127-5-2011

1

Energy & Telco synergies EU Brussels Workshop 27 may 2011 Peter Hermans.peter.hermans@stedin.net

“Food for Thought”

2

1. From an Utility perspective

Point of views

2. From a Utility & Telco comparison perspective

The grid becomes smartSmart means “connected”Connected means Telecommunication needsWhat do we need from Telco’s ?

GridUtilities

Building a SmartGrid

Telco offerings

Managing UtilitiesNetworks & Services

Managing TelcoNetworks & Services

Comparison• What can we learn• What can we re-use• How do we work together

Telco needs

Managing Telco networks & servicesManaging Utility networks & servicesWhat can we learn from each otherWhat can we re-use ?

3

Application issues

Understand what will happen to the business ofthe Utility Industry

Comparison with the Telco Industry Opportunities to learn & cooperate

What are the issues

4

Reaching the 5x20 targets

20% energy from renewable sources20% less CO2 emissions;20% higher efficiency;in 2020

Europe’s electricity markets and networks must evolve to meet new challenges

Market competition & consolidationClimate change related legislation Introduction renewable variable energy resourcesTransition to Demand/Response to Consumer Energy Management

Control by ConsumerUtility

Gartner

Time of use

Flat

Realtime

Demand Supply

Demand Response

Consumer Energy Management

2008

2020

Energy transition as context The ability to change will be key

5

Changing Business Characteristics A disruptive business transformation ahead

Energy flow

Grid

Parties

Role of customer

Portfolio E-supplier

End user Price

Risk at

Margin based on

Forecasting

Unidirectional

Few to Many, hierarchical

Consumers, Producers Suppliers, Markets, DSO & TSO

Energy Consumption

Energy Supply, TradeCustomer care & Billing

Fixed , fuel based

Supplier

Revenue- Energy costs- internal costs

Relevant for supplier

Bidirectional

Many to many, mazed

Consumers, Producers,Prosumers, Broker, MarketsDSO & TSO

Consumption, Production, Storage

Risk management, Balancing,Settlement, Trade, Customer Care & Billing, Asset management, Advisory

Volatile, weather based

Prosumer, Broker

Balancing/Risk management, Transaction based margin

Relevant for Prosumer & Broker

Today Tomorrow

6

Customer Relation

Consumer ProsumerSupplier Energy Services Provider

Portfolio

E transaction servicesBalance & risk management servicesWholes sale settlement servicesEnd user settlement servicesCustomer care & billing servicesAdvisory & investment servicesAsset management services

Supplier DSO

Customer Relation

Intensified market analysis required for adequate network & asset planning Intensified customer relation related to energy forecasting and maintaining system integrity Handling customer data (smart meters)

Portfolio (additional)Decentralized balance &

congestion managementStorage (peak shaving)Financial services

The changing customer relation & portfolio Becoming part of the system

7

Consumer SupplierWholesaleMarkets

GridOperator

Today

• EnergyConsumption

• Energy supply• End-user Customer

Care & Billing• Energy forecasting

& planning• Bulk Energy

Generation• Energy trade• Balance

management• Wholesale settlement

• Energy Trade• WS settlement

• Grid capacityforecasting &planning

• Energy transport

• Balance management

• Allocation• Reconciliation• Asset

management

Note 1:PhysicalVirtual

Prosumer

Tomorrow

• EnergyConsumption

• Energy Production• Energy Storage• Energy Management• Prosumer Asset

management

• End-user Customer Care & Billing

• Energy forecasting & planning

• Agregator• Energy trade• Balance

management• Wholesale

settlement

• Energy Trade• Whole-sale

settlement

• Grid capacityforecasting &planning

• Energy transport

• Energy storage• Balance

management• Allocation• Asset

management

• Intra end user settlement

• Energy forecasting & planning

• Energy buy/sell• Community Energy

management• Wholesale

settlement

Note 1

ProsumerCommunity

E-ServiceProvider

GridOperator

WholesaleMarkets

BulkGeneration

• Energy generation

• Whole-salesettlement

• Asset management

The Value Chain perspective

8

Prosumer

Tomorrow

• EnergyConsumption

• Energy Production• Energy Storage

• Energy Management• Prosumer Asset

management

• End-user Customer Care & Billing

• Energy forecasting & planning

• Agregator• Energy trade

• Balance management

• Wholesalesettlement

• Energy Trade• Whole-sale

settlement

• Grid capacityforecasting &

planning• Energy transport

• Energy storage• Balance management• Allocation

• Asset management

• Intra end user settlement

• Energy forecasting & planning

• Energy buy/sell• Community Energy

management• Wholesale

settlement

Note 1:PhysicalVirtual

Note 1

ProsumerCommunity

E-ServiceProvider

GridOperator

WholesaleMarkets

BulkGeneration

• Energy generation

• Whole-salesettlement• Asset

management

Extended Energy Services Provider

The Utility of theFuture is an Information

Utility !

