101 atos smartmeteringbusinessdrivers

7/30/2019 101 Atos SmartMeteringBusinessDrivers

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E E S E EB S ESS D E S

Basis for ROI calculation

Governments and Regulators will give indications to Utilities or investing in SmartMetering in rastructure. All actors will gain benefts in Smart Metering. PowerGenerating Companies and Transmission System Operators will directly proft rom the

precise data gathered by Smart Meters whereas Distribution System Operators willmanage the balance in a more e fcient way. End customers will also directly beneftrom the new green services and o ers Supply Companies will be able to market in

the uture, thanks to Smart Metering.

Smart Metering will considerably change the way we produce, deliver and consumeour energy. We there ore estimate that there is no standard business case or SmartMetering Projects. Each company has to per orm its own ROI calculations.

We consider that new Smart Metering systems must be Smart Grid Ready, to betechnically able to help manage the new grids, and there ore to enhance the global ROI.

In this paper, benefts and business drivers are detailed actor by actor along theelectricity value chain.

These business drivers will provide precious tips towards these ROI calculations: eachcompany should a minima include these actors in its own business case elaboration.

With this objective in mind, Atos Consulting, the Consulting subsidiary o Atos Origin,has developed a dedicated method to assess the fnancial returns o particular SmartMetering projects.

Executive Summary

Atos WorldGrid, an international entity of Atos Origin and leader in smart energy,has decided to write this paper to help investors in electricity Smart Meteringprojects evaluate the respective benefits.

Contents

Introduction 2

The Electricity Value Chain 2

Drivers for Governments andEnergy Regulators 3

Business Drivers for PowerGenerating Companies 4

Business Drivers for Transmission SystemOperators 5

Drivers for Conceding Authorities 6

Business Drivers for Distribution SystemOperators 6

Business Drivers for Resellers and SupplyCompanies 9

Business Drivers for Smart Energy ServicesCompanies 10

Business Drivers for End Customers 11

Tips for Smart Metering ROI Calculations 12

Conclusion 14

Atos WorldGrids Experience in SmartMetering and Smart Grid 15


2/20Electricity Smart etering Business Drivers Basis for O calculation

S E E S O B O OS E E S, S O E O S,

O O E O O , D

O- S O O S S E S.OD O

Smart Metering is a combination of Smart Meters,Smart Concentrators (or eventually only Gateways),Information Technology (IT), and two-wayscommunication systems.

Smart Metering is a major building block towards theimplementation of Smart Grid for which Utilities arepreparing. We can say therefore that Smart Meteringsystems must be Smart Grid Ready. However, theactors of the electricity value chain (from Governmentsto end Customers) are not always fully aware of thebene ts they can get from Smart Metering. Utilitiesinvesting in Projects therefore need to secure buy-infrom all of these stakeholders.

Based on its extensive experience in Smart Metering, Atos WorldGrid wants to share its views on SmartMetering business drivers, so that all stakeholders areable to base or enhance their ROI calculations.

In this document we will rst review business driversfor implementing or using Smart Metering, all along the

electricity value chain, stakeholder by stakeholder.It is to be noted that the electricity value chain willbe heavily transformed with the evolution towardsSmart Grids as for instance new services companieswill appear (in this paper we shall also look atpotential business drivers behind these new servicescompanies). In the second part of this document wewill present Atos WorldGrids experience in SmartMetering and Smart Grid.

E E E E The main evolutions in the electr icity value chain inthe past decade have been driven by the opening of energy markets to competition, insuring security of supply and emissions reduction objectives. Now thatthe technology has come of age, Smart Grids andSmart Meters are considered as two of the brickstowards building greener, more secure and cheaperways of consuming energy.

The value chain in electricity encompasses: Power Generating Companies; Transmission System Operators; Distribution System Operators; Resellers and Supply Companies; Smart Energy Services Companies; and End Customers.

The electrici ty value chain is mostly centralised today:most of the electrons are sent to distant customersand distributed generation only accounts for a smallpercentage of the total production of electricity.Besides, customers have very few options at hand to

follow and reduce their net consumption and changetheir behaviour.

In the near future Smart Meters will transform theelectricity value chain: all along the value chain, actorswill be forced to adapt and proactively offer newservices to ever more demanding customers. Newcompanies will appear and existing companies willhave to shift their business model to achieve pricecompetitiveness and security of supply in a context of growing environmental pressure.

Pierre arlardPortfolio and Solutions,

Atos WorldGrid

We will review one by one the business drivers along this value chain, and mention also impacts for Governments, EnergyRegulators and Conceding Authorities.

