NAESB report addresses need for digital technologies standards

by Peter Maloney
APPA News
December 18, 2020

The North American Energy Standards Board (NAESB) has adopted a report by its digital committee concerning the development of standards for the digital transformation taking place in the energy industry.

The report summarizes a series of conference calls and surveys conducted by NAESB’s board of directors and digital committee and is intended to aid NAESB as it considers new standards to support digital technologies.

Included among the digital committee members is Valerie Crockett, senior program manager for environment and energy policy at the Tennessee Valley Authority.

The report said that industry sectors ranging from energy, finance, manufacturing to healthcare are taking advantage of digital technologies that have lowered the cost of data collection, storage and processing and are enabling advanced analytics to drive better performance, increase productivity and support better strategic decision making.

The report paid particular attention to technologies, such as the use of distributed ledgers or the implementation of 5G networks, that have the potential “to alter the manner in which the transactions governed by NAESB standards take place.”

The NAESB report reviewed nearly a dozen technologies: distributed ledger technology (also known as blockchain technology), data governance requirements, cybersecurity, distributed energy resources, cloud computing, renewable energy certificate/credit tracking, deployable shareware, Internet of Things (IoT), 5G technologies and implementation, data analytics, and energy usage data.

Many of those technologies are already being deployed and are increasing efficiencies, and the development of supportive standards could accelerate their adoption and reduce the likelihood of “developing solutions that must be retrofitted to support interoperability with other technologies,” the report said.

In a 2018 meeting, NAESB’s board recommended that the organization begin looking at the impact digital technology could have on the energy sector.

Research and a series of discussions found that global investment in digital technologies by energy companies has risen over 20% annually since 2014 and that in 2016 an estimated $47 billion was invested in digital electricity infrastructure alone, a level 40% higher than worldwide investment in gas-fired power generation.

NAESB’s research also found that other standards organizations, such as the International Organization for Standardization, SAE International and ANSI, are pursuing digital transformation standards and have created groups within their organizations or held meetings to focus on exploring how new digital technology is transforming their industry sectors.

The report recommended that NAESB’s board continue “standards development efforts” for two technologies in particular – distributed ledger technology and cybersecurity – and monitor the other technologies identified in the report as “strongly relevant to the processes/transactions that NAESB standards currently address or may address in the future.”

The report noted that NAESB is currently developing standards to support distributed ledger technology in the wholesale and retail electric and gas markets.

NAESB’s Wholesale Gas Quadrant is working to conclude development of a standard to support conversion of the NAESB Base Contract for Sale and Purchase of Natural Gas into a digital “smart” contract that can be used with distributed ledger technology. And NAESB’s Wholesale Electric Quadrant and Retail Market Quadrants are jointly developing a standard contract to improve and automate the current voluntary renewable energy certificate processes.

NAESB’s Wholesale Electric Quadrant is also considering developing standards related to distributed ledger technology to support the accounting-close cycle for power trading.

The report also recommended that NAESB should continue to develop standards that support cybersecurity for the transactions the standards address and develop standards to support specific digital technologies, as well as review the finding of reports from Sandia National Laboratories and recommend any modifications that “may be necessary to support a new model for the implementation of NAESB cybersecurity standards.”

With respect to other technologies, the report identified the Internet of Things technology as an “emerging high interest and high value area for standards development.” The adoption of IoT technologies “will drive the need for new standards that support both privacy and cybersecurity, especially when used within operational or control environments,” the report said.

The report also identified data analytics as a technology that is relevant to the processes and transactions that the NAESB standards will address in the future, but noted that one-third of respondents to a NAESB survey said data analytics is not an area relevant to NAESB and that NAESB standards are not needed.

As with other emerging technologies, such as renewable energy credit contracts, the report recommended that NAESB should continue to monitor the development and adoption of the technology to determine if standards development is necessary.

The report also identified 5G technology as an area that received strong support as being relevant, but 50% of survey respondents said standards are not needed or that adequate standards are already in place.

The report is available here.

Public power utilities and blockchain

Several public power utilities are exploring blockchain technology.

A Sacramento Municipal Utility District project that is being funded in part through an award from the American Public Power Association’s Demonstration of Energy & Efficiency Development program will utilize blockchain-enabled tokens as part of an effort to encourage EV owners to charge their vehicles at workplaces when local renewables peak during the day.

In 2018, the Burlington Electric Department in Vermont won a grant from the DEED program to use blockchain technology to facilitate the integration and distribution of energy from multiple sources in real time.

Meanwhile, another California public power utility, Silicon Valley Power, and Power Ledger successfully completed the first stage of a program to test the use of blockchain technology for tracking and monetizing carbon dioxide reduction credits for electric vehicle charging and now plan to proceed to the second phase of the project.

In 2018, Silicon Valley Power used Power Ledger’s blockchain-backed platform to track and manage Low Carbon Fuel Standard (LCFS) credits at the Tasman Drive parking garage in Santa Clara, Calif., which has a 370 kW solar system and 49 electric vehicle charging stations.