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World Bank DiscussionGlobal Progress Towards Smarter Grid Cities and
Their Enablement of Energy Efficiency
January 27, 2010
Copyright © 2009 Accenture All Rights Reserved.2
Introduction and Discussion Context
Discussion Topics
• Introduction and Discussion Context
• Demand Side Management/Energy Efficiency Findings
• Accenture Point-of-View and Conclusions
Copyright © 2009 Accenture All Rights Reserved.3
Copyright © 2009 Accenture All Rights Reserved.Copyright © 2009 Accenture All Rights Reserved.Copyright © 2009 Accenture All Rights Reserved.
Introduction and Discussion Context
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Copyright © 2009 Accenture All Rights Reserved.4
Introduction and Discussion Context
Accenture Smart Grid Services (ASGS) Overview
ASGS is a dedicated practice within Accenture focused on smart grid and infrastructure
modernization for utilities
4
Accenture Smart Grid Services
• 500+ people working on smart metering/smart grid utility projects
• Accenture has led roughly 40 Smart Grid/AMI projects over the past three years ranging from
strategy development to implementation
• We are the advisor to the World Economic Forum on smart grid
• UK’s Department of Energy and Climate Change selected Accenture to provide strategic consulting
on the planning and implementation of smart grids in the U.K.
• 0 2 4 6 8 • 11.3
• DRAKE V 1.2 June 24, 2004 SE&G Primary System
• 0 2 4 6 8 • 11.3
Customer Care
Transformation
as a result
of AMI/DSM/EE
initiatives
CIS
Implementation
Program
Management
& Metrics
Achievement
Security
&
Access
Management
Grid Analytics
& Renewable
Integration
Work
ManagementField Force
Automation
Asset
Management
Customer Facing SG Services SG Program Services SG Operational Services
AMI,
DSM/Efficiency
Implementation
Copyright © 2009 Accenture All Rights Reserved.
Introduction and Discussion Context
A number of macro forces are compelling
utilities to modify their existing operating models
5
Copyright © 2009 Accenture All Rights Reserved.
Introduction and Discussion Context
Smart Grid Outcomes and Value
Outcomes
and
Value
Increase customer
satisfaction
Improve reliability
Support regulatory
/societal mandates
Increase
revenue/new
business
Optimize
Cost to Serve
• Enables customers to reduce energy bill and encourage
conservation
• Provides more accurate information on outages, billing
• Improve service order response
• Enables environmental choice
• Ability to improve customer side operations
• Supports building renewable generation (wind, distributed energy)
• Facilitates wholesale market efficiency
• Enables demand response
• Key component of carbon reduction agenda
• Reduce field and call center labor
• Reduce credit/collection cost
• Increase billing accuracy
• Reduce line losses
• Defer capital investment
• Decrease outage duration with self-healing grid and predictive
outage restoration
• Decrease outage frequency with better system planning, proactive
maintenance and asset management decision-making
• Decrease lost revenue/theft
• Energy-related products/services (e.g., DSM, CPP, TOU)
• Advanced home services
• Infrastructure growth
6
Copyright © 2009 Accenture All Rights Reserved.
A Smart Grid is a power grid that uses sensing, embedded processing, digital communications, and software to manage network-derived information, thus making itself:
7
Observable
measure the states of all
grid elements
Controllable
affect the state of any grid element
Automated
adapt and self-heal
Integrated
connected to utility
processes and systems
These capabilities support the three major business functions of the T&D utility: power delivery, asset management, and consumer experience enablement.
