Executive Corner: ABB Leader Talks Safety, Security

Wednesday, February 2, 2011 @ 06:02 PM gHale

Editor’s Note: Enrique Santacana, president and chief executive of ABB Inc. USA and regional manager of ABB North America sat down with Gregory Hale, editor and founder of Industrial Safety and Security Source (ISSSource.com) to discuss the latest trends, along with the growth in safety and security in the industry. This is the first in an occasional series in the Executive Corner.

ISSSource: Last year when we talked, we discussed the need for increased energy technology. Where do we stand with that?

Santacana: Something interesting happened over the past two years that I have to admit that I did not expect at all. For the first time in 50 to 60 years we saw a decrease in electricity demand in the U.S. You actually have to go back to the depression era to find a similar decrease. I don’t think anyone was expecting that. When we talked, we saw the beginning of the recession and it turned out to be the worst recession since the great depression. That drop in electricity demand certainly put a damper on investments by utilities.

There is no question in my mind it is a short term thing and if we are going to have economic growth, we will need electricity. They go hand in hand; you can not have one without the other. The economy is returning to growth over a period of time, but it will not be the usual type of return. Over time the aging infrastructure is still there, so investments will happen.

ABB’s Enrique Santacana

ABB’s Enrique Santacana

When do you see the economy really starting to come back?

Santacana: I think the beginning of 2011, the first half of 2011, after the economy has given more clear signals of growth; that is number one. With the new Congress in place, energy policy will come to the forefront in the U.S.

ISSSource: With government incentives in place, have they helped at all?

Santacana: They have helped in not allowing things to get worse. In some areas, if those incentives were not there, we would have seen much, much worse conditions. The incentives for renewables — for wind, solar — they are still there and are moving forward. Energy efficiency incentives have managed to put a floor on the economic debacle we had in 2009.

ISSSource: Where do we stand with the smart grid right now?

Santacana: It is moving forward; beginning to crystallize. You have a number of things going on. The smart grid began as AMI (Automated Metering Infrastructure) — smart meters, communications into the home, demand response, giving end users choice — and all of that is still there. What is happening now is the second step in the evolution of the smart grid. There is much more influence from the distribution transformer upstream, which means distribution automation, substation automation going all the way back to generation. That is beginning to get a lot of focus. We also see incentives from the federal and state governments helping.

ISSSource: What would be the time frame for the smart grid to be in play?

Santacana: This really a wild guess, but based on the kind of activity we see today and the amount of time it takes for certain products to be developed and fine-tuned, I think in 3 to 5 years will we will start seeing a real path to significant investments in this area. It is a matter of economic growth returning and utilities getting more certainty on all these issues of carbon taxation and return on investment.

There is another issue that will drive this smart grid and that is the integration of renewables into the grid. Aside from the economic issues and the policy issues, we still have the regulatory issue of transmission line siting and that deals with transmitting bulk power from renewable sources from “where the sun shines and the wind blows” to the population centers. Sometimes you have a great distance between those areas and the transmission infrastructure has to cut across several states, but the regulatory framework right now is not conducive to site transmission lines across states that will not get benefit from the power.

ISSSource: How does the smart grid environment become a secure environment?

Santacana: That is a very important issue. There has been a lot of effort placed in the area of security. The Department of Energy has a number of task forces to work together with private industries to address the issue of cyber security, for example. That is an area that has to be addressed so the integrity of the distribution and transmission networks will not be compromised. A lot of progress has been made, actually, but I would say we are mostly at the pilot stage. With some economic justifications, at some point we have to come out of the pilot stage. That means the issue of interoperability has to be addressed, so whatever type of encryption technologies are used we don’t have 50 of them. That is why I say smart grid implementation, in terms of picking up commercial volume, is 3 to 5 years away. It has to be clarified. In the meantime, there is a lot of investment going on. I think we have gone from the crib in terms of pilots to being in the child years. Very soon we will move into to adolescence and in 3 to 5 years, to adulthood.

ISSSource: With the infrastructure aging so much, how much has to be totally overhauled?

Santacana: The aging infrastructure has to do more with the issue of reliability than it has to do with the smart grid. The fundamental equipment of the grid is not going to change too much. What is going to change is what you attach to that equipment — what sensing technologies, what communications technologies — so that you can carry status information from that equipment back to a central location and make decisions based on that information. So if you have a transformer, you need to have the infrastructure around that transformer to be able to sense all the electrical parameters: If you have a breaker, a piece of switch gear, a relay, switches. It is not so much changing the overall design of the equipment that already exists. It is more about adding the sensing, communications and software tools to get the massive amounts of data from the equipment level and turn that data into valuable information on which you can make decisions.

There is a very clear evolutionary step between now and what needs to happen in that historically we have had reactive intelligent electronic devices which are deployed through the network. They measure and communicate data back. They are not proactive. They do not have the intelligence to be able make local decisions and that is where the smart grid becomes really smart. When you have the local intelligence, the equipment can make decisions. That capability already exists in the automation environment, and we now have to make it happen on the grid.

ISSSource: In the automation environment, are you finding more and more people are talking about safety and security?

