White Paper

How Ciscos Real-Time IP SCADA Enables Utilities to Adopt a Smart Grid Approach and Master New Challenges in Control and Manageability

Utility companies are rapidly advancing into a new era. Driven by a complex interaction of pressures, a higher level of operational control and systems manageability has become paramount for electricity, natural gas, and fresh or waste water companies. These sectors depend partly on assets that may be half-a-century old and more. Yet the time-honored ruleNever Touch a Running Systemno longer guarantees a smooth ride. The new world in which utilities nd themselves is shaped by multiple factors, some almost unimaginable a generation ago, which are now combining to accelerate the pace of transformation. This White Paper will take as its primary focus the electricity supply industry; but while each utility sector differs markedly in its specics, there are clear common themes, and emerging new imperatives, that cut across them all.

All contents are Copyright 1992-2008 Cisco Systems. Inc. All rights reserved. This document is Cisco Public Information.

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The Search for a Holistic Strategy to Manage Distributed Systems

As anyone with senior operations management experience in the utilities will be aware, SCADA (Supervisory Control and Data Acquisition) caught on in the 1960s, to monitor and control remote systems more efciently. It proved superior to the slow and labor-intensive traditional approachsending out engineers to make on-site checks and, after reporting back, carry out specied operations as directed by remote central managers. SCADAs success generated many applications, including large-scale industrial and utility automation. Early systems were built on centralized, hierarchical models, largely dictated by mainframe computer technology. They diversied along non-standardized lines, proliferating into literally hundreds of proprietary protocols, and had the drawback of requiring a high level of human decision-making and information support. Todays SCADA systems combine legacy and modern technologies in the monitoring and control of numerous vital functionsto reset switches, start or stop motors, open or close valves, switch pumps on or off. They use both Ethernet and Internet technologies. Yet the concomitant Internet Protocols (IP) have arrived in much the same piecemeal fashion as was evident in the early days of SCADAs development.

Ciscos Role in Raising the Potentialities of SCADA to a New Level

Until recently, these hybrid systems have functioned quite well. Yet there are clear signs that the trusted methodologies of SCADA are coming under unprecedented strain. The causes include a number of high-prole, large-scale power outages in the electricity sector; diversication into new supply sources, coupled with new peaks in demand; regulatory changes, tailored to international markets; post-privatization commercial imperatives; and mounting pressure to reduce the carbon footprint. This has led to the emergence of the Smart Gridan intelligent electricity/communications infrastructure that can monitor its own health, alert ofcials immediately when problems arise, and automatically take corrective actions to prevent a local failure from escalating out of control. Cisco has therefore drawn on an unrivalled technical expertise, and its vision of the network as a platform, to offer the kind of real-time information monitoring and management control that are becoming mandatory in an era of accelerating change. After intensive study of the evolving needs of the sector in the 21st century, Cisco solutions help enable modern utility companies to handle such demands comfortably. A simple but key insight underpins Ciscos approach: It is impossible to react to things we dont know; therefore, real-time information is a must in the modern utilities world. To develop practical solutions incorporating this truth, Ciscos starting point is to build on its market-leading expertise in converged IP networks. Its overriding aim in the utilities is to extend the granularity of SCADA monitoring and control systems to the fullest extent possible, like a nervous system reaching out to sense the bodys smallest skin-changes. And it is working closely with partners to ensure that all its solutions are fully aligned with the technologies and skill-sets of other major vendors offering specialized solutions, also tailored precisely to the requirements of utility customers. Based on a clear understanding that the utilities have distinctive characteristics and needs, Cisco has developed specialized products and solutions of its own. They range from ruggedized switches, capable of standing up to extremes of weather and temperature, to a plugin device that converts more than 300 SCADA protocols, thus making all devices in a complex, multi-protocol system equally recognizable over a converged IP networkincluding equipment which may have been embedded in that system for decades. After building in the high levels of security required, utility companies can thus gain all the benets of real-time IP SCADAwithout the trouble and expense of stripping out large quantities of legacy plant immediately. They can then upgrade their systems as and when budgetary or operational constraints determine, while taking full advantage of todays long term, continuing impact on Return On Investment (ROI)impossible in the old days of public ownership, with its cyclical, cost-plus formula for calculating permitted returns.