The roles played by the electricity value chain actors and transformations brought about by Smart Metering.

Power GeneratingCompanies

Electricity producer May be an integratedgroup or newcomer

Financial pro itabilityapproach

Greater availabilityo the generationcapacity

Better planning oinvestments Lower costs

Transmissiono electricity onhigh-voltage grid

Responsible or supply/ demand balance

Demand planning Security o supply

Better planning osupply/demandbalance

Better projection odemand

Responsible orthe distribution oelectricity on mediumand low voltage grid

Generally responsibleor metering activities

Initial investment Disappearance ohandheld meterreadings

Remote operation Fraud reduction Better grid management

Developscommercial deals

Buys in order to sellelectricity

Personalized o ers Better quality oservices

Improved customercare

Develops new energyservices dedicatedto the reduction oend user energyconsumption

New business models

New innovative andpersonalized o ers

Better customerservice

Final link in theelectricity sectorchain

Wants abundanceo supply and lowcosts

Competition andlowered prices

Adapted o ers Additional services

TransmissionSystem Operators

Distribution SystemOperators

Resellers / SupplyCompanies

Smart EnergyServices Companies End Customers


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Zorayda uerrero egaSmart Grid BusinessDevelopment, Spain

lne Schricke

Smart Metering BusinessDevelopment, France

D E S O O E E S DE E E O SGovernments, Policy-Makers and Energy Regulatorsare not directly part of the value chain as such, butare the most important stakeholders in the process.Indeed States give the initial kick-off for SmartMetering projects at a country level, through theirEnergy Regulators.

The European Union is putting more and morepressure on Governments to install Smart Meters intheir respective countries as with the EU Directiveon energy end-use ef ciency and energy services(Directive 2006/32/EC).

Throughout Europe and considering the speci cities of each electricity market, Governments have formulateddifferent answers to these pressures. Some countrieslike Italy, Sweden, Spain or France have opted forrapid deployment of the technology; others likeGermany or the Netherlands have refused mandatoryrollouts. In the UK, the supply companies will own theSmart Meters, DECC and Ofgem envisage a Central

Communication Provider (CCP/DSP) role.

However national Governments and their respectiveEnergy Regulators will always nd bene ts in SmartMetering to attain the objectives of:

Emissions reductions; More competition in the energy markets; and Security of electricity supply.

Lower Energy Demand and attain EmissionsReductions Objectives

The EU has set ambitious emissions reductionobjectives for member countries to reach, like the 3x20objectives in the EU energy conservation pact:

20% reduction in energy consumption; 20% reduction of CO 2 emissions from 1990

levels, and; 20% share of renewable energy present in the

aggregate energy supply by the year 2020.

These objectives were xed according to internationalacts, like Kyoto (8% reduction in GHG emissions from1990 levels by 2008-2012).

In order to follow these international targets and thetechnology being now mature, Smart Metering offerscustomers a way to save energy, hence avoiding theemission of GHG produced by burning fossil fuels(mainly oil, gas and coal). This has several impacts:

The countries energy independence wil l beimproved by reducing the importations of fossilfuels;

Governments will reduce the environmentalfootprint of their country as a whole; and

The image of the country will be shifted to one of amodern and green country.

Furthermore the integration of renewable decentralisedenergy production, storage and usage (Solar, Wind,Electric Vehicles), will be eased by Net Metering (2ways meters measuring consumption + production)and decrease needs for additional central Generation,

Transmission and Distribution capacity whichrepresent huge long term investments.

Let us not forget that these investments always comewith long political debates because of the Not In MyBack Yard (NIMBY) syndrome preceding each newhigh voltage line project or the renewal of nuclearcapacity for example.

Distributed Generation could save also up to anestimated 7% of electricity normally lost in losses(technical + commercial).


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SO E E E BE E O O PE O ( O EP ES) D BE E q O SE E (SE O S PP ).S E E P O O ES ESE O SS ES E O B

O EE S O2 E SS O S ED O OBjE ES.

Regulate energy markets and foster competitionSince the 1990s, Europe has pushed membercountries to liberalise, unbundle and deregulatetheir respective energy markets in order to fostercompetition and lower prices. Throughout this periodhave been adopting various legislative initiatives tobuild this new integrated market through practicalmeasures such as improve energy interconnectioncapacity, develop a uniform regulation andmanagement systems by independent entities.

