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    IBM Research

    Smart Grid: Components and TimingFERC-NARUC Smart Grid Collaborative

    Ron Ambrosio

    Global Research Leader, Energy & Utilities Industry

    Senior Technical Staff Member

    IBM TJ Watson Research Center, Yorktown Heights, NY

    U.S. Dept. of Energy GridWise Architecture Council Chairman

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    IBM Research

    2009 IBM Corporation

    IS THERE AN OBVIOUS SEQUENCE TO GRID DEVELOPMENT?

    What are the key components of a SmartGrid?

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    IBM Research

    2009 IBM Corporation

    Many starting points for smart grids

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    Utility Business FunctionsAsset ManagementEquipment Condition Monitoring

    Real time knowledge of asset health,

    sweat the assets whilst controllingoperating risks

    Increased asset life thru better

    management & maintenance

    Optimize Capital and O&M spending

    Remote management of Sensors/IEDs

    Operations ManagementIntelligent devices, sensors & meters to

    eliminate system "blind spots"

    Faster detection and localization ofoutages

    Better load balancing & maintaining

    stability

    Locate power quality, reliability & fault

    issues before they impact customers

    Workforce Management Reduce frequency and duration of site

    visits through remote monitoring and

    configuration

    Accurate response to outage location &

    cause

    Better prepared & informed crews

    Captures the knowledge of staff

    Planning ManagementAccess to accurate historical operations & asset data

    improves grid planning

    Optimize CAPEX across grid, defer capital

    investments

    Accurate design & sizing of new/ replacement

    equipment to meet demand / growth

    Investment decisions based on customer profile

    Customer Experience Meet Regulator expectations

    More choices about price and service

    Less intrusion

    More information with which to manage

    consumption, cost, and other decisions.

    Information Management Provides a common infrastructure for

    Utility applications & communications

    Access and re-use of common services

    Data inputted one time, re-used many

    times

    Reduced system integration costs

    Reduced operating costs

    Reduced system maintenance costs

    Revenue ManagementIntelligent meter a portal to the consumer

    Profile of customer usage

    Remote connect/disconnect, load control

    Assurance of billing/revenues

    Customer participation in time based

    rates

    An intelligent sensor on the grid

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    IBM Research

    2009 IBM Corporation4

    ASM BresciaIntegrated automatic meters increase service, security and revenue

    Business challenge

    ASM Brescia sought to automate its gas and electricity meter readingprocesses. Sending employees out to read meters manually meant the

    company was slow to collect revenue and it left too much opportunity forutility theft. Automating the process would allow the company to remotelyconnect and disconnect service, more efficiently monitor usage levels andreduce customer service costs.

    Solution

    IBM Business Consulting Services is managing a five-year project to

    install a comprehensive automated meter management (AMM) solution.The project involves integrating more than 200,000 automated electronic

    meters in an end-to-end solution that links the meters directly to ASM

    Brescia's billing and customer service systems, replacing all of ASM

    Brescia's traditional meters by 2006.

    Benefits

    New integrated meters will enable the company to offer highlycustomized, flexible commercial service packages and pricing options

    Improved compliance with network monitoring and optimizationregulations

    Increased service reliability

    Improved fraud/loss management, faster revenue collection

    Improved customer service

    Solution Components Global Business Services

    IBM WebSphere Software

    2007 IBM Corporation

    Intelligent Utility Network

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    IBM Research

    2009 IBM Corporation5

    Business challenge

    DONG Energy is Denmarks largest energy company. Increasing

    marketplace and regulatory demands along with a need for futureinfrastructure reinvestment drove Danish utility company DONG Energy to

    look for a way to better manage and utilize its electrical distribution network

    in order to respond to outages faster and more efficiently.

    Solution

    DONG Energy teamed with IBM to implement an Intelligent Utility Network

    (IUN), installing remote monitoring and control devices that give the

    company an unprecedented amount of information about the current stateof the grid. The new solution also involves extensive analysis of the data

    provided by the remote devices, as well as reengineering of DONG

    Energy's business processes. The IBM designed service-oriented

    architecture (SOA) IT infrastructure to accommodate the new processes. ,

    SOA makes IT processes far more flexible and scalable, improving DONG

    Energy's responsiveness.