Introduction and Discussion Context
Smart Grid Definition
Copyright © 2009 Accenture All Rights Reserved.8
Introduction and Discussion Context
Smart Grids Represent Utility Model of the Future
SmartD
Substation
SmartT
Substation
SmartT
Substation
SmartD
Substation
Grid-based
renewables
Grid-based
storage
Nuclear
Power Plant
Coal & Gas
Plant with CCS
Natural Gas
Transmission
CO2 Transport for
Sequestration
Tidal Power
Hydrogen, biofuels and gasoline/diesel distribution infrastructureH2 production –
electrolysis
Direct H2
production –
Gen IV
H2 production –
electrolysis
Direct H2
production –
Gen IVBio-fuels
Production
H2 production –
electrolysis
Direct H2
production –
Gen IV
High Temp
Super
Conductor
Super Grids
HVDC link to
neighboring
grids
CHP/District
heating
network, DC
Micro Grid
Embedded
renewables
Embedded
storage
Photo Voltaics
Heat pump
Smart
Sensors
Automatic
Fault Isolation
Smart Buildings
Smart Homes
Fault
Location
Sensors,
Smart Switches
Highly insulated
housing structure
Micro
generation
Photovoltaic
roof tiles
Dynamic control
of refrigeration
and HVAC
In-house
data on
usage and
costs
Demand side
management
High efficiency
appliances
Plug-in hybrid
Wind Farm
Wind Farm
Fault
Location
Generation
Transmission & Distribution
Retail
Utility Model of the Future
Copyright © 2009 Accenture All Rights Reserved.9
Introduction and Discussion Context
Accenture Smart Grid Projects - North America
So Cal Edison: MDMS strategy, AMI business
case assessment; regulatory filing support
Sempra Energy: AMI integration to CIS
Xcel Energy:
Smart Grid City
PECO: AMI assessment, fit-
gap analysis
BGE: Overall program
management, Systems
Integration for AMI and DR
programs
Dominion: Smart meter
strategy and business case
ComEd: AMI,
MDM and ESB
implementatio
n
Enbridge: MDMS
implementation
PSE: Meter-to-cash/smart
meter assessment
Power Stream: Hosted MDMS operations
Newmarket-Tay Hydro: Hosted MDMS
operations
Thunder Bay Hydro: Hosted MDMS operations
Duke: Smart
grid strategy
and MDMS
integration
e.on:
Smart grid
strategy
National Grid:
Smart meter
strategy &
business case
CL&P:
Demand
response / AMI
pilot
PG&E: AMI integration,
smart grid and HAN
strategy
PSEG: Smart meter
strategy & business
case
PPL: Program
Management
support, Change
Management, and SI
Copyright © 2009 Accenture All Rights Reserved.10
Introduction and Discussion Context
Accenture Smart Grid Projects – Global
Enel: Operate and maintain MDM
solution for 30+M AMI implementation
ERDF: AMI strategy and program
management
City of Amsterdam: Smart Grid City
Implementation
Alliander: Smart metering transformation
Delta: Delivered head-end implementation
for 200K households
Rhein Energie: Smart metering strategy
Light S.A.:
MDM
implementatio
n and
integration to
SAP IS/U
SP AusNet: SAP ISU with an interface to
eMeter’s Energy IP for >1M smart meters
Jemena: SI for a 1.1M meter deployment
Eskom: PM and SI
for smart metering
and load control
implementation
State Grid of
China: Smart
Grid Strategy
CLP: Smart Grid
Strategy
Scottish & Southern: Hosted and implemented a MDM for a 10K meter deployment
Scottish Power: Smart Buildings / white label services
ESB: Designed smart metering structure, processes, and AMI requirements
National Grid: Smart Grid Strategy and business case
United Utilities: Strategy and MDMS evaluation
EDF: Managed a 300K meter pilot
BT: Communications strategy
Copyright © 2009 Accenture All Rights Reserved.11
Introduction and Discussion Context
Discussion Topics
• Introduction and Discussion Context
• Demand Side Management/Energy Efficiency Findings
• Accenture Point-of-View and Conclusions
• Open Discussion
Copyright © 2009 Accenture All Rights Reserved.12
AMI (DSM Efficiency) Initiatives and Results
DR Reductions Requires Integration of Rate and Tech. Design
Source: Accenture analysis and Piloting the Smart Grid, Ahmad Faruqui, Bryan Hledik and Sanem Sergici
The typical reductions seen in traditional DSM programs are not enough to
achieve a number of the demand reduction requirements that are emerging.
Pricing changes of 10x current prices on peak are required to get 15+% reductions.
-30.0%
-25.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
% C
ha
ng
e i
n P
ea
k D
em
an
d
Average Customer Cust w/ CAC Cust w/o CAC
Average Customer 0.0% -3.8% -6.2% -7.9% -9.3% -10.4% -11.4% -12.3% -13.0% -13.7% -14.3% -14.9% -15.4% -15.8% -16.3%
Cust w/ CAC 0.0% -6.3% -10.2% -13.1% -15.4% -17.3% -18.9% -20.2% -21.5% -22.5% -23.5% -24.4% -25.2% -26.0% -26.7%
Cust w/o CAC 0.0% -2.3% -3.7% -4.7% -5.5% -6.2% -6.7% -7.2% -7.7% -8.0% -8.4% -8.7% -9.0% -9.3% -9.5%
$0.13 $0.23 $0.33 $0.43 $0.53 $0.63 $0.73 $0.83 $0.93 $1.03 $1.13 $1.23 $1.33 $1.43 $1.53
% D
em
an
d R
es
po
ns
e Im
pa
ct
Critical Peak Price Responsiveness Technology impact on Demand Response
0%
10%
20%
30%
40%
50%
Series1 0% 8% 18% 29% 30% 46%
Series2 0% 3% 8% 16% 21% 32%
Series3 0% 5% 13% 23% 26% 39%
Baseline TOU PTR CPP TOU w/ Tech CPP w/ Tech
High
Low
Mean
Technology impact
Technology
impact
TOU
CPP
21%
16%
Copyright © 2009 Accenture All Rights Reserved.13
AMI (DSM Efficiency) Initiatives and Results
Number of DR* Trials Completed Across the Globe
Demand response trials completed across the globe have demonstrated demand
response benefits in the range of 5 – 50% reductions in peak & non-peak loads.
