tantalus presents: 2015 municipal smart grid report...3 2015 municipal smart grid report | september...

1 2015 Municipal Smart Grid Report | September 2015 etsinsights.com | tantalus.com

Tantalus Presents:

2015 Municipal Smart Grid Report September 2015 Analysis Zpryme

CONFIDENTIAL AND PROPRIETARY

© 2015 Zpryme Research & Consulting, LLC


Table of Contents

• Executive Summary 3

• Methodology 4

• Key Findings 5

• Consumer Trends by Technology 7

• 2015 Survey Results 9

• Survey Basics 9

• Smart Grid Overview 12

• Smart Grid Technology 17

• Smart Grid Challenges 23

• Smart Grid Spending 27


Executive Summary

Zpryme and the Municipal Smart Grid Summit (MSGS) completed a smart grid survey

of 81 U.S. municipal utilities and found that cost poses the most significant challenge

for smart grid initiatives. Despite challenges with cost, many municipal utilities are

embracing smart grid technologies, particularly AMI meters and data analytics.

Key Takeaways

• Nearly all municipal utilities have some sort of smart grid effort. Many are at the

planning and investigation phase (30%), while others are taking it to the next level.

Up from 14% last year, 22% are taking on large-scale deployments.

• More than 50% of municipal utilities see a positive impact from smart grid programs.

Those seeing no noticeable effect is largely due to programs just getting started, the

negative effects are often due to consumer backlash.

• The most significant challenge for a smarter grid is budget limitations (42%),

followed by concerns around technology maturity and availability (15%).

• Despite challenges, there is smart grid spending at municipal utilities. In the next 12

months many companies are spending up to $1M on smart grid technologies; the

next 36 months will bring some spending closer to $5M or more.


Methodology

Zpryme and the Municipal Smart Grid Summit (MSGS) conducted the survey in May to

June 2015. The survey consisted of 18 questions about smart grid initiatives at

municipal utilities in the United States. A total of 81 municipal utilities responded to the

survey.

• Data reported in this report are a percent of the total respondents.

• Respondents’ top three areas of expertise were operations (64%), engineering

(43%), and customer service (36%).


Key Findings

• Nearly all municipal utilities have some sort of smart grid effort. Many are at the

planning and investigation phase (30%), while others are taking it to the next level.

Up from 14% last year, 22% are taking on large-scale deployments.

• More than 50% of municipal utilities see a positive impact from smart grid programs.

Those seeing no noticeable effect is largely due to programs just getting started, the

negative effects are often due to consumer backlash.

• In the longer term, smart grid remains a priority for nearly all municipal utilities. For

most (54%), it will be a moderate priority.

• The top benefits for smart grid remain foundational benefits, including restoration

time reduction (62%) and improved power quality (40%). Another important benefit

includes analytics-based decisions (42%).

• As municipal utilities take on AMI, many of them have already reached the majority

of their customers (35%), and many more plan to reach the majority of their

customers in the next three years (24%).

• Opportunities for cloud-based and SaaS solutions are growing. Many utilities are

considering them, but others are not sure. Concerns include loss of control, liability,

security and privacy of customer information.


Key Findings

• Even with the opportunities of a smarter grid, there are still challenges. The most

significant challenge is budget limitations (42%), followed by concerns around

technology maturity and availability (15%).

• Other concerns include cybersecurity and privacy—68% and 43% of respondents,

respectively, are very concerned. Others still have concerns about managing the

onslaught of data and effectively engaging customers.

• Technology challenges are also reflected in workforce gaps. Companies are facing

difficulties finding individuals with the skills needed to effectively take on data

analytics (48%) and systems integration (52%).

• Despite challenges, there is smart grid spending at municipal utilities. In the next 12

months many companies are spending up to $1M on smart grid technologies; the

next 36 months will bring some spending closer to $5M or more.

• Municipal utilities are primarily spending on AMR/AMI (80%) and MDM (48%) efforts.

And despite the hype around them, DER integration (6%) and microgrid integration

(3%) comprise just a small percentage of smart grid spending.


