ontario smart grid opportunities in the electrical utility sector - mars market insights
DESCRIPTION
To become smart grid leaders, Ontario needs to effect a transformation in a risk-averse environment. To do so, the province needs not only to advance its electricity infrastructure but also embrace a long-term and global vision. This breakfast panel brings together diverse energy-sector stakeholders, including utilities, key industry players, government authorities, regulatory bodies and innovators. Does an opportunity exist for Ontario utilities that implement intelligent operations to leverage that expertise into other markets? Can synergy between innovation and the electricity sector be created to support these practices? How much are we open to change? http://www.marsdd.com/events/details/ontario-smart-grid-opportunities-electrical-utility-sector/TRANSCRIPT
Ontario Smart Grid Opportunities in the Electrical Utility Sector: Getting out from Behind the Meter Brian Warshay – Research Associate Lux Research, Inc.
January 25, 2012
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Lux Research
Svalbard Global Seed Vault, Norway
Suntech solar factory, China
Qatar Science and Technology
Park
! We focus on emerging technologies in the chemical, material, and cleantech sectors
! We interview and evaluate emerging technology companies
! Support Technology Monitoring and Market Intelligence
! We have 12 practices in:
! Smart Grid & Grid Storage
! Electric Vehicles & Alternative Fuels
! Solar Components & Solar Systems
! Bio-‐based Chemicals & Materials
! Green Buildings
! Water, and others…
! Offices in New York, Boston, Singapore, Tokyo, and Amsterdam with ~70 employees:
! 67% scientists, 33% business analysts
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Lux Smart Grid Intelligence – Key issues addressed
! Smart Grid & Grid Support • How will utilities implement advanced metering
infrastructure? • Is there a viable business model for demand response? • How can network security be maintained on the power grid? • How will utilities deal with grid-‐connected vehicle charging?
! Grid Storage • Which technologies fit which applications? • Where on the grid will grid storage be located? • How will storage integrate with renewable energy and other
grid applications? ! Fuel Cells
• Which fuel cell technologies are most cost effective? • For which applications are fuel cells most viable?
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Global Regulatory and Investment Overview
! What is driving smart grid technology adoption? ! Why are smart grid technologies important to utilities? ! Where is the investment? ! How do regulations incentivize or constrain the market ! How is Ontario doing?
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U"lity back-‐office Distribu"on network End-‐user
The Smart Grid
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Smart Grid 1.0 giving way to Smart Grid 2.0
Smart Grid Device Sales
Data Rates
Source: Lux Research
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Smart grid tools and data benefit utilities
Smart Grid Tool Data Quan"ty Data Value Benefit to U"li"es
Smart meters High Low Reduced monitoring costs; point-‐of-‐use monitoring
Demand management & response High Medium Peak shaving
Voltage & VAR OpKmizaKon High Medium Peak shaving; higher efficiency
Fault detecKon, isolaKon, & repair Low High Improved reliability & safety
Sensors High Low Improved monitoring
Grid storage Medium Medium Dispatchable renewable energy; outage buffer
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Smart Grid 2.0’s thirst for data drives adoption
Source: Lux Research
Global Utility Investment
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Investment and acquisitions in Smart Grid
Investments in 2010 & 2011 by Technology
Source: Lux Research Data through June 30, 2011
M&A in 2010 & 2011 by Technology
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Policies directly and indirectly drive adoption…
Policy Approach Region(s)
Incen"ves & Mandates
Smart meter mandates and grants Direct European Union (EU) & USA
IncenKves for distributed generaKon Direct Global
Market Restructuring
Time-‐of-‐use electricity pricing Direct Global
Pay-‐for-‐performance Direct USA
Feed-‐in-‐tariffs and net-‐metering Direct Global
Redefining as asset class for energy storage Direct USA (California)
Renewable energy credits Indirect USA
Renewable porVolio standards Indirect Global
Carbon Management & Security
Emission regulaKons Indirect Most developed naKons
ReKrement of fossil/nuclear power plants Indirect USA, Europe, Japan Source: Lux Research
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…while politics constrain progress
Policy Resul"ng constraint Region(s)
Regulatory uncertainty Direct USA
Cross-‐border interconnecKon permiYng and funding
Direct North America; EU
Short-‐term investment perspecKve Direct USA
Disconnect between smart grid beneficiaries an investors
Direct Deregulated uKlity markets
UKliKes are highly regulated Indirect Global
Lack of standards for interconnecKon Indirect Global
Status quo inerKa Indirect Global
Source: Lux Research
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Grid Smarts in Ontario
! Regulatory and Infrastructure Support • 2.6% of Ontario’s electricity is from wind, a 40% increase • Ontario has a Feed-‐in-‐Tariff for renewable energy projects • Ontario has time-‐of-‐use rates and 500 MW of demand response • Nearly 100% of Ontario’s meters are smart
! Demonstration Projects • Energate pilot allowed customers to control and monitor energy
consumption along with consumer-‐connected demand response • Enbala’s projects in North America pave the way for frequency
regulation
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Summary and outlook
! What is driving smart grid technology adoption? • Though smart meters will lay the smart grid foundation, it is the resulting
influx of data that will drive new markets
! Why are smart grid technologies important to utilities? • Smart grid technologies align with the goals of utilities to improve reliability,
safety, and reduce costs
! Where is the investment? • Although later stage private investment and M&A continue to streamline the
market, government funding will remain imperative for adoption
! How do regulations incentivize or constrain the market? • While regulations indirectly and directly drive adoption, antiquated
regulatory frameworks are slow to adapt new infrastructure
! How is Ontario doing? • Ontario is equipped with the technology and infrastructure to rapidly expand
its smart grid capabilities, but regulatory guidance will need to remain flexible and adaptable to meet the goals in the Long-‐Term Energy Plan
Thank You
Brian Warshay Research Associate +1 (917)484-‐4872
[email protected] www.luxresearchinc.com
Market Potential for Smart Grid in Canada MaRS Market Insights
Alex Bettencourt Managing Director
Our Mission
SmartGrid Canada is a national association of public and private organizations including utilities, vendors, technology and service providers, academics and other industry leaders.
