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Future proof your investment in Smart MetersValuing Applications beyond Metering
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Conventional Wisdom on Conventional Wisdom?
“Conventional Wisdom – We associate the Truth with what most closely accords with self interest and personal well being or promises best to avoid awkward effort or unwelcome dislocation of life. We also find highly acceptable what contributes most to self esteem. Economic, and social behavior are complex, and to comprehend their character is mentally tiring. Therefore, we adhere, as though to a raft, to those ideas which represent our understanding."– John Kenneth Galbraith – economist
Conventional Wisdom must be simple, convenient, comfortable and comforting – though not necessarily true…
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Smart Meter data…has many Stakeholders
Smart meter data could empower consumers…– to choose based on the real-time cost of electricity
Smart meter data could empower the LDCs…– to reduce costs and increase productivity and reliability
Smart meter data could empower OEB– to set rates based on best practices and target incentives
Smart meter data could empower OPA…– to make sure Ontario plans to get enough power…
Smart meters could be a platform for Energy policy– to drive culture of conservation
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What do you want your Smart Meters to do?
Smart Meters will drive a “Culture of Conservation”– How is left to the implementation by an LDC
With the meter and network and data repository…– You can create a real time market for energy– You can reduce peak demand– You can protect the generator from capacity shortfalls– You can eliminate theft and fraud– You can open access to all smart meter data– You can make Smart meters pay for themselves
You can do what you want…but only IF your Meters and Network and Processing are Smart Enough!
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Ontario Smart Metering opportunities beyond hourly interval metering data…
SMART METERING – flexible, low cost metering services – On-demand and scheduled automatic meter reads– Remotely manageable tariff tables and billing periods– Multi-parameter load profiling
SMART ELECTRICITY -distribution network monitoring and optimization– Outage detection & isolation, restoration verification– Per meter power quality information– Load balancing– Tamper & theft detection
SMART CONSUMPTION - Advanced control platform– Remote disconnect/reconnect– Maximum power limiting– Optional direct load control– Pre-payment and consumer budgeting
SMART MARKET Demand management or other
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Advanced Metering as an Information Gateway- CA Energy Commission Study by Levy Associates
Customer Application Areas Hydro Application Areas
Financial Management
Production/ Process Management
Facility/ Home Management
Other Services
Bidirectional Information
Gateway
System Operations
Financial Management
Customer Services
Demand Response
Energy Products & Services
Energy Products & Services
Red
uced
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tC
ompe
titiv
e A
dvan
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Val
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efits
Val
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Ben
efits
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nues
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petit
ive
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osts
CORE
Non-COREPotential Applications
Existing Applications
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Ontario Smart Meter draft Specification
A very “inclusive” specification –– Least common denominator of what is available in the market– One way or Two way networks– Simple Meters or Smart Meters– Limit to hourly billing or expand to multiple applications
Allows for two very different architectures– Simpler meters read more frequently and processed Centrally– Smarter meters processing locally and read as needed
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Metering Architecture Trade-offs
Use existing simple metersMetering set in HardwareAdd on Communication InterfaceAdd on Hardware for new applications in fieldMonolithic CIS ApplicationData ConversionsSimple billing parametersLimited rate designLong Settlement Cycle limited by CIS modification
New smart networked metersMetering set in SoftwareBuilt-in Powerline CommunicationDownload firmware for new applications over NetworkModular Web ApplicationsPlug in to Middleware BusAccess any meter resource for: Rates, Peak Demand, Disconnect, Load ControlAny Settlement date including prepayment
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The Issue is how Smart is your Meter …
One opportunity to replace meter for 20 years– Never go back to every house– Not cost effective to add incrementally to Hardware
The Meter enables or prevents future energy policySmart Meter is the critical control point for most customers– Logical place for demand response, load control and disconnect
Networking moves much faster than meter technology– Interface in meter to isolate it from changes (like USB in computers)
How will Ontario assess Financial Benefits?– Minimally acceptable vs. Maximum possible? – Opportunity Cost over 20 year lifespan?– Who gets to keep which benefits?
