Impact case study database

Vegetation management is a major challenge for power line operators worldwide. National energy regulators typically stipulate a minimum distance between vegetation and power lines, but there is no industry-wide best practice on how operators can comply with these requirements or efficiently identify and manage the trees that pose the greatest threat to their transmission and distribution networks. The aggregate costs can be substantial; the US has 450,000 km of transmission lines alone, and operators collectively spend approximately USD150,000,000 per year on vegetation management, while in Australia operators of the 45,000 km of transmission lines spend AUD25,000,000 per year (evidence source E1). While compliance costs for most individual operators are confidential, figures released by the Australian Energy Regulator show that compliance with updated vegetation regulations cost Evoenergy, a single distribution network operator in the Australian Capital Territory with 200,000 subscribers, AUD2,400,000 in 2018-2019 compared with pre-tax revenues of AUD164,000,000.

In direct response to this issue, the collaboration with Durham has enabled NMG to be first-to-market with a network-scale power line risk assessment product that integrates multiple datasets to allow vegetation and line management, proof of compliance with clearance regulations, and assessment of risks from infringement and falling trees. The underpinning research provides both the technical basis for the product as well as enhanced credibility with current and potential customers. As a direct result of the collaboration, NMG has transformed its focus and business model and is part-way through an ambitious growth strategy designed to capture a larger share of an increasing international market. We describe the impacts on NMG below, in terms of both direct capacity building as well as a more structural shift in NMG’s business model and relationship with its customers.

KTP1 resulted in new capacity within NMG to model the thermal behaviour and capacity of a power line network, but more importantly it led directly to the creation of an integrated framework for combining data on line geometry, electrical load, environmental conditions, and vegetation, and for visualising these data within a single flexible package. While many of these features were incorporated into NMG’s bespoke 3D data management and visualisation software, Caydence, we do not claim impact arising from KTP1 because it spans across the REF2014 and REF2021 periods. That initial collaboration was a key element of the pathway to impact from KTP2, however, because it demonstrated to NMG that (1) the company lacked the fundamental understanding of forestry and vegetation data analysis that was required to bring a comprehensive vegetation management product to market, and (2) the KTP mechanism was an ideal way to address this gap ( E1).

KTP2 has allowed NMG to define an emergent field of ‘vegetation analytics’ by providing a suite of tools and approaches to identify current and potential future vegetation risks to a power line network. LiDAR surveys can measure the structure of individual trees across an entire network, but those data alone are not sufficient to allow power line operators to pinpoint the areas of greatest risk or to prioritise their management actions. The core innovation in KTP2 was to combine Durham-developed approaches for deriving vegetation structure from LiDAR point cloud analysis with knowledge of forest growth patterns and other GIS data on canopy extent and health, all integrated within the Caydence software. This has resulted in a flexible toolbox rather than a single ‘solution’, enabling NMG to tailor vegetation risk models for power lines to specific national regulatory standards around the world ( E2). As stated by the company, ‘We utilise historical information and a suite of analysis tools to look at every tree and calculate its growth, its ability to hit the line and its likelihood of falling. Paired with risk criteria and cost information specific to the network operator, this allows for significantly improved targeting of tree inspections and the design of management programs for trimming/felling which optimise cost, risk or a balance of both’ ( E3). In addition, NMG has used the Durham research on leaf-on and leaf-off conditions ( R4) to justify the use of long-term LiDAR data series to understand, and analyse, changes in vegetation patterns over time. Thus, according to the business development manager of NMG Australia, ‘rather than just telling the utilities where the trees are too close to the line, we’re using existing LiDAR libraries to look at trends over time. So when you’ve got multiple year data sets you can start to look at how trees are behaving over time and we can start to predict growth rate. And using the predictive growth rate we can then take a proactive approach to a utilities’ cutting programme’ ( E4, 0:28 to 0:55).

Development of this predictive approach has led to direct impact on NMG through competitive advantage in the market and leadership within the field of vegetation management, leading to the acquisition of new contracts. In the KTP2 final report, NMG states that ‘…the KTP contribution to the vegetation analytics played a part in the securing of three major contracts for fast turnaround vegetation clearance information on distribution networks: two in the UK and one in Australia. The contribution has primarily been around the thought leadership and the positioning of [NMG] as an innovator’ ( E2). As a direct result of KTP2, vegetation analytics now makes up about 50% of NMG’s business, compared to <10% in 2014 (the final year before the collaboration started; E2). Annual sales turnover resulting directly from KTP2 was GBP1,000,000 in 2017, rising to GBP3,000,000 in 2020 ( E2). Annual exports that can be directly attributed to KTP2 rose from GBP500,000 in 2017 to more than GBP2,000,000 in 2020, while attributable pre-tax profits were nil in 2017 but exceeded GBP500,000 in 2020 ( E2, E5, 00:44 to 2:28).