Together, the members of SmartGrid Canada are united by a passion and dedication to building a more innovative, reliable and cost-effective electricity delivery system for the benefit of all Canadians.
SmartGrid Canada Membership U
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Serv
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&
Tech
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Aca
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Smart Grid Canada is a national association of public and private organizations including utilities, vendors, technology and service providers, academics and other industry leaders.
Together, the members of Smart Grid Canada are united by a passion and dedication to building a more innovative, reliable and cost-effective electricity delivery system for the benefit of all Canadians.
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6 reasons why smart grid is important to Canadians & the economy
A Smart Grid is essential to Canadian economic prosperity.
Over 60% of our GDP now comes from industries and services that run on electricity; in 1950, the figure was only 20%. Since 1980, over 85% of energy growth has been supplied by electricity.
Manhattan Institute: The Million-Volt Answer to Oil
Our infrastructure is aging – as we upgrade it we should be looking forward.
Conservation is the cheapest way to accommodate load growth.
A clean economy requires renewable energy, which in turn, requires a smart grid.
Outages cost money – smart grid can improve reliability.
Power outages and interruptions cost Americans at least $150 billion each year - about $500 for every man, woman and child.
DOE, The Smart Grid: an Introduction
Smart grid sets the foundation for future technology – electric vehicles, etc.
Key Areas of Competitive Advantage 1. Time of Use Rates
2. Sustainable Remote Communities
3. Renewable Integration on Distribution System
Time of Use Rates
CALIFORNIA
ONTARIO
Good Consumer Collaboration & Communication
Mass Implementation
Time-of-Use Rates
Telecom Over Rugged Terrain
Opportunities for Smart & Sustainable Communities
CANADA FACTS
• Population 34 million • Population Density Rank 230th
Canada has over 300 remote communities with a total population of 200,000 – mostly on diesel.
Opportunity for Canada to reduce its own cost of powering these communities while solving the problems and selling to the developing world.
Community Energy Management Hydrokinetic Turbine
Sustainable Remote Power Projects
Hydrogen Assisted Renewable Power Wind-Diesel Storage
Coming Generation Gap
Significant resource gap that will need to be filled over the coming 10 years
Distributed Renewable Generation
Ontario has the some of the highest penetration of renewable generation on its distribution system (up to 10MW/connection)
Voltage Regulation
Energy Storage
Energy Management
Market Innovation
Protections & Control
National Technology Road Map
The First Era: 1850 to 2000
Closing Thoughts
Founded on Growth
The Second Era: 2000 to ….
Closing Thoughts
Founded on Sustainment
MaRS Market Insights
For more information, contact:
Alex Bettencourt Managing Director SmartGrid Canada [email protected]
SmartGrid Canada www.sgcanada.org
“Implemen"ng Smart Grid ……….. U"lity Best Prac"ce”
Presented to MaRS Insight Panel
January 25, 2012
By: John Mulrooney
What is Best Prac"ce ??
A Best Prac"ce is a method or technique that has consistently shown results superior to those achieved with other means, and that is used as a benchmark.
Best Prac"ce come from experience.