Smart Metering will enhance the ef ciency of thesemarkets by allowing easier and faster switch of supplier. Smart Metering will allow suppliers to unlock tariffs and will support them in providing variablepricing (which also represents a push for customers toinstall their own decentralized generation and storage).In addition, the vast amount of information that SmartMetering will produce will be easier to audit and sharebetween actors. This will greatly improve transparencyand ef ciency of the electricity market and support endcustomers in getting accurate information regardingtheir consumption.

Technical options offered by Smart Metering will alsoallow Governments to maintain social justice in theconsumption of this essential commodity which iselectricity (as for instance allocate a minimum capacityfor customers in need during winter for heating).Smart Metering will help further liberalise and openelectricity markets while checking the fair share of costs and bene ts to customers.

Improve security of electricity supplyBy reducing peak and global demand, Smart Meteringwill improve security and continuity of electricitysupply, a strategic issue for each country (as proven bythe Italian blackout of 2003) by:

reducing the need to burn imported fossil fuels; reducing the need for new production capacity; and allowing a better management of the real time

production-consumption equilibrium.

This will bene t all of the customers by increasing thequality of service.

B S ESS D E S O PO EE E O P ES

The business model of todays Power GeneratingCompanies is based on evaluating substantiallong-term investments, even more so today as colossalnew capacity is needed to replace aging power plants.However Power Producers must face a chronologicalparadox: Generators must demonstrate short-term

exibility to meet real time changes in electricitydemand.

Whats more Power Producers are directly targeted byCO 2 emissions reduction programs like the EU ETS.Smart Meters will answer the environmental issue andthe paradox of the generation process.

Reduce energy production and GHG emissionsSmart Metering will allow a reduction in peak electricitydemand because end customers will have the toolsto measure, follow and shift or reduce their energy

consumption. Peak loads are usually met by usingspinning reserve or switching on Fuel or Gas units(non-spinning reserve) which are expensive and highlyCO 2 emitter units.

Better management of these loads will have both anenvironmental and a nancial impact:

Smart Metering will globally reduce theenvironmental impact of Power GeneratingCompanies and help them follow internationalregulations towards the decrease of CO 2 emissions.

The better management of peak loads will allowGenerators to reduce operating reserve and toget Energy Saving Certi cates (White Certi cates,White Tags, Energy Ef ciency Credit ) and retrievetheir nancial value.


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The extra information fromSmart Meter ManagementSystems will offer TSOsmore insight into what ishappening in real time inthe MV/LV networks andwhat will happen in themedium and long-term,allowing optimisationof security of electricitysupply and costs.Whats more SmartMetering will supportdecentralised energy

production hence avoidinglosses on the nationaltransmission grid.

...and transform the business modelReducing peak load will also put less stress on existingor new generation capacity. This will offer greateravailability of the power plants and extend the life of those that are aging. This will also defer or avoid theneed for new capacity, hence allow better resourceoptimisation and better planning of new investments.By reducing the need for centralised power generationcapacity, Power Generating Companies will thenbe able to invest massively in Decentralized PowerSources: solar, wind, hydroelectric, batteries, biomassas well as in Power Storage.

B S ESS D E S O S SS OS S E OPE O S

As well as Power Generating Companies, nationalor regional Transmission System Operators (TSOs)are also facing a chronological paradox of their own.

They hold the dif cul t mission of insuring the real timeproduction-consumption equilibrium, while supportinglong term investments in very high VHV and highvoltage HV transmission lines.

The vast amount of information that will be gathered bySmart Metering networks will directly bene t them forthese three missions.

Manage the production-consumption equilibriumin real time

The information given by real time data coming fromend customers will allow more accurate demandforecasts (short, medium and long-term).

The short and medium term data will allow a betterplanning of the supply and demand balance, andof electricity operating margins (i.e. the differencebetween forecasted demand and available supply).

The possibi lity given by Smart Meter ManagementSystems to use massive but intelligent switch-offs ora load shedding on large or speci c groups of meters(e.g.: controlling residential consumption but allowingthe normal consumption in a hospital and loadshedding in the same time up to 3 million meters inless than 5 minutes) to avoid a total blackout will allow

TSOs to optimise customer interruption and customerminutes lost. TSOs will then bene t from enhanceddelivery resilience.

Optimise the planning of investments ininfrastructureReduction in peak load will improve security of supplyby putting less stress on the existing transmission gridhence less need for new investments in high voltagetransmission lines.

