Author: Sean M. Lyden

Although drone sales in the North American utility market will reach only about $850,000 in 2018, that number is expected to grow by more than 20 times – to $25 million – by 2026, as U.S. regulations ease and drone technology improves.

That’s the outlook from Michael Hartnack, a research analyst covering drones and robotics for transmission and distribution operations worldwide for Navigant Research. (For Navigant’s full market report, visit www.navigantresearch.com/research/drones-and-robotics-for-transmission-and-distribution-operations.)

While those numbers might appear underwhelming, they represent hardware sales only, and not revenue from ancillary drone services – such as piloting, training, software development, data management, cybersecurity and other support offerings – which will make the overall U.S. utility drone market significantly larger, Hartnack said.

So, what exactly is the state of drones in the North American utility sector today? What pieces need to fall into place to accelerate growth? And what are some of the most interesting future possibilities?

UFP recently spoke with Hartnack to get his perspective. Here is an edited version of our conversation.

UFP: With all the buzz surrounding the potential for drones in utility applications, the market size you’re quoting is much smaller than one might expect. Why is that?

Michael Hartnack: Right now, there aren’t many utilities that own drones. And the ones that do may buy three, 10, 15 or, at most, 20 units. So, when you consider that the price of a drone is anywhere from $8,000 to $50,000, that doesn’t equate to a tremendous dollar amount for the overall market.

Today, the utilities that are using drones are doing so as part of a limited pilot program – and that’s where things are going to stay until regulations are eased. So, there’s a ton of potential for drones, but everything is kind of stalled right now.

That’s why, in our research, you see an exponential growth curve. There’s minimal growth until the middle of the forecast. And then the market takes off.

What assumptions are you making to explain such a steep growth curve?

One assumption is that the FAA will ease regulations, specifically the rule that requires the drone to always be in the line of sight of the operator. This would enable utilities to inspect much longer segments of power lines per flight, making drones more efficient, productive and practical.

So far, Xcel Energy [based in Minneapolis] is the only utility company that has been granted an exception by the FAA to fly drones beyond the operator’s line of sight.

So, is your assumption that the FAA will ease line-of-sight restrictions across the board for utilities?

Yes. It’s hard for me to put a precise timeline on it, but for most people I have spoken to in the industry, one to three years is about when they expect the FAA to start granting more exceptions like they have done for Xcel Energy on a much bigger scale.

Beyond regulations, what’s holding back wider-spread adoption of drones by utilities?

Once you take the regulations out of it, you still have a technology barrier. For the most part, the technology required to do a lot of the work utilities want them to do is already here. For example, the ability to put a camera on a drone and fly it over and inspect transmission lines – that’s here.

The issue now becomes, how far can the drone fly without having to be recharged? How can it be controlled without somebody piloting near it?

There are a lot of technological questions that need to be answered, but none of those questions is really being addressed right now because of the line-of-sight issue.

As this market grows, will you see utilities own their drones or outsource that function of their operations?

Right now, utilities, for the most part, own their drones. But I think there will be a shift toward a more hybrid approach where utilities may own the drone itself but outsource other aspects of drone operations. They’ll say, “OK, I’m going to own the drone, but I want to use your pilots and software platform where all I need to do is plug into an app and see the data.”

What are some exciting possibilities for drones that could create game-changing breakthroughs for utility operations?

One possibility is being able to install a drone in a box under a transmission line or a substation, and program it along the lines of, “OK, once a month, I want this drone to fly over a preset area of this transmission line.” And it would have a long enough battery life to do the job. Or, in some cases, the drones could return to home base and get a new battery all by themselves, and then get back to work, flying over the line, doing this whole thing autonomously. The end game here is total autonomy; you’re removing the human, as much as possible, from having to be involved with the process.

Another cool application is using drones for light repairs on transmission lines. Right now, if you have a fault that’s caused by a tree branch, you have to roll a truck out there, get everyone all geared up in their safety equipment, cut the power and perform the repair.

But what if you could sit there in the truck and send a drone up with two little robotic arms that grab the tree branch and throw it to the side? And maybe it can do some minor line repair with tape and insulators and things like that. You can save a lot of money and time, minimize power disruption to customers and, most importantly, improve worker safety.

You talk to any utility and the first thing they’ll say is, “Well, this needs to be safe.” Putting a drone up there in these situations is safer than putting a person up there.

When it comes to fully autonomous vehicles becoming commercially available, industry consensus is that it’s not a question of if but when. And that time frame appears to be within the next two to three years.

For example, industry research firm Navigant Research (www.navigantresearch.com) expects that highly automated light-duty vehicles will begin to be introduced in 2020, with steady growth anticipated starting in 2025.