EETD DivRev 2004 page 10
Automatic Demand Response to Price Automatic Demand Response to Price SignalSignal
Echelon: Whole Building Power and Baseline, 11/5
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Actual Regression
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Demand Response with and without Metering
Program Features Without Metering With Metering
Load Measurement Estimated- uncertain Measured- certain
System Operations Not qualified-uncertain
Qualified- certain
Marketing To Qualified participants only
All Customers participate
Customer Participation
Passive- no accountability
Active- full accountability
Incentives Fixed- not tied to load impactsSeparte from basic rate
Paid for performanceIntegrated into basic rates
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Key Policy Issues
Meter platform can enable new energy policy– Automatic demand response benefits consumers
Price Signals, Smart Appliances, Smart Buildings – Transparent real time pricing drives rational actions
CPP, TOU, interval, demand, options…– Net Metering of distributed generation
Stimulate private finance and entrepreneurs – Peak demand limits at critical peak times
Avoids blackouts and spot power price gouging– New rates set using performance benchmarks
Value of Smart Metering Data to regulators
Limitations in Meter can prevent policy too…
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Is this the policy platform for next 20 years?
Conservation Programs
– Sub Metering– Prepayment
System Performance Benchmarks
– Operating costs– Reliability– Time to Repair– Asset Utilization
Consumer Benefit– Lower rates– Control TOU– Smart Appliances– Web Portals
Social Subsidy– Lifeline service– Heat subsidy
Specify the resources you need
Real-time Energy MarketTariffs Options
– Real-time pricing– TOU, CPP– Peak Demand– Interruptible Service
Generation Options– Distributed Generation– Renewable Energy– Fuel Source Arbitrage– Peak Capacity Plan
Communication Networks– Public or Private – Cross subsidy of– Unregulated services
Demand Response– Automatic and Verifiable– Dispatch against reserve
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Smart Electricity – Can pay for itself
Benefits 500 Million Euro per yearIncluding: (from 2006)
– Purchasing and Logistics– Field Operations– Customer Service– Revenue Protection
More than 2700 people in “excess” saving 108 Million Euro per year
Benefit per Household ~ 18.52 Euro~ $25 US Dollars/year
Payback estimate 4.2 yearsEstimated life – 10-15 years
Costs2.1 Billion Euro over 5 yearsIncluding:
– R&D Costs– Product and Installation cost of Meters– Product and Installation cost of Data
Concentrators– IT System Development– Other Costs
Cost per Household ~ 78 Euro~ $100 US Dollars
Source - Vincenzo Cannatelli, COO Enel, Euro Intelligent Metering 2005,
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Enel 2002 – 2004 Savingsarea of savings
Collection
Bad debts
CustomerService
Invoicing Readings Activation/Deactivation
Interventionson failures
Failedaccesses
Replacement
Installationand recovery
Internaltransportation
Purchasing RevisionWarehouses
Checks onmeters
Thefts andfailures
Selfconsumption
CAPEX-32.1%
Revenue+19.8%
EBITDA+42.9%
Employees-13.1%
Net Income+70.0%
Market Cap+38.5%
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Curtailment to ensure minimum social supplyNo more outright cut-offs for bad debts
Power allowed
Airconditioning
Washingmachine
Dishwasher
Home videoand HI-FI
Refrigeratorand lighting
20%
FULL POWER FULL POWER AVAILABILITYAVAILABILITY
INCREASING SHORTAGE OF SUPPLY BRINGS INCREASING SHORTAGE OF SUPPLY BRINGS TO A SELECTIVE STOP OF HOME APPLIANCESTO A SELECTIVE STOP OF HOME APPLIANCES
100% 80% 60% 40%
-20% -40% -60% -80%
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The revolution of new “tailored” tariffsA choice for each customer needs
30 Jan TV ADV launch
30 Jan TV ADV launch
Over
300,000 as
of March, 31
Target of more than 13 million Enel household customersTarget of more than 13 million Enel household customers
(*) Considering 100% of Customers remotely metered
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Benefit for the system: Demand Side ManagementFrom “peak hours” to “off peak-hours” consumpion
GW
35
5
15
25
