© Copyright IBM Corporation 2004 Business Consulting Services Automatic Meter Management The future has already started Ing. Carlo Maria Drago European

© Copyright IBM Corporation 2004

Business Consulting Services

Automatic Meter ManagementThe future has already started

Ing. Carlo Maria Drago

European metering workshop

ISPRA, March 7th 2005

2 © Copyright IBM Corporation 2004

IBM Confidential

Milan, November 2nd, 2004

AMM

Alliance The Alliance will offer a complete, integrated, reliable AMM solution

A solution tested and integrated with over 21 million meters, backed by two large leaders in their industries

ENEL and IBM have created an Alliance to offer complete AMM Solutions


IBM Confidential


Agenda

Utilities industry challanges

ENEL Telegestore project

How can AMM help tackling these challenges Field Operations

Customer Management

Revenue Protection

Receivables Management

Energy Management

Network Management

AMM Business Case

AMM Likely Evolution

The future can start right now


IBM Confidential


AMM will permit Utilities to change their operating model by the end of this decade

Executing customer requests in a few minutes.... Providing customers with precise, actual bills which contain a rich history of

their consumption, with suggestions on how to improve energy efficiency.... Designing bespoke contracts which apply rates in synch with the actual cost

of energy Accepting new customers with just a phone call or an internet message,

without any need of phisical intervention or new meters.... Reducing outages by one order of magnitude... Providing Regulators evidence of service rendered to each customer.... Providing Regulators and Government the evidence of energy saved through

the elimination of frauds, thefts and the smoothing of peak demand...


IBM Confidential


AMM permits to create an Intelligent Network that can sense and respond to specific customer service needs

ISO/RTO

DistributionControl Center

Mobile FieldForce

GenerationFleet

TransmissionSubstation

TransmissionSystem

DistributionSubstation

Industrial Customer

ResidentialCustomer

DistributionSystem

“On-Demand”Response

Network Monitoring

AMM

DER


IBM Confidential


Agenda




Customer Management

Revenue Protection


Energy Management

Network Management

AMM Business Case




IBM Confidential


The Telegestore Project at a glance

Key figures

A New Network Linking 30 millions Customers by 2005A New Network Linking 30 millions Customers by 2005

The Most Extensive Two-Way Communication NetworkThe Most Extensive Two-Way Communication Network

Annual savings of € 500 millions from 2006Annual savings of € 500 millions from 2006

Total investments of € 2.1 billions over 5 yearsTotal investments of € 2.1 billions over 5 years

Replacement period of 4 years, 10.000+ people involvedReplacement period of 4 years, 10.000+ people involved

50,000+ units manufactured/day and 40,000+ installed/day50,000+ units manufactured/day and 40,000+ installed/day


IBM Confidential


The Telegestore Project – System Architecture

GSM - Traditional Communication

Network

Intranet

PLC 2.5 Kbps half-duplex

MV/LVSubstation

Commercial System (CRM)Centralised Remote Management System

Interface Communication Software

ConcentratorConcentrator

Meters

Data Communication Centre

CTGN-CTGTOperation

center

30 Millions

Total: 14• 2 national • 12 local

350.000


IBM Confidential


Data flows between AMM central system and electronic meter

Supply service diagnostic (e.g. energy supply outage, etc.) Load profile in terms of energy consumption and tariff profile Meter self-diagnostic Communication protocol management

Data referring to meter activation and energy supply planning (tariff structure, bill period, contractual energy power, etc.)

Activation/Deactivation of energy supply and modulation of contractual energy power Software update downloading


IBM Confidential


Messages and commands from/to customers

Commands to initialize/program contractual parameters

Commands to initialize/synchronize clock/calendar Commands to modulate the power available to the

customer Commands to open/enable manual reclosure of the

circuit breaker Short messages to be visualized on the meter display Commands to activate/deactivate communication to

devices beyond the meter Messages and commands to devices beyond the

meter (domotic devices, external display) Downloading of new software releases or patches

and/or new tariff

Tariff data (energy consumption, load profiles, etc.) Contractual data (tariff structure, subscribed

demand, billing period, etc.) Data on service quality (interruptions, power

outages, voltage variations) Information on meter self diagnostics Information on meter access (SW and HW) Serial number of the meter Signals from appliances self-diagnostics devices

Central Telemetering System Server

Customer Information System

Information received from the central system Information sent to the central system


IBM Confidential


Agenda




Customer Management

Revenue Protection


Energy Management

Network Management

AMM Business Case




IBM Confidential


Utility companies may apply flexible approaches to customer management and charge for real value delivered

00,5

11,5

22,5

3

kW

AMM maps individual load profiles

0

0,5

1

1,5

2

2,5

kW

AMM enables the design of tariffs for optimal energy usage

The meter contains a circuit breaker, which trips off and interrupts supply when the maximum power allowed is reached

The amount of maximum power supplied to each customer is remotely monitored, and can be changed with an electronic command through PLC at any time, from 0 to 15 KW for single phase meters and from 0 to 35 KW for three-phase meters

AMM introduces the very innovative capability to curtail the power supplied to specific customers at any time

0

5

10

15

20

25

30

35

40

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Marginal cost 1 Marginal cost 2 Marginal cost 3 Marginal cost 4

AMM permits to bill the real value of energy with dynamic adjustments any 15 minutes


IBM Confidential


Regulators will rely on auditable track of service at the single user level to check Utility operations


IBM Confidential


An Intelligent network enables:

Real time asset inventory

Real time utilization history and load profile for every part of the distribution infrastructure

Real time availability history and service levels

Real time maintenance interventions history

Support to distributed generation and reliability of power system

and therefore allows the best investment planning

AMM is beneficial for effective Utilities network investment selection...