All contents are Copyright 1992-2008 Cisco Systems. Inc. All rights reserved. This document is Cisco Public Information.

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Electricity Supply and the Broader Picture for Utilities

To the experienced eyes of senior utilities managers, charged with rising to the challenges of the 21st Century, an overview of the pressures now facing electricity companies should sufce to reveal a number of signicant parallels. In the electricity sector, they include: A series of cascading blackouts in the last ve yearsin the US, Italy, France, Germany, and to a lesser extent Austria, the Netherlands and Australiawhich have brought close scrutiny of reliability issues from regulators and customers Regulatory changes in the wake of large-scale privatizations, which may in time entail both signicant nancial penalties for failure to meet preset targets and potential reward to those companies efcient enough to exceed them Enlarged transnational markets, coupled with rapid company growth by merger and acquisition, operating across more complex, heterogeneous environments Electricity demand rising at between four and seven per cent a year, with bigger demand spikes from power-hungry consumers making load-balancing a more demanding, unpredictable taskespecially when operating at higher capacity A shift away from the old unidirectional power transmission and distribution (T&D) model: as multiple sources, from wind turbines to domestic solar panels, feed power into a bidirectional network, balancing the grid grows more complex. Mounting public and governmental demand for greener energy from sustainable sources, and for a reduced carbon footprint among electricity suppliers A mounting focus on ROI from private shareholders, requiring more effective and efcient use of network capacity as well as full optimization of asset lifecycles A growing need for fully traceable audit trails, with respect both to more rigorous compliance requirements and the commercial need for shareholder disclosure.

European Markets: A Signpost for the Worlds Energy Future?

Efcient transmission and distribution of electricity is a fundamental requirement for providing European citizens, societies and economies with essential energy resources. The need to renew Europes electricity networks, meet growing electricity demand, enable a trans-European electricity market, and integrate more sustainable generation resources (including renewable sources), presents major challenges. Research and development have an important role to play in addressing them. 1
The imperatives of the new era have been succinctly put by the European Commission. While Europes traditional electricity networks have provided the vital links between electricity producers and consumers with great success for decades, the fundamental architecture of these networks was developed to meet the needs of large, predominantly carbon-based generation technologies, located remotely from demand centers. But the energy challenges that Europe now faces are transforming the electricity generation landscape. The drive for lower-carbon generation technologies, combined with improved efciency on the demand side, will enable customers to interact far more with the networks. More customer-centric networks are a key element in the way ahead. These fundamental changes present new opportunities and new challenges. In order to maximize the potential gains, operations directors in the electricity industry, in common with other utilities, need to look very closely at their communication networks. A new level of information and responsiveness is required. In a world of complex variables and changing demands, the ultimate prize will be to manage and control the grid in real time. In the classical early example of a transmission and distribution (T&D) network shown in Figure 1, the core backboneknown as transmissioncan be clearly identied as the most critical part of the network. In most settings, there would be connected several power plants (the ring) within a restricted area, linked in turn to the distribution branches (the tree). This architecture made for a simple, easily controlled infrastructure.

1* Source: Janez Potocnik, Commissioner for Science and Research, European Technology Platform
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Electricity T&D Network

High voltage transmission lines Power substation Transmission substation

Transformer

Power plant

Power poles

Transformer drum Houses

Figure 1: The traditional system for generating electricity and distributing it to customers

As networks evolved, more local networks became connected to one another and a large, often heterogeneous electricity patchwork developed. Serious problems were frequently encountered at the edges of such interconnected systems, as the component networks had not originally been designed to carry high, or very high, voltages and currents. Another frequent challenge to the process of enlargement was to synchronize the variable frequencies of alternating current across larger areas. In a third stage, peak demand began to rise more steeply and to spike more savagely, in consequence of the growing economic prosperity in the developed nations. Changing demand proles added further uncertainty, and balancing the grid became a very complex issue indeed. From a technical perspective, the key development that will determine the shape of things to come in the electricity sector is the rise of distributed power generation. Today, power is fed in from multiple sources and in variable amounts, which may be injected into the grid at unforeseen times, as shown in Figure 2. This also creates a network in which power ows two waysupstream as well as downand this, in turn, raises a whole new set of complex gridbalancing, management, and control issues. The newer power sources include: Solar cells: More and more installations are being made at domestic premises, ofces and factories; likely in future to be grouped on extensive photovoltaic cell farms, which may be situated in other countries with longer sunshine hours Wind Turbines: An increasingly popular approach to power generation on grounds of sustainability, wind-turbines are located on wind farms both on- and off-shore; in fact, windpower has been used to produce electricity for 100 years Fuel Cells: Like batteries that never run down as long as they are supplied with a fuel source and an oxidizing agent, fuel cells are coming into greater use because they avoid the pollutant effects and inefciencies of combustion-based generation

