Smart Grids Benefits Michele Marzola Chief Executive Officer michele.marzola@dnplc.net Digital Networks PLC
Executive Summary � Smart Grids will transform the Utilities business � Utilities will be able to cut their costs by more than 30% whilst increasing revenues � Smart Grids create more than € 1,000 of value for every meter � Smart Grids can be implemented quickly, using existing meters
Smart Grids will transform the utility business TELECOMMUNICATION COMPONENTS 200 MBps data connection delivered through existing electrical wires VoIP as a free additional service delivered through existing assets Intelligent Intelligent Intelligent Buildings Appliances Networks ENERGY MANAGEMENT COMPONENTS Real Time control of Low Voltage Network Interactive Load and Service management Elimination of commercial losses
Smart Grids can be implemented using existing meters and sensors Advanced AMM TO BPL Network CENTRAL APPLICATION GAS WATER METER METER Domotic appliances IP Video surveillance Sensors NB Radio or WIMAX Serial Link PLC (or UMTS (GPRS)) NB PLC or NB NB Radio or BROADBAND or FIBER Serial BUS BBNB PLC Ethernet/IP COMM. MBUS Concentrator GATEWAY MV BPL BPL MV/HV Electric Grid LV Electric Grid BPL BPL Broadband WiFi INTERNET indoor and Modem outdoor access PC VoIP CUSTOMER SITE TRANSFORMER SITE CENTRAL SITE
The Leadership Team of Digital Networks PLC has already implemented a Smart Grid at ASM Brescia 220K customers fully managed for their electricity, gas, hot water and Broadband internet services Broadband Internet services are sold at € 17 per month per customer…
Smart Grids open a complete new World to Utilities and customers VALUE ADDED SERVICES Entertainment Interactive Information / Digital terrestrial Television Safety, Remote Healt Care Security CUSTOMER Broad Band Internet services MANAGEMENT INSTITUTIONS MANAGEMENT Remote Appliance Management SMART Intelligent Interfaces Customer Service Level Promotions Management Critical Situation Mgmt. GRIDS Profitability Management Energy Efficiency Connection / Disconnection Pollution Management Service Monitoring Peak Power Reduction Bundle Pricing Flexible Tariffs NETWORK MANAGEMENT Substation Management Peak Load management Conditionbased Maintenance Outage Management Network Planning
Only Smart Grids can solve three infrastructural problems at the same time Efficient distribution needs real time network ENERGY DISTRIBUTION management SMART GRIDS TELECOM BROADBAND WITH DATA VOIP NETWORK ADSL, Fibre, WiMax Incumbent interest in Digital Divide No effect on Energy VoIP? Management
Governments and Regulators are favouring the introduction of Smart Grids to achieve multiple benefits Disposable Income Supply GDP Smart Grid Reliability Growth Distribution Efficiency, Elimination of Customer Choice Commercial Losses
Investments in Smart Grids are driven by four inevitable forces Generation Capacity is limited by environmental and political factors Smart Grids are the only sensible Most Assets should have been replacement alternative replaced already a decade ago Overall demand is increasing with the economy. Peaks are already exceeding Capacity
In 5 years no Utility will dare managing the Network with tools of the ’50s Would you envisage….. � Staying blind on Low Voltage operations? � Relying on annual manual readings that tell you nothing of users dynamics? � Ignoring where your assets are and which is their operating condition? � Fixing your assets only after they broke with unmanageable customer damages? � Investing according to historical patterns instead of real critical usage? � Having a fragmented, inconsistent and scarce data base of customer events and network events? � Growing the top line selling the same services with rates continuosly reduced by the Regulator?
The key issue for many utilities is which is the best path to arrive to the Smart Grid vision � Which generation of technology should I invest Invest in metering? In communication? In application? Which is the right sequence? � Scale the investment from pilots to universal rollouts? Which is the minimal size of economic investment in Smart Grids? � Invest now or invest later? � Which is the correct timeframe for the investment? � Can I move from 3G to 4G? Is there a 5G around the corner?