45
55
65
8760
Hours in 1 year0
• To move 1%-5% consumption from “peak hours” to “off-peak hours” means to switch off a 2,000-3,000 MW equivalent power unit
• This prevents inefficient power plants to produce energy for a few hours only in a year
Significant benefits in Significant benefits in terms of pollution as terms of pollution as
wellwell
Power capacity to balance peak
hours consumption
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Four Perspectives of Cost/Benefit
Model Scope Attributes Primary FocusCompetitive Value Chain
Enterprise plus Suppliers, and other Service Providers
Vales impacts on all participantsConsiders all cost savingsRevenues from new servicesStrategic orientationConsiders financing options
Long-Run Gain in Value
Enterprise Internal Integrated plus Customer Impacts
Compatible with PBRValues redesigned operationsConsiders all cost savingsRevenues from new services
Profitability
Integrated Substitution plus T&D, Customer Operations, Call Center & planning
Compatible with PBRValues redesigned operationsCompares old and new costsDoes not consider new revenues
Cost Savings
Substitution Meter Reading Compares old and new costsNo value to added functionalitySubstitution orientationFinancing options not considered
Short Run Least Cost
Regulatory approaches rarely start from or assign value to functional capabilities necessary to support anticipated future customer or market needs
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Smart Meters could benefit many operationsWhat could you do better…if you had “real-time” data?
Smart MeteringDatabase + LDC
Attributes
DemandForecasting
Capacity Planning
Capital Investment
GenerationWork
Management Customer contracts
AMR & Billing
DistributionTrends
Distribution Automation
Reads
QueriesInstallation & Services
Quality
Roll Out
Customer Information
Purchasing and logistics
Revenue protection
Field operations
Customer service
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Smart Meters Can Reduce Costs & Generate Revenue in Many Areas
Metering
Customer Service
DistributionOperations
Other
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The Power of Integrated Design –High Function at low costs using standard MCU
- Two way communicating electric meters- Powerline communication interface- Use any WAN or LAN technology
- Sub Meter or Load Switch- Networked Pre payment Meter- Time of Use, Interval Meter
- 5, 15 30 60 minute reads
- Remote Tariff Table Management- Gas / water / heat meter reading- 200A Service Disconnect - Critical Peak Power Rationing- Tamper Detection - Line Taps- Outage Detection
- Control external loads- Automatic DR Dispatch- Verifiable Reductions
- Local Optical Port- Accurate time-keeping- Programmable Messages- User Display
- Date, Time, Tariff, $, KWh, Kvarh, Comms
- 8 Channel Data Log- Voltage Sag or Swell- Over Current, Frequency - Power or Phase loss duration- Power Factor- Interval Peak Usage- Store up to 4 months of hourly
reads
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Future-proof Investment requires a Platform
Open Database access to all Smart Meter data AND LDC attributes by qualified stakeholdersWeb Services API allows modular applications by many developersSmart Meters that can download applications over the networkA Smart Meter that attach to any Wide Area Network not just one
Understanding the significance of remote system upgrades on Life Cycle Costs– Monitoring of power quality – Pre-payment – Remote disconnect – Load control – Alarm and control services for customers – Customer communications – Changes in tariffs– Asset Utilization Study
Legislation that Values the possible applications in a two way smart metering network, not merely replacing existing meter reading processes.Financial evaluation using Competitive Value Chain Model
– Fairly value the importance of having the equipment ready for future needs and regulations
“Conventional Wisdom” may be wrong – “Utilities that have fully implemented advanced metering report benefits and operating experience that are very different perspective than the commonly accepted industry issues tend to depict”. – Roger Levy, CA Energy Commission meter scoping study
Thank You
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