* DR = Demand Response
U.S:
• CA: City of Anaheim
• CA: Automated Demand Response Pilot
System (ADRS)
• CA: State-Wide Pricing Pilot
• CO: Xcel Energy TOU Pilot
• FL: Golf Power Select Program
• ID: Power Company Energy Watch Program
• IL: Energy Smart Pricing Plan
• MS: Ameren Critical Peak Pricing Pilot
• NJ: GPU Pilot
• WA (Seattle): Puget Sound (PSE) TOU
Program
• WA: The Olympic Peninsula Project
Canada:
• Ontario: Hydro Ottawa
Australia:
• Country Energy
• Energy Australia
• Energy Australia’s Network Tariff Reform
Europe:
• Norway
• France: Electricite de France (EDF) Tempo Program
Source: Brattle Group’s “Unlocking the €53 Billion Savings from Smart Meters in the EU” – Oct 2009
Copyright © 2009 Accenture All Rights Reserved.14
AMI (DSM Efficiency) Initiatives and Results
Demand Response Pilot Savings
* Assumes no ARRA or any other type of government funding or subsidy; Capital costs include Program Management for deployment
** Does not include any incremental operational expenses, including maintenance, associated with deployment of Smart Technologies
Note: Assumes base tariff of ¢11.26 per kWh; Annual consumption of 10,000kWh; Load Shape from Southeastern Utility
Source: Accenture Analysis
Average Reductions in Usage During Peak Times
Projects included above:
Rate Design
Number of
Observations Mean
95%
Lower
Bound
95%
Upper
Bound Min Max
TOU 5 4% 3% 6% 2% 6%
TOU w/Technology 4 26% 21% 30% 21% 32%
CPP 8 17% 13% 20% 12% 25%
CPP w/Technology 8 36% 27% 44% 16% 51%
• AmerenUE Residential TOU Pilot Study
• Anaheim Critical Peak Pricing Experiment
• BGE Smart Energy Pricing Pilot
• California Automated Demand Response System Pilot (ADRS)
• California Statewide Pricing Pilot (SPP)
• Electricite de France (EDF) TempoProgram
• Energy Australia’s Network Tariff Reform
• GPU Pilot
• Idaho Residential Pilot Program
• Olympic Peninsula Project
• Ontario Energy Board Smart Price Pilot
• Public Service Electric and Gas (PSE&G) Residential Pilot
Program
• Puget Sound Energy (PSE)’s TOU Program
• The Community Energy Cooperative's Energy-Smart Pricing
Plan (ESPP)
• The Gulf Power Select Program
• Xcel Experimental Residential Price Response Pilot Program
Copyright © 2009 Accenture All Rights Reserved.
The best results (17-35% reduction on peak) are achieved when
customers are provided information through value based
interactions that are enabled by both price and technology.
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Newfoundland Power
Hydro One T
OU 1
Hydro One R
TM
BC Hydro
Woodsto
ck Hydro
SRP
Country Energy
Hydro One T
OU 2
Co
nse
rva
tio
n I
mp
act
(%
)
IHD-Only Impacts IHD and Prepayment
Impacts
IHD and Time-Varying Rates
Impacts
Role of Technology on Pilot Program Impacts
0%
5%
10%
15%
20%
25%
30%
35%
40%
PSE&G (TOU) PSE&G (CPP) CA SPP (CPP) AmerenUE-2004
(CPP)
AmerenUE-2005
(CPP)
Pilot Program
% R
ed
uc
tio
n i
n L
oad
No Technology
Technology
Consumers conserve when their usage is displayed…
…and respond dramatically to dynamic price
signal and enabling technology…
2-18%
range
12-17% price
17-35% w/tech
• Pilots’ widely varying results on conservation and
demand shift owe to their specialized design
objectives:
• Display centric pilots have not been tested
with smart rates, and rarely with enabling
technology (e.g., smart stat, controls)
• Dynamic pricing have been tested with
enabling techs but not with display impact
• Limited sample size make extrapolation across
customer segments and end use/geographic
situations difficult
• SGC Boulder will be first “pilot” at scale to testing all
4 major components of customer value proposition:
• Display (Prius effect) = awareness
• Smart Rates (inclining block) = price incentive
• Enabling Premise Techs = facilitate response
• DSM/EE Programs = lock in/amplify usage cut
• Large customer benefits in bus case predicated on
accelerated penetration - > requiring “campaign-style”
rollout of tailored value props to priority segments
• Increased scrutiny/mandates for customer outcomes
likely including incentive/penalty structure –
establishing fair baseline expectations imperative and
dependent on robust pilot design to increase
confidence level
Source: Brattle Group15
Copyright © 2009 Accenture All Rights Reserved.16
AMI (DSM Efficiency) Initiatives and Results
Number of Lessons Learned from DR Pilots