Opportunities for the Industry IT as business enabler will make the difference

9

An Architectural Reference Framework and Standards are needed

Level 0

Level 3

Level 2

Level 1

Equipment & appliances

ProsumerEnergy Management

CommunityEnergy

Management

Service Provider Energy

Management

Liquid Energy Markets(Wholesale)

Grid endpoint management(Smart Meter)

Intelligent Transport & Distribution Grid

Management& Grid Asset Management

Grid

Regulated domainFree Market domain

Intelligent EnergyFlow

Management

example

Why:To manage complexity

To maintain system integrity

To ensure market model alignment

To ensure the creation of consistent legislation

To develop consistent applications/services

To enable innovation

10

Standardization

NIST Special Publication 1108 NIST Framework and Roadmap for

Smart Grid Interoperability Standards, Release 1.0

Office of the National Coordinator for Smart Grid Interoperability

Vision & Ambition

ReferenceFramework

Legislation Standards

Business change

Technologycapabilities

Societal behaviourchange

11

Utility & Telco comparison: Opportunities to learn & cooperate

Telecommunications Utilities

Legislation Open Network Provisioning Unbundling

Service providers & Network Operators Supliers, DSO,TSO, System Operator

Focus on fair competition Focus on fair competion & 202020 targets

Business model disruption: Transformation to internet

Business model disruption: Transformation to decentral production & E storage

Customer role: Provides & uses services Customer role: Producer & consumer of energy (prosumer)

Products:IT defined products (eg Mobile bundles) Products: IT defined, flexible pricing (Demand/Response)

Charging,billing& settlement: realtime To come ( E-mobility)

Roaming services To come ( E-mobility)

Services independent of networks Energy usage independent of grid connectionIP based networks; intelligence (services) outside the network Decentralized production (renewables)

Element management Asset managementNetwork management Grid managementService management Energy flow management

No centralized control on service providing & usage Centralized control required for garanteeing system integrity & security of supply

Reference models TMN NIST US (emerging)

eTom reference model ?

Standards Organisations TMF/ETSI/CCITT CEN Cenelec, NIST (US)

PDH:Technology designed from a element perspective Current technology

SDH: technology desigend from a network perspective Future smart grid technology

Datavolume Itemnized billing Smart metering

Company culture Competative Competative - 10 years

Business

Key Concepts

Technology

12

To summarize : Application Issues

Markets/Customers

Products/Services

Processes

Data

Functionality/ application services

Infrastructureservices

Investigation of posible collaboration between Utilities & Telco’s should start from a business perspective (outside in):Markets/Customers Products/services Processes Data

functionality/ Applications Infrastructure services

From an IT point of view there is a lot of synergie between Telco and Utilities and potential for cooperation; In order to initiate actual collaboration & innovation, however, business synergies should be created

Telco- Utility cooperation could be different for DSO & suppliers:For a DSO a Telco could be a supplier or partner (public private cooperation)For a Energy Supplier a Telco could be a supplier, partner or competitor (Gartner 2009: The Utility of the Future is an information Utility !)

The Utility sector at least requires a reference model/frameworkdriving standardization and (accompanying) consistent legislation Re-use of models from the Telco space has potential: Proces models, Common Information Model. Interaction patterns defined from roles in the reference model should drive the standardisation of application services. The EU should drive this (Task Force Smart Grid)

13

Infrastructure issues

1. Is the communication infrastructure, required for smart grid management, part of the smart grid, or do we regard it as a service that can be obtained from the liberalized market ?

What was the rationale of unbundling?What level of control, nations want to have over their Energy InfrastructureHow strong is the impact of communication outages on system integrity & security of supply ?Do we agree that communications is the core business of a Telco and not of an Utility ?

2. Both suppliers as DSO’s will require “last mile connectivity” (smart metering from DSO perspective, consumer energy management services from an supplier perspective)

Will this lead to silo approach ?Opportunity for Telco’ s ?

3. How do we enable public/ private cooperation ?

Public ownership/ privately operated ?Cooperation on standards : CEN/CENELEC/ETSI a.o. ?