Then there’s Waymo (https://waymo.com) – formerly the Google self-driving car project – pushing the pace, saying that it will roll out fully self-driving taxi rides to the public by the end of this year, with a plan to operate 1 million self-driving miles by 2020.

And at the NTEA Work Truck Show in March, Ed Peper, vice president of fleet at GM (www.gm.com), said that the automaker expects to launch fully self-driving vehicles “safely and at scale” in ridesharing applications in 2019.

But fatal crashes in recent weeks – involving an Uber vehicle in fully autonomous mode and a Tesla Model X with Autopilot engaged – also have caused many in the industry and government to pump the brakes on vehicle testing, creating some uncertainty around when robots will actually rule the roads.

So, what needs to happen for fully autonomous vehicles to be ready for prime time?

UFP spoke with Sam Abuelsamid, senior analyst for Navigant Research, to get his perspective.

Innovation vs. Regulation: Striking the Right Balance
Abuelsamid said that the industry and regulators need to develop standards that achieve a delicate balance between innovation and regulation.

“We don’t want to stifle innovation or development of technology,” he said. “At the same time, I think that if we’re going to put these vehicles on public roads – either for testing purposes or commercial deployment – we need to take a look at some basic standards and make sure that the vehicles that we’re putting on the road achieve at least a minimum level of safety.”

What might those standards involve?

“We can begin by taking a look at developing standards for the sensing systems on these vehicles – to make sure that they can reliably ‘see’ in a wide range of driving conditions,” Abuelsamid said. “And then we need to make sure that the systems can react and do the right thing under those conditions. We should have confidence that when the autonomous systems detect something, that they’re going to make the right decision. As human drivers, we have to take a basic driving test to get a license to drive. We should have the same expectation when it comes to licensing a car to drive itself.”

The Machine-to-Human Handoff Hassle
In both the Uber and Tesla crash incidents, the human driver in the vehicle was required to be fully aware and ready to take over control when necessary. But it’s precisely this machine-to-human handoff situation that can be dangerous, according to Abuelsamid.

“I get to drive a lot of different vehicles and try out these different technologies,” he said. “And unfortunately, I’m increasingly coming to the opinion that the partially automated systems like [Tesla] Autopilot and others that require a handoff to a human being are actually a bad idea. I think that having a human as a supervisor for these systems is fundamentally not going to be safe or workable because as soon as you start getting reasonably comfortable with the technology, people quickly become complacent.”

What’s the solution?

“What we should do is move away from these partially automated systems to fully automated systems, even if they’re limited in their scope in terms of where they can operate,” Abuelsamid said. “I have no problem with testing the systems and using them in limited conditions. But I think that is a better approach than relying on a human to oversee the system because that’s what we had in the recent Uber [crash] case.”

Remote Control
Last year, Nissan (www.nissan-global.com) introduced a remote control system for autonomous vehicles called Seamless Autonomous Mobility, or SAM. The way it works is that when the car encounters an unpredictable situation – such as a new road-construction area – it brings itself to a safe stop and requests help from the command center. The request is routed to the first available mobility manager – a person who uses vehicle images and sensor data, streamed over a wireless network, to assess the situation, decide on the correct action and create a safe path around the obstruction. Once the vehicle has cleared the area, it resumes fully autonomous operations, and the mobility manager is free to help other vehicles calling for assistance.

So, is a remote control system like this a viable solution to give human passengers greater confidence in an autonomous vehicle?

“I think that some degree of remote control is going to be a necessity for autonomous vehicles,” Abuelsamid said. “There are going to be certain situations where the vehicle gets stuck and is unable to figure out what to do. So, having a remote operator who can see what the vehicle sees and guide it through certain scenarios or to a safe place if there’s some sort of system failure is a good thing. But that’s not something that’s ever going to be scalable to all the vehicles on the road. It would be used as an emergency-only backup.”

Security
What about cybersecurity? How much of a challenge is that right now?

“It’s a huge issue that all the OEMs are going to have to deal with to make sure that autonomous vehicles are both secure and resilient,” Abuelsamid said. “When you have complex systems like these, you can never guarantee absolute security. It’s not possible. No one can say that a system is 100 percent secure with as much code as these systems are running. The technology must be resilient so that when there is a security breach, it can be detected and the vehicle brought to a safe stop.”

How optimistic is Abuelsamid that automakers are making cybersecurity a top priority?

“The good news is that manufacturers have recognized that cybersecurity is a real issue,” he said. “Four years ago, I could not say that was true; they weren’t taking it very seriously. But now they are.”

The Bottom Line
What needs to happen for fully autonomous vehicles to expand beyond niche robo-taxi applications to achieve significant scale?

Here’s how Abuelsamid put it: “People have to trust that these vehicles are going to behave properly – that they’re going to be reliable. The public needs the confidence that the autonomous vehicle is safer than a human driver.”

And that timeline is not so certain.