    Benefits

    Potential to reduce outage minutes by 25-50 percent

    Fault search time reduced by one-third

    Estimated capital savings on planned grid reinforcements of up to 90percent, when fully implemented

    It turns out that the real

    key isn't the fact that

    we've got visibility into the

    grid, though that was our

    initial goal. It's that we

    now have information

    available on grid

    performance that we

    didn't have before. We

    can do a lot with that

    information. Peter

    Vinter, power grid

    specialist, DONG Energy

    DONG EnergyMaking the most of the intelligent electrical grid

    Solution Components Global Business Services

    IBM Software Group

    IBM Business Partner

    PowerSense

    Intelligent Utility Network

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    IBM Research

    2009 IBM Corporation6

    TernaIncreased reliability and manageability of their telecommunication infrastructure

    Business challenge

    After a major 2003 blackout in Italy, Terna discovered that it had a

    transmission problem that was due to loss of telecommunications signaling inthe leased lines it used to monitor and manage its network. To improve the

    reliability of the network, Terna needed a new and advanced backup system

    to eliminate weak points and a centralized monitoring solution for its 300 field

    stations.

    Solution

    Back-up IP network over power lines supplements superior MPLSfunctionality

    Forward Error Control patch-panel solution with Asset LifecycleManagement

    Joint Cisco-IBM team covering development, implementation andmaintenance

    Benefits

    Improved safety and security across entire nationwide high-voltagenetwork

    New equipment costs at field stations cut by 90 percent

    Low-maintenance costs

    Digital solution will allow central monitoring and control of electrical line

    In the energy sector,many of the technologiesare very old and they arenot open. We spotted theopportunity to create away of dealing with our

    telecommunications thatwould get rid of a closedtechnology a customcomponentand insteadintegrate solutions on anopen standard platform,like the Cisco MPLSnetwork we are nowdeploying.

    Carmine Auletta,CTO, Terna

    Solution Components Global Technology Services

    Intelligent Utility Network

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    IBM Research

    2009 IBM Corporation

    THE SMART GRID MATURITY MODEL

    How some utilit ies are planning their smartgrid roadmaps and investments

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    IBM Research

    2009 IBM Corporation8

    Global Intelligent Utility Network Coalit ion

    COALITION KNOWLEDGE TRANSFER

    Formal knowledge sharing sessions organizedcovering key topics:

    Fault Location

    Automated Metering

    Business Benefits Repository

    Demo Centers

    Advanced collaboration tools enable members topresent and share their expertise

    COALITION DEVELOPMENT PROJECTS

    The Coalition is jointly developing the followingthought leadership projects

    Business Models of the Future

    Embedded & Distributed Generation

    Messaging

    Smart Grid Maturity Model

    Project deliverables and assets will likely be sharedwith industry as appropriate

    - Smart Grid Maturity Model already made available to industry

    MEMBER UPDATE

    Seven leading utilities have joined the coalition: CNP...Q1 07 / USA

    PHI ... Q2 07 / USA

    Sempra Q4 07 / USA

    Country Energy .. Q4 07 / Australia

    Progress Energy .Q2 08 / USA

    DONG Energy .Q2 08 / Denmark

    NDPL Q3 08 / India

    Two final coalition members will join in late2008/early 2009:

    1 SW Europe Q4 08 / Q1 09

    1 China/Japan/Asia Pacific . Q4 08 / Q1 09

    Country

    Energy

    NDPL

    DONG

    Energy

    PHI

    PGNSempra

    CNP

    A TRULY GLOBAL COALITION -- Serving 46mElectric & Natural Gas Consumers

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    9 Copyright APQC 2008. All Rights Reserved

    Why was a Smart Grid Maturity Model Needed?

