The Anatomy of a Smart Meter Roll Out and the Development ... · PDF fileSmart Grid Components...

Shamal SivasankerDirector: Power Solutions

DeloitteSouth Africa

The Anatomy of a Smart Meter Roll Out and the Development of the Smart Grid

2

Copyright © 2011 Deloitte Development LLC. All rights reserved

Topics

• The “Smart” Journey

• Smart Grid Technologies & Energy

Efficiency Opportunities

• Defining the Value

• The Importance of Customer Engagement

• Cyber Security Realities

3

The “Smart” Journey

4


Finding the value for utilities globally

Stakeholder/

Shareholder

Value

RevenueOperating

MarginAsset Efficiency Expectations

• Focus on increasing revenues

• Revenue protection and assurance

• Better pricing methodologies

• Socio-economic impact

• Climate impact

• Regulatory

• Improved cost efficiency

• Optimised customer service

• Improved back office services

• Asset lifecycle optimisation

• Improving working capital

5


Source: 2009 CIA Factbook

Electricity Production (TWh)

African utilities have similar imperatives

•Meeting demand

•Efficiency of operations

•Ability to collect revenues

efficiently

•Electricity growth and rural

electrification

•New capacity build

•Interconnectivity

•Long term business viability

6


Smart Grid Roadmap A business transformation for both utilities and cu stomers over time – Smart Metering as a foundation

Technology Immaturity

Fault detection

and isolation

Automated thef t

detection

Remote meter conf iguration and updates

Conf igurable intraday data

collection

Two-way communication

networks

Power restoration notif ication

Automated demand

response

Remote connect and disconnect

Real-time power quality

monitoring

Home appliance monitoring and control

Loss-less transmission

Personal energy storage

devices

Fault anticipation

Self -optimizing distribution

Self -healing grid

Fixed one-way communication

networks

Net metering

Manual demand

responseHandheld

data collection

Remote data collection

Legacy Technology AMR

Ope

ratio

nal O

ppor

tuni

ties

supp

ortin

g E

nerg

y E

ffici

enc

y

Automated meter reading

Customer power usage web portal

Enhanced physical

and cyber security

Plug ‘n play generation

devices

Cross regional electric supply and demand management

Pollution-f ree, low-carbon electricity generation

Customizable energy supply

Two-way power f low

AMI/Smart Metering Smart Grid

Direct load control

7


Approaching the “Smart” Journey

Establish the imperative

Design the solution

Develop the solution

Create customer and staff

awareness

Implement the solution

Support the solution and

evolve

Develop the

vision and

strategy for the

smart grid

Develop the

technology

framework and

architecture

Build the

integrated

solution

Create customer

value

proposition

Implement and

roll-out solution

Post

implementation

support

Identify the

business

rationale and

value drivers

Define the

processes

Testing and

assurance

Test marketing

and

implementation

approach

Provide post

implementation

support

Ongoing

solution

evolution

Establish the

programme

Select the

solution

Discovery Blueprint Build Educate Deploy Evolve

8


Process implementation is often tied to a schedule of anticipated, realizable benefits, dictated by a rate case, but other factors should be considered such as capital investment,

technology maturity, and organizational readiness.

Illustrative Deployment Approach

Wave 1 = Core Business Processes

•Consumer education

•Meter Installation

•Load limiting

•Remote Connect / Disconnect

•Interval Consumption

•Billing

Wave 2 = Enhanced Business Processes

•Tariffs (TOU, CPDP)

•Revenue Protection

•Outage Management

Wave x = Further Enhanced Business Processes

•Appliance control

•Incentive schemes/customer participation

•Distribution Automation

•Smart Grid Functions

Process and value based

9


Success is business driven, not only technology driven

Solution Immaturity•Need to “future proof” what’s being implemented, as some components won’t be available until later

Information Management•The value is not resident in the data that is collected and stored. The value is in the manner that the organization translates that data into information that is used to make critical business decisions

Vendor Dependence•With the ever changing landscape of technology vendors in this space, standards must be utilized in solution enablement to insulate the organization from changes introduced by new or disappearing vendors

Stakeholder Ownership•Leaders in the organization must not only embrace and support the program, but also take proactive steps to be advocates throughout the entire organization

