The availability of massive amounts of infrastructure data is informing investors about how assets work in a way they’ve never been before.
Big data is increasingly available for infrastructure assets, coming as welcome news for the investor always wanting more information before committing any capital. This kind of insight into a potential investment could have a big impact on how asset managers approach the sector.
“The question for us is what are the steps we need to take so that we are staying as much as possible ahead of the curve?” says Tibor Schwartz, technology specialist and principal at Australia’s QIC.
That can be a wide curve, though. It seems in the information age, technology has disrupted, enhanced or changed every infrastructure sector in some way or another. Where investors say big data can help the most is for roads, ports and power and energy assets.
For example, the Oregon Department of Transportation this year unveiled a programme billed as “the new way to fund roads”. The pilot programme gives drivers what amounts to a plug-in transponder that tracks the distance a vehicle travels on a highway and charges 1.5 cents per mile.
Look at wind energy as well. Developers seek weather forecasts and analysis as accurate as possible before constructing a wind farm.
“Investors, like everyone, are used to more information these days,” John Medina, a senior analyst at Moody’s global infrastructure and finance group explains. “Big data is affecting the way infrastructure is being invested in as a developer, as an owner, as an operator.”
Big Brother is watching you
Medina says new road developments, in particular, are a sector in which investors are better informed because of big data.
Of course, traffic studies have been conducted for years, but wide adoption of mobile phones and penetration of mobile internet over the past decade has created a deeper and more accurate data pool from which to draw.
“Everyone’s being tracked,” Medina says. “If you have a cellphone, you are being tracked and your data is likely being sold to one of these data aggregators.”
That may set off privacy alarm bells, but Atlanta-based AirSage, a geolocation data processing company, insists its data remain anonymous.
“We provide analysed, aggregated and, of course, most importantly, anonymous insights,” Jonathan Silverberg, AirSage chief technology officer, says. He calls the company’s work “demand modelling” or “population analytics”. For a road project, it’s “quantifying the demand for such a road”.
What AirSage interprets from geolocation data, he says, are statistics such as: how many people traverse a highway each day, how long does it take them and how upgrades can benefit drivers and generate revenue for operators.
“We would say that, at this shopping centre, the people who tend to visit it are mostly from this neighborhood, the other percentage from the other neighborhood, and they tend to spend 30 minutes at every visit and so on,” Silverberg says, by way of example.
And road operators have been a reliable consumer of the data AirSage collects, being the company’s “longest-lasting vertical” for its business. “Today, you won’t see any toll road being planned in the US without getting data sets.”
A new kind of maintenance
Big data is helping investors learn more about an asset before acquisition, but it can also lead to better management of what’s already in a portfolio, providing answers to questions such as: Where are a road’s bottlenecks? What direction should turbines face?
For Schwartz and QIC, an important question is: What information can be collected about a recent addition to the company’s portfolio?
QIC, in a consortium with Global Infrastructure Partners and investors including The Future Fund and South Korea’s NPS, purchased the Port of Melbourne, Australia’s busiest port, for A$9.7 billion ($7.3 billion; €6.24 billion). The asset is a coastal labyrinth of docks wharfs, roads and railways. Bright cranes line canals and hoist cargo containers to land or out to sea. Its busiest year was 2016, during which it handled 2.6 million 20-foot equivalent units, a measurement used to count containers.
Schwartz says QIC is experimenting with new ways to track how some of the port’s assets are monitored, including sensors at various points of operation. Schwartz explains that investing in technology like this will lead to a shift from “reactive” to “condition-based” maintenance. Its investors know how to better direct capital expenditure to improve the asset.
“It comes down to what the key gaps are for inspecting this asset,” Schwartz says. “How can we move from periodic inspections on a fixed-schedule basis? How do you move that to inspections where you have a larger collection of multi-sensor data sets that will be more objective for making improved repair and maintenance decisions?”
Power transmission is another example. The approach to inspecting power lines today isn’t sending someone up in a bucket, but a network of sensors that alerts operators to problems.
“You’ve got infrared and ultraviolet sensors, 4K videos, still images and LIDAR (Light Detecion and Ranging) data, which can be acquired by semi-autonomous drones, including automation of flight planning operations. You combine those into a package where you create a 3D virtual representation of a power line, in combination with automated fault detection and integration into planning and executing repair and maintenance decisions,” Schwartz says.
Technology too fast?
Technology is shedding light on how infrastructure assets operate in a way that makes the futuristic-sounding “smart city” seem not that far away. It must be intelligent design for a city to have programmes that automate the timing of streetlights, to have buildings with blinds that adjust themselves to sunlight and traffic systems that evenly distribute vehicles.
These things are happening now in some places, says John Medina at Moody’s. “The idea that you can divert traffic here and there, that you can build better infrastructure,” he explains. “It’s using big data that helps to analyse the times when certain routes and roads are used or not.”
The downside is that new technology may develop faster than a society is prepared for. Consider the privacy concerns about Oregon’s pay-as-you-drive plug-in device or AirSage’s data collection. Or if an investment in that kind of technology will survive other types of disruption, such as the increasing use of ride-sharing services.
The infrastructure itself may not be prepared for an injection of new technology, either. Internet connectedness is the undercurrent that makes big data possible. With more infrastructure coming online in different ways, the points of entry for someone wishing to do harm greatly increase.
“If someone wants to get into the electric grid, they are not going to just tap into the grid directly, because that is difficult to do,” Medina explains. “They are more likely to try to go through a backdoor. And as you have more and more smart meters connected, you may create potential entry points not thought of before.”
All things considered, big data seems to be having an informative effect on infrastructure. Investors and operators are learning how assets operate in conjunction with other assets. How much future investments are going to be data-driven is yet to be seen.