 Annual Energy Conference included ten panel sessions on various current energy hot topics. These sessions began following an early morning plenary session with a keynote address given by Dr. Steven Chu, the newly appointed Secretary of Energy for the United States. Several hundred people filled the meeting room to capacity to hear Dr. Chu. The next speaker, Yale University Professor William Nordhaus, discussed energy and the macro economy and then EXELON’s Chairman and CEO, Mr. John Rowe spoke on energy in a carbon-constrained world.

The first day session of most interest to me was the session entitled: Electric Power Infrastructure: Status and Challenges for the Future. The EIA’s Scott Sitzer moderated a lively and informative panel comprised of the FERC’s P. Kumar Agarwal, Dr. Tim Brennan from UMBC, and NERC’s Mark Lauby. The three panel members came at the infrastructure issues from different backgrounds, perspectives and approaches, but each hit home on at least a few of the key electric power issues confronting the nation, and indeed, the entire world.

Continue reading A Good Day in D.C. – The 2009 Annual Energy Conference

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Where T&D Automation Is Headed: 2009 and Beyond

by Charles Newton

The financial environment and economic outlook
darken many segments of the national and global economies. Will the electric power industry significantly scale back planned capital expenditures and operations and maintenance spending on transmission and distribution automation? To find the answer, we conducted a global study of capital-expense budgets.

This article is featured in the March/April edition of EnergyBiz magazine, which you can download as a .pdf from their website: http://energycentral.fileburst.com/EnergyBizOnline/2009-2-mar-apr/Tech_Front_TandD_Headed.pdf

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Leveraging SCADA for the Smart Grid

An article by Chuck Newton titled Better Leverage SCADA: Systems Expand to Support New Challenges and Needs was featured in the first issue of Energy Central’s newest serial, Intelligent Utility magazine. This new publication focuses on Smart Grid topics. From the website:

“The magazine addresses core smart grid components, including distribution automation, substation automation, smart meters, demand response, home area networks, intelligent consumer devices, distributed generation, SCADA, GIS, outage management systems, mobile workforce technologies, work management and asset management.”

Visit their website to get a free subscription.

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Remote 2008 Conference & Expo – SCADA, Device Networking, M2M, Wireless Technology, Onsite Power and Security for Remote Sites

The Remote 2008 Conference and Expo will be held November 5-6, 2008 at the Atlanta Marriott Marquis Hotel, Atlanta, GA. This technology-driven and solution oriented event brings together innovators and users from multiple industries, including utilities, power, oil & gas, telecom, industrial, water & public utilities, agriculture and facilities management.

The conference will focus on the leading advancements for the monitoring and management of distributed equipment and facilities, remote assets, automated process & system controls and device networks. Industry experts will speak on SCADA, security (cyber and physical), control, automation, onsite and back-up power, M2M, networking, emerging wireless technology, telemetry, environmental monitoring, grounding and remote smart services.

Newton-Evans CEO Charles Newton will be Keynote Speaker on Thursday morning, and he will speak on Trends in Substation Automation, Control Center Operations and Field Automation for the World’s Utilities. Mr. Newton will provide a synopsis of findings from Newton Evans Research Company’s 2008 global study of substation automation and control center SCADA operations. These research studies encompassed current issues, including cyber security for NERC CIPS compliance, communication protocol usage and overall smart grid investment focus for utilities located in more than 50 countries. Coverage of additional remote monitoring and control functions such as FDIR (fault detection, isolation and service restoration) being performed by electric utilities will be included in the presentation.

Additional information available from the Remote Site and Equipment Management website.