IBM Confidential


AMM may provide massive infrastructural savings in the generation field thanks to its capability of smoothing peak demand

Dec 03

Dec 04Nov 04Oct 04Sep 04Aug 04Jul 04Jun 04May 04Apr 04Mar 04Feb 04Jan 04Dec 03Nov 03Oct 03

Act of law to increase

production

Demand

SupplyCritical periods

ENEL estimates that Italy can spare 2 power plants

of 1000 MW each by shaving off 5% of peak demand for 3 hours 10

days a year


IBM Confidential


Electricity losses are a major utility distribution concern and not only in selected countries

Source: World Bank


IBM Confidential


Curtailment functionnality ensures minimum social supply to all, instead of outright cut-offs

1 2 3 4 5 6

Full power availability

Minimum allowed for key social

reasons

Illustrative Example

Po

wer allo

wed

-80%

-60%

-40%

Increasing shortage of supply brings to a selective stop of home

appliances

-20%


IBM Confidential


Outages – an always present stream of lost revenue and bad customer service

September 28th, 2003Italy went through a major black-out affecting the whole italian population for many hours

August 14th, 2003was lost 85% of power in New York State

August 28th, 2003A rush-hour power cut has caused major disruption on rail and Tube services in London and the South EastMore than 60% of Tube network and 1800 trains where involved

………………………………….


IBM Confidential


Conditions Based Maintenance can cut cost of network availability

AMM will give a full picture of energy flows, with related utilisation rates of every Distribution network assetts

Capacity planning can be designed with detailed knowledge of peak demand by distribution node

Service history will indicate likely points of failure Maintenance can be directed to nodes with tight capacity and haphazard

service track Savings can be very substantial


IBM Confidential


Agenda




Customer Management

Revenue Protection


Energy Management

Network Management

AMM Business Case




IBM Confidential


AMM creates benefits for all stakeholders

End user benefits from a better service with more

customised tariffs

Utilities benefit from a reduction in customer

management processes costs

The Economy benefits from better energy management


IBM Confidential


GenerationGeneration

Demandforecasting

Readiness forDistributedgeneration

Improvedrisk management

Improvedscheduling

Networkoptimisation

Load profiling

Direct accesssettlement

Load profiling

Outage detection

Energy Trading Energy Trading Transmission Transmission

Distribution Distribution

The benefits of an extended AMM solution will be realised across the entire utility value chain

Supply Supply

New energy Management

services

Tightercontrol of debt

ReducedCustomer complaints

Reduced theft

Value-addedservices

Easier “BlackStart”


IBM Confidential


The business case for AMM shows multiple areas of savings

Collection

Bad debts

Customer Service

Invoicing Readings Activation/Deactivation

Interventionson failures

Failedaccesses

Replacement

Installationand recovery

Internaltransportation

Purchasing Revision

Warehouses

Checks onmeters

Thefts andfailures

Selfconsumption

Purchasing and logistics

Revenue protection

Field operations

Customer service


IBM Confidential


Annual savings

The Enel experience

Purchasing and logistics

Field operations

Revenue protection

Customer service

(1)

(1) Enel calculations and estimates

€ 500 M


IBM Confidential


R&D Costs

Product and installation cost of

meter

IT System development

Product and installation cost of

concentrator

€ 2.1Billio

nOther costs

Total investmentsThe Telegestore Project

over 5 years


IBM Confidential


Agenda




Customer Management

Revenue Protection


Energy Management

Network Management

AMM Business Case




IBM Confidential


New 2005 Tariffs for Householders

7 mln7

mlnResidential

No Residential

Low income

4,4 mln4,4 mln

2,8 mln2,8 mln

for Business Customers Bioraria Business < 16,5 kW

2,3 mln UDA

2,3 mln UDA

Bioraria Business BT>16,5kW

0,5 mlnUDA

0,5 mlnUDA

Customers target


IBM Confidential


Remote management of bad payers

• August 2004: Test performed in Sardegna

• October-November 2004: Test performed to the clients of Piemonte, Liguria, Campania, Puglia, Basilicata e Calabria in addition to Sardegna

• 1°week December 2004: informed the Regualtory Agency about the outcome of the test performed on 15,000 cutomers for the reduction of the power by remote. Go-ahead received by the Regulatory Agency

• 1°January 2005: Go-ahead of the process for all the customers

2005 Remote Disconnection Estimates

Aprox 1.100.000 disconnection request

(equal to 70% of the total)

2005 Remote Disconnection Estimates

Aprox 1.100.000 disconnection request

(equal to 70% of the total)


IBM Confidential


Agenda




Customer Management

Revenue Protection


Energy Management

Network Management

AMM Business Case




IBM Confidential


The strategic decision that Utilities will need to make …

1. Is this relevant to your business ?

2. Now, later or never

3. Make vs. Buy ?

4. Driven by transformation or technology

5. Who do you want to work with

Our alliance has a proven …• business case• solution installed and working with 17 million users in Italy (700,000

new additions per month)• Experience to implement this successfully

Buy is a better solution for your business …• More business impact with less capital investment• Faster solution implementation and accelerated benefits realisation

Transformation is important …• AMM will transform network management and the way you serve

customers• If you just apply technology you will only realise 20% of the potential

benefits

• Never is not an option – AMM is already a viable solution and is seen as an enabler for liberalisation

• The business case is already proven - later simply means you are postponing sources of funding and new revenue streams

• How can you justify to your customers, the regulator and shareholders that this is not relevant?

Key Questions Our Perspective

Documents

© Copyright IBM Corporation 2004 Business Consulting Services Automatic Meter Management The future has already started Ing. Carlo Maria Drago European