1 Value & Risk in the New Energy Era: Rethinking Asset Inv estment DecisionsJune 15, 2017
Value & Risk in the New Energy Era: Rethinking Asset Investment Decisions
June 15, 2017etsinsights.com
2 Value & Risk in the New Energy Era: Rethinking Asset Inv estment DecisionsJune 15, 2017
Agenda
Copperleaf Technologies Presents:Value& Risk in the New Energy Era: Rethinking
Asset Investment Decisions
Zpryme Duke Avista Copperleaf
3 Value & Risk in the New Energy Era: Rethinking Asset Inv estment DecisionsJune 15, 2017
Thought Leaders
Copperleaf TechnologiesBoudewijn NeijensChief Marketing Officer
Duke EnergyAnjuja RatnayakeDirector of Emerging Technology Strategy
Zpryme [Moderator]H. Christine RichardsChief Content Officer &VP of Research
AvistaJon ThompsonSmart Cities and Utilities Enterprise Architect
4 Value & Risk in the New Energy Era: Rethinking Asset Inv estment DecisionsJune 15, 2017
Zpryme
H. Christine RichardsChief Content Officer & VP of Research [Moderator]
5 Value & Risk in the New Energy Era: Rethinking Asset Inv estment DecisionsJune 15, 2017
DERs Will Bring Change to Utilities—Its Already Begun
6 Value & Risk in the New Energy Era: Rethinking Asset Inv estment DecisionsJune 15, 2017
31%have a comprehensive plan for IoT
82%of utilities believe that IoT is an important technology trend
IoT is Bringing Change to Utilities As Well
7 Value & Risk in the New Energy Era: Rethinking Asset Inv estment DecisionsJune 15, 2017
63%believe microgrids compete with traditional utility business model.
think microgrids will reduce utility load in the future.
There Will be Impacts to the Utility Business Model—What’s Next?
Utilities must adapt to changing regulations, maintain the reliability of their infrastructure, and focus on activities that deliver shareholder value—all while investing in new technologies and services to build new revenue streams.
81%
8 Value & Risk in the New Energy Era: Rethinking Asset Inv estment DecisionsJune 15, 2017
Duke Energy
Anuja RatnayakeDirector of Emerging Technology Strategy
This document may be shared with others, but requires attribution that it was created by and remains the property of Duke Energy Corporation
Rethinking Asset Investment Decisions
Anuja Ratnayake
Director, Emerging Technology Strategy
June 14, 2017
© Duke Energy Corporation 2017
This document may be shared with others, but requires attribution that it was created by and remains the property of Duke Energy Corporation
We power 23 million lives
• We’re a regulated energy provider in Indiana, Kentucky, Florida, Ohio, North Carolina and South Carolina: – 7.4 million retail electric customer
accounts – impacting about 23 million lives
– 1.5 million retail natural gas customer accounts
• We also: – Own and operate wind and solar farms
across the U.S., where the power generated is sold to regional utilities
© Duke Energy Corporation 2017
This document may be shared with others, but requires attribution that it was created by and remains the property of Duke Energy Corporation
Leading the way to cleaner, smarter energy solutions that customers value
© Duke Energy Corporation 2017
This document may be shared with others, but requires attribution that it was created by and remains the property of Duke Energy Corporation
Emerging Technology Trends TE
CH
NIC
AL
MA
TU
RIT
Y
1yr 5yrs 10yrs 15+yrs TIME TO BUSINESS IMPACT
DC Systems
Low
NEAR-TERM MID-TERM
Hig
h
LONG-TERM
Distributed Intelligence
Small Modular Reactor
Electric Vehicles
Fuel Cells
Zero Net Energy
Buildings
Solid State
Transformers
Microgen Combined
Heat & Power
Smart City
Low Voltage Power
Electronics
Megawatt scale
Energy Storage
Behind the Meter Energy Storage
Small Scale Distribution Tied Energy
Storage
Carbon Capture, & Storage –Coal, Gas,
Algae
Connected Devices
Intelligent Machines
Cyber Security
Water Treatment
Increased Generation Flexibility
(Coal)
Behavioral Psychology
in P&S
Nano-Grid
Big Data Analytics
Microgrids Advanced Combustion
Advanced Cooling
Size of Sphere = Potential Impact
Transformational High
Moderate Low
© Duke Energy Corporation 2017
This document may be shared with others, but requires attribution that it was created by and remains the property of Duke Energy Corporation
Vertically Integrated Utilities planning must consider value across the system
Will require…
• Granular, long-term view of base forecasts
• Longer-term view of system needs
• Stacking benefits based on functional capabilities of emerging technologies
• Multi-year investment portfolios combining wires and non-wires solutions
© Duke Energy Corporation 2017
15 Value & Risk in the New Energy Era: Rethinking Asset Inv estment DecisionsJune 15, 2017
Avista
Jon ThompsonSmart Cities and Utlities Enterprise Architect
Value and Risk in the New Energy Era | Rethinking Asset Investment DecisionsZypryme ETS Insights Webinar | June 15, 2017
Jon ThompsonSmart Cities and Utilities Enterprise Architect, Avista Utilities
About Avista
Generationo 1861 MW Generation Capabilityo 49% Hydro (8 Plants)o 35% Natural Gaso 9.5% Coalo 4.5% Windo 2% Biomass
Customerso Over 374,000 Retail Electric Customerso Over 336,000 Natural Gas Customers
Transmissiono Over 2,700 miles transmissiono Hourly Average System Load 1000 MW
Distributiono 19,000 miles of electric distribution l ineo 7,700 miles natural gas distribution mainso 160 Electric Substationso 65 Natural Gas Gate Stations
Our Changing Landscape
Investment Challenges
Possible End States for the Grid
Grid as Back-Up Current Path Grid as a Platform Convergence
Value of the Grid
Source: Paul De Martini
Our Journey - Smart Grid Demonstration Project
Energy Storage Project
Shared Energy Economy Project
• Distribution System Platform• Peer-to-Peer Transactive Energy• Building-to-Grid Integration• Microgrid and DER Management• Value Stacking and Optimization• Solar Photovoltaics• Energy Storage• Smart Inverter• Distributed and Edge Analytics• Cyber Resiliency
26 Value & Risk in the New Energy Era: Rethinking Asset Inv estment DecisionsJune 15, 2017
Copperleaf
Boudewijn NeijensChief Marketing Officer
ASSET INVESTMENT DECISIONSBoudewijn Neijens - Copperleaf
Copperleaf Technologies Inc. © 2017 I 28
BUSINESS AS USUAL?