TSOs will then be able to focus on strategicinvestments as, for example, linking Europeancountries to optimise the European grid as a whole,which will in its turn offer a better security of supplyand unify European markets for more exchanges, orlinking European Countries with North-Africa (e.g.

Transgreen consortium for designing a VHV DCnetwork).

Optimise operations and costsBetter short term planning of demand will bring betterrisk management and reduce cost for trading on thewholesale market to balance supply and demand.

This will also br ing more players and more competi tionon the wholesale markets with third-party balancingaggregators bidding on Demand-Response programsor using aggregated Power Storage capacities as VPP.

BE E S O E P ODE D B BE E S

E E D ED ED OS

With the announced reduction in global and peak consumption o end customers equipped with SmartMeters (hence the announced reduction in kWhsold by Power Generating Companies), traditionalcentralised Power Producers will have to adapt theirgeneration capacity to ulfl emissions reductionobjectives and change their business model to that oDecentralised and Renewable Power Producers, ando Power Storage companies.



D E S O O ED O ESLike Governments, Conceding Authorities are notpart of the value chain as such. However they are theactors who grant concession rights to DistributionSystem Operators.

Guarantee customer service and satisfactionSmart Meters will come with improved quality of service on the concession perimeter and improvedsecurity of supply for local customers.

Modernised assets and asset management toolswith automatic reporting will provide improved datainformation and reliability on concession perimeter.

On the long run, as Smart Metering and Smart Gridwill help managing Electric Vehicles, this may lead toa change of paradigm in the transportation sector:as EV will have to be able to calculate their remainingautonomy, for the rst time EV will know where theyare going to, and therefore the vehicles uxes may beanticipated in cities, and exible traf c schemes (EV,tramways, public eet) could be anticipated, helping

the day to day life of hundreds of thousands of citizens.

Attain energy savings objectivesSmart Metering will globally reduce the environmentalfootprint of Conceding Authorities and help them toful l their energy savings targets.

When customers are provided with actualconsumption data, they have the possibility of changetheir own energy consumption behaviour. Moreover,time-of-use (ToU) pricing models can enable thecustomers to reach signi cant energy savings by usingmore power during off-peak hours.

The potential sharing of instal led electrical smartmetering infrastructure with gas, water and heat mayalso be a driver for infrastructure costs savings.

B S ESS D E S O D S B OS S E OPE O SDistribution System Operators (DSOs) are usually themain actors of Smart Metering projects. Indeed DSOswill have to support the substantial costs of installing theSmart Metering infrastructures. In return they will ndthe most bene ts in the transformation of their activities.

Manage performance in real timeSmart Metering infrastructure will allow DSOsto measure and report in real time the network operational performance. For example, DSOs willmonitor precisely and in real time:

Loss Of Load Expectation (LOLE); Loss Of Energy Expectation (LOEE); Expected Demand Not Supplied (EDNS); Frequency of Loss Of Load (FLOL); Energy Index of Reliability (EIR), etc.

These information will be displayed on a geographicalperspective (linked to Geographical InformationSystems) and will allow to follow precisely the quality

of service (load, voltage regulation, harmonic distortionand icker, disturbances, frequency, number andduration of short and long interruptions, customerminutes lost, annual unavailability, ).

By looking further, Smart Grids will be introduced byinstalling Smart Sensors (Smart Meters) - replacingpresent too-late sensors (customers with theirtelephone) - connected to Smart Concentrators.

Using real-time information from this Smart Sensorsand automated controls, DSOs may anticipate, detect,and respond to network problems in order to avoid ormitigate power outages, power quality problems andservice disruptions.

Smart Meteringinfrastructure will allowDSOs to measure and reportin real time the network operational performance.

S E E OB ED EE E O E OO P O

O ED O ES D E P E

O E E E S S E S

Without having a strong decisional role in the process, Conceding Authorities will nevertheless beneft romSmart Metering with a greener image: emissions reduction o local customers as well as energy savings or theConceding Authorities own consumption (town halls, hospitals, local schools, ) will both improve the carbon

ootprint o their perimeter. Distributed Generation in their perimeter will also improve their energy independence.


