Technology Services Procurement Vendor Engagement Event 30 th August - - PowerPoint PPT Presentation

Technology Services Procurement

Vendor Engagement Event 30th August 2017

Agenda

▪ Introductions from the Chair ▪ Alt HAN Company ▪ Scale of the Alt HAN ‘gap’ ▪ Commercial Strategy ▪ Technology Services Procurement Process ▪ Break (30 min) ▪ Scope and Requirements ▪ Next Steps in Process ▪ Question and Answer Session ▪ Close

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Introduction

▪ Housekeeping ▪ Introduction of Presenters ▪ Alt HAN Co Overview – Colin Sausman (Alt Han Forum Chair) ▪ Scale of the Alt HAN ‘gap’ – Peter Morgan (BEIS) ▪ Commercial Strategy – Rod Glover (Alt HAN Co) ▪ Procurement Process – Christian Harris (Alt HAN Co) ▪ Scope and requirements – Ysanne Hills (Alt HAN Co) ▪ Objectives for the day

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Key Objectives for Today

▪ Explain the commercial opportunity. ▪ Explain the proposed commercial approach, in particularly:

▪ Key principles; ▪ Procurement Process and timescales; and ▪ Scope of services.

▪ Encourage vendor participation in the forthcoming competition. ▪ Seek feedback on the approach from potential vendors.

▪ Please complete and submit the feedback form at the end of the day. ▪ Option to request a 1-2-1 for focussed discussion.

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Vendor Engagement Event

Alt HAN Company Overview & Context

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Policy Context

▪ Smart Metering Implementation Programme. ▪ Transformational:

▪ Energy market operation – wholesale, networks, retail; and ▪ Consumers – products and information.

▪ Design (and benefits case) assumes a HAN for:

▪ Near real-time information in the home, for all, as standard; and ▪ Communications link to gas meters.

▪ Standard equipment has HAN performance limitations. ▪ Government policy - Suppliers to work together to “plug the gap”. ▪ Alt HAN Co is the contractual vehicle for doing this, supported by the Alt HAN Forum.

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7

Limitations of Standard HAN Architecture and the Alt HAN ‘gap’

Alt HAN Co.

Alternative HAN – Reminder of the Problem

EM-CH

IHD

?

GM

?

IHD

EM-CH

?

GM

?

IHD

EM-CH

?

GM

?

• HAN range extension becomes a much more serious issue

when Smart Meters are not located in or near the customer’s premise.

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Alt HAN Contractual Relationships

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Alt HAN Co

Business Support Function Service Management Function Technology Services Data Management Building Evaluation Alt HAN Board

Contract Management

Energy Suppliers

Operational Services

Alt HAN Operational Relationships

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Status of the Alt HAN Forum and Alt HAN Co

▪ Key Drivers:

▪ Government policy and implementation plans; ▪ Supplier obligations; and ▪ Funding model in-place.

▪ Regulatory arrangements to enable the Alt HAN Company, Forum & Board to operate were designated in July 2016, since then the Project has been implementing those arrangements, establishing the processes and procuring Business Support services for the company and increasing the projects capability. ▪ Alt HAN Co is now established and operating independently, with Management provided by Engage Consulting, Business Support provided by Gemserv, Project Support provided by Baringa and Strategic Commercial Oversight by PA Consulting. ▪ Alt HAN Co is funded by energy suppliers via the DCC charging mechanism.

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Sources: 1. https://www.gov.uk/government/consultations/consultation-on-home-area-network-solutions

Vendor Engagement Event

Scale of the Alt HAN ‘gap’

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Alt HAN ‘gap’ – DBCH Performance Dependency

▪ Overall Alt HAN challenge is to fill the gap left by Standard HAN (i.e. 2.4GHz and Sub GHz). ▪ Standard HAN coverage from Ofcom Study = 96.5% of GB premises. ▪ Recent information from a DCC trial to determine Sub GHz HAN performance of the current prototype designs of dual band communications hubs (DBCH) indicates around 90% coverage of GB premises. ▪ Vendors should not draw any conclusions from this on the basis that: ▪ The DBCH units tested are at the prototype stage; ▪ The process of determining final DBCH propagation performance is not yet complete; ▪ There is a commitment to optimise DBCH propagation performance to nearer the 96.5% estimate within the R2 plan timescales; and ▪ BEIS understands that further work to gain certainty on the dependent Alt HAN market size will move forward in parallel to the procurement process thus supporting commercial certainty. ▪ It should be acknowledged by vendors that on basis of the information noted above that the

• verall Alt HAN market may increase.