Smart Grids are the fourth generation technology in Distribution networks management 1° Generation: 4° Generation: 2° Generation: 3° Generation: Standalone meters Smart Grids Remote Reading AMM Narrow Band
The first generation is structurally limited 1° Generation: 4° Generation: 2° Generation: 3° Generation: Standalone meters Smart Grids Remote Reading AMM Narrow Band Manual Reading 1 data per read (from once a month to once a year) As reliable as the meter reader No customer intelligence No Network Monitoring
The second generation is a mere substitution of labour costs with capital costs 1° Generation: 4° Generation: 2° Generation: 3° Generation: Standalone meters Smart Grids Remote Reading AMM Narrow Band Manual Reading Oneway remote reading 1 data per read 1 data per read (from once a month to (from once a month to once a year) once a year) As reliable as the meter Up to 24 hrs to read a reader meter with proprietary protocols No customer No customer intelligence intelligence No Network Monitoring No Network Monitoring No Integration with Legacy systems
The third generation has already proven its Value 1° Generation: 4° Generation: 2° Generation: 3° Generation: Standalone meters Smart Grids Remote Reading AMM Narrow Band Manual Reading Oneway remote reading Twoways remote management 1 data per read 1 data per read (from once a month to (from once a month to At least 8 data every 15 once a year) once a year) min As reliable as the meter Up to 24 hrs to read a 2.4 Kbps band, reader meter with proprietary Asyncronous mgnt with protocols proprietary protocols No customer No customer Asymcronous intelligence intelligence Customer intelligenece No Network Monitoring No Network Monitoring Asyncronous Network Monitoring No Integration with Legacy systems Legacy Integration
But only Smart Grids can maximise performance with flexible realtime Network management 1° Generation: 4° Generation: 2° Generation: 3° Generation: Standalone meters Smart Grids Remote Reading AMM Narrow Band Manual Reading Oneway remote reading Twoways remote Full grid management management 1 data per read 1 data per read Any data with any (from once a month to (from once a month to At least 8 data every 15 frequency once a year) once a year) min 200 Mbps band with open As reliable as the meter Up to 24 hrs to read a 2.4 Kbps band, Internet protocol and reader meter with proprietary Asyncronous mgnt with open IT architecture protocols proprietary protocols Alwayson customer No customer No customer Asymcronous management intelligence intelligence Customer intelligenece Alwayson Network No Network Monitoring No Network Monitoring Asyncronous Network Management Monitoring No Integration with Legacy Integration Legacy systems Legacy Integration
Only Smart Grids enable major functionalities 1° Generation: 4° Generation: 2° Generation: 3° Generation: Standalone meters Smart Grids Remote Reading AMM Narrow Band X X Y X Peak Load Management X Y Y Flexible X Tariffs X Y Y X Fraud Detection X X Y X Outage Management X Y Y X Network Planning X X Y X BB Services
Two business models are sustainable CURRENT Smart Grids HIGH POSITION Broadband Services Unstainable for the Real Time Mgmt Regulator Energy Mgmt Unstainable for the Continuous Evolution Customers Investment AMM Basic services Narrow Band LOW Asyncronous Static services LOW HIGH Level of Service
Smart Grids generate a much higher Net Present Value than previous technologies Solution Completeness Present Value Per Metering Point Value Value to Utility € 1,000 Investment € 100 € 10 3° Generation: 4° Generation: 2° Generation: 1° Generation: AMM Smart Grids Remote Reading Standalone meters Narrow Band
Savings from Energy Management can already justify the investment in Smart Grids Savings per meter per annum (€) 100 Commercial Losses 80 3 years Customer payback Operations 60 Disaster 40 Avoidance Network 20 Operations 0 Field Operations Savings Hi Savings Low Savings Reasonable
Smart Grids create more than € 1,500 of benefits per meter just out of pure electricity management € per Metering Point (for the 15 yrs. Lifecycle) 800 Regulatory benefits 700 Provision of BB VAS Savings on Telephony and 600 VAS Network management 500 Field Operations 400 Commercial losses GDP growth 300 Home gateway 200 Peak Power Reduction 100 Critical Outage Flexible rates 0 Systemic End User Utility Benefits Benefits Benefits Illustrative example for Emerging Markets
Smart Grids may enable to double the revenue per user and increase the average margin Revenue evolution 70 60 Other Value 50 Added Services €/month 40 Internet access 30 20 Base revenue 10 0 Electricty Network Smart user customer Grid pal Net Margins are well above average
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