Artificial intelligence, cybersecurity, Internet of things...these terms, which used to sound foreign, are currently part of our identity, even though their specific meaning eludes us sometimes. The best evidence is in our smartphones, but we also find them in our homes, offices and leisure spaces: these words are everywhere. It could not be otherwise: water, as a cross-cutting sector that affects the social and productive fabric, is not alien to this frantic digitalisation trend.
The so-called fourth industrial revolution has arrived to stay and improve the way things are done in the industry. Hence, integrated water cycle management faces new and exciting challenges, but also challenges that nobody was able to anticipate until now. Sector companies have before them an opportunity that they cannot and should not miss, because the risk of being left behind is a difficult obstacle to overcome in this sector, a highly competitive one.
Faced with this scenario, and trying to draw a picture that includes the current and future changes in the water sector, Alejandro Beivide, Automation and Control Manager Director at ACCIONA; Maurizio de Stefano, Director Energy&Utilities (Head Water&Environment) in charge of Water Practice at Indra; Agustín Fragoso, Marketing Manager - Industrial Automation at Schneider Electric; Salvador Herrando, Director of Operations - GoAigua; and Raúl Pérez de la Ossa, Head of Analytics & IoT at Aqualia, got together at the Santander Work Café to discuss these terms, which already are trailblazing the path to follow, although it may not be the only path.
Agustín Fragoso (Schneider Electric)
Industry 4.0: Where is the water sector?
Before turning to specific technological developments, we took a look at the context: 'The fourth industrial revolution', started Alejandro Beivide, 'is the revolution of the connected industry and people'. 'It is the reality we are living', Raúl Pérez de la Ossa pointed out. 'Industry 4.0 brings to the table new tools to understand our business better; we are immersed in a process of change that will continue for years to come', he said.
'Industry 4.0 is one aspect of a global perspective: the digital transformation, which refers to changes in the way of doing business', affirmed Agustín Fragoso. 'Technology is the tool that drives these changes. And the water sector is also affected'. And he specified: 'It started earlier in sectors with heavier capital investments, such as the petrochemical industry. The water industry, because of the limitations concerning the environment and ecology, is bound to be transformed'. Salvador Herrando agreed: 'Water is a pioneering sector because of its significance. Digitalisation started 20 years ago with automation. Taking that leap is not as complex as in other industries.’
We have an educational milestone ahead of us, regarding the public's perception of the value of water, a task where the digital transformation can help - Alejandro Beivide (ACCIONA)
Maurizio de Stefano's thoughts somewhat differ: 'This digital revolution points to a greater need for technology, consumption and energy. That means that other sectors will need a lot more water'. Hence, he noted that 'it could have a negative effect on water needs. There are some advances, but it is one of the sectors that lags behind the most'. 'We work in a very traditional sector', confirmed Raúl Pérez de la Ossa, and he brought in a positive note: 'We need companies to embrace change'.
Agustín Fragoso proposed a solution: 'Regulations will be the main driver. Water is a scarce resource, and there will be increasing pressure on authorities to toughen up regulations.’ Regulations will become more and more strict', agreed Raúl Pérez de la Ossa, and it will mean that 'customer information services will be more immediate. We are part of a process of cultural change concerning what water really means.’ Alejandro Beivide thinks that 'we have an educational milestone ahead of us, regarding the public's perception of the value of water, a task where the digital transformation can help'. And he cited mobile apps as an example: 'When you see in your mobile that you have used 8,500 litres of water in 6 days, you will start to assimilate it. It is a way to make concepts and uses our own'. He believes that with apps 'all services related to the water sector will be universal'. That made Salvador Herrando reflect: 'Ultimately, there is a democratisation of information that the final user did not have before, but also you can improve or expand the range of services'.