Trends


U.S. consumer trends by technology

Source: Source: Zpryme monthly consumer tracking surveys of smart grid sentiment, EV demand, HEMS demand, and Mobile

Energy Monitoring. Data is based upon nationally representative survey of 1,000 U.S. adults (margin of error: +/- 3.5%)

28%

6%

6%

7%

33%

11%

12%

10%

31%

9%

14%

16%

0% 10% 20% 30% 40%

Smart grid awareness

Likely to purchase EV

Likely to purchase HEMs

Mobile energy monitoring

May 2015 May 2014 May 2013

Interest in mobile energy monitoring, home energy management and electric vehicles continues to grow slowly among

consumers. Smart grid awareness has remained the same for most consumers over the past three years.


Survey

Basics


Fewer than 50K 54%

50K-100K 25%

100K-500K 12%

500K–1M 1%

Over 1M 7%

How many electric customers do you have?

The survey included diverse respondents in terms of company size. Roughly half of respondents have fewer than

50,000 electric customers.


64%

43%

36%

31% 30%

23%

0%

10%

20%

30%

40%

50%

60%

70%

Operations Engineering Customerservice

Informationtechnology

Maintenance Other

Respondent areas of expertise

Other responses:

Finance

Data analytics

AMI

Respondents’ top three areas of expertise are operations (64%), engineering (43%), and customer service (36%). In the

“other” category several respondents also note more specific expertise, such as AMI and data analytics.


Smart Grid

Overview


No strategy 5%

Approving budgets 7%

Pilot deployment 14%

Multiple applications 22%

Large-scale deployment

22%

Planning/ investigatory

30%

Current smart grid deployment status

Up from 14%

last year

Nearly all municipal utilities have some sort of smart grid effort. Many are at the planning and investigation phase

(30%), while others are taking it to the next level. Up from 14% last year, 22% are taking on large-scale deployments.


Impact of smart grid program on company

Negative effect 5%

No noticeable effect 40%

Positive effect 56%

More than 50% of municipal utilities see a positive impact from smart grid programs. Those seeing no noticeable effect

is largely due to programs just getting started, the negative effects are often due to consumer backlash.


Not a priority 0% Low priority

10%

Moderate priority 54%

High priority 36%

Overall importance of smart grid in next 5 years

In the longer term, smart grid remains a priority for nearly all municipal utilities. For most (54%), it will be a moderate

priority and for one-third of respondents it will be a high priority.


Top smart grid technology benefits

4%

5%

5%

9%

14%

26%

35%

36%

37%

40%

53%

62%

0% 20% 40% 60% 80%

Environmental/GHG reductions

Increased security

Increased asset life

Increased DER integration

Ensuring future energy demand met

Reduction in forced outages

Energy efficiency

Increased visibility/control

Customer choice

Improved power quality

Analytics-based decision making

Reduction in restoration time

The top benefits for smart grid remain foundational benefits, including restoration time reduction (62%) and improved

power quality (40%). Another important benefit includes analytics-based decisions (42%).


Smart Grid

Technology


Most important smart grid applications

5%

6%

6%

11%

16%

16%

19%

20%

22%

25%

25%

35%

48%

73%

0% 20% 40% 60% 80%

Grid storage

HAN/EMS

Microgrid integration

DER integration

Renewable integration

Volt/VAR optimization

Critical infrastructure protection

Customer engagement

Demand response

Advanced services

Data analytics

DA/grid optimization

MDM

AMR and AMI

Down from 85%

last year

With the importance of AMI, municipal utilities most frequently mention AMI/AMR as a top smart grid technology (73%).

However, as more AMI projects roll out, utilities are diversifying their efforts—AMI is down from 85% last year.


63% 70%

24% 31%

25%

11%

44% 36%

7%

24%

14%

15%

14%

27%

34%

31%

1%

3%

21%

25% 47% 50%

18% 31%

29%

4%

41%

29%

14% 12% 4% 3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

UnderwayNext 3 yearsNext 5-10 yearsNever

Status of smart grid programs at utilities

Most utilities are tackling AMI/AMR projects right now, but nearly every utility sees more advanced grid efforts—such

as EV programs (86%) and dynamic retail rates (88%)—on the horizon.


When will AMI meters reach a majority of customers?

More than 10 years 3%

In next 10 years 20%

In next 5 years 18%

In next 3 years 24%

[CATEGORY NAME] [VALUE]

As municipal utilities take on AMI, many of them have already reached the majority of their customers (35%), and many

more plan to reach the majority of their customers in the next three years (24%).