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B S O S E E , DSOs D P O EE O E E S DS

Smart Meteringinfrastructure will graduallyimprove the management ofelectric vehicles

By switching to Smart Metering, DSOs will gradually improve network managementwith Smart Grids 1, thanks to:

the global management of demand (often called Demand Side Management),storage ( ywheels, compressed air storage and turbines, batteries, electricvehicles, ) and supply (and no longer generation supply side only);

the management of Distributed Energy Resources DER (current operatingpractices only ensure that they are quickly disconnected if needed, but SmartGrid will provide exibility and controllability towards a more secure systemoperation); the management of potential weak hours

the Management of Electric Vehicles the accurate and timely knowledge of the status of meters and lines (thanks

to Power Line Communication using actual electric lines and throughconcentrators);

the optimisation of the sizing of transformers and other distribution equipments; the surveillance of transformers and other distribution equipments, and the

monitoring of control and condition (through sensors and concentrators); the surveillance of weather conditions (globally through direct links to weather

forecasting, and locally with temperature, humidity and light sensors throughconcentrators);

the improvement of power ow management through earlier event detection,faster reporting, easier alarm management, and quicker recovery / restorationtime;

the optimisation of user pro ling and forecasting of consumption; the chance to detect fraud patterns; and an enhanced delivery resilience and exibility (early developing overload

conditions detection, peak shaving / clipping / smoothing / shifting usingdemand response programs, smart cold load pick-up management, alert onmisuse, load and phase balancing, smart fault detection and outage mapping,predictive maintenance, smart load shedding: remote collective gradualdistributed load limiting in shifts at concentrator level, self-healing, sub-network island management: micro-Grid enhancing local reliability seen from the Grid asa single aggregated load, or micro-Grid isolation as autonomous communitiesback-up providing continuity of supply to emergency units, ).

1Smart Grid: An electricity delivery in rastructure that leverages advancements in IT, communications technology, and energy technology to improve delivery utilisation / resilience and empower customers to address environmental concerns (Gartner, 2008). It will be characterized by a two-way ow o electricity and in ormation.

OP ZE E E E E



Enhance customer service and satisfaction The Smart Meter infrastructure will allow a quick switch between suppliers, an easier switch betweentariff, billing schemes or load limits for end customers.

Typically the delays will be reduced from several daysto 2 hours maximum (some minutes as a minimum).

This will therefore increase competition betweensuppliers, as requested by the EU and RegulatingBodies, and End Customers will directly bene t fromthe increased competition and better service levels.

Contribute to environmental objectivesSmart Meters will allow DSOs to follow national orinternational regulations (for example: EC 2006/32,USA EPAct 2005, ) and save energy (less CO 2 -direct savings from less crew cars and less mileageand indirect savings from end customers energysavings) with the direct impact on the environment.

Smart Metering will let end customers become localproducers (by allowing net metering), and thereforedistribution technical losses will be saved.Furthermore, DSOs will improve their public image

to that of a modern, positive, green, innovative andhigh-tech (and also now accurate!) company.

Attain nancial excellenceNot only will Smart Metering allow attaining operationalexcellence but it will also boost the competitiveness of DSOs by:

reducing operating expenses (OPEX) throughremote meter reading, remote meter management,remote meter supervision (which reduces thenumber of crew interventions, associatedmanagement and administrative support formanual reading, and con guration of the meters);in fact Metering itself is only one of the numerousinterventions now avoided during a Smart Meter life;

reducing maintenance costs (OPEX) throughreducing maintenance crew interventions, andimproving their ef ciency due to:

- Remote meter supervision and softwareupload (which reduces the number of crewinterventions, associated management andadministrative support, and con guration of the meters), low failure rate not exceeding forinstance 0,5% per year and longer life span of the meters, up to more than 20 years, which

reduces maintenance interventions; - Interoperability and interchangeability of SmartMeters and Smart Concentrators providedby open protocol, standardisation andshared speci cations of the equipments andcommunication protocols.

Even if there are 10 different hardware providers,maintenance crew can plug any meter in anyhome with unique installation procedures andtools, and have it automatically connected to thenearest concentrator. They can also plug anyconcentrator. Stocks are therefore smaller andeasier to manage and to dispatch (the need tocheck availability of the right equipment in the caror to go to a regional stock will no longer exist).

- Asset Management software integrated to thesolution which provides all information on themeter and its location (GPS coordinates shouldabsolutely be taken when tting the new SmartMeter), with additional functions implementedto provide crew planning, life duration statisticsfor preventive maintenance purpose, or evenpredictive maintenance based on conditionmonitoring,

The main nancial bene ts of Smart Metering for DSOsusually include cost savings through the reduction of manpower, crew cars, fuel, and CO 2 emissions.