Ontario LDCs
Years of Experience developing U"lity Best Prac"ce Planning
Engineering
Capital and OM&A Management
OperaKons
Best Judge of Utility Best Practice
Slide 40
At the end of the day, there is only one judge of Best Practice for the LDC
Our Regulator …….The OEB
Smart Grid Overarching “Must Haves”
1. Smart Grid IniKaKves must benefit the Customer. 2. Smart Grid IniKaKves get no “free ride”. I will explain….
Best Prac"ce To Iden"fy SG Ini"a"ves
1. “Best PracKce” starts with Smart Grid strategy and mulK year Smart Grid capital plan Ked to the corporate vision and approved by the Board of Directors. No different to what LDCs having been doing in the past.
2. Each Smart Grid IniKaKve must make business sense and benefit the
customer (I.e. Benefit:Cost raKo greater than one). This is where the prudence of the iniKaKve is checked. ExcepKons: pilot or demonstraKon projects where these iniKaKves are jusKfied on their longer term potenKal benefit to the customer.
3. “ Best PracKce “ involves collaboraKon with other industry stakeholders
taking advantage of the experience of others to determine technical feasibility and benefits.
Priori"zing SG Ini"a"ves
In any capital budget, there is usually more demand for capital funding than capital dollars available.
Smart Grid IniKaKves should undergo the same rigor as
every other corporate iniKaKve in compeKng for capital funding.
Priori"zing SG Ini"a"ves (con"nued)
1. The SG IniKaKve has already passed the prudence test (part of idenKfying SG iniKaKves).
2. SG IniKaKves are evaluated with other capital iniKaKves
based on their raKng of benefit and risk to the corporaKons overall corporate objecKves.
Not All Smart Grid Technology Is Smart
With enough horsepower, even a rock can fly……..but…
MINISTRY OF ENERGY
Smart Grid in Ontario
MaRS Discovery District Smart Grid Seminar
January 25, 2012
MINISTRY OF ENERGY
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A Smart Grid is a Modern Electricity System
Telecom Network - Phone - Internet - Smart Meter
communication infrastructure
Intelligence/Communications Layer
Conventional Grid SMA
RT
GR
ID
Status / Control
Status / Control
Status / Control
Diagram source: EPRI
Diagram source: EPRI
Conventional grid interoperates with smart grid intelligence through enhanced devices: - Smart meters - Auto Switches - Intelligent Transformers
MINISTRY OF ENERGY
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Smart Grid is Global
• Grid modernization is being driven by aging infrastructures, growing energy demands, and the availability of new technologies that enable 2-‐way communications and control.
• Drivers change with time. The smart grid is a “journey” rather than a “destination”.
“smart grid technology …is the equivalent of the internet for electricity. It is the thing that brings our plans all together, that makes it all possible and will deliver a genuinely low carbon world” Prime Minister David Cameron (UK) “the energy Internet is what happens when…the information revolution meets the energy technology revolution…the breakthrough platform in which innovation is going to happen and will be built” Tom Friedman, author, “Hot, Flat, and Crowded” “… updating the way we get our electricity by starting to build a new smart grid that will save us money, protect our power sources from blackout or attack, and deliver clean, alternative forms of energy to every corner of our nation ” President Barack Obama
MINISTRY OF ENERGY
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Ontario as a Smart Grid Leader
• Ontario is a leading jurisdiction on smart grid, leveraging IT, communications technology, and automation to move toward Grid 2.0
• Smart grid in Ontario is driven by a need to:
• Modernize Old Infrastructure – Move toward a cleaner, greener and more efficient grid, while ensuring
reliability and safety.
• Maximize Existing Assets – Use existing assets to their full potential, by using them smarter
• Lay the Foundation for Smart Homes – Enable conservation and active participation of energy consumers – Accommodate future innovations for energy generation, storage and
management.
MINISTRY OF ENERGY
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Key Drivers for Smart Grid
• Key Drivers for Smart Grid in Ontario:
1. Aggressive integration of renewable distributed generation
2. One of North America’s most ambitious conservation targets
3. One of the largest smart meter (1st in North America) and time of use pricing (1st in world to have mandatory) rollouts globally
4. Advanced automotive sector and efforts to accelerate electric vehicle adoption
5. Strength in manufacturing, research, and utility sectors
• Key Success Factors:
• Feed-‐in-‐Tariff
• Green Energy Act
• Engaged Customers
• Engaged Leadership
• Leading Utilities
MINISTRY OF ENERGY
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• Modernize outdated meter infrastructure
• Enable time-of-use pricing and conservation
• Provide basis for smart grid / smart homes
Ø Gives customers ability to move discretionary
load to cheaper hours. Ø Reduces long-term cost of electricity supply Ø Increases awareness of consumption
What do Smart Meters do?