    A maturity model can move an entire industry forward

    > To establish a shared picture of the Smart Grid journey

    > To communicate the Smart Grid vision, internally and externally

    > To assess current opportunities, choices and desired levels

    > To use as a strategic and decision making framework

    > To develop business, investment and rate cases

    > To build an explicit plan to move from one level to another

    > To measure progress using Key Performance Indicators (KPIs)> To benchmark and learn from others

    It is not a tool for assessing utilities against each other

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    12 Copyright APQC 2008. All Rights Reserved

    3

    Eight smart grid domains and important elements

    Societal andEnvironmental

    Technology

    Information, engineering, integration of

    information and operational technology,

    standards, and business analytics tools

    Conservation and green initiatives,

    sustainability, economics and ability to

    integrate alternative and distributed energy

    People and Technology Domains

    Strategy, Management

    and Regulatory

    Organization

    Vision, planning, decision making,

    strategy execution and discipline,

    regulatory, investment process

    .

    Communications, culture, structure

    Work and Asset

    Management

    Grid Operations

    Value Chain Integration

    Customer Managementand Experience

    Optimizing the assets and resources

    (people and equipment)

    Advanced grid observability & advanced

    grid control, quality and reliability

    Enabling demand and supplymanagement, distributed generation,load management, leveraging market

    opportunities

    Retail, customer care, pricing options and

    control, advanced services and visibility

    into utilization quality, and performance

    Process Domains

    1

    2

    4

    7

    5

    6

    8

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    IBM Research

    2009 IBM Corporation

    THE GRIDWISE ARCHITECTURE COUNCIL

    Decision Makers Interoperability Checklist

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    IBM Research

    2009 IBM Corporation

    Outline of the Checklist document

    Introduction to Interoperability

    An overview of the Checklist and its use

    Four checklist question categories

    Architecture and design

    Interconnectivity and security

    Evolutionary capability and service life Collaborator independence

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    IBM Research

    2009 IBM Corporation

    A few example Checklist questions

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    3) Does the proposal maintain technology neutrality, in that it specifies performance results and outcome

    requirements rather than prescribing a specific technology or method to achieve those results?

    This allows vendors to innovate and compete by developing and improving technologies, which can create

    significant opportunities for new value.

    10) DDoes the device/project use at least the basic cyber-security measures as recommended by the NERCCritical Infrastructure Protection standards? Does the device/project follow industry consortia (e.g.

    UtilityAMI, CEC PCT Reference esign) security and privacy recommendations?

    As grid interconnectivity and interdependence increases, the grid becomes more vulnerable to threats from the

    failure of its information technology nervous system. This means that every element of the grid must

    incorporate cyber-security protections. Privacy protections are necessary to protect users and grid entities

    information and identities.

    12) Can the device be updated or have its functionalities upgraded by downloading new software and

    configuration information?

    A device that lacks built-in intelligence, upgradeability, and connectivity and requires physical modification,

    whether to replace a chip-set or bolt on new equipment, is more difficult and more costly to upgrade and is

    likely to become obsolete and stranded faster.

    14) Does the device or project allow collaborators or users to make independent decisions (within defined

    parameters such as contractual provisions, NAESB wholesale agreements, electric market rules, or tariff)?

    As the complexity of the electricity system grows, most interactions and transactions will require willing,

    consensual partners rather than command-and-control relationships. Therefore, it should allow users and other

    collaborators to modify automatic responses by user over-rides or permissions.

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    IBM Research

    2009 IBM Corporation

    Closing Comments

    There is no single defined path to the smart grid vision

    Where a Utility begins, and how far they go depends on the

    specific situation at that UtilityMany subprojects can be implemented in parallel, but there are

    usually pre-requisite tasks/activities within a subproject

    E.g., Regulatory structure needs to be defined for Demand ResponseAutomation programs (including Plug-In Vehicles, which are a separate,

    special case most likely)

    Tools such as the Smart Grid Maturity Model may

    eventually have wide adoption, and can also be helpful to

    Regulators in understanding how Utilities are planning

    roadmaps and making investment decisions

    The Decision Makers Checklist is another tool for

    Regulators, and the Council wants to work with the

    Regulatory community to improve it and develop of tools17

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    IBM Research

    2009 IBM Corporation

    Contact

    Ron Ambrosio

    Global Research LeaderEnergy & Utilities Industry

    Ron Ambrosio/Watson/IBM@IBMUS

    [email protected]

    +1 914-945-3121

    IBM T.J. Watson Research Center

    P.O. Box 218

    1101 Kitchawan Rd. / Route 134

    Yorktown Heights, NY 10598

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    IBM Research

    2009 IBM Corporation19