Post on 02-Jan-2016
© Copyright IBM Corporation 2005
Automated Meter ManagementStarts from pre-payment the transformational journey of African Utilities
Michele MarzolaVice-President, IBM Global ServicesCape Town, May 17, 2005
2© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
In the World, Utilities and Regulators are facing four different challenges depending on the local economic scenario
Increase Demand Efficiency
And Reduce Outages
Peak Shaving and Creation of
Retail Competition
Domotics Integration
Eradicate Frauds,
Thefts and Bad Payers
Economy growth
GDP percapita
3© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
Automatic Meter Management (AMM ) helps dealing with all four issues at the same time
Increase Demand Efficiency
And reduce Outages
Peak Shaving and creation of
Retail competition
Domotics Integration
Eradicate Frauds,
Thefts and Bad Payers
Economy growth
GDP percapita
AMM
4© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
AMM creates an Intelligent Network with bi-directional communication
Two-way communication with
all customers
Intranet
MV/LVSubstation
Integration with SAP and creation of a powerful new series of applications handling customer
management and energy efficiency
ConcentratorConcentrator
Meters
Data Communication
Centre
A completly new network of intelligent meters
Customer Portals available for users, regulator and retailers New services,
including broadbandoptions
5© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
AMM is very distinct from AMR and drives the transformation of the Distribution business
Slows Down and Minimise the benefits of AMM
AMM(Benefits extended to:
-Remote customer mgmt.-Energy balance every 15 m.
-Flexible tariffs and DSM
-Power modulation
AMR(Benefits limited to
more efficient reading)
AMR does not have sufficientcapabilities to
transform the Business
Implementation approachEvolution Transformation
Client’sObjectives
Tactical(Meter reading efficiency)
Strategic(Revenue protection,Load management,Competitive Adv)
6© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
AMM will transform the Utilities Industry by the end of this decade. Utilities adopting AMM will be able to...
Execute customer requests in a few minutes.... Provide customers with precise, actual bills which contain a rich history of their
consumption, with suggestions on how to improve energy efficiency.... Design bespoke contracts which apply rates in synch with the actual cost of energy
and the price sensitivity of each customer... Accept new customers with just a phone call or an internet message, without any
need of phisical intervention of new meters.... Reduce outages by one order of magnitude... Eradicate thefts and frauds... Manage bad payers with both social responsibility and business integrity Provide Regulators evidence of service rendered to each customer.... Provide Regulators and Government the evidence of energy saved through the
elimination of frauds, thefts and the smoothing of peak demand...
AND ALL OF THE ABOVE AT HALF OF THE CURRENT OPERATING COSTS !!
7© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
AMM will help African Utilities to reduce the cost of commercial losses
Source: World Bank
8© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
Commercial Losses require different approaches for different customer segments
AMM enables flexible rates and can help people to pay, also using pre-payment
functionalities
AMM avoids wrong billing and
creates new services opportunity
AMM permits to identify endemic leaks
and help dealing with the political issues of these customers
AMM permits to identify key losses and provides ways
to bring behaviours back to law
Can Afford to Pay for Energy?NO YES
Willingness to Pay ?
NO
YES
9© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
The eradication of Commercial losses requires a systemic approach
AMM enables flexible rates and can help people to pay, also using pre-payment
functionalities
AMM avoids wrong billing and
creates new services opportunity
AMM permits to identify endemic leaks
and help dealing with the political issues of these customers
AMM permits to identify key losses and provides ways
to bring behaviours back to law
Can Afford to Pay for Energy?NO YES
Willingness to Pay ?
NO
YES
Identification of by-passes
Elimination of tampered meters
Elimination of faulty meters
Introduction of flexible
pre-payment
10© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
00,5
11,5
22,5
3
kW Peak TariffLow Tariff Low Tariff
Peak Tariff (Seasonal) ??