Maurizio de Stefano (Indra)
Artificially intelligent minds
Getting into more specific issues, the first idea to be discussed was Artificial Intelligence (AI). But, what does it entail? 'There are 3 elements that make AI a little more mature', explained Maurizio de Stefano: 'First, the data. Without them, it makes no sense. On the other hand, great computing capacity. And finally, a new policy'. And in the water sector 'there are projects where using data is starting to be of value to optimise operations'. However, 'it is complicated to understand to what extent there are investments, because the return is not as specific as in other cases. AI business cases in the water sector are complex'.
'We have a problem, which is lack of investment', restated Salvador Herrando. He noted that 'there is a part, dealing with sensors and automation, that can provide guidance for infrastructure management and operation decisions. Beyond that, to have a decisive investment, greater investments have to be approved'. Alejandro Beivide was more positive in this regard: 'I see a problem in the water sector, the investment capacity, but I also see huge opportunities. Water companies are very competitive because they sharpen their wits, and maximise resources'.
Some small water companies have the same problem as large companies do, but with no capacity to implement a cybersecurity plan - Maurizio de Stefano (Indra)
In terms of practical applications, 'there are lots of areas where AI is used', noted Maurizio de Stefano. Agustín Fragoso provided some examples: 'Concerning machine learning, there is a clear application in drinking water distribution networks, or in hydraulic network modelling to detect leaks'. Maurizio de Stefano added that 'drones are being used in dams, or operators enter a compound...'. Alejandro Beivide also added: 'There are many AI layers, but the basic ones require a computer. This means that, if you have chosen business data, in little time you have answers applicable to that business. If you want to be cost-efficient, you could do it in 15 minutes. It opens up a million possibilities'. Raúl Pérez de la Ossa confirmed that: 'Nowadays we are using AI with machine learning processes, to detect anomalies, leaks, etc. We are already creating value: it makes us more efficient because we reach the problem earlier. We have to consider AI from the point of view of the challenges overcome'.
Maurizio de Stefano continued with a critical stance: 'Often, as an industry, we are not able to think big; we think small. As a country — not just as a water company – we are not ambitious enough'. Salvador Herrando agreed to a certain extent: 'True enough, if we consider only the technology side, other countries may be more advanced, but we lead in terms of knowledge about the business'. 'What needs to be done', noted Raúl Pérez de la Ossa, 'is to sum up the problem and apply solutions with what's available, to provide a quick service. Our objectives must be ambitious but attainable'.
Even so, Maurizio de Stefano insisted: 'The sector lacks ambition'. 'I don't think it is lack of ambition', affirmed Raúl Pérez de la Ossa. 'It is ambition, but subject to our business'. 'We sell water', replied Alejandro Beivide. 'I agree that we have a gap in development when it comes to large AI platforms, but maybe in a few years we will be saying we are the best in the world creating applications that run on Google Analytics, Microsoft Azure or Amazon Web Services with business case applications in the water sector. That will mean that Spanish water companies have succeeded. We are not Google, but we do not want to be Google'. 'In fact', stated Agustín Fragoso, 'this is not very different from what happened with automation: the devices that allowed the automation of operations are components that already existed in the market, and their suppliers are from different places. The key is applying them'. Alejandro Beivide told us about another success story that applied this principle: 'In the SmartWater4Europe project (in the Leeuwarden (Netherlands) demo site), Twitter was the best algorithm to detect a leak. And we had pressure gauges, flow meters, volume algorithms, network testing, sonar, radar, etc.' And he summed up: 'In this process of evolution in the water sector, we find ourselves at different stages, and we have missed half of them. Therefore, we are in a competitive process of transformation, where the new potential of the cloud and its features are our day-to-day.
'The only way to survive in this market is to leverage current advantages, transform them, and generate a business model that is valid in the long term', concluded Salvador Herrando.
About Internet and Things
The Internet of Things (IoT) in the water sector 'used to be called remote control', said Alejandro Beivide. 'Water infrastructure is scattered over large areas, so we have invested in connected infrastructure, and connectivity is the primary IoT concept. What happens now? The IoT paradigm: where before we talked about "infrastructure", we now talk about "things" as a simile of "devices", and from "devices", to whatever you want to’. In addition, 'IoT entails connectivity improvements. It eliminates what used to take a lot of effort: communication protocols, infrastructure, network devices, etc. If you add to that 5G, the great catalyst, you have a device revolution. A world of smart things starts to become plausible'.
