Smart Grid for CIO€¦ · New technologies become critical for business Significant IT landscape transformation to become ‘Smart grid compliant’ Integration of new types of suppliers

Smart Grid for CIO

Copyright © 2012 Capgemini Consulting. All rights reserved.

The Smart Energy Services (SES) discussion has been kicked-off since several years now ...but do CIOs estimate properly the transformation to achieve to integrate the SES solutions?

3

Why a CIO could underestimate the transformation?

His/her focus is on short term objectives such as cost reduction, business-as-usual and keep-it-running activities count for a major part of the budget...

CIO often think on a 3-5 years timescale while Smart Energy Services project require a 10–15 years plan -> currently, the SES initiatives are considered as long term and may not get the right priorities

Low CIO involvement in strategic decision for SES initiatives, often led by business

SES solutions will require a significant change in the ICT organization in term of competencies, scope of services, alliances/partners and also operating models while the SES solutions components are rapidly evolving

What are the major impacts of SES that the CIO have to address?

Data ‘Tsunami’

A huge CAPEX peak to face

New technologies become critical for business

Significant ICT landscape transformation to become ‘SES Compliant’

Integration of new types of suppliers with different delivery models

Under the spotlight of the CEO

In an unbundled market, all stakeholderswill face those issues with some specificities

Smart Grid for CIO

Data ‘Tsunami’

A huge Capex peak to face


Significant IT landscape transformation to become

‘Smart grid compliant’

Integration of new types of suppliers with different

delivery models


Next steps

4


…Storing data coming from various areas

…Running complex and real time processes with massive volume of

data

…Securing customer’s personal data

…Making these data accessible and usable

IS Services will have to deal with...

A significant increase both in volume and frequencyData coming from various sources

Generation Transmission Distribution Customer

In-home sensors, electric vehicle charging sensors, smart appliances, smart thermostats

Phasor Measurement Units

DLR sensors

Distribution and sub-station sensors,Smart Meters

Distributed Generation control and automation

To/year

0200400600800

1 0001 2001 400

2011 2015 2020 2025

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Smart meters are only the first step for building a smart grid infrastructure, requiring to plug a combination of new technologies across the value chain, and causing an explosion of the data volume

Smart Metering dataElectric vehicleCustomer Side data

TODAYMax. 12 meter extracts per year 2 indexes per extract ~ 5 GB / year

WITHIN 10 YEARS 6 meter extracts per hour 14 indexes per extract ~ 150 TB / year

X 30 000

Example: data volume due to smart metering in France will be multiplied by 30 000 within 10 years

And much more to come in few years with smart home

Smart Grid for CIO

Data ‘Tsunami’






delivery models


Next steps

6


Utilities located in more than 25 countries reported Smart grid to be the main reason for Capex increase,

before regulatory mandates and government stimulus

Smart grid investments will not decrease despite the global downturn …

Despite the current economic crisis that forces utilities to reduce expenses, half of utilities have maintained investments related to

smart grid, while half of them have increased them

Percentage of respondents (multiple answers allowed)Source: Newton-Evans study 2010

41%

42%

64%

Government Stimulus

Regulatory Mandates

Smart Grid Initiatives

0% 100%

18%

77%

Regulatory Change

Economic Outlook

0% 100%

Reason for increases Reason for decreases

0% 25% 50% 75%

EMS / SCADA / DMS

Substation Automation & Integration

Protection & Control Relays

Distribution Automation and Field IEDs

AMI

Transmission Infrastructure

Distribution Infrastructure

Decrease No Change Increase

Comparison of 2010 planned Capex investment for Smart Grid programs

7

Opex decrease due to economic crisis Capex increase due to smart grid projects More and more budget arbitrage to facilitate the launch of smart grid projects


Even though Smart Metering is only the first brick of a Smart Grid program, European regulators recently published average cost estimates which can provide rough idea of what a Smart grid budget can be

Cost of smart metering / meter = 120 € (source CRE, consistent with many projects in Europe and North America)

Cost of end-to-end smart grid / meter = 450 € (source CRE)

Around 10% of a smart grid budget is dedicated to IS/IT (Capgemini Consulting study for French smart grid pilot)

… and will have dramatic impacts on the IS budgets

Illustration for a utility company in a major European country (France, Germany, Italy, UK)

1 meter = 450 €of cost end-to-end for Smart Grid

35 millions meters15.8 billions €Smart Grid total cost

2010-2020

Program duration: 10 year1,58 billions € / year

10% related to IS/IT158 M€ / year

8

IS Opex/ Capex allocation will evolve significantly for the Utilities in the next decade

Smart Grid for CIO

Data ‘Tsunami’






delivery models


Next steps

9


> New skills will be required in IS services to manage these technologies that will become critical for business

Smart grid performance relies on the combination of many new technologies related to operational technologies, telecoms, mobility solutions and applications solutions

Telecom &

Communication

Operational Technologies

Real time technologies

Mobility solutions

Applications solution

MDM

Intelligent Electronic Devices

Process data historian

Advanced Distribution

Management Systems

Phasor Measurements Units

Advanced Metering Infrastructure (AMI): Zigbee, 3G/4G, Wifi, PLC

Home Area Network

Telecom and Utility Mobile Solutions

Common Information Model (CIM)

