© copyright ibm corporation 2004 business consulting services automatic meter management the future...
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© Copyright IBM Corporation 2004
Business Consulting Services
Automatic Meter ManagementThe future has already started
Ing. Carlo Maria Drago
European metering workshop
ISPRA, March 7th 2005
2 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
AMM
Alliance The Alliance will offer a complete, integrated, reliable AMM solution
A solution tested and integrated with over 21 million meters, backed by two large leaders in their industries
ENEL and IBM have created an Alliance to offer complete AMM Solutions
3 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
Agenda
Utilities industry challanges
ENEL Telegestore project
How can AMM help tackling these challenges Field Operations
Customer Management
Revenue Protection
Receivables Management
Energy Management
Network Management
AMM Business Case
AMM Likely Evolution
The future can start right now
4 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
AMM will permit Utilities to change their operating model by the end of this decade
Executing customer requests in a few minutes.... Providing customers with precise, actual bills which contain a rich history of
their consumption, with suggestions on how to improve energy efficiency.... Designing bespoke contracts which apply rates in synch with the actual cost
of energy Accepting new customers with just a phone call or an internet message,
without any need of phisical intervention or new meters.... Reducing outages by one order of magnitude... Providing Regulators evidence of service rendered to each customer.... Providing Regulators and Government the evidence of energy saved through
the elimination of frauds, thefts and the smoothing of peak demand...
5 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
AMM permits to create an Intelligent Network that can sense and respond to specific customer service needs
ISO/RTO
DistributionControl Center
Mobile FieldForce
GenerationFleet
TransmissionSubstation
TransmissionSystem
DistributionSubstation
Industrial Customer
ResidentialCustomer
DistributionSystem
“On-Demand”Response
Network Monitoring
AMM
DER
6 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
Agenda
Utilities industry challanges
ENEL Telegestore project
How can AMM help tackling these challenges Field Operations
Customer Management
Revenue Protection
Receivables Management
Energy Management
Network Management
AMM Business Case
AMM Likely Evolution
The future can start right now
7 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
The Telegestore Project at a glance
Key figures
A New Network Linking 30 millions Customers by 2005A New Network Linking 30 millions Customers by 2005
The Most Extensive Two-Way Communication NetworkThe Most Extensive Two-Way Communication Network
Annual savings of € 500 millions from 2006Annual savings of € 500 millions from 2006
Total investments of € 2.1 billions over 5 yearsTotal investments of € 2.1 billions over 5 years
Replacement period of 4 years, 10.000+ people involvedReplacement period of 4 years, 10.000+ people involved
50,000+ units manufactured/day and 40,000+ installed/day50,000+ units manufactured/day and 40,000+ installed/day
8 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
The Telegestore Project – System Architecture
GSM - Traditional Communication
Network
Intranet
PLC 2.5 Kbps half-duplex
MV/LVSubstation
Commercial System (CRM)Centralised Remote Management System
Interface Communication Software
ConcentratorConcentrator
Meters
Data Communication Centre
CTGN-CTGTOperation
center
30 Millions
Total: 14• 2 national • 12 local
350.000
9 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
Data flows between AMM central system and electronic meter
Supply service diagnostic (e.g. energy supply outage, etc.) Load profile in terms of energy consumption and tariff profile Meter self-diagnostic Communication protocol management
Data referring to meter activation and energy supply planning (tariff structure, bill period, contractual energy power, etc.)
Activation/Deactivation of energy supply and modulation of contractual energy power Software update downloading
10 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
Messages and commands from/to customers
Commands to initialize/program contractual parameters
Commands to initialize/synchronize clock/calendar Commands to modulate the power available to the
customer Commands to open/enable manual reclosure of the
circuit breaker Short messages to be visualized on the meter display Commands to activate/deactivate communication to
devices beyond the meter Messages and commands to devices beyond the
meter (domotic devices, external display) Downloading of new software releases or patches
and/or new tariff
Tariff data (energy consumption, load profiles, etc.) Contractual data (tariff structure, subscribed
demand, billing period, etc.) Data on service quality (interruptions, power
outages, voltage variations) Information on meter self diagnostics Information on meter access (SW and HW) Serial number of the meter Signals from appliances self-diagnostics devices
Central Telemetering System Server
Customer Information System
Information received from the central system Information sent to the central system
11 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
Agenda
Utilities industry challanges
ENEL Telegestore project
How can AMM help tackling these challenges Field Operations
Customer Management
Revenue Protection
Receivables Management
Energy Management
Network Management
AMM Business Case
AMM Likely Evolution
The future can start right now
13 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
Utility companies may apply flexible approaches to customer management and charge for real value delivered
00,5
11,5
22,5
3
kW
AMM maps individual load profiles
0
0,5
1
1,5
2
2,5
kW
AMM enables the design of tariffs for optimal energy usage
The meter contains a circuit breaker, which trips off and interrupts supply when the maximum power allowed is reached
The amount of maximum power supplied to each customer is remotely monitored, and can be changed with an electronic command through PLC at any time, from 0 to 15 KW for single phase meters and from 0 to 35 KW for three-phase meters
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
14 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
Regulators will rely on auditable track of service at the single user level to check Utility operations
15 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
An Intelligent network enables:
Real time asset inventory
Real time utilization history and load profile for every part of the distribution infrastructure
Real time availability history and service levels
Real time maintenance interventions history
Support to distributed generation and reliability of power system
and therefore allows the best investment planning
AMM is beneficial for effective Utilities network investment selection...
