Virtualized Protection, Automation, and Control in Electrical Substations: An Open-Source Dynamic Cost-Benefit Assessment Model

Virtualization has emerged as a promising technological solution for electrical substations, driven by the convergence of information and operational technologies and the new requirements of cost efficiency and adaptability. Virtualization employs software to emulate hardware-level functionalities by means of an equivalent computing system. However, despite the promising potential that virtualization offers in driving cost efficiencies and enabling operational flexibility, there is a scarcity of techno-economic studies assessing its financial and societal impact. This paper proposes a novel, open-source cost-benefit assessment model based on net present value analysis (NPV) and system dynamics tailored to the case of protection, automation and control systems (PACs) in electrical substations. The model explores the capital expenditures (CAPEX) and operational expenditures (OPEX) of two alternatives: 1) traditional substations based on intelligent electronic devices (IEDs) and 2) virtualized PAC functions based on hardware-independent implementations deployed in virtual machines or containers. The economic model is evaluated for a 30-year simulation through comprehensive, optimistic and pessimistic scenarios of virtualization adoption as well as sensitivity analyses of relevant functional cases covering reliability, redundancy, initial costs, and virtualization roll-outs. The findings indicate that virtualization presents a promising technology for substations, leading to reductions in both CAPEX and update costs of approximately 20% and 60%, respectively, compared to traditional substations. Similarly, from a societal perspective, virtualization can offer positive key performance indicators associated with system downtime reductions and savings in power consumption and, consequently, in carbon footprint. However, the technology maturity, roll-out strategy, software licensing, and maintenance schemes can hinder the overall cost savings and affect payback periods.