Customer centricity - new choices with ICT solutions for Smart Grid

1 © Nokia Siemens Networks 2011

Customer centricity - new choices with ICT solutions for Smart Grid

• Smart Grid, lessons learnt

• what’s in it for a consumer

• where Nokia Siemens Networks fits

Dr. Artemy Voroshilov,

Head of Smart Grid sales, Europe

Nokia Siemens Networks


‘SmartGrid’ disrupts utilities’ business models

Requires new forms of customer

load shaping, beyond DR, EE and

curtailment

Meeting demand

Introduce new / unanticipated

volatility into an industry proud

of its track record for reliability

Renewable Energy Sources

increasingly ‘omni-directional’,

volatile power sources require

new control mechanisms

Distribution Grid

Building & running centralized

generation, key to meeting

supply, is increasingly difficult

Environmental

Getting the ‘rules right’ requires

new business models / ways to

manage the customer experience

Regulatory

Security, customer privacy,

integration of multiple disruptive

technologies, aging workforce

Set of new challenges


The ‘simple’ utility paradigm …

Customers Generator

…. is transforming smartly

into the dynamic nexus of

supply and demand

Early trends in SG focus on technology

Without a customer value prop,

Smart Grid misses the point...


Smart Grid is, first and foremost, about the customer

‘Simple’ AMI isn’t simple,

lots of global pushback

Reliability & real-time

communication need to

scale cost-effectively

Financial implications of Smart

Grid too broad to model

Focus here!


Smart Metering prevails in Europe

Dynamic movers - clear path towards a full rollout of smart metering (mandatory rollout or major pilot projects on-going

Market drivers - no legal requirements for rollout, but installation of meters on-going

Ambiguous movers - legal / regulatory framework established to some extent , but due to lack of clarity only small scale installations

Waverers - some interest from regulators / utilities, no regulatory push towards smart metering implementation.

Laggards - smart metering not yet an issue.

Source: European Smart Metering Landscape Report, 2011, www.smartregions.net • Progress in implementation (# of pilots, meters & services in-field, realistic implementation roadmap for metering technologies)

Regulatory framework

• EU’s 3x20 umbrella: 20% GHG reduction, 20% renewable energy, 20% energy efficiency for 2020

• 3rd Energy Package pushes for AMI (80% coverage subject to cost-benefits analysis, 2009/72EC, 73EC)

• focus on cost efficiency rather than investment in smarter systems / broader energy policy goals

http://www.smartregions.net/


Not a Market, yet first learnings and successes

Smart Grid in Europe*

• 219 smart grid projects, €5.5bn invested (July 2011), most projects in E15 (E12 members lagging)

• Smart metering projects dominate (56% of investment), demonstration rather than R&D / PoC

• Distribution operators in the lead (27% of projects, 67% of investment)

• Integration & scalability in focus (SI - largest category, 34% of projects, 15% of investment)

• Multidisciplinary consortia & high collaboration (operators, academia, research centers, manufacturers, ICT vendors)

• Missing cost-benefit analysis, common methodology required

• Success stories (EU15) - real-time info helps save up to 10% of electricity consumption

Source: EC’s JRC, Smart Grid projects in Europe, 2011


Consumers require transparency of power consumption

Source: Accenture, 2011

9%

38%

51%

66%

88%

16%

41%

68%

69%

91%

Knowing that I am one of the highest electricity users in my peer

group

It would decrease the time required to manage my electricity use

It would better allow me to control the heating/cooling in my home

It would decrease my personal environmental impact

It would decrease the amount of my electricity bill

2011 2010


Smart rating can build in the customer from the start

Online rating & billing of electricity

Easy top-up

Balance notifications

Cost control

Bonus programs

Unified rating and tariffing

• Links smart meters directly to customer accounts held on a prepaid energy server

• Real-time rating and tariffing

• Flexible pricing schemes from flat fees to dynamic tariffs and bonus programs

Customer Interaction & Experience Mgmt

kWh

… through various existing channels, e.g.:

• Web-portals

• Emails

• SMS’

• Social Networks / Chats / Blogs


Thanks for Energy

saving. You earned

100 points to your

CO2 bonus account.

Watch your consumption

- you are above the

Average Threshold of

last 3 months.

Weekend Promotion

– free charge of your

EV on Sunday night

starting 10pm – 3am.

Happy Hour – 50%

price reduction for the

next 2 hours

Thanks for contributing to

our Green Energy target.