16 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
AMM may provide massive infrastructural savings in the generation field thanks to its capability of smoothing peak demand
Dec 03
Dec 04Nov 04Oct 04Sep 04Aug 04Jul 04Jun 04May 04Apr 04Mar 04Feb 04Jan 04Dec 03Nov 03Oct 03
Act of law to increase
production
Demand
SupplyCritical periods
ENEL estimates that Italy can spare 2 power plants
of 1000 MW each by shaving off 5% of peak demand for 3 hours 10
days a year
17 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
Electricity losses are a major utility distribution concern and not only in selected countries
Source: World Bank
18 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
Curtailment functionnality 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 2004
IBM Confidential
Milan, November 2nd, 2004
Outages – an always present stream of lost revenue and bad customer service
September 28th, 2003Italy went through a major black-out affecting the whole italian population for many hours
August 14th, 2003was lost 85% of power in New York State
August 28th, 2003A rush-hour power cut has caused major disruption on rail and Tube services in London and the South EastMore than 60% of Tube network and 1800 trains where involved
………………………………….
20 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
Conditions Based Maintenance can cut cost of network availability
AMM will give a full picture of energy flows, with related utilisation rates of every Distribution network assetts
Capacity planning can be designed with detailed knowledge of peak demand by distribution node
Service history will indicate likely points of failure Maintenance can be directed to nodes with tight capacity and haphazard
service track Savings can be very substantial
21 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
Agenda
Utilities industry challanges
ENEL Telegestore project
How can AMM help tackling these challenges Field Operations
Customer Management
Revenue Protection
Receivables Management
Energy Management
Network Management
AMM Business Case
AMM Likely Evolution
The future can start right now
22 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
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
23 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
GenerationGeneration
Demandforecasting
Readiness forDistributedgeneration
Improvedrisk management
Improvedscheduling
Networkoptimisation
Load profiling
Direct accesssettlement
Load profiling
Outage detection
Energy Trading Energy Trading Transmission Transmission
Distribution Distribution
The benefits of an extended AMM solution will be realised across the entire utility value chain
Supply Supply
New energy Management
services
Tightercontrol of debt
ReducedCustomer complaints
Reduced theft
Value-addedservices
Easier “BlackStart”
24 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
The business case for AMM shows multiple areas of savings
Collection
Bad debts
Customer Service
Invoicing Readings Activation/Deactivation
Interventionson failures
Failedaccesses
Replacement
Installationand recovery
Internaltransportation
Purchasing Revision
Warehouses
Checks onmeters
Thefts andfailures
Selfconsumption
Purchasing and logistics
Revenue protection
Field operations
Customer service
25 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
Annual savings
The Enel experience
Purchasing and logistics
Field operations
Revenue protection
Customer service
(1)
(1) Enel calculations and estimates
€ 500 M
26 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
R&D Costs
Product and installation cost of
meter
IT System development
Product and installation cost of
concentrator
€ 2.1Billio
nOther costs
Total investmentsThe Telegestore Project
over 5 years
27 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
Agenda
Utilities industry challanges
ENEL Telegestore project
How can AMM help tackling these challenges Field Operations
Customer Management
Revenue Protection
Receivables Management
Energy Management
Network Management
AMM Business Case
AMM Likely Evolution
The future can start right now
28 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
New 2005 Tariffs for Householders
7 mln7
mlnResidential
No Residential
Low income
4,4 mln4,4 mln
2,8 mln2,8 mln
for Business Customers Bioraria Business < 16,5 kW
2,3 mln UDA
2,3 mln UDA
Bioraria Business BT>16,5kW
0,5 mlnUDA
0,5 mlnUDA
Customers target
29 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
Remote management of bad payers
• August 2004: Test performed in Sardegna
• October-November 2004: Test performed to the clients of Piemonte, Liguria, Campania, Puglia, Basilicata e Calabria in addition to Sardegna
• 1°week December 2004: informed the Regualtory Agency about the outcome of the test performed on 15,000 cutomers for the reduction of the power by remote. Go-ahead received by the Regulatory Agency
• 1°January 2005: Go-ahead of the process for all the customers
2005 Remote Disconnection Estimates
Aprox 1.100.000 disconnection request
(equal to 70% of the total)
2005 Remote Disconnection Estimates
Aprox 1.100.000 disconnection request
(equal to 70% of the total)
30 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
Agenda
Utilities industry challanges
ENEL Telegestore project
How can AMM help tackling these challenges Field Operations
Customer Management
Revenue Protection
Receivables Management
Energy Management
Network Management
AMM Business Case
AMM Likely Evolution
The future can start right now
31 © Copyright IBM Corporation 2004
IBM Confidential
Milan, November 2nd, 2004
The strategic decision that Utilities will need to make …
1. Is this relevant to your business ?
2. Now, later or never
3. Make vs. Buy ?
4. Driven by transformation or technology
5. Who do you want to work with
Our alliance has a proven …• business case• solution installed and working with 17 million users in Italy (700,000
new additions per month)• Experience to implement this successfully
Buy is a better solution for your business …• More business impact with less capital investment• Faster solution implementation and accelerated benefits realisation
Transformation is important …• AMM will transform network management and the way you serve
customers• If you just apply technology you will only realise 20% of the potential
benefits
• Never is not an option – AMM is already a viable solution and is seen as an enabler for liberalisation
• The business case is already proven - later simply means you are postponing sources of funding and new revenue streams
• How can you justify to your customers, the regulator and shareholders that this is not relevant?
Key Questions Our Perspective