Benefits to Consumers: Ø Facilitates conservation and demand
management programs Ø Accurate meter reads (no more estimates) Ø Timely information to help manage
consumption Ø Better customer service (e.g. outages
automatically known)
Benefits to the Electricity System: Ø Reduces the number of LDC field visits
to read and service meters Ø Reduces tampering and theft of
electricity Ø Significant operational benefits (better
outage management and system visibility)
Ø Environmental benefits as a result of
load shifting Ø Savings in avoided/ deferred capacity
investments (new generation and transmission)
Smart Meter Benefits
TOU Benefits
Progress:
4.7 million deployment complete
> 3.4 million
expected to be completed by Summer 2012
Leadership on Smart Meters
MINISTRY OF ENERGY
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A Framework for Smart Grid
The Green Energy Act established what a smart grid should do for Ontario.
Power System Flexibility Enable more renewables and better
efficiency in grid operation
Adaptive Infrastructure Encourage more innovation and
ensure adaptivness to future conditions (e.g. electric vehicles)
Customer Control Enable more conservation through
a shift to smarter homes
• Mobile charging infrastructure to support EVs • Storage opportunities • Enabling innovative technologies
More Innovation
• Customer based micro-generation • More distributed generation, used more efficiently
(i.e. less transmission investment)
Cleaner supply and lower costs
• Smart meters • Time-of-use rates • Home Energy Management • Load control
More Conservation
Expected Outcomes Focus Area
MINISTRY OF ENERGY
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Smart Grid Initiatives
Smart Grid Implementation: • Hydro One Smart Zone (integrating DG) • Toronto Hydro Smart Zone (reliability and control) • Burlington SmartCity, Powerstream, Veridian and other pilots/asset management • Industry pilots, such as Better Place EV charging infrastructure • Industry ramp-‐up, such as GE Grid IQ Innovation Centre, and much more.
Industry engagement • Ontario Energy Board working group on Smart Grid • Outreach to Small and Medium size businesses (MEDI) • Discussions with ICT sector and broader smart grid component industries. • Ontario Economic Opportunities in Energy (OE2)
Funding • Smart Grid Fund: $50 million supporting companies building the smart grid industry
MINISTRY OF ENERGY
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Ontario Economic Opportunities in Energy
• OE2 Advisory Group – A look at Ontario’s strengths and economic opportunities
Focus Examples
Global Drivers and Trends Global Market Size; Top Global Players
Ontario’s Private Sector Top Ontario-‐based Companies; Strengths and Gaps
Ontario’s Research Strengths Universities and Colleges; Partnership Projects
Role of Ontario Utilities Investment opportunities and patterns
Programs and Funding Private and Public Sector funds
Ontario’s Regulatory Framework Utility cost recovery; Regulatory and other instruments
Cluster analysis Global comparison; networks of energy hubs
MINISTRY OF ENERGY
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The Opportunity
♦ Projected worldwide smart grid investments: $200 billion from 2008 to 2015.
♦ By 2014, the annual global market potential for smart grid equipment manufacturers and solutions providers will be $15 to $31 billion.(McKinsey, 2010)
♦ The Smart Grid Forum estimates that Ontario will invest $390 million per year over 5 years on Smart Grid projects.
MINISTRY OF ENERGY
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Thank you.
Jon Norman Director – Transmission and Distribution Policy
Ontario Ministry of Energy
Phone: 416-‐326-‐1759 Email: [email protected]
MINISTRY OF ENERGY
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EFFICIENCY • Make the grid more efficient and cost-‐effective
through control and automation, visibility.
COORDINATION • Coordinate activities of multiple LDCs and
encourage partnerships.
INTEROPERABILITY • Ensure information exchange between systems
through use of standards and partnerships.
ECONOMIC DEVELOPMENT • Encourage economic growth and job creation
within the province of Ontario.
ENVIRONMENTAL BENEFITS • Promote green technologies to reduce
environmental footprint.
CUSTOMER VALUE • Provide benefits to electricity customers such as
access, participation, visibility, and choice.
SECURITY • Protect against unauthorized or malicious
attacks to the grid.
PRIVACY • Integrate privacy requirements into smart grid
planning and design. Privacy-‐by-‐design.
SAFETY • Ensure health and safety and improve it
wherever practical.
RELIABILITY • Maintain reliability and improve it wherever
practical through flexibility, innovation and forward compatibility.
Smart Grid Principles
MINISTRY OF ENERGY
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Smart Grid Objectives
CUSTOMER CONTROL Conservation through
smarter buildings
POWER SYSTEM FLEXIBILITY Enable renewables and better efficiency in grid operation
ADAPTIVE INFRASTRUCTURE More innovation and adaptive
to future conditions
• Access • Visibility • Control • Participation In Renewable Generation
• Customer Choice • Education
• Distributed Renewable Generation
• Visibility • Control And Automation • Quality
• Flexibility • Forward Compatibility • Encourage Innovation • Maintain Pulse On Innovation