Lessons Learned Implications
• There is conclusive evidence that
households (residential
customers) respond to higher
prices by lowering usage
• The magnitude of price response
depends on
– The magnitude of the price
increase
– The presence of central air
conditioning
– The availability of enabling
technologies such as two-
way programmable
communicating thermostats
• Time-of-use rates induce a drop in peak
demand that ranges between 3-6%
• Critical-peak pricing tariffs induce a drop
in peak demand between 13-20%
• When accompanied with enabling
technologies, the CPP tariffs lead to a
drop in peak demand in the 27-44%
range
• Consumers who actively use an IHD
reduce their consumption of electricity
on average by 7% and 14% when
prepayment of electricity is and is not
involved, respectively
Copyright © 2009 Accenture All Rights Reserved.17
Introduction and Discussion Context
Discussion Topics
• Introduction and Discussion Context
• Smart Cities Initiatives and Results – 2 case studies
• Demand Side Management/Energy Efficiency Findings
• Accenture Point-of-View and Conclusions
• Open Discussion
Copyright © 2009 Accenture All Rights Reserved.18
Accenture Point-of-View and Conclusions
Smart Grids Represent Fundamental Paradigm Shift
• Potential of smart grids to drive energy
efficiency is limitless
• Operationalizing & fully realizing
benefits requires paradigm shift
• Most utilities do not possess requisite
capabilities in-house
• Consortiums, partnerships, and
alliances key to smart grids
• Deployment of end-to-end smart grids
capabilities is evolutionary
• True value lies in beyond-the-meter
applications (customer value)
• Customer privacy issues will continue
to be an issue to manage
• Do not underestimate power/influence
of regulators & authorities
Smart Grids Lessons Learned Smart Grids CSF’s*
* CSF’s = Critical Success Factors
• Engage state and local regulators and
authorities early
• Proactively work to align various
stakeholder interests
• Get and stay ahead of state and local
regulatory filing deadlines
• Assure consortium partners bring
‘right’ capabilities to table
• Secure stable and requisite funding
sources up-front
• Be clear on aspirations, vision, and
benefits hypotheses
• Undertake pilot approach to minimize
deployment risks
• Track smart grids results early & often
• Expect the unexpected!!!
Copyright © 2009 Accenture All Rights Reserved.
Accenture Point-of-View and Conclusions
As a result of the Smart Grid Technologies, the
following Stakeholder Groups are most impacted
19
Copyright © 2009 Accenture All Rights Reserved.
Accenture Point-of-View and Conclusions
Customer Adoption Journey to Energy Consumerism
• Budget billing programs that
disconnect energy costs from
consumption
• Bill frequency and complexity
• Pricing / billing complexity
• Customer affordability
• Customer Awareness
• Lack of Trust
• Misinformation
• Technological Complexity
Energy Consumerism
Study your
customers by
segments
Design Customer-
Centric
Experience &
Interaction Points
Employ soft-sell
and personal
touch approach
Obstacles
Embrace both
traditional and
new channels
Alignment and development of visible product and pricing signals.
Define the key
messages &
entry points
Develop customer-
empowered
products, services
and tools
Use analytics to drive
evolution of programs and
products
Open dialogue
with
customers
20
Copyright © 2009 Accenture All Rights Reserved.
• Budget billing programs that
disconnect energy costs from
consumption
• Bill frequency and complexity
• Treatment of financially
disadvantaged customers
• Pricing / billing complexity
• Reflection of ‘true costs’ in pricing
• Data ownership and security
• Customer adoption and awareness
• Customer affordability
• Employee engagement and change
management
Accenture Point-of-View and Conclusions
Operational Journey to Energy Consumerism
Energy Consumerism
Imp CIS,
MDMS, CRM
2.0. Including,
pilot roll-out
and programs
Contact
Center
Transformatn
Security
Solutions
Marketing &
Adoption
Programs
Customer
Segmentati
on
Demand
Response
Programs
Obstacles
Revenue Cycle
Transformatin
Alignment and development of visible product and pricing signals.
Change Mgmt
& Employee
Programs
Partnership
and Alliance
Development
Pricing &
Program
Developmt
Multi-channel
Implementatn
21