Your new Solar feed-in

Tariff Increases by 5%.

Congratulations – you are the most

balanced Energy consumer in your

neighborhood. 5% Discount on your

actual monthly bill.

Congratulations! You are

upgraded to a SILVER

CUSTOMER. Enjoy the

benefits!

Save 2% Energy in peak

hours and you will receive

the same Energy free in

off-peak time.


Automated meter provisioning etc

Rating & Tariffing

ERP Layer

Meter Data Management

Meters

Connection layer

Tariff Management

ERP

system

Invoicing

CIS (CRM)

Customer Self Care

Customer Care

MDCS 1 MDCS 3

Business Intelligence

Reports

Home Area Network Last Mile Wide Area Network

Basic energy rates Time of Use rates Dynamic rates

Bonus programs Notifications Prepaid Energy

Data Collection

Meter data integration Validation, Estimation, Editing

Versioned data storage Application Enablement Command brokering (disconnect/reconnect)

Top up

Energy Solution Architecture complements CIS and MDMS

MDCS 2

Customer Experience

Management

Customer information

Product information

Long-term usage data

Deviations, impact to

P&L, impact of offers


EV charging / eMobility – additional revenue with same asset

Smart energy delivery

Convenient Billing and Dynamic Tariffs

Charge vehicles anywhere, enabled by roaming support

Secure identification of users and vehicles

Electric Vehicle Charging Solution (ECS)

• Online rating and dynamic tariffs

• Customer identity and data management

• Secure identification and roaming enabled

by eMobility control

• Reduced risk and initial investments enabled

by Software-as-a-Service (SaaS) delivery

Field-proven


kWh

Real-time monitoring

and billing to enable

dynamic tariffs and

prepaid energy

Smart Rating

Where Nokia Siemens Networks fits – Today & Tomorrow

Provide reliable,

cost-efficient and

secure backhaul

communication

Transport

connectivity

Cost-efficient

communication

solutions for AMI +

grid automation

Access

networks

Provision of charging

points & management

of the related billing

infrastructure

E-mobility

Management of the

dynamic Smart Grid

infrastructure, new

assets and OPEX

Network

management

Connectivity – to provide an evolutionary blueprint that optimizes the overall 2-way communications infrastructure in lock step with the evolution of your smart grid strategy

Software – to shape customer behaviors, enable value-add services and process high volumes of Smart Grid data

traffic in near real-time

Services – expertise and support to design, build, run or outsource Smart Grid communications networks, as needed


Summary

• Smart Grid transformational to Utility business

• no evolution but revolution

• disruption best understood from customer perspective

• Customer centricity

• start with customer value prop, design backwards

• electricity price – elastic, people respond to dynamic tariffs

• there are simple / expandable ways to focus on customer messaging

• For a vendor

• no simple technology sale

• embed a wider vision of customer into everything we do

• insights from our experiences in other industries matter to our customers and partners!


Thank you [email protected]


Backup


What Customer Experience Management is all about?

Experience is individual.

Customer must feel that you think about him and not that you shoot at will.

Experience has timing.

Actions have a specific moment to happen and lose most of the effect if the window is lost.

Experience must be shared.

It’s unthinkable to have dedicated people for individual analysis. So, self-learning is key.

Experience reaches you.

You can’t wait to the customer to contact you. He will only do so when something is wrong.

Experience is everywhere.

Customer is unique and must be faced as so, not silo by silo


Participating in national and international Smart Grid standardization activities

Systems integration projects and 100 security contracts globally

500+ Consulting engagements for over 70 customers globally

170+

Services professionals operating in 150 countries

45,000+ Nodes installed and in service with over 140 utilities in more then 100 countries

750,000+

Subscribers served by our rating and billing solution

550,000,000+

Managed services contracts serving over 570 million subscribers globally

310+

NSN strengths in telecom - for power utilities


Nokia Siemens Networks – who are we?

• 3 billion mobile subscribers

• 75 of top 100 Telco operators

• €12.7 bn net sales in 2010

• network systems, business solutions, global services

• Full grid connectivity

• Smart dynamic rating and smart billing

• Renewable energy management

• E-mobility

• Active demand response

A strong partner for the energy industry

A world leading supplier for the Telco industry

• Joint venture of Nokia (FI), Siemens (GER), recently acquired Motorola’s wireless networks infrastructure business

• Started operations April 1, 2007

• 72,000 employees in 150 countries

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Customer centricity - new choices with ICT solutions for Smart Grid