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Vendor Engagement Event

Commercial Strategy

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Background: Drivers Of Commercial Strategy

▪ Smart metering obligations that energy suppliers need to meet ▪ Relevant technology market as revealed by previous market engagement ▪ Addressing the uncertainties currently inherent in meeting the requirements ▪ Achieving an appropriate balance of risk and reward These considerations translate into criteria representing Critical Success Factors for Alt HAN Co…

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Critical Success Factors for Commercial Strategy

• 1. Maximises coverage
• 2. Generates an outcome consistent with regulatory framework
• 3. Delivers in a timely manner
• 4. Generates consistent and quality consumer experience
• 5. Is economically efficient
• 6. Generates acceptable whole-life costs
• 7. Generates effective competitive pressure in procurement
• 8. Generates solutions that meet the requirements
• 9. Permits VFM to be maintained through life of contract / contract operation

10.Delivers a solution that is manageable in operation

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▪ The commercial approach recognises and seeks to balance: ▪ The potential advantages and benefits of having vendor continuity across this scope ▪ The commercial risks of locking in to a particular vendor at this point, with the current uncertainties over technology maturity levels and development effort required, volumes of use cases/units that need to be manufactured, and the details of operational arrangements for service management

Scope of Services Covered by the Commercial Strategy

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Stage 0: Vendor Engagement Stage 1: Selection including Initial Design 2A: Detailed Design

–

Alt HAN Full Roll Out Stage 3: Manufacture Stage 4: Installation & Support 2B: Design Assurance & Prototype ITT and Contract for full scope of services issued Up to 4 vendors contracted for Stage 2A Selection of up to 2 vendors to progress to Stage 2B Selection of 1 vendor to progress to Stage 3 Installation proposal submitted, vendor progressed to Stage 4 Installation complete, maintenance services commence Procurement Stages Process Stages Stage 2

Illustrative Overview of the Commercial Strategy

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Funded prototype & trials (paid deliverables) Funded design development (paid deliverable) Increasing certainty Mix of simpler 'plug & play' and more complex shared HANs

NB: The anticipated number of vendors within the competitive process may vary.

Commercial Principles Underpinning the Commercial Strategy

Key theme: partnership working and funding for development Combined with 'typical' aspects: ▪ Appropriate pricing and payment mechanisms at each stage. ▪ Incentives for delivery and for co-operation with Alt HAN Co. ▪ Retaining competitive pressure to ensure ongoing VfM. ▪ Providing for robustness in delivery. ▪ Appropriate treatment of assets and Intellectual Property.

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Summary of Commercial Opportunity

Alt HAN technology services development partnership: ▪ A significant opportunity with scope for funded development. ▪ A collaborative journey as technology brought to maturity. ▪ A step-by-step progression as information becomes more certain. ▪ An element of competitive pressure is retained to test for VfM. ▪ Desired outcome is vendor success in providing full scope.

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Vendor Engagement Event

Procurement Process

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Procurement Principles

▪ Transparency and Good Practice, but procurement is not subject to OJEU. ▪ Contract award based on Most Economic Advantageous Tender. ▪ Ongoing Value for Money is a critical requirement. ▪ ITT to test competency against the full scope of services. ▪ Selection Questionnaire to assess corporate capability.

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Procurement Process & Stage Gate Process

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Stage 0: Vendor Engagement Stage 1: Selection including Initial Design 2A: Detailed Design

–

Alt HAN Full Roll Out Stage 3: Manufacture Stage 4: Installation & Support 2B: Design Assurance & Prototype ITT and Contract for full scope of services issued Up to 4 vendors contracted for Stage 2A Selection of up to 2 vendors to progress to Stage 2B Selection of 1 vendor to progress to Stage 3 Installation proposal submitted, vendor progressed to Stage 4 Installation complete, maintenance services commence Procurement Stages Process Stages Stage 2

NB: The anticipated number of vendors within the competitive process may vary.

Procurement Process: Selection and Initial Design

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End-to-End Indicative Timescales

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Procurement Timescales

▪ Issue of ITT ▪ Submission of Proposals ▪ Presentations/Site Visits ▪ Contract Award 25 October 2017 12 December 2017

• Est. January 2018
• Est. April 2018

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Vendor Engagement Event

Break 15:00 – 15:30

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Vendor Engagement Event

Scope and Requirements

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Solution Principles

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• 1. Minimise customer inconvenience, protecting and maintaining the reputation of SMIP

e.g. First time install

• 2. Provide an equivalent service for Alt HAN customers when compared to a standard

Comms Hub

We contracted externally for a research piece earlier this year to further assess the technology scope and more detailed information on this will be made available in the ITT. Examples of high level Alt HAN requirements include: ✓ Must interface with existing GB smart metering devices, without needing to change hardware or software ✓ Must operate robustly when exposed to interference from other equipment ✓ Should support the average data rates

Use Case Example 1 – Remote IHD in a Large Single Premise

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▪ The IHD may be located in the main living area of the house whereas the electricity and gas meters may be further away in the Garage ▪ This scenario is also applicable for other Consumer Access Devices (CADs) which may be remotely located

A single premise where the IHD only is remote from the electricity meter

Example topology:

IHD

Outbuilding e.g. Garage The Comms Hub, Electricity meter and Gas meter are located together in the Garage