Challenges
• Customer Expectations
• Alternatives
• Uncertainty
• Predictions
• Stakeholders
• Resource Reallocation
Factors
• Consumer & Societal Benefits
• Renewables, Non-wire, Storage
• Economical, Political
• Growth, Technology
• Regulatory, “Broad Prosperity”
• Sustainment vs. Change
Copperleaf Technologies Inc. © 2017 I 29
DECISIONS, DECISIONS…
Optimal– Constrained
– Alternatives
– Scenarios
– Portfolios
DECISIONS
Governance– Transparent
– Defensible
– Auditable
– Approval Cycles
PROCESSES
Value & Risk– Quantifiable
– Comparable
– Inclusive
FRAMEWORKS
ISO 55000– PDCA
– Management System
– Certifiable
STANDARDS
Copperleaf Technologies Inc. © 2017 I 30
ISO 55001 – The Management System
• Value– Assets exist to provide value to the
organization and its stakeholders– Asset management enables realization of
value
• Alignment (“Line of Sight”)– Asset management objectives align with
organizational objectives– Asset management decisions, plans and
activities (technical, financial and operational) collectively enable the achievement of AM objectives
• Leadership– Leadership and culture are determinants of
realization of value
• Assurance– AM gives assurance that assets will fulfill
their required purpose– Assurance is derived from effective
governance, controlled processes and robust management of risks
Copperleaf Technologies Inc. © 2017 I 31
ISO 55001 – The Management System
• Value– Assets exist to provide value to the
organization and its stakeholders– Asset management enables realization of
value
• Alignment (“Line of Sight”)– Asset management objectives align with
organizational objectives– Asset management decisions, plans and
activities (technical, financial and operational) collectively enable the achievement of AM objectives
• Leadership– Leadership and culture are determinants of
realization of value
• Assurance– AM gives assurance that assets will fulfill
their required purpose– Assurance is derived from effective
governance, controlled processes and robust management of risks
Copperleaf Technologies Inc. © 2017 I 32
FRAMEWORK
© The IAM
Copperleaf Technologies Inc. © 2017 I 33
PROCESS
• Remove the emotions– Transparency & defensibility – Collaborative: buy-in
• Add rigor– Involve the right stakeholders– Compare apples to oranges
• The time factor– Whole life approach– Dynamic (re-)evaluation
• Leave nobody & nothing behind– Predict– Capture all ideas & needs
• Governance– Approvals– Repeatable– Auditable
Copperleaf Technologies Inc. © 2017 I 34
DECISIONS
• Data driven– You can’t manage what you can’t measure
• Options/alternatives– One problem, multiple possible solutions
• Scenarios– What-if & sensitivity
• Time-dependent– The cost of not doing, of delaying
• Portfolios– Multiple constraints – not only monetary– Deciding where your resources (should) go
Copperleaf Technologies Inc. © 2017 I 35
ASSET INVESTMENT PLANNING & MANAGEMENT
Copperleaf Technologies Inc. © 2017 I 36
SUMMARY
• Value– Not only cost and risk!– Build a common scale for all value measures– Whole life approach
• Alignment– Value measures must fairly represent
organizational objectives– Ensure all plans & investments are measured
accordingly
• Leadership– Buy-in & consistency– Support from top management– Gradual approach
• Assurance– Transparent, auditable process– Best practices
• Data driven• Dynamic in time• Optioneering• Portfolios & Scenarios
Copperleaf Technologies Inc. © 2017 I 37
• Contact: [email protected]
• White Papers: www.copperleaf.com
• ISO 55000: committee.iso.org/TC251
• Guidelines: www.theiam.org
THANK YOU
38 Value & Risk in the New Energy Era: Rethinking Asset Inv estment DecisionsJune 15, 2017
Thank you for attending. Please share your questions with our thought leaders:
Thank you!
Copperleaf TechnologiesBoudewijn NeijensChief Marketing Officer
Duke EnergyAnjuja RatnayakeDirector of Emerging Technology Strategy
AvistaJon ThompsonSmart Cities and Utilities Enterprise Architect
Zpryme [Moderator]H. Christine RichardsChief Content Officer & VP of Research
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