Santacana: Yes, absolutely. The two main issues we hear about from our industrial customers are energy efficiency and safety and security, also safety from an employee’s standpoint, as well as security from a cyber security standpoint.

ISSSource: What brought that on? Is it an evolution of technology or are people finding out they are easy prey to attacks?

Santacana: I think it is both. The technology is now at a point where you can get more out of your safety and security systems. At the same time there is the awareness it is more of an interconnected world and you need to have your security environment much more protected and be able to react if something happens. You need to know that, if somebody breaks into the system, you have the tools in place to neutralize the situation and take corrective actions. I think from a safety standpoint, the more automated you become the more people are dependent on the equipment itself. You need a new level of awareness about becoming too comfortable when things are done for you. When you are dealing with this new infrastructure it can break down, it can cause harm if you don’t know how to use it, so people are becoming more aware of the safety environment to be able to deal with this new interconnected world. To me, that is a driver for safety.

The new level of safety we are seeing is in the proactive mode, not the reactive mode. Everywhere it is preventive, the anticipation of knowing when an accident can happen and taking care of it before it does happen.

ISSSource: Do you feel there are more safety incidents out there, do you feel there is a fundamental breakdown in safety awareness, or is it just more media coverage?

Santacana: I just think it is technologies making it more transparent. I don’t see a fundamental reason why we would have less safety today than what we had five years ago. But the speed of communications and the speed of reaction are so much higher and there is a new level of awareness. I think that is what is driving all this. That is helping push the evolution of preventive safety methods and tools that are much more intelligent than they were before.

I think we are going from the physical paradigm of safety prevention and correction to an environment where you have intelligence. That is when you start looking at data and if you connect these data points you can see this piece of equipment will have a problem in X period of time, and therefore this is what you need to do to prevent a possible explosion or an accident.

ISSSource: On the security side, we have seen Stuxnet hit. Could that worm hit anyone at anytime?

Santacana: It could happen to anybody. You give some people in society some tools that allow them to do things and some do it for good and some use it for not so good. It is inevitable that things like that will happen and it is inevitable we take security to new levels. We need to use encryption technologies and powerful software to connect the dots. At ABB, we’ve been working with the Idaho National Lab since 2003 on their National SCADA Testbed, and that has produced some excellent results in terms of hardening these vital control systems.

To me, the issue of safety and security is about trends. We now have the ability to generate trends with sophisticated algorithms that look at previous incidents that seemed to be independent of each other. We can now statistically establish possible correlations and, based on that, we can make statistical projections. That gives us a tremendously powerful way to take corrective action before an accident can happen or a security breach can happen. That is what is going on right now that is so fascinating and powerful and important.

ISSSource: You are talking about the technology side, and that is important, but there is also the human side.

Santacana: You hit the nail on the head, it is a culture change. You have the people used to the old paradigm asking, “why do we need to do this? What are the benefits?” It is an education and training process and it is an important activity that management has to undertake to effect that culture change. One doesn’t happen without the other. Technology and culture change have to go hand in hand.

ISSSource: I heard a story that one manufacturer came in and secured a system and that was going to change the way people did their job and the first thing workers did when they came in was turn off the new security so they could keep doing things the way they always did. How long does that kind of culture change take?

Santacana: It doesn’t happen overnight, and companies will have their own pace. Some will take an aggressive training, education approach. You do have to give employees incentives so that what you just described does not happen. Some incentives are financial as well as communication of the social benefit of people doing things differently for the prevention of accidents. You need to make things clear about the consequences of things that could happen. For the industry, it will probably take years.

ISSSource: How much of a factor will Baby Boomers leaving have on the safety and security culture?

Santacana: I actually think it will be less than in the past precisely because the systems and tools will be more intelligent. The technology will take a higher share of the load so the new generation coming in dealing with this new paradigm, with proper training, will feel more at ease.

In a way, that is good. Having software-driven systems in place that already have the intelligence to measure and assess things and take corrective actions automatically will ease the generational shift.

We need to take advantage of that. It doesn’t happen automatically. It needs to be recognized by the companies in the industry that it is an opportunity to allow for change.

ISSSource: At the Honeywell user group, HPS President Norm Gilsdorf said the industry was losing about $20 billion a year in safety and security incidents. In your knowledge of the industry, do you feel that number is about right? High? Low?

Santacana: I think you get up to that number pretty quickly when you translate the number of incidents into what happens with the healthcare of those injured. It is not so much the direct cost, but the cost to society. When you think about that number, then maybe $20 billion is too low.

Let’s put it this way, when you look at opportunity costs, $20 billion doesn’t seem big enough.

ISSSource: When it comes to security, do you see IT and engineering working well together?

Santacana: I don’t see how they can’t. If you don’t have the engineer working with someone in IT then you are going to miss a lot. It would be foolish not to have them strongly linked. I don’t know of any design teams at ABB today that don’t have a close link with IT experts.

ISSSource: What regions of the world are leading way in terms of safety and security?

Santacana: I think today you can’t make much of a difference between North American, Europe and Asia, particularly North and Central Asia, Malaysia, Thailand, and of course China. They are as good as anybody.

One Response to “Executive Corner: ABB Leader Talks Safety, Security”

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