'It is another layer of infrastructure and technology that is missing in order to realise the digital transformation', described Agustín Fragoso. 'It is the basic layer where you acquire the raw material for industry 4.0. It implies having data capture well organised, not only in terms of things, but of the people connected to those things, the kind of information or the algorithm complexity. To be useful, it has to include whomever takes the decision'. Raúl Pérez de la Ossa thinks 'we will have a completely different ecosystem. Towards the end of next decade, we will have some 30,000 million connected devices, and that will mean we will know our business better and will have more data'. Thus, that data would be 'the trigger, because it leads to: I have a volume of data that I cannot handle; what do I do? I need computing capacity with easy access tools'.
Concerning machine learning, there is a clear application in drinking water distribution networks - Agustín Fragoso (Schneider Electric)
'The paradigm of the isolated device is broken. Now we assume that the information is integrated and accessible', noted Salvador Herrando. He recalled that '10 years ago, each water withdrawal point, facility or treatment plant was isolated. We no longer doubt the need to have data at a single point, and you do not have to worry about how to access data, because it comes to you'. 'The important thing' shared Agustín Fragoso, 'will be connecting the business layers. First, because technologically, it is possible, and second, because we want that kind of decision — to automate — to have an impact on the business of the company making the decision'.
Finally, Maurizio de Stefano raised several questions: 'What will we do with all that data? That is the big question. Who will manage them? Companies will have a data management unit, because it is something completely new. And with all that data, what questions will I ask myself? We will have a generation gap in terms of thinking, about how I manage that amount of data, which surely are very useful, but which we are not used to having'.
Alejandro Beivide (ACCIONA)
Are we cyber-safe?
The last issue addressed at the forum was cybersecurity, a concept that 'has always existed' in the sector, according to Maurizio de Stefano. In this new digital scenario, he considers that 'people will do whatever they want with the data. In the future, our data will be anywhere. Also, because it is impossible to control it'. 'Moreover, we are using third party infrastructure. You de facto relinquish the data' stated Salvador Herrando. 'The problem — he continued — is it generates a dependency. If you automate operations in your business relinquishing data to third parties, you generate a huge dependency. You are exposed, you cannot stem the tide. If someone wants to come in, he comes in, but it doesn't mean we should obsess about it. We must have action plans, security protocols, and keep it in mind to design and implement systems. It is the new reality: you cannot innovate without some exposure'.
In the words of Alejandro Beivide, 'the concept of cybersecurity now has a last name: industrial. Earlier on, the development of hackers' potential had more to do with entertainment than malice. Now things are changing, but the concept of need was there. In fact, in companies, the cybersecurity of IT infrastructure is in place'. And he went on: 'What happens with the fourth industrial revolution? They can attack a different kind of devices, because operation and information technologies are converging'. Therefore, he asserted that 'we have to focus on industrial cybersecurity. Large manufacturers knew their old devices were vulnerable, because they have used protocols and ports that were historically industrial. So they have developed safe protocols and encryption systems, protected messaging, unique identification, access control, encrypted software...anything we can imagine. But it does have a cost'. 'It is a culture thing', reasoned Maurizio de Stefano. 'When you present it to a client that does not understand it, in terms of the culture, he/she does not understand its value; the cost is a lot higher than buying an antivirus, and we cannot take any risks with water'.
