Smart Grids Benefits Michele Marzola Chief Executive Officer - - PowerPoint PPT Presentation

Michele Marzola

Chief Executive Officer

michele.marzola@dnplc.net

Smart Grids Benefits

Digital Networks PLC

Executive Summary

Smart Grids will transform the Utilities business Utilities will be able to cut their costs by more than

30% whilst increasing revenues

Smart Grids create more than € 1,000 of value for

every meter

Smart Grids can be implemented quickly, using

existing meters

Smart Grids will transform the utility business

Intelligent Appliances Intelligent Buildings Intelligent Networks

ENERGY MANAGEMENT COMPONENTS Real Time control of Low Voltage Network Interactive Load and Service management Elimination of commercial losses TELECOMMUNICATION COMPONENTS 200 MBps data connection delivered through existing electrical wires VoIP as a free additional service delivered through existing assets

­

BROADBAND PLC Concentrator

Ethernet/IP

BPL

CUSTOMER SITE TRANSFORMER SITE CENTRAL SITE

WI­MAX

(or UMTS­ (GPRS)) ­­­­­­

• r FIBER

M­BUS appliances Sensors IP Video surveillance

MV/HV Electric Grid

MV BPL

Advanced AMM BPL Network

GAS METER WATER METER PLC NB

BB­NB COMM. GATEWAY

NB Radio or Serial Link NB PLC or NB Radio or Serial BUS

BPL

Domotic Broadband INTERNET Modem

VoIP BPL PC Wi­Fi

indoor and

• utdoor access

LV Electric Grid

TO CENTRAL APPLICATION

Smart Grids can be implemented using existing meters and sensors

The Leadership Team of Digital Networks PLC has already implemented a Smart Grid at ASM Brescia

220K customers fully managed for their electricity, gas, hot water and Broadband internet services

Broadband Internet services are sold at € 17 per month per customer…

Smart Grids open a complete new World to Utilities and customers

SMART GRIDS

NETWORK MANAGEMENT

Substation Management Peak Load management Condition­based Maintenance Outage Management Network Planning

VALUE ADDED SERVICES

Entertainment Interactive Information / Digital terrestrial Television Safety, Remote Healt Care Security Broad Band Internet services

INSTITUTIONS MANAGEMENT

Customer Service Level Critical Situation Mgmt. Energy Efficiency Pollution Management Peak Power Reduction

CUSTOMER MANAGEMENT

Remote Appliance Management Intelligent Interfaces Promotions Management Profitability Management Connection / Disconnection Service Monitoring Bundle Pricing Flexible Tariffs

Only Smart Grids can solve three infrastructural problems at the same time

SMART GRIDS

ENERGY DISTRIBUTION BROADBAND DATA NETWORK TELECOM WITH VOIP

ADSL, Fibre, Wi­Max

Digital Divide

Incumbent interest in VoIP? Efficient distribution needs real time network management No effect on Energy Management

Governments and Regulators are favouring the introduction of Smart Grids to achieve multiple benefits

Disposable Income

Elimination of Commercial Losses Distribution Efficiency, Customer Choice Smart Grid Supply Reliability

GDP Growth

Investments in Smart Grids are driven by four inevitable forces

Overall demand is increasing with the economy. Peaks are already exceeding Capacity Smart Grids are the only sensible replacement alternative Generation Capacity is limited by environmental and political factors Most Assets should have been replaced already a decade ago

In 5 years no Utility will dare managing the Network with tools of the ’50s

Staying blind on Low Voltage operations? Relying on annual manual readings that tell you nothing of

users dynamics?

Ignoring where your assets are and which is their operating

condition?

Fixing your assets only after they broke with unmanageable

customer damages?

Investing according to historical patterns instead of real critical

usage?

Having a fragmented, inconsistent and scarce data base of

customer events and network events?

Growing the top line selling the same services with rates

continuosly reduced by the Regulator?

Would you envisage…..

The key issue for many utilities is which is the best path to arrive to the Smart Grid vision

Which generation of technology should I invest Invest in

metering? In communication? In application? Which is the right sequence?

Scale the investment from pilots to universal roll­outs?

Which is the minimal size of economic investment in Smart Grids?

Invest now or invest later? Which is the correct time­frame for the investment? Can I move from 3G to 4G? Is there a 5G around the

corner?

Smart Grids are the fourth generation technology in Distribution networks management

1° Generation: Standalone meters 2° Generation: Remote Reading 3° Generation: AMM Narrow Band 4° Generation: Smart Grids

The first generation is structurally limited

1° Generation: Standalone meters 2° Generation: Remote Reading 3° Generation: AMM Narrow Band 4° Generation: Smart Grids Manual Reading 1 data per read (from once a month to

• nce a year)

As reliable as the meter reader No customer intelligence No Network Monitoring

The second generation is a mere substitution of labour costs with capital costs

1° Generation: Standalone meters 2° Generation: Remote Reading 3° Generation: AMM Narrow Band 4° Generation: Smart Grids Manual Reading 1 data per read (from once a month to

• nce a year)

As reliable as the meter reader No customer intelligence No Network Monitoring One­way remote reading 1 data per read (from once a month to

• nce a year)

Up to 24 hrs to read a meter with proprietary protocols No customer intelligence No Network Monitoring No Integration with Legacy systems

The third generation has already proven its Value

1° Generation: Standalone meters 2° Generation: Remote Reading 3° Generation: AMM Narrow Band 4° Generation: Smart Grids Manual Reading 1 data per read (from once a month to