Financial excellence will also be allowed in particularthrough the:

ability to invoice precisely distribution network usage;

possibility to use several registers for later Time-of-Use network usage billing (charging moreat peak hours for instance);

decrease of commercial (non technical) lossesthanks to real-time automatic fraud detection(tampering, removing, bypassing, ); and

reduction of peak electricity demand and the bettermanagement of load hours, therefore alleviatingthe need for expanded distribution capacity ordistribution infrastructure installation (CAPEX investments).

The main nancial bene tsof Smart Metering for DSOsusually include cost savingsthrough the reduction ofmanpower, crew cars, fuel,and CO2 emissions.

Distribution System Operators can really makegreat savings rom Smart Metering and have arather quick pay-back or their initial big investment.However and although the international regulationsare pushing or Smart Metering, national regulationsvary rom country to country and the initialinvestments are as high as the trans ormationsSmart Metering projects will bring. Distributorsshould there ore ponder the various technical

options (AMR or AMM, two-way communicationsystem options ) and assess precisely the ROIthat their respective Smart Metering project carries.


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B S ESS D E S O ESE E S DS PP O P ESElectricity Sales Companies provide electricity andservices to End Customers. They will directly bene tfrom Smart Metering by enhancing service levels inparticular.

Offer improved and new servicesFor Electricity Suppliers, Smart Metering will provideaccurate real time metering: there will be no longerestimates every 2 months and yearly (or more) actualmetering. At the same time, Suppliers will provide totheir customers informative bills based on actual tariffs,actual time of use, as well as energy saving informationand advice, maybe even simulations (what if cases) topromote end customers subscription to new energysaving schemes.

Smart Metering will allow more frequent billing andfaster reading to cash: frequent enough to enablecustomers to regulate their own energy consumption

New Smart services that supply companies will include:

preferred bill (based on the real consumption andnot an estimate) due date for end customers; new competitive tariff packages and competitive or

incentive offers (e.g. Time of Use, Dynamic Pricing,Demand Response, Automated Load Control,Prepaid with same smart meter, Cost Reporting,), and easy opt-in / opt-out of the deals; and

Smart invoicing concepts (e.g. invoice each timebill exceeds 100 , or a single invoice for twohouseholds in two different countries with twodifferent currencies, );

Existing service levels will also be increased: Customer calls will be decreased, in number

and in duration, due to higher reliable data,reduced errors, improved analysis process time,more reliable network, and outage mapping andrestoration. Therefore Suppliers will save on CRM- Customer Relationship Management (especially

when prepaid is used) and increase customersatisfaction and loyalty; this is even more importantfor prepaid customers with present calls increasedfrom +30% to +100% when compared with normalpost-paid customers.

Smart Metering will help new entrants (orcompanies wanting to increase their market share)in the Supply Market and ease the change of supplier (e.g. switching in 2 hours maximum vs. 2weeks); and

The process for customers moving into / out of homes will be eased.

Change customer behaviour User load pro ling (i.e. allowing logical or geographicalaggregation and also detailed marketing analysisand customer segmentation) will provide a basis forcustomer targeting, with differentiated value addedservices.

The new services that will be elaborated wil l alsohelp to: change customer behaviour from xed

consumption user to smart customer with self regulation of energy consumption, thanks tofrequent billing, local dynamic in-home display,usage of Short-Message Service (SMS) and/or webportal, Smart Phones power applications, EnergyBoxes, Demand-Response programmes like loadcurtailment scheme, or direct load scheme;

allow to de ne customer energy pro les fortargeting Energy Ef ciency/Demand Responseprograms;

allow Distributed Generation (DG) and buyingelectricity back (net metering if possible) fromrenewable alternative decentralized micro-generation like solar, wind, hydroelectric,biomass; and

allow Distributed Storage ( ywheels, compressedair and turbines, batteries, Plug-in hybrid electricvehicles (PHEVs) or full electric vehicles (EVs) ).


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Optimise cash owSince Smart Metering will provide accurate real timedata, suppliers will bill customers with the exact realconsumption (no more estimates). Suppliers will thenhave lower payables and less unrecoverable.Furthermore, the future infrastructure will authorisemore frequent billing and faster reading to cash andtherefore in the same time, Smart Meters will improvecompany cash- ow.

Suppliers and especially new entrants will be ableto offer new services or more sophisticated andadapted tariff packages allowing them to differentiatetheir electricity supply offers. These new offers andservices will help end customers change their way of consuming energy while improving cash ow.

Now is the time for Suppliers to imagine the servicesand offers of the XXIst century!

B S ESS D E S O S E ESE ES O P ESNew market roles and new business models will

emerge in coming years thanks to Smart Metering. These new Energy Services Companies will need toget Third-Party access to Data through the Regulator.