Cyber Security•Any small misstep can lead to big perception problems, and impact long-term success

Customer Adaption•Without true customer enablement and engagement, you run the risk of having excellent technical solutions that ultimately deliver no value to utilities or their customers

Regulatory & Public Hurdles• It is imperative to keep

regulators, local government, and intervener groups informed and aligned to avoid issues with support from the public

Process Transformation•The best technical solution will not meet expectations if the internal organization is not equipped with the new and updated business processes to take advantage of what is now available

Strong Program

Management

Solution Immaturity

CustomerAdaption

Regulatory &Public

Hurdles

Process Transformation

StakeholderOwnership

VendorDependence

Information Management

CyberSecurity

Program Management

• At the center of an effective Smart Grid program is a strong and enabled program management organization that drives the program with rigor, effectiveness, and efficiency

10


De-layering the solution

The ‘9 Layers’

By deconstructing the solution into nine constituent layers, the solution is systematically mapped and analysed. This ensures that we get a proper understanding of how an overall solution works and how it could work differently in the future to deliver smart grid strategy strategic objectives. The layers are inter-dependent and must be aligned.

Physical Locations

People

Organisation

Technology

Information

Processes

Product / Services

Channels

Customer SegmentsCustomer Segments

which customers e.g. residential, commercial, industrial

Servicesoffering which services e.g. load control, AMR, TOU

Devices/Vendorsoffering which products eg. Single vendor, multiple vendors

Processessupported by which processese.g. billing, revenue management,

Informationrequiring what information e.g. customer details, network connection

Technologyusing which enabling technologies e.g. Applications, Data, Hardware, cybersecurity

Organisationorganised in which way to delivere.g. customer services, technical services

Peoplerequiring what resources & skills e.g. FTEs, Roles, Costs, Culture

Physical location in which locations e.g. Properties, Costs

Product 2

Product 1

11

Smart Grid Technologies & Energy Efficiency Opportunities

12


Smart Metering Provides a Solid Foundation

(Data + Connectivity + Information = Predictable + Reliable + Secure )

13


Standards based technology integration is critical

14

Defining the Value

15


Smart Grid functions

Each Smart Grid function enables the utility to recognize benefits throughout the enterprise.

Operational

Efficiency

Financial

Risk and

Peak Load

Reduction

Regulatory

Compliance

Grid

Automation

Customer

Service and

Revenue

Improvement

16


Operational Efficiency and Grid Automation opportunities

Smart Grid Components Benefits Key Considerations & Risks

Automated Meter Reading, Configuration and UpdatesRemotely read power consumption, update meter configuration

• Significantly reduce meter reading field service visits and personnel• Eliminate property access issues• Improve billing accuracy and reduce billing costs• Reduce customer service inquiries due to estimated or incorrect bills

• Infrequent field visits may reduce perceived barriers to tampering and theft

• Impacts headcount reductions

Fault Detection and IsolationAutomatically detect power outages and notify field crews of fault location and extent

• Reduce fault isolation time and crew redeployments• Improve customer service due to quicker restoration time• Reduce revenue loss associated with system downtime• Improvements in overall reliability performance metrics (SAIFI, CAIDI, etc.)

• Additional IT integration requirements and ancillary processes (e.g., Geographic Information System information needs to be up to date

Fault Restoration NotificationAutomatically receive meter-level notification of power restoration

• Reduce in-field testing time and crew redeployment due to multiple faults• Reduce revenue loss associated with system down-time• Improvements in overall reliability performance metrics (SAIFI, CAIDI, etc.)

• Modification of existing procedures

Remote Connect/DisconnectRemotely connect or disconnect power to individual residences

• Eliminate field service deployments for connect/disconnect• Enable prepay services• Reduce non-occupant billing complaints• Cost reduction from remote connect/disconnect

• Customer demographics (e.g., geographic density, rate of move in/move out) can impact the benefit

Remote Grid Configuration and Automated SwitchingRemotely or automatically update grid configuration

• Flexibility to manage grid operations• Reduce fault isolation time and crew re-deployments• Improve customer service due to quicker restoration time• Reduce revenue loss associated with system downtime• Improvements in overall reliability performance metrics (SAIFI, CAIDI, etc.)• Provide access to alternative energy supply and distributed generation

• Cyber security becomes a new consideration

• Additional IT and process integration requirements

• Cross-company integration requirements depending upon market model

Real-Time Power Quality MonitoringMonitor power quality throughout the distribution network in real time

• Improve power quality for sensitive customers• Revenue from quality sensitivity • More granular power quality and load monitoring can provide improved

decision-level information• Enable interference/disruption surcharges

• Overall area is relatively immature as a product offering in the industry.

