Post on 13-Mar-2020
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Operational Analytics for Utilities
Creighton Oyler (creighton.oyler@oracle.com)
Patrick Steigler (patrick.steigler@oracle.com)
April 15, 2014
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Goals for today:
1. Arm you with information to intelligently discuss
some key forces shaping the electric utilities
industry
2. Deep dive into one example of technology at
work in a real life setting
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Why Bother Talking About Utilities
Utility industry behaviors will have a
significant impact on the commercial success
of any new energy-related product or service
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TRUE or FALSE?
Global regulation encouraging renewables adoption have been a success.
BY WHAT MEASURE?
Reliable, Safe, Clean, and Affordable…electricity
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Installed Capacity
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Agenda
Industry Backdrop
Euphemism City: “Revenue Protection”
Q&A
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Key Concepts
1. Peak
2. Rate Setting
3. Intermittency
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1. Peak Load Drives Infrastructure Sizing
Utility must have enough generation and T&D capacity to meet the
highest demand moment of the year
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1. So What’s the Big Deal?
1/3 of generation capacity…..
…utilized only 7% of the time
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2. Basic View of Utility Rate Setting Mechanism
Capital Base ($)
Annual Electric Consumption (kWh)
Unit Price ($/kWh) =
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3. Renewables Intermittency
WIND
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3. Renewables Intermittency
BACKUP
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Recap
1. Electric infrastructure is sized for peak periods
2. Electric rates set to allow for cost recovery (plus profit)
3. Most renewable generation (less Hydro) is intermittent
4. Batteries are not a cost-effective option (yet) to solve
intermittency
5. Utilities legally required to be backup energy provider
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The dilemma
Increased Costs
= Higher Cost Per kWh
Decreased kWh Consumed
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Germany
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German Installed Solar Capacity Is Huge….
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…But Still Just a Portion of Realized Generation
a Geothermal/Wind/Solar/Other Source: International Energy Agency, Fitch
23.5 15.7
64.6 66.9
4.4 4.7
7.5 12.7
Germany (2008)
Germany (2012)
Renewables
Hydro
Combustible Fuels
Nuclear
Germany Realized Generation Mix (%)
Copyright © 2014, Oracle and/or its affiliates. All rights reserved. Proprietary & Confidential 18 Source: “How to lose half a trillion euros.” The Economist, October 12, 2013.
Copyright © 2014, Oracle and/or its affiliates. All rights reserved. Proprietary & Confidential 19 Source: “How to lose half a trillion euros.” The Economist, October 12, 2013.
Copyright © 2014, Oracle and/or its affiliates. All rights reserved. Proprietary & Confidential 20 Source: “How to lose half a trillion euros.” The Economist, October 12, 2013.
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Customer Bills Rise While Utilities Earn Less
Electricity Prices in Germany Normalised Consumer CPI vs. Wholesale Baseload
Source: Bloomberg, Fitch
50
60
70
80
90
100
110
120
130
140
150
Jan 08 Mar 09 May 10 Jul 11 Sep 12 Oct 13
Consumer Wholesale (January 2008 = 100)
• The rising bills include higher subsidies and network charges
• Utilities earn less in generation segment while supply margins remain modest
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Credit Ratings of European Utilities
Source: Fitch
• Portfolio composition: 100+ entity ratings (split between networks and integrated and generators)
• Over 50% of ratings in BBB range, around 25% in A range and 15% in BB range
• 46% are either BBB+ or A-
• Existing ratings drifting down, new ratings on average lower than before
Historical Distribution of Ratings
EMEA utilities dynamic sample
0%
20%
40%
60%
80%
100%
Jun 07 Feb 08 Oct 08 Jun 09 Feb 10 Oct 10 Jun 11 Feb 12 Oct 12 Jun 13
AA A BBB BB B CCC
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There Must be Good News Here Somewhere… So, what’s the impact on emissions?
• Largely a function of increased industrial activity, carbon dioxide emissions increased compared to the crisis year of 2009
• But increased coal burning and nuclear decommissioning in Germany add to the trend
Source: European Commission
0
50
100
150
200
250
300
350
400
450
500
2009 2010 2011 2012
Germany UK Spain Italy France Poland (mt CO2)
ETS Verified Emissions
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What Options Exist?
Cost per kWh sold ($/kWh)
Goal
Decrease Costs
Increase No. of kWh Consumed
Value Levers
Streamline operations, reduce and restructure controllable costs
Consider M&A or divestitures to achieve synergies or reconsider business structures
Change the regulatory paradigm (e.g. changing renewable portfolio standards, etc.)
Capture, Retain Customers
Evaluate opportunities for new products and services
Change the Business Model
Advanced Analytics
Advanced Analytics
Advanced Analytics
Source: ‘The Math Does Not Lie: Factoring the Future of the US Electric Power Industry’ – Deloitte Energy & Resources Dbriefs, Jan 2013
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Agenda
Industry Backdrop
Euphemism City: “Revenue Protection”
Q&A
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Global Prevalence of Energy Theft
Source: Awesense (graphic); Oracle Analysis (figures)
China
United States
India
0.7
0.7
6.3
1.0
0.5
0.4
4.7
1.2
0.6
0.4
0.3
0.2
Russia
1.3
Canada
Germany
Italy
Japan
United Kingdom
Brazil
France
South Africa
Mexico
ANNUAL VALUE OF 1% THEFT $B
Assumption: $0.12/kWh retail
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Local Impact of Energy Theft
Pacific Gas and Electric Example
Assumption: $0.12/kWh retail
2013 MWh sales: 84,045,146
2013 Profit: $828m
Value of 1% theft: $101m
1% = 12% of profit
Source: Awesense (graphic); Oracle Analysis (figures)
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Jumper cables diverting electricity around the meter
Meter
Cables
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Tap at weatherhead diverting wires around
meter
Meter
Diversion
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Data Curation
Intelligent Data Systems
require curation
Google Maps –
– Many people working
actively to correct errors
– Appears to work
automatically but the
algorithms only get better
via manual input
Platform to curate meter data
Deal with Data Issues and
Discover Relationships:
Voltage
Missing Data
Bad Data
Voltage
Consumption
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Model
Technical Loss =
2*Resistivity*Length*Current
Power (kWh) = Current * Voltage
…Based on data received…
Expected Voltage = 240 -
2*Resistivity*Length*(Power/Voltage)
Most likely non-technical loss when
Actual Metered Voltage < Expected
Voltage
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PURPOSE BUILT SOLUTION
ADAPTABLE PLATFORM
Solution Platform
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Agenda
Industry Backdrop
Euphemism City: “Revenue Protection”
Q&A
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