Water is a pioneering sector because of its significance. Digitalisation started 20 years ago with automation - Salvador Herrando ( GoAigua)
'It has to do with risk assessment', noted Agustín Fragoso. 'The risk depends on the vulnerabilities and the threats. You have to make a decision: to what extent do I want to be protected? It has a cost. A minimum, to cover many cases, already provides a certain level of security'. And he specified: 'The priorities are not the same in IT and IoT, In IT the focus is on data confidentiality and integrity. In IoT the important thing is the security and availability of the facilities. They need different approaches. There are methods to, based on what you want to protect and to what extent, develop plans to implement processes. Because we talk about cybersecurity as if it was having a firewall, and it isn't. It literally is...'. 'A policy', added Maurizio de Stefano. 'It is establishing a process to implement a defence, usually with layers: the physical layer, the network layer, the server layer, the application layer, etc. It is acquiring good practices and maintaining them', said again Agustín Fragoso.
Raúl Pérez de la Ossa thinks that 'it is not something new. We have been working on this for years. We always address this problem the same way: through people, processes and technology. Regarding the two first ones, we need a sensitive business culture. Regarding technology, safety issues are different. We have to separate them'. Maurizio de Stefano responded that 'some small water companies, even very small ones, with few resources, have the same problem as large companies do, but with no capacity to implement a cybersecurity plan. They do not have the capacity to do it, and so they take risks'.
Salvador Herrando (GoAigua)
There are alternatives
Faced with this situation, we have to analyse the potential alternatives. 'We are gradually assimilating the importance [of cybersecurity]', said Salvador Herrando. 'We have to move forward that culture, even in small companies. They have to be aware of the risks they are exposed to'. And he warned that, despite all precautions, 'new vulnerabilities will come up, we will fix them, and then new technologies and ways to cause harm will surface. Everything is connected, for good and for bad'.
Alejandro Beivide had a point to address the problem: 'One of the things that absolute connectivity brings us is that anonymity loses value. There are many actions to try to overcome resistance to anonymity, because as long as they have a name, hackers are identified'. 'Whomever has been identified, will not get into anything', emphasised Agustín Fragoso. 'Losing anonymity in the Internet and using connected capacities is on the table to prevent many of the wrongdoings that can be done', maintained Alejandro Beivide. He dared to 'guess' the future: 'The way things are in films is: first, there are robots who look very much like people. Then, there is the integration of the external world with people: with senses, screens, virtual reality. I don't think it is far from reality. You are directly saying, concerning cybersecurity and water, that you have to protect that. And in order to offer protection, some measures will entail legislation: if we want everything to work, we will lose some freedoms'.
That is where the 'digital identity' is key, affirmed Raúl Pérez de la Ossa. 'Legislation will help us in this world of cybersecurity, but digital identity must be something global'. 'Do you really believe that legislation will come before technology?' questioned Maurizio de Stefano. The answer was unanimous: no. Alejandro Beivide is quite clear about it: 'Whenever there are big problems, we will put in place some legislation to address them, so it doesn't happen again'.
Customer information services will be more immediate. We are part of a process of cultural change concerning what water really means - Raúl Pérez de la Ossa (Aqualia)
Agustín Fragoso goes back to the water industry: 'I would differentiate things that can affect the water distribution and treatment infrastructure, and the diversity related to consumption. Here, the diversity related to users is in line with what Alejandro mentioned: data protection, digital identity, etc. There is another side related to industrial diversity: infrastructure protection, where we should focus our efforts in the short term; in fact, current architecture proposals already take into account certain levels to minimise risks. We have moved forward quite a bit, because the automation systems for water treatment and distribution infrastructure already have the basic level that ensures protection against any attacks'. 'I totally agree', concurred Raúl Pérez de la Ossa. 'As with other major problems, what we have to do is to segregate and differentiate the problems, in order to find a solution for each one'.
'Let us hope nothing serious happens in the water sector before everybody understands that cybersecurity should be taken seriously', said Maurizio de Stefano. 'It is also a way to evolve. There is no such a thing as a zero risk, but that is no reason to stay away from any sort of exposure, or to stop innovating. They are paradigm shifts. You have to dedicate the resources to ensure reasonable protection, according to how critical what you are protecting is, and if by chance there is a mishap or a catastrophe, you can improve based on it', concluded Salvador Herrando.