• Discussions for rate pricing, technology requirements, etc., may push out benefit realization.

17


Financial Risk & Peak Load Reduction and Regulatory Compliance opportunities


Intraday Consumption CollectionCollect power consumption data in variable time intervals

• Enable TOU pricing, required by some states’ legislative mandates• Shift financial risk of energy purchase to customers• Improve margins by tying prices to actual power costs• Enable power generation based on consumption patterns, which could

improve the viability of green power options• Enable customer segmentation based on intraday usage patterns;

potentially sell blocks of customers to generators based on this data

• Percentage of customers who adopt TOU rates will depend on regulatory decisions; specifically, whether TOU rates are applied on an opt-in or opt-out basis

Direct Load ControlAutomatically modulate customer loads during critical demand periods

• Reduce consumption and increase network reliability during critical demand periods

• Reduce need for peaking power generation capacity and fuel costs for peak power

• Reduce or defer need for transmission and distribution upgrades• Possibly decrease environmental impact in systems with high-polluting

peaking plants• Improvements in network reliability may justify rate cases

• Customer adoption

Price Responsive Demand Response

Send notifications to customers to enable self-regulation of consumption during peak periods

• Enable customers to respond to dynamic prices and reduce their electric bills

• Reduce consumption and increase network reliability during critical demand periods

• Reduce need for peaking power generation capacity and fuel costs for peak power

• Reduce or defer need for transmission and distribution upgrades• Possibly decrease environmental impact in systems with high-polluting

peaking plants• Significant cost savings from demand response programs with additional

benefits from use of HAN devices

• Customers may not participate in demand response programs

• Technology complexities• Regulatory process

18


Customer service and revenue improvement opportunities


Automated Theft and Tamper DetectionAutomatically detect theft and notify utility of meter tampering

• Identify tampering without field visits• Notify revenue assurance organization of suspect usage patterns• Reduce theft and associated revenue loss• Enable data collection from meters that have not registered with the AMI

head end

• Decreased visibility by field service personnel may reduce perceived barriers to theft and tampering

Net MeteringAccurately account for energy generated by customers and used on the grid

• Improve customer service by allowing customers to put excess energy onto the grid

• Reduce customer complaints through granular net metering • Reduce critical demand requirements• Possibly improve distribution infrastructure due to more accurate

assessment of customer generation

• Percentage of customers who are eligible to participate in net metering may be very small, at least in the near term

Home Appliance MonitoringMonitor the efficiency of in-home appliances

• Improve customer service by notifying customers of appliance efficiency• Possibly sell appliance data to manufacturers

• Maturity of technology, business alignment, and cyber security

Other Customer ServiceProvide more consumption, billing, and efficiency information to customers

• Improve customer service by allowing customers to see their current bill based on to-date/hour/minute consumption via web portal

• Possibly reduce delinquent payments• Provide customer the ability to manage consumption pattern based on price

signals• Improve customer service by providing consumption analysis reporting and

home energy efficiency recommendations to customers

• New business capabilities may be required to build web portal

1Deciding on “Smart” Meters: the Technology Implications of Section 1252 of the EPAct of 2005, EEI, Sept 2006.

19

The Importance of Customer Engagement

20


Importance of Customer Engagement

A majority of customers have never heard of smart metering or smart grid. Therefore, utilities will need to communicate messages in clear, common language; adopting new techniques, channels and incentive schemes to build trust and to explain the value

proposition to consumers in their everyday lives.

