Privatizations, grid modernizations boosting utilities’ digital spending

The digitization of field operations and internal control systems by electricity, water and gas utilities should intensify with the modernization of the sector and the opening up of markets in countries like Brazil, creating important opportunities for developers of software and solutions.

Such is the case of Chilean IT company Sonda, which has Brazil, Chile and Colombia, in that order, as its three main markets for the utilities segment. The utilities division is growing and now represents 7-8% of sales – while the leading and most traditional vertical, namely government, corresponds to around 15% of Sonda's revenue.

“More complex projects are starting to get off the ground now at the end of the year. And the privatization processes in some markets should generate more resources and more investments in networks,” Rivaldo Ferreira (pictured), head of Sonda’s utilities unit, told BNamericas.

Brazil has hosted since 2016 a Sonda center of excellence in solutions for utilities. It co-develops smart grid solutions, smart meters, cloud computing, mobility, business intelligence and big data.

Relatively new, the division has grown in importance in the wake of the digitization of networks, according to the company. 

It has shown resilience during the pandemic, as several utilities needed to quickly adopt customer self-read mechanisms, chatbots and self-service solutions for clients isolated at home, according to Ferreira.

On the other hand, the crisis led many utilities to postpone more comprehensive, complex and long-term projects related to systems replacement and network upgrades, he said.

“We already see companies calling us to resume these more complex projects as early as 2021,” Ferreira added. Sonda is participating in three tenders for the deployment of advanced distribution management systems (ADMS), which are long-term, expensive implementations. He did not name the companies.

Neoenergia, the Brazilian subsidiary of Spain’s Iberdrola, recently activated a solution enhancing the interoperability of its smart sensors. A consortium formed by Tecsys and Lactec was responsible for the deployment. Sonda participated in the tender, but was not selected to provide the services, said Ferreira.

Sonda is also participating in pilot projects with potential to scale up for the use of AI-powered cameras to detect anomalies and possible failures that can occur in utilities’ systems, ranging from large transmission lines to power substations and water pumping systems. The idea, said Ferreira, is to avoid displacement of teams and generate faster diagnosis.

Sonda's partners for cloud and artificial intelligence solutions include IBM, Microsoft and Google. For analytics solutions, one of the partners is SAS.

SCHNEIDER ELECTRIC

Another supplier reaping the benefits of utilities’ digital transformation is France’s Schneider Electric.

The group recently activated an ADMS platform at power distributor CPFL’s Piratinininga unit, which operates in 27 municipalities in São Paulo state, serving approximately 1.8mn consumers.

By the end of the year, CPFL plans to have activated the platform at the CPFL Paulista unit, which covers 234 municipalities in the interior of São Paulo state, serving 4.6mn consumers; and at CPFL Santa Cruz, which operates in São Paulo, Paraná and Minas Gerais states, serving approximately 457,000 consumers.

For 2021, the goal is to activate Schneider’s ADMS at RGE, which is responsible for distributing 65% of the electricity consumed in Rio Grande do Sul state, serving 2.9mn residential and corporate customers.

“With the COVID-19 pandemic, many companies understood that, if they cannot manage to remotely control their network in a dynamic manner, their businesses will be in trouble,” the company’s energy management VP, Philippe Delorme, told BNamericas.

“We have strongly invested in new software for real-time management of networks in the pursuit of the optimal balance of supply and demand, and we hope to expand this business in Brazil and South America, participating in the digitization process of utilities,” Delorme added.

MODERNIZATION

The electricity sector is seen as more advanced in IoT and smart grid initiatives, while water and sewage companies are, in general, just beginning to reap the benefits.

In Chile, with sanitation already more universal, the demand has been for the automation and digitization of water and waste systems, while in Colombia, the scenario in terms of access and companies’ maturity is more similar to that of Brazil, Ferreira said.

In Brazil, one of the drivers should be the liberalization of the sanitation sector, with the new regulatory framework enacted by President Jair Bolsonaro in July, which the market sees as having the potential to bring more investment in companies and hence automation and digitization. 

Likewise, the potential privatization of Brazil's power distributor Eletrobras and its subsidiaries, as well as the liberalization of the gas sector, recently passed in the lower house, should attract more resources for investments in modernizing the sectors.