This is a guest post by James Varley. You can find the original article in the January 2020 edition of The Energy Industry Times.
Nexans is a company currently in transition, with aspirations to “move up the value chain” from merely being a cable supplier to more involvement at the systems level. The transformation has been described in several ways. For example, Jérôme Fournier, corporate VP, Innovation, Services & Growth talks about going “beyond cables” and a shift from commodity based thinking, centered on volumes and cable costs, to a focus on value and the customer’s “total cost of ownership” (TCO). Jérôme rejoined Nexans in January 2019 having spent eight years running R&D at Michelin – attracted by the challenge of change management at Nexans. The TCO approach has proved successful in the premium tyre business, he says.
Franck Blonbou, Electrical Engineering Services Manager at Nexans, speaks of “moving from a transactional relationship with customers. in which we simply wait for them to issue a request, to becoming a key partner in designing and operating systems” and going from a “buy cheaper position” to what he calls “buy better”.
A key piece of the “new Nexans” strategy is what CEO Christopher Guérin chracterises as a “profound transformation towards services”, with a dramatic increase in the personnel devoted to this side of the business, and innovation in services identified as a priority area.
This shift is exemplified by the launch of a new asset management offering, Asset Electrical, targeted principally at DSOs (distribution system operators). The basic aim of Asset Electrical, developed by Nexans in partnership with French simulation software start-up Cosmo Tech – a specialist in use of digital twins and “augmented intelligence” to manage complex systems – is to help grid asset managers optimise the total cost of ownership without impacting reliability. It is pitched at the “strategic” level of asset management, ie looking at medium to long term maintenance and equipment-renewal investment.
Nexans sees the grid asset manager’s mission as essentially to find the best balance between performance and expenditure (operating and capital), taking into account various risk factors, financial, regulatory, system security, environmental.
Asset Electrical facilitates this by enabling the asset manager to build a model or “digital twin” of the network and the processes used to manage it. To make the best possible network model, and therefore provide a basis for the best possible decision making, data from all relevant departments (silos) of the DSO (eg, maintenance/engineering, human resources, finance, purchasing) is gathered together centrally and organised. Inputs include network inventory and topology, regulatory requirements, and information about inspection, maintenance, repair and replacement policies in place, combined with additional data from Nexans about the ageing of electrical assets.
The resulting digital twin is then used to analyse/test various scenarios and simulate, for example, multi-year capital and maintenance expenditures, and their impact on grid performance. Risks to the grid are assessed using UK Ofgem’s CNAIM (Common Network Asset Indices Methodology), which estimates probability of failure and consequences of failure, and a new methodology developed by Nexans and Cosmo Tech, called Apparent Age, which employs a longer time horizon than CNAIM’s ten years. Several scenarios can be simulated and the one providing the best fit to objectives selected and presented to stakeholders.
Judging by experience to date, Asset Electrical appears to have the potential to achieve remarkable savings for DSOs. This is achieved by reducing maintenance expenditures “with negligible impact on grid performance” (as measured by an indicator such as SAIDI (System Average Interruption Duration Index)), resulting in lower OPEX, and by delaying or reducing CAPEX “via safely rescheduling investments.” Nexans estimates that “in total it can deliver TOTEX (CAPEX +OPEX) savings up to 10-15%” in the medium to long term.
An application in France identified potential DSO TOTEX savings of “up to 12%” over about ten years. In this case the TOTEX was 50 billion €/y, so “a 12% saving without loss of performance is not insignificant”, says Franck Blonbou .