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Cloud Computing Uptake: Key triggers, benefits and challenges for power utilities

September 13, 2017
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With the increasing influx of renewable energy and the existence of a large number of suppliers and contractors across diverse locations, power utilities are turning to advanced technologies to increase their efficiency and optimise operations. Among these, machine-to-machine (M2M) technology and cloud computing are gaining increasing traction across the sector.

M2M technology enables communication between multiple devices in the power value chain, ranging from transformers to the grid, thus generating a large amount of data for utilities to store and analyse. For the efficient utilisation of this data, the role of cloud computing becomes crucial. Cloud computing refers to storing and accessing data and programmes on remote servers hosted on the internet instead of on the hard drive of a personal computer. Cloud computing services include the delivery of on-demand computing resources, applications and data centres over the internet on a pay-per-use basis.

Cloud service models

There are different cloud models such as SaaS (software as a service), PaaS (platform as a service) and IaaS (infrastructure as a service), which offer storage solutions and applications on any device, at any time, on the internet.

• SaaS: It typically provides software and databases to clients.

• PaaS: This provides a computing platform, which includes an operating system, database and a web server. Users can develop their own products using these services.

• IaaS: This is the most basic cloud service, which provides virtual machines, servers, storage, active network components, etc.

Besides, depending on the business needs of a company, cloud services can be of three types – private, public and hybrid. A private cloud is an environment operated by a single organisation. It is managed and hosted either internally or by a third party. A public cloud is an environment that renders services that are accessible to the public. Meanwhile, a hybrid cloud is a mix of public and private cloud.


Cloud computing provides significant cost savings by reducing the capex, as the resources are acquired when needed and are only paid for when used. Thus, companies do not need to install costly hardware and software packages. In addition, it offers greater scalability and reduces go-to-market time through rapid prototyping. The technology enables power utilities to ensure business continuity through its various disaster recovery models, and frees valuable personnel, allowing them to focus on delivering value. Further, platforms such as cloud-based customer relationship management and social media help discoms move closer to their customers.

Discoms have a high resource requirement for cloud computing for processes such as meter data management, billing and collection, consumer engagement and demand response, connection management, transformer health monitoring and outage management. Cloud computing allows discoms to monitor their performance and gain business insights through analytics in order to strengthen their network operations and manage customer services efficiently.


A major barrier to cloud migration in India is the limited broadband connectivity, particularly in remote areas. There are also multiple challenges related to data security. Data, which is hosted by a cloud provider, faces the risk of interception when it is in transit and the risk of corruption when in use. However, these risks can be offset through third-party authentication, strong identity and access management for automated provisioning and authorisation, and cryptographic encryption.

There also exists the risk of data theft or damage, as well as jurisdiction-related risks as the data is stored in multiple locations. While the physical location can be secured through biometric scans and area access management, compliance can be ensured by regular audits, comprehensive legal documentation and trust-based partnership.

Other areas of concern for utilities are the lack of direct control over the data and reliability of the cloud service provider. Further, once a firm enters into an agreement with a provider, it faces a “vendor lock-in” situation. To this end, the utilities need to enforce stringent contract management and comprehensive company evaluation guidelines.

The way forward

As per a Gartner report for 2015, the public cloud spending in India is projected to increase from $618 million in 2014 to $2,000 million by 2018. The expected increase in investment can be attributed to the benefits offered by cloud computing services. Recently, a number of discoms have launched mobile applications for customer billing purposes using cloud-based solutions. Going forward, several utilities are expected to migrate to cloud computing based solutions to meeting their key business requirements.

Based on a presentation by Ravikant Yadav, Senior Consultant, Infosys, at a recent conference organised by the India Infrastructure Group


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