All contents are Copyright 1992-2008 Cisco Systems. Inc. All rights reserved. This document is Cisco Public Information.

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Combined Heat & Power: A highly efcient way to use both fossil and renewable resources, CHP generates usable heat and power in a single process. It can be combined with cooling (CCHP) and contributes to improved sustainability. Electricity Storage: While electricity has a shelf-life of zero, sub-surface hydro-installations are being developed to store energy generated at off-peak times for later use, whenever additional power is needed in the network.

Electricity T&D Network in a New World

Central power plant

Ofces

Houses

Storage Micro turbines

CHP

Fuel cells

Industrial plant Virtual power plant

Source: European Commision, European Technology Platform

Wind turbines

Figure 2: Multiple power generation sources and bi-directional networks usher in a new era

The combined effect of such additional power generation sources and new storage techniques, along with others that may come to prominence in the future, is to produce a vastly more complex infrastructureand a corresponding leap in the number of variables that have to be juggled simultaneously to maintain the critical state of grid balance. All of this points to a need for fresh thinking on management and control issues. Yet because electricity networks developed slowly, over decades, many companies did not see a compelling need to achieve total control and manageability of their assets. Hence the saying, Never touch a running system. For in spite of far-reaching changesin their business models, in patterns of ownership and regulation, in the nature and size of their marketselectricity companies still have one overriding goal: to Keep The Lights On, 24/7. Unsurprisinglyand, on the face of it, not unreasonablymany have traditionally believed they could not afford to be frontrunners in technology, in case they jeopardized the stability of their operations. Why spend money if the ROI was not clear? In the old days, there was next to no competition, and no mandatory regulations forcing electricity providers to make fundamental changes. In the absence of such pressures, little changed.

All contents are Copyright 1992-2008 Cisco Systems. Inc. All rights reserved. This document is Cisco Public Information.

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Why the Electricity Industry Is Being Forced to Rethink Information Use

During the last ve years, the loudest and most high-prole wake-up call for European electricity companies has been a series of major cascading blackouts (in which the failure of a single substation quickly overloads neighboring facilities, gathering an exponential momentum). In some cases, large areas were left without power for more than 24 hours. Such events have occurred in the US, as well as in Italy, Germany/France, Austria and the Netherlands. New European Union regulations will require improvement of management and control standards to prevent cascading outages, including an effective back-up solution. All European countries need to have a plan in place by July 2008. Both North American and European regulators also wish to ensure that utilities are running their entire infrastructuresfrom generation, to transmission and distribution, to customer delivery as close to full capacity as they responsibly can. Both European regulation and the European marketplace are acquiring increasingly pan-European dimensions, with the advisory European Regulators Group for Electricity and Gas (ERGEG) set up in 2003, and the Single European Market in Electricity gathering pace. The forces of cost control, performance-based rates and deregulation have become an irresistible combination, driving the need for improved operations management. Today, as a result, IP-based SCADA is viewed as a vital tool that will enable utilities to take control of their distribution networks as never before. IP SCADA meets a pressing need for more accurate monitoring and measurement, yielding full management and control of utility networks of many different kinds. For the electricity companies, only this will enable them to initiate the swift and timely sequence of actions needed to prevent further cascading outagesevents that happen so fast that human response times can rarely keep up. In short, they need to incorporate the current control systems they use in substationsoften SCADA-basedinto unied, real time, central control, at the same time as handling complex, bidirectional energy ows and updating the accuracy of their accounting and billing to 21st century standards.