• nce a year)

As reliable as the meter reader No customer intelligence No Network Monitoring One­way remote reading 1 data per read (from once a month to

• nce a year)

Up to 24 hrs to read a meter with proprietary protocols No customer intelligence No Network Monitoring No Integration with Legacy systems Two­ways remote management At least 8 data every 15 min 2.4 Kbps band, Asyncronous mgnt with proprietary protocols Asymcronous Customer intelligenece Asyncronous Network Monitoring Legacy Integration

But only Smart Grids can maximise performance with flexible real­time Network management

1° Generation: Standalone meters 2° Generation: Remote Reading 3° Generation: AMM Narrow Band 4° Generation: Smart Grids Manual Reading 1 data per read (from once a month to

• nce a year)

As reliable as the meter reader No customer intelligence No Network Monitoring One­way remote reading 1 data per read (from once a month to

• nce a year)

Up to 24 hrs to read a meter with proprietary protocols No customer intelligence No Network Monitoring No Integration with Legacy systems Two­ways remote management At least 8 data every 15 min 2.4 Kbps band, Asyncronous mgnt with proprietary protocols Asymcronous Customer intelligenece Asyncronous Network Monitoring Legacy Integration Full grid management Any data with any frequency 200 Mbps band with open Internet protocol and

• pen IT architecture

Always­on customer management Always­on Network Management Legacy Integration

Only Smart Grids enable major functionalities

1° Generation: Standalone meters 2° Generation: Remote Reading 3° Generation: AMM Narrow Band 4° Generation: Smart Grids Peak Load Management Flexible Tariffs Fraud Detection Outage Management Network Planning BB Services

X X X X X X X X X X X X X Y Y X Y X Y Y Y Y Y Y

Two business models are sustainable

CURRENT POSITION

­Unstainable for the Regulator ­Unstainable for the Customers

Smart Grids

­Broadband Services ­Real Time Mgmt ­Energy Mgmt ­Continuous Evolution

AMM

­Basic services ­Narrow Band ­Asyncronous ­Static services

Level of Service LOW HIGH Investment LOW HIGH

Smart Grids generate a much higher Net Present Value than previous technologies

Solution Completeness Value to Utility

€ 10 € 100 € 1,000

Present Value Per Metering Point

Investment Value

1° Generation: Standalone meters 2° Generation: Remote Reading 3° Generation: AMM Narrow Band 4° Generation: Smart Grids

Savings from Energy Management can already justify the investment in Smart Grids

Savings per meter per annum (€)

20 40 60 80 100

Savings Hi Savings Low Savings Reasonable

Commercial Losses Customer Operations Disaster Avoidance Network Operations Field Operations

3 years pay­back

Smart Grids create more than € 1,500 of benefits per meter just out of pure electricity management

100 200 300 400 500 600 700 800 Systemic Benefits End User Benefits Utility Benefits

Regulatory benefits Provision of BB VAS Savings on Telephony and VAS Network management Field Operations Commercial losses GDP growth Home gateway Peak Power Reduction Critical Outage Flexible rates

€ per Metering Point

(for the 15 yrs. Life­cycle)

Illustrative example for Emerging Markets

Smart Grids may enable to double the revenue per user and increase the average margin

Revenue evolution

10 20 30 40 50 60 70 Electricty user Network customer Smart Grid pal €/month Other Value Added Services Internet access Base revenue Net Margins are well above average

Broadband PLC services are sustainable and competitive Competitive Map ­ Italy

10 20 30 40 50 5 10 15

Download bandwidth (Mb)

€/month TIM Tele2 Wind Tiscali ASM Brescia Fastweb

PLC Price ­ performance

Broadband PLC services are sustainable and competitive Competitive Map ­ Switzerland

20 40 60 80 1 2 3

Download bandwidth (Mb)

€/month Bluewin Easynet Init7 AMB Bellinzona

PLC Price ­ performance

When the benefits of Value Added Services are added to Energy Management, the investment is repaid 20x

200 400 600 800 1000 1200 1400 1600 Systemic Benefits End User Benefits Utility Benefits

Regulatory benefits Provision of BB VAS Savings on Telephony and VAS Network management Field Operations Commercial losses GDP growth Home gateway Peak Power Reduction Critical Outage Flexible rates

€ per Metering Point

(for the 15 yrs. Life­cycle)

Illustrative example for Emerging Markets

The investment in Smart Grids requires some upfront strategic decisions

Smart Grid, AMM or just AMR? Universal coverage or selected customers? Single technology or multiple technologies? Single supplier or multiple suppliers? Intense deployment or diluted deployment? Compliance or Transformation?

To size the possible Value Creation, a thorough business case should be prepared

Analyses of current cost base Saving model adapted to the specific utility situation Broadband services strategy Investment strategy Technology and Partners selection Financial model Investment approval management

The major sources of value are often underestimated

200 400 600 800 1000 1200 1400 1600 Systemic Benefits End User Benefits Utility Benefits

Regulatory benefits Provision of BB VAS Savings on Telephony and VAS Network management Field Operations Commercial losses GDP growth Home gateway Peak Power Reduction Critical Outage Flexible rates

€ per Metering Point

(for the 15 yrs. Life­cycle)

Illustrative example for Emerging Markets

Digital Networks PLC can provide a full life­ cycle, modular Smart Grid services offering

Business Case Investment Detailed Design Technical Verifications Project Financing Contract Negotiation Deployement

Possible way outs

Regulatory Management