Comms hub Electricity meter

2.4GHz

ZigBee

HAN

WAN

Gas meter

House The In-Home Display (IHD) is in the house, far away from the Comms Hub and needs to be connected The Alt HAN solution is required to bridge the comms gap between the IHD with the comms hub

2 3 1

Key

ZigBee End Device ZigBee Network Coordinator Bridge required

Detailed Use Case Mapping

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Premise There are 28 potential use cases in total – 8 high level ones

High level use case Detailed use case

1

Key

IHD – In-Home Display MDU – Multi Dwelling Unit

Use Case Example 2 – Remote Gas & IHD in an MDU

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▪ Electricity meters are all located in a meter room on the ground floor ▪ As such the 5 gas meters are all varying distances from the Comms Hubs and may require different solution types

A multi dwelling unit (MDU) premise where the gas meter and the IHD are remote from the electricity meter

For simplicity, assume each floor represents one apartment/

• premise. Gas meters are located within each premise

Apartment Building

The apartments on the ground floor and 1st floor are in close range

• f the Comms Hubs and so are likely to be able to function on the

Standard HAN As the distance from the comms hubs increases, as does the likelihood of requiring the 868MHz then Alt HAN solutions. As we do not know the confirmed range of the 868Mhz solution, premises on the 3 & 4th floors are considered Alt HAN candidate premises

Electricity Meter room

CH 2 Elec M 2

Standard HAN candidate premises 868MHz solution candidate premises Alt HAN solution candidate premises

Gas meter

+ +

IHD

WAN

Key

ZigBee End Device ZigBee Network Coordinator Bridge required

}

Candidates for both the 868 and Alt HAN solutions Increasing distance from the Comms Hubs e.g. 2m per floor

Premise

Horizontal dimension e.g. 8m

Example topology: 1 2 3

CH 1 Elec M 1 CH 3 Elec M 3 CH 4 Elec M 4 CH 5 Elec M 5

Technical ITT Requirements

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Summary of the requirements categories used for the ITT (within two high level categories):

Health & Safety Environment Durability* Performance Requirements Design Requirements Technical & Quality Assurance Security Legislation & Standards

Product Requirements

* New categories added in since the 2016 RFI Tech & installation support Maintenance & Solution support Packaging & logistics

Operational Requirements

General use solution support* Stage 2A Stage 3 Stage 2B

Design Process Requirements*

Stage 4

Solution Design Process

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▪ The following steps outline the high level four-stage design process, also including the requirements from the vendor in order to ensure that the selected solution is able to provide an enduring capability and meets the required performance specifications

Initial Design Detailed Design Design Assurance & Prototyping

Clarify solution design, undergo due diligence and enter contract for detailed design stage Confirm detailed design information of the full solution lifecycle to proceed to trialling Development of the solution prototype and testing to validate that the requirements are satisfied before securing the manufacturing contract

Manufacture & Implementation

Large scale manufacturing and rollout

• f the solution to design,

installation and support

1 2 3 4

▪ Planning: including design development stages, activities, responsibilities for design, review and validation techniques ▪ Design and development process inputs: Functional, regulatory etc. ▪ Design Outputs: Solution description, design assumptions, requirements ▪ Design outputs: clear technology description with detailed design information e.g. commissioning and

• peration

▪ Design review: evidence of the review process, to confirm conformance with the requirements ▪ Design Verification: Evidence of QA, manufacturing capability & resourcing ▪ Design validation: testing and trialling to validate meeting the requirements ▪ Change process: demonstration of the design and development change process ▪ Solution manufacture: Build equipment as specified, QA testing of the technology ▪ Installation: Completed, scaled production of the solution

▪ We have created an End to End Design Blueprint, this version of the Level Zero Process has been amended to highlight the stages where we expect the vendor solution will impact the design, in green

Integration into the wider Alt HAN Co Design

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• 1. A high level solution design specification that meets our requirements
• 4. A detailed understanding of the technical costs for detailed design and a high level understanding of

the likely costs beyond this

• 5. An early view of the likely interfaces between the chosen Technology vendor and Operational

Services

• 6. An understanding of how you propose to work with us and the make up of your team
• 7. Your view of the key risks and dependencies and how to manage these
• 2. A clear and thorough view of your plan for delivering a suitable detailed design
• 3. An overview level approach for how you will deliver prototyping, support trials and conduct

manufacturing/implementation

      

Design Perspective – what are we looking for

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Vendor Engagement Event

Next Steps

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▪ Please complete and hand-in feedback questionnaire. ▪ Vendor 1:1s are available on 5 and 6 September 2017. ▪ Requests for a 1:1 to be made via feedback questionnaire. ▪ Alt HAN Co expect to issue Technology ITT Procurement on or about the 25th of October 2017. ▪ Regular updates will be provided. ▪ Procurement Contact: AltHANProcurement@Gemserv.com

Next Steps

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Vendor Engagement Event

Questions & Answers

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Vendor Engagement Event

Close

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