Supplier DSO

Centralized

Decentral(Customer location)

Smart meter(E)P1

P3

P3

CTS

P1

Production

Usage

StorageConsumerEnergyManagement

Billing & Settlement

Forecasting, Trading & Production control

CRM

MDR P4

Grid

IP network

(Regulated market)(Liberalized market)

P2(G)

Smart Metering Architecture

network

14

Background material

See:- Next slides- Attached article- Presentation on www.trendsinenergy2010.nl

15

Peter Hermans

Peter Hermans:

Started in 1983 in the Telecom sector in the Netherlands.

Worked on IT strategy & systems development for Network Management of Digital Networks, CRM & Billing, Internet Services Delivery, Enterprise Architecture and Integration (SOA).Joined the Eneco group in 2007, where since then, he initiated company change programme’ s on several business- IT strategic issues, related to unbundling, smart metering, smart grids & regulatory requirements, including the set up of Eneco’s Enterprise Architecture, Application Portfolio, and Roadmaps.

MSc degree on Telecommunications, a CMC degree on change management, (ICMCI); 54 years old

Introduction

Stedin & Eneco

Stedin’s (DSO) Ambition: Total Grid Operator

• Distribution System Operator• E and G• > 2 Mio Customers• Contribution to sustainable

energy supply• Providing extra value for our

clients • Participation, financing,

management and exploitation of transport infrastructure, for the benefit of independent transport of energy and energy related products

Eneco’s (Supplier) Vision/Strategy

• Sustainable, Decentral, With customers

• Consumer becomes Energy Producer

• 100% Energy Supply from renewable sources in 2030

16

• to bring together utilities and telecom companies in order:

• to create a favourable business, regulatory, and technological environment for a low carbon electricity grid,

• to influence the policy making process,

• to clarify which data could be transmitted in Smart Grids via existing (and future) telecom network infrastructures and which data might need to have a dedicated connection/network for the purpose.

Objectives of the Workshop

17

The challenges of standardization

Global• IEC tech. committees coordinated by

Strategic Group 3 Smart Grids

• Strong link with US (e.g. NIST, UCAIug)

• Also IEEE, ITU, ISO, etc.

EU• EC Directives

• EC Smart Grids Task Force

• Standardisation mandates for CEN, CENELEC and ETSI• Smart Metering• Smart Grids• Electric Mobility

US• NIST pushes hard on standards

development and stakeholders.

• Conceptual framework Smart Grids

• Standards gaps identified (as did many other groups)

NL• EZ Taskforce

• Intelligente Netten

• Proeftuinen

• Stroomopwaarts

• NTA8130

(Smart meters)

US: is moving fast, Europe is behind

EU: needs to orchestrate the initiatives

NL: are our Market Models future proof ?

Dutch sector: Are we connected to the initiatives ?

18

NIST has identified five families of foundational standards as ready for consideration by

regulators. Developed by the International Electrotechnical Commission (lEC), these identified

consensus standards are:

• IEC 61970 and IEC 61968: Provide a Common Information Model (CIM) necessary for

exchanges of data between devices and networks, primarily in the transmission (lEC61970) and distribution (lEC 61968) domains.

• lEC 61850: Facilitates substation automation and communication as well as interoperability through a common data format.

• IEC 60870-6: Facilitates exchanges of information between control centers.

• IEC 62351: Addresses the cybersecurity of the communication protocols defined by the preceding IEC standards.

NIST

1919

E TOM reference model

20

Customer Management

CPLM Billing

Energy Management

Asset Management

Enterprise Management

End user delivery B2B, Retail Installation companies

Energy Trade

Energy Generation

Infra (Engineering, construction & maintenance)

End user

Local renewablegeneration

Delivery

Commercialdistribution

Fysical distribution

Centralised renewablegeneration

Biofuelwind, solar

Business focus

FunctionFocus

Transport (Grid Operations)

1)

Commercial domain

Commercial domain

Public domain

1) Customer & Product Lifecycle Management

Architecture modelling Defining the landscape…

21

Delivery

Trade

Generation

Transport

Infra

Electricity, Gas, Heat, CO2Metering (BM)Consumer energy installations

Sourcing, Trade E,G,WShipper, PV role

E,W GenerationWkk/ Wkk-controlEnergy storage

Transport E,G,W

Infrastructure maintenance & operations

Information Architecture Business roles/portfolio

22

CPLM Billing Energy Management

Asset Management

Enterprise Management

CRMMarketing & SalesProduct ManagementContract &Order management

EDMBalancingPortfolio/position manAl/Recon

Planning & designAsset operations & maintenance

Business planning & controlHRM & FinanceOrg./ Processes /systems

Information Architecture Functions