AMM will introduce flexible rates and enable Demand Side Management
00,5
11,5
22,5
3
kW
AMM records individual load profiles with 15 minutes intervals
AMM enables the design of tariffs for optimal energy usage
AMM introduces the very innovative capability to curtail the power supplied to specific customers at
any time
0
5
10
15
20
25
30
35
40
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Marginal cost 1 Marginal cost 2 Marginal cost 3 Marginal cost 4
AMM permits to bill the real value of energy with dynamic adjustments any 15 minutes
11© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
New tailored tariffs permit savings of more than $ 100 per annum to customers willing to move their consumption patterns
Price: -16%
MonTueWedThu Fri Sat Sun
19:00
Price:-22%
0:00
24:00
3 kW
1:00
minimum “Blu time” consumption: 26%
minimum “Blu time” consumption: 26%
MonTueWedThu FriSat Sun
Up to 80 € of saving per Customer p.a.
12© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
Both Utilities and the customers will benefit from the much easier pre-payment process enabled by AMM
1 2 3 4 5 6 7 8 9 10
months
€
Examples of possible pre-payment systems
•Bank transfer, ATM
•Cheque
•Debit or credit card through call center
•Pre paid through mobile phone
•Cash through supermarket collection
•Vending (including kiosk in post offices, etc.)
•POS device on the electronic meter
Curtailment process for bad payers
Consumption path for a pre-paid card
Area =
Anticipated cash
More payments options for the
customer
More personal financial planning
options for the customer
Credit updated in Billling system
13© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
The massive installation of new electronic meters creates a fraud–free installed base
New meters are preciseFraud meters are removedIllegal connections are eliminatedAgeing assets replacedStandardized meters and meters boardsUp to date meter database built
Network asset monitoring
Customer Information
System
Information system (AMM)
Information system (AMM)
Final report:
•Consumption database update
•Type and number of illegal situations
• Connections ageing
Final report:
•Consumption database update
•Type and number of illegal situations
• Connections ageing
• Expected consumption by customer type and builling history
•Asset description (n.a.)
• Expected consumption by customer type and builling history
•Asset description (n.a.)
•Meter initialization
•Meter initialization
Illegal connections removed Asset renewal
Platform standardization
Platform standardization
•Consumption reading
•Meter’s picture
•Consumption reading
•Meter’s picture
Meter data repository
14© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
Once operational, AMM permits to have constant monitoring of energy distribution yield
MV/LVSubstationConcentratorConcentrator
Meters
ENERGY BILLED
Total Energy Invoiced
≠
Technical Losses(Joule effect, ...)
(Mathematical models)
Commercial Losses
• Theft• Fraud• Wrong measurement
Energy Balance every 15 minutes
(Syncronous reading between meters and
transformer
15© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
Already during the first weeks of operations the quantum leap in energy efficiency can be measured
100 %
Sistematic meter replacement removes all types of frauds at time 0
New meters installation
Asset renewal will reduce technical losses
Energy billed
Other losses
Technical losses
time
Kwh injected in the grid
90%
0
Revenue OK !
16© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
Only a complete AMM roll-out will permit to control the full energy balance, with the capability of detecting any new fraud attempt
LV
MV meter
MV meter
LV
MV meter starts calculating user load
profile
Dedicated substation apparent yield can already be
calculated
Detected unbalance
Detected leakage
Detected leakage
tampering
17© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
AMM is the only systematic solution to eradicate frauds
“1000 Inspectors with 1000 dogs” can visit any account at least once a year..– If they were to know where to go...without political biases– If they are let in...– If this does not create political repulsion against the Utility....– Frauds can be reinstalled a day after the visit...– Evidence about frauds may be insufficient to recover past losses– ....and why could not the readers execute this fraud eradication program before?...– ..and would anyone replace a dum old electromechanical meter with a new, still dum,
electromechanical meter bound to be tampered soon?