Properly understand the unique customer segments in the smart grid program, as well as the appropriate customer touch points

Avoid confusing, unclear and/or contradictory messages to customers about any potential impacts to customers’ utility services

Adequately prepare customer-facing employees with tools and training to deal with customer questions or new processes

Live customer piloting, testing and iterative learning are cornerstones of initiative deployments that can deliver customer trial and retention results.

Develop Consistent

Communications

Employee Enablement

Understand Your Customers

Customer Insights and

Analytics

How do I use it?

What's in this for me?

Who pays? What does it cost me?

Who can see my private

information? Is it safe?

How am I helping the environment?

21


Segmentation Strategy and PlanUtilities can use data to more successfully tailor the program’s approach to meet the needs and expectations of individual customer segments – introducing technologies & solutions to support Energy Efficiency that are targeted to each segment.

07 - Transition Blues

11 - Mature Wealth

14 - Leisure Buffs

13 - Active Elders

01 - Beginnings

02 - Gen X Singles

09 - Modest Means05 - Cash & Careers

10 - Our Turn03 - Taking Hold

12 - Golden Years04 - Gen X Parents

06 - Flush Families08 - Boomer Barons

0%

20%

40%

60%

80%

100%

120%

140%

By adding actual customer usage data, supplied by one of our clients, we see significant variances in usage behavior between segments:

• Overall Volume

•Usage Patterns by Time of Day

01 - Beginnings

• Concerns about security (AIDS, biological terror, drugs, amorality and economic uncertainty)

• Short residential tenure, with low HH incomes and minimal net worth's

• Education, personal and car loans to PC and video games, no-interest checking, night clubbing and active sports.

05 - GenX Parents

• Have younger children in which the mean household age is under 40; underscoring the dramatic ten-year delay in all phases of child bearing,

raising and launching over the last four decades

• Despite differences in income, shopping at The Disney Store and Kids R Us seems to indicate that this group's life stage focuses family resources toward meeting the needs of children.

17 - Modest Means

• Were young adults of draft age during the Viet Nam era

• Single with grandchildren – a fairly high level of divorces and widowing.

• Mostly homeowners, with above-average residential tenures and equity

• Low-mid and lower socio-economic strata with below-average college

education and high indices for clerical white-collar and blue-collar

• Most own only one car, shop discount stores for bargains and seem prone to play the lotteries

21 - Leisure Buffs

• Less than half of the HH income and education of other seniors, but resemble them on several other counts

• Rank among the top ten for residential tenure and enjoy even higher ratios (60-67%) of available-equity-to-home-values

• Advanced mean ages from 70 to 83 years, with mix of widows, health consciousness (many being reliant on Medicare) and fiscal conservatism

Using Data to Understand Customer Segments

22

Risks of Cyber Security

23


Smart Grid Attack Scenarios

Targeted denial of service attacks against other critical infrastructure providers

Can Energy companies detect advanced, persistent threats inside of their environments when legitimate credentials and systems are used by cyber criminals?

Theft of service by manipulating collected energy information

How do we collect data from multiple disparate sources and generate normalized, enriched, and actionable information showing that data manipulation has occurred?

Targeted phishing attacks against key smart grid support personnel

Are internal employees susceptible to sophisticated social engineering attacks that install malicious code on their administrative console workstations?

The creation of a botnet made up of proprietary, intelligent, network devices using a slow spreading worm

Some Smart Meters have been shown to be susceptible to buffer/integer overflow attacks and state machine flaws. Do Energy Companies have the ability to detect and stop worms on the grid?

A rogue insider who sells access to the internal network

Are secondary checks in place to prevent a malicious insider from providing rogue access to smart grid management resources?

The following scenarios are representative of the different types of attacks which are likely to

affect Smart Grid solutions:

24


Risks are Prevalent Across the Smart Grid Zones

25


Conclusions

• Implementing smart metering is about realising value from

operations and delivering customer service excellence.

• As much a journey for the customer as it is for the utility.

• No “one size fits all” solution.

• New emergent risks because of technology enhancements.

• Must be aligned to an overall smart grid strategy.

The Anatomy of a Smart Meter Roll Out and the Development ... · PDF fileSmart Grid Components...

Documents

Transcript of The Anatomy of a Smart Meter Roll Out and the Development ... · PDF fileSmart Grid Components...