The services these new Smart Energy companiesoffer may sometimes be compared to the servicesa supply company might offer. However, we havealready identi ed some potential new areas for EnergyServices Companies.

Elaborate demand response programsIndependent Third-Party Aggregators (or Curtailmentor Balancing Service Providers) could represent animportant opportunity for consumers who wouldotherwise be unable to participate individually or asa community in Demand-Response (DR) programs.

These new companies will: aggregate several customers into a single more

powerful purchasing unit to negotiate the purchaseof electricity from supply companies;

bid coordinated DR programs on wholesale marketon behalf of customers, as an intermediary forsmaller individual loads;

offer proactively, in real time, Smart tariffs based onthe consumption forecast and network balance;

manage Energy Interruption or Curtailmentprograms of individuals and communities throughSmart Meters: Economic Curtailment Program and/ or Emergency Curtailment Program;

create and run Virtual Power Plants VPP (clustersof distributed energy providers and/or bundlingof local curtailment volunteers for Negawatts curtailment of Megawatts, including innovativeforms of electricity storage, able to help the TSOnationally or even now the DSO to regionally orlocally balance supply and demand; and

manage nancial compensation (Incentive and/orPenalties schemes).

Competition and Innovation could lead to a greatervariety of DR programs that will introduce more exibilityand therefore promote participation to such programs.

Offer new Smart Meter servicesSmart Meters will probably see Independent Third-Party Smart Metering Companies provide outsourcingservices like:

Two-ways meter management; Remote meter readings; Billing information or even full bills to customers on

behalf of small Utilities.

These three deliveries could be even provided by threedifferent companies.

O S E E O S PP E S OE E SE ES D O E S O

E 21S E !


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E E O ED E E EP E E S E

D E E O E S O E E O O S PO E OS E E D S D O P OPOSE E O ESE ES, O D ED OD , S PPE ED

OB E P O ES O E E .

Another aspect of Smar t Energy Services Companieswill be the analysis of the huge amount of data that willbe gathered daily. These Independent Energy AuditCompanies will provide:

Knowledge of the detailed energy consumptionpatterns and consumer pro les;

Identi cation of potential energy savings; Tailored advice to individuals or to group of

customers (with the same pro le);

Advices in energy saving appliances (smartappliances) and in smart plugs.

Advices in Home Area Network and Home EnergyManagement / Automation

Integrate Smart Metering into Smart GridsSmart Metering is only a step towards larger SmartGrids. A hot topic of Smart Grids is the integration of Mobile Plug-In Electricity Vehicles (PEV) or Plug-inHybrid EV (PHEV). New Load Companies will takeadvantage of Smart Grids and provide the followingservices: Public Plugs scattered around cities;

The rental of Public EV (this new service could becompared to what has happened for bicycles inmany European cities);

Trading: Companies will for example buy electr icityat high rate from PEV at peak hours, or sellelectricity at low rate when distributed generation isrunning to high;

Smart Billing for PEV drivers (prepaid, post paid,free 1h offer while shopping, );

Roaming facilities: plug-in to public plugs or toprivate plugs while charging your usual supplier.

On-board Meter: Smart Meter included in an EV could ease roaming and more importantly EV usageas storage unit anywhere.

B S ESS D E S O E D S O E SEnd customers should bene t a lot from SmartMetering: they will be able to lower their bills andconsume less (hence emit less) while at the same timeenjoying new services, and therefore becoming SmartConsumers.

Save on energy bills End customers will clearly save money, with

cheaper energy bills, through both new competitiveoffers and direct energy savings (thanks to exactbilling, Smart Meter or in-house display and webportal). It is still to be noted that some if they donot pay attention - may pay more money, but in thefuture they will know precisely why and when.

Each customer will proactively manage and reducehis energy use through direct load control program(for example: use of a smart energy box, smartprice responsive appliances or computerizedthermostats, Home Area Network - HAN) orthrough smart time of use outlets (smart plugs).

Customers will now play an active central role inmanaging (reducing, smoothing, shifting) electricity

demand. This will help them manage their energybills and control (at their level) further priceincreases.

Competition will be enhanced and customers willalso take advantage of an increased number of potential suppliers in the market, providing a varietyof time-based rate options (and therefore againlower costs).