...but the cost of this program would waste more than half of the benefits, besides requiring € 6 per meter (per annum?) to renew the assets
AMM will insure a continuous monitoring of energy efficiency, with an auditable track record of consumption patterns and would also help to improve the technical losses, besides eradicating the commercial losses
18© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
The curtailment functionality of AMM ensures minimum social supply to all, instead of outright cut-offs
1 2 3 4 5 6
Full power availability
Minimum allowed for key social
reasons
Illustrative Example
Po
wer allo
wed
-80%
-60%
-40%
Increasing shortage of supply brings to a selective stop of home
appliances
-20%
19© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
AMM permits to monitor the availability of the distribution grid
Concentrator(CBT)
GSM Network
Concentrator(CBT)
GSM Network
Concentrator(CBT)
GSM Network
AMM
Telegestor
e
AMM
Telegestor
e
20© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
..and transforms the way to handle critical situations
Generation capable of coping with increased demand However, the capacity of two large transformers was stretched to the
limit until they burn out The black-outs following this event caused disruptions evaluated to
exceed $ 650 M AMM could have curtailed demand and balanced the throughput of the
two transformers, avoiding a major capital loss, insuring continuos services and sparing two weeks of havoc to a major town
IMPACT OF THE HEAT WAVE IN SEVILLA IN 2004
21© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
AMM creates benefits for all stakeholders
End user benefits from a better service with more
customised tariffs
Utilities benefit from a reduction in customer
management processes costs
The Economy benefits from better energy management
22© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
AMM offers great benefits for customers…
No charges made for the new meter, however it is a great opportunity for the utility to upgrade paid-up equipment and services….and rational customers may be willing to pay $ 100 to obtain rate savings
Never need to answer the door to a meter reader early in the morning or to wait in all day for one to arrive
Able to activate, or change, their energy contract immediately
Billing always aligned with actual consumption
Information to identify the best tariff
Power curtailment will permit most appliances to operate during energy shortage periods
A cost-effective gateway into the home for new value added services such as alarm monitoring, fire detection, lighting management, intelligent buildings management
23© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
… and for the wider economy
AMM allows economy to grow even with a stalled generation supply
AMM will ensure that each kWh of energy is delivered where it is most needed - less pollution
Reduce peaks and outages, sustaining economic growth - - The Swedish regulator estimates that AMM will increase GDP by 0.03%
Ability to plan network investments according to the real consumption patterns
Strong monitoring of network availability and efficiency
24© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
The return on investment for an integrated distribution company is impressive, with a four years pay-back
Total investments
Annual savings
Savings on purchasing of old meters
Field operations
Readings
Revenue protection (thefts/failures)
Other
TOTAL SAVINGS € 500M
Plus:-Accelerated Return on RAB
-Increased Market Share-Increased Bonus for better Service
25© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
Thanks to AMM, even the most efficient utilities will be able to cut its process costs by 33%
1 2 3
Meter-to-Cash cost per customer per annum
BaselineOperating Cost
FutureOperating Cost
Total New Net Cost
- 65%
- 33 %
- 27 % Compared with
European Average
Case Study 2
26© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
AMM creates a Net Present Value of $ 105 per customer just out of Operational Savings...
AMM Value Creation (Sample)
Benefits Investments
Net Present Value
$ p
er
cu
sto
me
r
AMM Operations
Infrastructure
Revenue Protection
Operations
CustomerManagement
Network
NPV$ 105
27© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
The Value of AMM is in the integration with the operating processes, not in any single component of the technology
Value for the Utility
Offering evolution
ElectronicMeters
ElectronicMeters
Electronic Meter Installation
Electronic Meter Installation
Business Process
Outsourcing
Business Process
Outsourcing
Customer Information
SystemsRenewal
Customer Information
SystemsRenewal
Business Transformation
Business Transformation
Project FinancingProject
Financing
28© Copyright IBM Corporation 2005
Cape Town, May 17, 2005
In Summary......
AMM Solutions exist and deliver new important functionalities to Utilities
Regulators are highly favouring the adoption of AMM technologies
The business cases for a variety of Utilities around the world show a pay-back period between 2 and 7 years, with Net Present Value created per customer up to $500
Risks are identified and are manageable
The full achievement of AMM benefits requires the integration of the entire solution supported by a full business transformation programme