Web 2.0 for utilities

Home/consumer energy management

Customer gateway

Meter Data Management

Business Process Management

Demand Response

10

Smart Grid for CIO

Data ‘Tsunami’



Significant IT landscape transformation to

become ‘Smart grid compliant’


delivery models


Next steps

11


A deep impact analysis must be conducted on the comprehensive Information Systemat a macro and detailed level

Impact on IT (%) :

0% 25% 50% 75% 100%

HumanResources

Customer account

managementFinancial Premises

RetailSupply chainand logistics

Energy managementand energy

trading

Maintenanceand

construction

Operationalplanning and optimization

NetworkOperation

Recordsand Asset

Management

Network extensionplanning

Distribution management business functions

CustomerManagement

Meterreading

and control

Business functions external to distribution management

IEC 61968 compliant middleware services

12

> Illustration of an impact analysis for a Distribution IS done through the CEI 61968 standard

Smart Grid for CIO

Data ‘Tsunami’





Integration of new types of suppliers with

different delivery models


Next steps

13


To manage smart grid transformation, CIOs will have to team-up with partners; however many of them are only emerging today

A new kind of supplier for

smart metering is emerging:

turn-key contract providers,

who offers complete solutions,

including the manufacturing of

meters, tools and ITTrad

itio

nal

su

pp

liers O

the

r pro

vide

rs

IT integrators

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CIOs have to learn how to work with these new suppliers, as they offer new interesting solutions to help IS services solving smart grid issues

Meter suppliers Specific players Telecom service providers Electric hardware suppliers Data management services Printed circuit board

manufacturers Software publishers Other suppliers

Many IT integrators managed to establish themselves with their solution and have

developed a strong footprint

Atos Origin, Capgemini, IBM, Logica , TDC, TeliaSonera, Telvent, Tieto…

Other turn-key contract providers tend to become a

major playerNation-wide recognized, these providers are now aiming at other countries

ADD Grup, Echelon, Embriq, Enel, ISA, Metrima, NURI, Telecom Remote

Energy, Monitoring, RWE Metering, Siemens, Trilliant, Tritech

Technologies, Xemex

Smart Grid for CIO

Data ‘Tsunami’






delivery models


Next steps

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Smart grid must be considered as a strategic transformation program, which is often directly supervised by utilities executive management

Indeed, not succeeding in implementing a smart grid program is not an option for utilities CEOs

– Control / close follow-up by regulators and governments

– High visibility to citizens

– Very significant budgets

Moreover smart grid programs involve the whole company, thus CEOs arbitrage will be needed between the different business lines of the company– Telecoms

– IS Services

– Operational Units

– Business Units

A study from Gartner shows that in more than 80% of cases, a smart grid initiative has C-level executive sponsorship;

in half of those cases, sponsorship comes from the very top

19

15

8

12

17

20

39

0 5 10 15 20 25 30 35 40 45

We do not have a C-levelexecutive sponsor

Other C-level executive

CTO

CFO

CIO

COO

CEO

Percentage of Respondents

Source : Gartner (September 2010)

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Smart Grid for CIO

Data ‘Tsunami’






delivery models


Next steps

17


Thanks to in-depth knowledge of Smart Energy and a significant number of references, Capgemini Consulting can help CIOs getting prepared to face Smart Energy challenges

Examples of services proposed by

Capgemini Consulting

‘Smart Grid Health check ’ for CIO

Maturity assessment of the IT function regarding Smart Grid challenges

Smart Grid IT Strategy & Roadmap

Customize an overall IT strategy approach to treat all the smart grid issues, including: IT organization, Architecture strategy, Sourcing strategy, HR strategy, IT Services strategy, Security strategy

Classical 3-year projection is no more sufficient with regards to smart grid investments timelines; we propose a customized IT roadmap approach to focus on smart grid impacts in a 10-year projection

Covering all the IT layers: IT infrastructure, IT Applications, Functional area, Business Processes needs

Benchmarks / lessons learnt from existing

programs

Based on the large number of Smart Energy projects launched by our clients worldwide (from R&D to massive roll-out, including experimentations and pilots), we can deliver content-rich insights from these experiences and highlight the issues, challenges and roles of IT Divisions and CIOs

Philippe ViéVice [email protected]

About Capgemini Consulting

Capgemini Consulting is the global strategy and transformation consulting organization of the Capgemini Group, specializing in advising andsupporting enterprises in significant transformation, from innovative strategy to execution and with an unstinting focus on results. With the newdigital economy creating significant disruptions and opportunities, our global team of over 3,600 talented individuals work with leadingcompanies and governments to master Digital Transformation, drawing on our understanding of the digital economy and our leadership inbusiness transformation and organizational change.Find out more at: www.capgemini-consulting.com

Sébastien [email protected]

Sylvain CionneauManaging [email protected]

Contacts

Tour Europlaza20 avenue André Prothin92927 La Défense Cedexwww.capgemini-consulting.com

Documents

Smart Grid for CIO€¦ · New technologies become critical for business Significant IT landscape transformation to become ‘Smart grid compliant’ Integration of new types of suppliers