More fundamentally, the toolbox developed in KTP2 has enabled a major shift in NMG’s business model away from data acquisition and toward data analysis. In the KTP2 final report, NMG states that ‘…market changes and improved commercial efforts, combined with an improved understanding of vegetation management techniques and technologies, has significantly expanded the scoping and audit side of the business, particularly with regards to distribution (as opposed to transmission). As such, the KTP has enhanced and supported a meaningful shift in business mix by provisioning tools, techniques and examples that have enabled us to capitalise on these new opportunities’ ( E2). NMG’s technical director has stated that ‘…we’re looking at new concepts around managing a data pipeline, an analytics pipeline. So you’re thinking about a flow of data and information at different points. And how do you plug different input, outputs into that. Which is real paradigm shift in terms of how we look at serving the market. So it just generates new ways of thinking and looking at it which are all a consequence [of the KTP]… we have started to increase what the potential market is because you’re starting to do new bits of the market ... And getting on to the next point about business models, that starts to really free us from the need to acquire data… And so it starts to mean that we’re more scalable because you’re working on what information exists and applying tools to that workflow cycle’ ( E5, 05:21 to 06:45). NMG have estimated that the total addressable market worldwide for vegetation management is USD321,000,000, but that this is highly fragmented between different service providers. NMG has 2% market share at present, but is aiming for 10% on the back of the advances in KTP2 ( E5, 6:48 to 8:58). It is important to note that this change will take time and that NMG’s plans are significant given the nature of the industry; the NMG technical director argues that ‘It’s probably worth noting on that story that our customers [i.e., power line operators] are extremely conservative. Really risk averse, really conservative. And change is a matter of either them changing policy – which is really hard – or … the safety and the economic regulators making changes which influence behaviour. And that’s probably where more impact happens. So to actually change things it’s a long, hard slog; so big impact but it’s slow’ ( E5, 08:59 to 09:35).

Three examples illustrate the impact of the research in KTP2 on NMG and its engagement with major customers in diverse electricity markets worldwide:

• Endeavour Energy, Australia: Endeavour is a distribution network operator for greater western Sydney and part of New South Wales, serving 2.4 million people. Like other network operators in Australia, Endeavour is under significant regulatory pressure to reduce operational expenditure to lower consumer electricity prices while at the same time improving vegetation management practices. Compliance with new vegetation management regulations cost Endeavour more than AUD10,000,000 annually over the 2014-2019 regulatory period ( E6). Endeavour began working with NMG in 2018 to utilise multi-year LiDAR data to predict vegetation risk at a network scale. The vegetation manager at Endeavour Energy has said that ‘having Network Mapping Group’s data and analytics means that we can go to the right spans at the right times before the bushfire season… Reputational risk is one of the great things that we manage at EE especially from a vegetation perspective. And this is a new, exciting chapter in data science. So it’s brains like [NMG technical director] and [KTP associate] ... she’s the person who built the algorithm around what we’re doing here at Endeavour Energy. And together with our incredibly innovative teams what we’re doing now is starting to look at how we take this to the next level’ ( E7, 01:04 to 01:12 and 13:40 to 14:07).

• UK Power Networks (UKPN), UK: UKPN is a distribution network operator for south-eastern England, serving 8 million people and distributing 27% of the UK’s electricity supply. Prior to working with NMG, UKPN relied on foot patrols of its entire network to assess vegetation risk, even in areas with low or negligible risk. NMG has now been awarded a multi-year contract for vegetation analytics across the entire UKPN network. The senior asset engineer at UKPN has said that ‘the inclusion of 3D visualisation technology enables us to better judge the damage risk to our network from trees and other vegetation, and help us to manage our contractors more effectively. This will assist in realising significant cost savings and further improve the reliability of power supplies for our customers’ ( E8).

• Florida Power and Light, USA: Florida Power and Light is the largest retail electricity provider in the US, serving more than 10 million people. The company has engaged NMG in a three-year contract for vegetation analytics and management covering its 4,000 miles of high-voltage transmission lines. Florida Power and Light is responsible for LiDAR data collection while NMG has designed the workflow and analysis. This agreement has enabled Florida Power and Light to eliminate repeat ground patrols and to carry out rapid assessment of vegetation conditions, reducing the risk of both outages and regulatory violations. The operations leader at Florida Power and Light has estimated that the collaboration with NMG saves USD100,000 per year, and means that ‘…our team is the first to perform a LiDAR capture ‘in house’ on such a large scale (4,000 miles) and have been able to do so at a fraction of the cost of the rest of the industry (based on recent industry benchmarking indicators)’ ( E9).