NAESB’s first move to define energy digitalization standards strongly focused on Blockchain, Cybersecurity


The North American Energy Standards Board (NAESB), a wholesale and retail electricity and natural gas industry forum of 300 corporate members, will initially focus standards development to support cybersecurity and blockchain on 11 digital technologies that identified that they are rapidly transforming the energetic space.

The Digital Committee formed by the board of directors in April 2019, which includes 16 members from a variety of organizations, including the Tennessee Valley Authority, Southwest Power Pool, North American Electric Reliability Corp. (NERC) and Consulting Wood3 Resources, Analysis Group, and Big Data Energy Services: He chose his target after consulting with stakeholders during six conference calls and multiple surveys.

NAESB said its efforts began with the analysis of 11 significant technologies that are poised to reshape the energy industry today. Along with distributed ledger technology and cybersecurity, these include: cloud computing; distributable shareware; 5G technologies and implementation; data on energy use; data governance requirements; distributed energy resources; renewable energy certificate (REC) and credit tracking; the Internet of Things (IoT); and data analysis.

After discussing how to classify technologies, which areas would benefit from standardization, and how other standards development organizations and government bodies are engaging with the technologies, the Digital Committee concluded that for now, distributed ledger technology and cybersecurity show the greatest relevance and urgency, and are both areas of “emerging high interest and high value” for the development of standards.

However, in its first report on the digitalization of the energy sector released on November 30, the board emphasized that it will continue to coordinate with entities such as the National Institute of Standards and Technology (NIST), Department of Energy (DOE), Institute of Electrical and Electronics Engineers (IEEE), International Organization for Standardization (ISO) and NERC, and continue to monitor the areas identified as “highly relevant” to the processes and transactions that NAESB standards currently address or may address in the future.

Focus on Blockchain and Cybersecurity

According to the report, the committee identified distributed ledger technology as a “high value” area, although members agreed that “caution should be exercised with immature and developing technologies.” The committee concluded: “It is important that NAESB remain active in developing supporting standards and continue involvement as the energy industry continues to adopt applications for the technology.”

Distributed ledger technology, sometimes known as blockchain, essentially allows trading parties to run automated processes using a secure shared ledger that can serve as a digital record to track commodities. Blockchain, the committee said, has many potential benefits, including improved cybersecurity, greater transparency and efficiency, and a reduction in the operational and administrative costs of supporting transactional processes.

Despite unstable legal and regulatory bases, many other markets, including the financial sector, are developing standards to support the use of technology, the committee noted. While it proposed a number of potential generalized use cases for the technology, the committee agreed to focus on decentralized generation and grid management applications and / or distributed energy resources.

So far, the report notes, the NAESB Wholesale Gas Quadrant (WGQ) is working to conclude efforts to develop a standard to support the conversion of the NAESB basic contract for the sale and purchase of natural gas into a digital “smart” contract. which can be used with distributed ledger technology. The NAESB Wholesale Electric Quadrant (WEQ) and Retail Markets Quadrant (RMQ) are also jointly addressing an element of the annual plan to develop a standard contract to improve and automate the current voluntary renewable energy certificate (REC) processes. “These model contracts can also be converted for use with distributed ledgers,” said NAESB.

Additionally, the NAESB WEQ has a second element of the annual plan planned for 2020 to consider the development of standards related to distributed ledger technology that will support the closing cycle for energy trading. “With these activities already underway within NAESB, the Digital Committee has focused on exploring additional use cases or business cases for the technology that could be supported through the development of standards in other areas. The committee also discussed recommendations on how NAESB resources should be devoted to developing standards to support the technology and the priority that should be given to current and new efforts, “he said.

Cybersecurity, on the other hand, “is an inseparable part of any discussion of digital transformation,” the committee said. At the September meeting, committee members agreed that “cybersecurity is a global umbrella area that is pervasive in all other areas but can be refined and evaluated in the context of specific digital technologies. As the committee moves forward. with recommendations for the development of standards to support specific digital technologies, information related to cybersecurity requirements will accompany the recommendations.

For now, the board’s attention will focus on reviewing and revising the NAESB Business Practice Standards required to ensure a minimum level of security for transactions addressed by the standards, but also considering how NAESB’s activities ensure that the organization be responsive to the market, “the report said. “While no specific use cases have been identified for cybersecurity and information security measures, there was a need to avoid” one size fits all “solutions in developing standards and to incorporate cost considerations when appropriate. Finally, it was also noted that NAESB’s unique role in the energy sector may represent an opportunity for the organization to consider acting as a repository for sharing information related to cyber security or cyber threats and their mitigation. ”

High interest: IoT, REC monitoring, DER communication protocols

Other areas identified by the report as “emerging of high interest and high value” for the development of standards include the IoT, a concept of connected electronic devices or their components together and the Internet. In the energy sector, the IoT can provide efficiency, facilitate data sharing and renew the way operations are conducted, the committee said. He identified several use cases for the technology, primarily focused on maintenance and operations / situational awareness. A specific use case provided was the use of technology for monitoring and detecting energy resources distributed on the grid. However, the committee recognized that many existing NAESB standards, although not directly identified as IoT standards, support or allow the technology to be applied.

In addition, many stakeholders preferred to focus on REC monitoring and accounting. RECs are market-based tools that represent property rights over the environmental, social, and other non-energy attributes of renewable electricity generation and are used by energy consumers and regulators for compliance with state renewable portfolio standards. “With adequate technological standards, there may be an opportunity to connect the wholesale and retail markets, helping to ensure the authenticity of RECs and eliminate current concerns of duplicity,” the committee said. However, it refused to focus on the area in particular due primarily to related efforts to develop blockchain use cases.

DER communication protocols have also received strong support. The committee recognized the urgency of related technical standards, noting that NAESB “has contemplated the development of standards in the area for many years but has not made any specific efforts.” The committee said, however, that the information needs of network operators regarding the aggregation of loads and distributed resources available to support network reliability are likely to be met through NERC standards. But he added: “There are also market benefits that can be achieved by standardizing protocols for commercial purposes. Although the use cases identified by the committee relate to control and reliability of operations, it was noted that there may be an opportunity to develop standards that support performance monitoring or reporting. “

Among the technologies identified as enabling digitization, the council highlighted 5G networks, which are the next generation of mobile internet connectivity, which offer faster speeds, more reliable connections and provide the infrastructure needed to carry huge amounts of data. However, the committee identified the provision of 5G services, not necessarily a technology in itself, as a “still emerging area” whose impact on the energy sector, “while expected to be significant, is yet to be defined.”

Cloud computing has also received strong support. The committee classified cloud computing as another area where standards and research exist, but it can benefit from additional standard security requirements specific to the energy supply chain. The council decided to monitor the area to determine whether establishing basic safety requirements would be beneficial.

Future meetings will reveal how the council will act. As Pat Wood III, former president of the Federal Energy Regulatory Commission and the Texas Public Utility Commission, and a member of the NAESB Digital Committee noted, publishing the report as a first step is crucial. “NAESB (and its predecessor GISB [Gas Industry Standards Board]) has played such a significant role in bringing significant value to customers in the energy markets through basic standardization of market transactions, “he said.

“The cross-sectoral collaborative process that is a hallmark of NAESB will be of paramount importance to us all as we accelerate towards a much more digital future. The early identification of usable areas by this report will help guide our future and ensure that our continental energy markets remain a global success. “

Sonal Patel is a senior associate editor of POWER (@sonalcpatel, @POWERmagazine).

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