Ciscos Incremental IP Program for Process Control and Communication

When considering the potential benets of implementing a system capable of managing all SCADA-enabled devices over a single, converged IP Network, utility companies need to ask a series of key questions before accepting the case as proven. They include: How will business processes be enabled? What are the current vulnerabilities and how will a secure architecture mitigate them? What are the key business benets when constructing the value case for change? How will the change impact command, control and decision rights? What are the lessons learned from Cisco and from other industries? In the electricity network, the transmission (high-voltage) networks and distribution (medium- to low-voltage) networks carry electricity to the end user, domestic or commercial, who is usually equipped with a metering device. Optimum systems control, offering the highest possible granularity of information, is attained only when all metering devices and substations are included in one integrated control system. This requires the large-scale introduction of smart meters in homes and businesses. Even if an organizations initial focus extends no further than the control systems used in substations, however, once all the data from these SCADA-based systems becomes available in real time, the grid is protected from cascading outages. Automatic shut-offs take less than a secondat least ten times faster than a human operator; large-scale electrical blackouts should be a thing of the past. Other streams of real-time information convert into an easily readable pictorial form for closer monitoring and management.

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Many suppliers of Intelligent Electronic Devices (IED) or complete SCADA systems today offer their products with IP connectivity as standard. Integration of such devices into an IP SCADA network is usually unproblematic. Yet there are numerous older systems embedded in utility networks, with many substations using systems and technologies that are more than ten years oldover 30 is not uncommon. These systems are unlikely to be changed in the short term, on grounds of cost alone. Such systems communicate serially, often using proprietary protocols. However, Cisco makes it possible to integrate these old environments into a converged IP network without making any other changes. Utilities can reap the benets of an integrated management and control network without further upgrades to current environments. Where investment protection is a key issue, therefore, Cisco delivers a seamless migration path. It enables operators to carry on using older, non-IP control systems, and at a later stage, to incorporate new IP based-equipment after renewals or refurbishments, as shown in Figure 3.

X
Old Sub Station Other Services

Security Camera

Magnetic Door Lock

Utility Compliant Device IP Phone

New Sub Station

Access Point RTU of SCADA

Figure 3: How Ciscos IP SCADA enables utilities to integrate old and new equipment in one system

Cisco is also keenly aware of IT security threats facing utility companies, from malware or insider interference to hackers and even, potentially, terrorists. The company has identied over a dozen key utility company vulnerabilities in order to help its utility customers reduce or eliminate them. Cisco is also sensitive to the fact that utility companies are understandably cautious of any inherent weaknesses in their existing congurations of hardware and software. Ciscos holistic, end-to-end approach to securitythe creation of a Cisco Self-Defending Networkprovides industry-leading protection against such threats, across all network end-points. In an increasingly complex world, Cisco has also recognized the need to work with partners to deliver total solutions. It has formed alliances with leading companies that serve the Utility sector to offer proven solutions that meet real business need.

All contents are Copyright 1992-2008 Cisco Systems. Inc. All rights reserved. This document is Cisco Public Information.

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Conclusion
In the electricity industry, Cisco believes IT has today left the building transforming itself into a key enabler of vastly improved sense and response capabilities that extend throughout the T&D network. The transition will ensure that energy companies can connect, collaborate and compete on a much larger scale than any historically required of them. Converged, secure and robust IP networks are now the key to delivering full process control, high safety standards, and essential enterprise information to key decision makers. A converged information network architecture provisions not only SCADA, with full data and virtual security; it also potentiates new services such as voice (Unied Communications), video surveillance, and physical security using automated magnetic locks to keep out intruders.

For More Information

To nd out more about the benets of the superior management, monitoring, control and responsiveness enabled by Cisco real-time IP SCADA, please contact: Arjen Zwaag at azwaag@cisco.com or Stuart Robinson at strobins@cisco.com

Americas Headquarters Cisco Systems, Inc. 170 West Tasman Drive San Jose, CA 95134-1706 USA www.cisco.com Tel: 408 526-4000 800 553-NETS (6387) Fax: 408 527-0883

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All contents are Copyright 1992-2008 Cisco Systems. Inc. All rights reserved. This document is Cisco Public Information.

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