Raúl Pérez de la Ossam (Aqualia)
A look to the future
Before we end this dialogue, participants imagine the future 5 to 10 years ahead. Alejandro Beivide started: 'I think the simile in terms of capacities and business is a market place with many apps, and the water sector is well suited for that. Many new actors will arrive: small companies, software developers, services companies...providers of all kinds will now offer their services in a more optimal way using digital solutions'. As well, he mentioned 'edge computing. I see great analytics capacity in the facility itself. We will start to install devices that will not have to go to the cloud, but just be there. And it will be related to people in the plants themselves, because digital talent will change. We will see different professional profiles in the water sector: with these elements they will analyse their own facility and improve the business'. And he continued: 'Concerning the design, the software development platforms will make us more agile and divided. Innovation will come from many different people and places, located in collaborative working platforms, linked to the project. Word, Excel, computing software...they will lose weight in comparison to large engineering software platforms'.
Raúl Pérez de la Ossa predicted something similar: 'I see more modern water companies in 10 years’ time. We will need new roles to translate the digital world into the operational world. And those factors will generate new ways to work and improve efficiency'. He also thinks that 'in the coming years, the use of sensors will increase exponentially. With the inclusion of new technologies, such as 5G, we will have more information, we will understand our business better and we will be able to turn that into efficiency. We will experience changes in how we collaborate with other water stakeholders. A better understanding of our business will open up opportunities that right now we cannot see'.
Salvador Herrando focused first on the operations side, which 'will tend towards a high degree of automation. That is, knowing about the process business. Ultimately, you will have more efficient operations and that will have an impact on operational and energy costs, and overall process optimisation, thanks to the data, databases and analytics tools'. In his case 'we have already implemented it in several large markets, and we can see the improvements. A large portion of “smart operation” follows that path'. Another focal point is the business side: 'It is more complex; it depends more on the market. The distribution of technological solutions will experience a process of globalisation. Water companies will look to external markets to leverage their knowledge and experience'.
From a broader perspective, Agustín Fragoso noted that 'in the future, the concept of sustainability will influence how the sector will evolve. Sustainability will be a requirement in regulations: wasting water will not be an option. It will require higher efficiency at different levels, thinking about water infrastructure. The life cycle of facilities will be digitalised'. Therefore, 'when it comes to designing a facility, we will create a digital model to simulate its operation. That way operations will be more efficient concerning resource and energy use. New lines of business will emerge'. In the case of Schneider, 'in 2018 we have signed energy savings contracts with water entities valued at 50 million dollars for a 15 year period. Performance contracting in the energy domain will rise as an incentive. And all of this will be possible using the technologies we have discussed'.
Closing the forum, Maurizio de Stefano considers that 'this industry is quite slow-moving', particularly in terms of 'the effects of climate change: we will experience a lot of stress. It will change water management completely'. What will water companies do then? 'Improve their efficiency, because they will face a very serious problem. Technology is one of the potential solutions to ensure business efficiency around a resource that will be very scarce. Companies have to think about that future and act now, because once it happens, there will be no time for AI, nor analytics...it will be too late'.
How do you see the future of the water sector?
Alejandro Beivide. Automation and Control Manager Director, ACCIONA
- 'I think the simile in terms of future capacities and business is a market place with many apps, and the water sector is well suited for that'
Maurizio de Stefano. Director Energy&Utilities (Head Water&Environment), in charge of Water Practice, Indra.
- 'Companies have to think about that future, because once it happens, there will be no time for AI, nor analytics...it will be too late'
Agustín Fragoso. Marketing Manager - Industrial Automation, Schneider Electric
- 'Sustainability will influence how the sector will evolve. Sustainability will be a requirement in regulations'
Salvador Herrando. Director of Operations, GoAigua
- 'The distribution of technological solutions will experience a process of globalisation; water companies will look to external markets'
Raúl Pérez de la Ossa. Head of Analytics & IoT, Aqualia
- 'I see more modern water companies in 10 years’ time. We will need new roles to translate the digital world into the operational world'