Systems plan to implement in next 3 years

4%

9%

10%

15%

17%

22%

28%

31%

42%

42%

51%

0% 10% 20% 30% 40% 50% 60%

EAM/ERP

DERMS

DMS

Critical infrastructure protection

Business intelligence

CIS

Big data analytics

OMS

GIS

MDM

Advanced DMS

The survey also explored many other application areas. Advanced distribution automation technologies are on the

horizon in the next three years (51%) along with MDM (42%) and GIS (42%) applications.


Considering cloud-based and SaaS solutions

53% 50% 44%

11% 12%

8%

37% 38%

49%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Cloud-based solutions Software-as-a-Service(Saas) based solutions

Managed services

Yes

No

Not sure

Opportunities for cloud-based and SaaS solutions are growing. Many utilities are considering them, but others are not

sure. Concerns include loss of control, liability, security and privacy of customer information.


Smart Grid

Challenges


42%

15%

10% 10% 10% 9%

4% 1%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Primary challenge to smart grid deployment success

Even with the opportunities of a smarter grid, there are still challenges. The most significant challenge is budget

limitations (42%), followed by concerns around technology maturity and availability (15%).


How concerned utilities are with:

0% 0% 5% 1% 1%

19% 21% 19%

14%

28%

23%

36%

44% 55%

45%

58%

43% 33% 30% 26%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Cybersecurity Privacy Managing dataonslaught

Customerengagement

Energymanagement

Not concerned at all

Slightly concerned

Somewhat concerned

Very concerned

Other concerns include cybersecurity and privacy—68% and 43% of respondents, respectively, are very concerned.

Others still have concerns about managing the onslaught of data and effectively engaging customers.


52%

48%

33%

30% 27% 27%

26%

0%

10%

20%

30%

40%

50%

60%

Systemsintegration

Dataanalytics

Changemanagement

Customerengagement

Systemsengineering

Utilityprocessdesign

Networkmanagement

Smart grid skill gaps in existing workforce

Technology challenges are also reflected in workforce gaps. Companies are facing difficulties finding individuals with

the skills needed to effectively take on data analytics (48%) and systems integration (52%).


Smart Grid

Spending


68%

38% 39%

25%

48% 39%

5%

10%

5%

2%

5%

17%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Next 12 months Next 24 months Next 36 months

Up to $1M

$1M to $5M

$5M to $10M

More than $10M

Smart grid spending patterns

Despite challenges, there is smart grid spending at municipal utilities. In the next 12 months many companies are

spending up to $1M on smart grid technologies; the next 36 months will bring some spending closer to $5M or more.


Smart grid areas currently receiving funding

80%

48% 44%

27% 26% 21%

14%

8% 6% 5% 3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Municipal utilities are primarily spending on AMR/AMI (80%) and MDM (48%) efforts. And despite the hype around

them, DER integration (6%) and microgrid integration (3%) comprise just a small percentage of smart grid spending.


About Tantalus

Tantalus provides a two-way, multi-purpose platform that enables access to data to power advanced Smart Grid applications for monitoring and control of electric, water and gas municipal and cooperative utilities. TUNet® – the Tantalus Utility Network – is an award winning end-to-end WAN/FAN/LAN/Grid Edge communications system that utilizes IP-based networks including Fiber, WiMAX and cellular as well as 220 & 900 MHz wireless RF.

TUNet is purpose built for the Smart Grid and unites utility applications through distributed computing capability embedded at every endpoint. The result is enhanced value across all utility departments through solutions such as automated metering, outage management, power quality monitoring, load management, and distribution automation that are both cost-effective and practical to deploy throughout urban and rural service areas. For more

information, please visit www.tantalus.com.

CONFIDENTIAL AND PROPRIETARY

© 2015 Zpryme Research & Consulting, LLC

Additional Resources:

Public power utilities are adopting technologies that will set the stage to drive data-intensive advanced

applications – such as Demand Management (98%) and Dynamic Retail Rates (88%). The most challenging

hurdle that these utilities face today is identifying a logical financial case to support a migration to Smart

Grid. As a result, many utilities are now further analyzing and quantifying the monetary value of Smart Grid

investments across all utility departments as a key element in a successful business case for Smart Grid.

White Paper | Getting the Most Value From Your Metering Technology Investments: Economic Migration from AMR to Smart Grid

http://www.tantalus.com/

http://www.tantalus.com/grid_library.php

http://www.tantalus.com/grid_library.php

tantalus presents: 2015 municipal smart grid report...3 2015 municipal smart grid report | september...

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