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Bene t from better and new services As discussed in the chapter above, new serviceswill be offered by either Smart Energy Companiesor Supply Companies and End Customers will enjoythese innovative solutions:

End customers will bene t from better metermanagement services while reducing the numberof complaints, thanks to early detection of meterfailures and faster service restoration, fast meterrecon guration after a change request in the energysupply contract, ;

Customers will bene t from new adapted offers andadditional services, like exible billing cycles;

They will get accurate and real time bills (no longerestimates and staying in for home readings),frequently enough to be able to regulate their ownconsumption;

Switching suppliers will be facilitated as well aschanging tariff or billing schemes (e.g. switch toprepaid for one month of seasonal rental, or gettemporarily a higher load limit during winter forelectric heating or during summer for AC) and

moreover without physical visit implying staying intotheir homes; Get information on actual quality of service.

Reduce energy consumption and CO 2 emissionsReduction of CO 2 emissions will be carried out in twoways: direct energy savings and indirect CO 2 savings(through remote reading / management of their SmartMeter, and reduced peak consumption).

Thanks to Net-Metering, End Customers will nd iteasier to generate their own alternative renewableelectricity (solar, wind, hydro ).

These personal installation wil l help them save onpeak pricing, save transmission and distribution losses(around 7%) and will let them sell electricity back.With the future emergence of Smart Grids, Electric

Vehicles or Plug-In Hybrid Electric Vehicles (PHEV using the Vehicle-to-Grid V2G concept) will helpcustomers not only reduce the energy consumption of their homes but also reduce the energy consumptionof their vehicles.

Smart Meters will therefore add more and more valueto a customers home, as potential buyers will spendmore in the coming years for a residence includingrenewable energy (green certi cation).

At their own level, each customer will gain insight intobetter understanding their household energy footprint,and will be able to compare with similar neighbours.

As end customers manage electricity demand, theyshould always be placed at the forefront of the SmartMetering topic. Companies will have to anticipate theirneeds of new services while packaging new pricingoffers to help them reduce their bills and their

CO 2 emissions.

PS O S E E OO S

Investments in Smart Metering infrastructure representone of the biggest investments in attaining SmartGrids. This is why investors should methodically andsystematically elaborate precise business cases fortheir respective projects.

Calculations should be made on a more or less 25years period (5 years rollout followed by a 20 years lifecycle).

S O E - E E , E D S O E S D E S E O E E E E O

E E E E B E E E

S E D S O E S E E E DE D, E S O D

S BE P ED E O E O O E S E EOP . O P ES E O P E E EEDS O E

SE ES E P E P O E S O E P EED E E B S D E O2 E SS O S.



Normal Smart Metersallow prepayments, but aremuch cheaper than speci cprepaid meters; Customercalls are much higher in theold prepaid segment andCRM savings are higher inthis segment.

Main business case parameters depend on this nonexhaustive list of following factors:

Whom the global infrastructure belongs to (SmartMeters, IT): the distributor, a third party, the enduser, suppliers, shared between several actors;

Status of the existing grid status (oversized or with just what is needed)

SLA requirements; Regulatory obligations; Legal restrictions and recommendations (for

communication, privacy, safety, security); privacyis getting more and more of a concern these days,and associated costs are not always included in theinitial ROI calculation

Actual manual readings per year (12 x a yearsometimes in the USA, 1 x or 2 x or 4 x a year inEurope ). The more readings, the more savings!

Existing manpower status in the Utilities (number of manual reading staff, and associated managementstaff, number of CRM staff, age pyramid, ability tobe retrained, normal retirement schedules, earlyretirements costs);

Openness of the solution: - proprietary solutions are not open and thereforeare globally more costly;

- open standard / protocols promote competitionand lower costs;

- interoperability and interchangeability decreaseinstallation and maintenance costs;

Technical content and level of the HAN relatedhardware to be installed, with a home display ornot, self installable (plug and play) or not etc.

Consumers population density: - If population density is high, then:

- less concentrators are needed (Meters toConcentrator ratio varies usually from 10 incountryside to 200 in cities, with a min of 1 and a max of 1200 and e.g. from 50 onaverage in France to 90 in average in BelgiumFlanders); below 10, a concentrator may notbe economically viable;

- moreover meters installation is much faster ; - old meter reading was faster also, therefore

manpower savings are lower; - If population density is low, then:

- more concentrators are needed; - meters installation is slower; - old meter reading was slower also, therefore

manpower savings are higher; Ratio of meters outside/inside the residence;

Cost of manpower for tting new Smart Meters this is usually a very important factor!

Availability of these hardware tters, possibilityof retraining for instance staff coming from otherindustries, and speed of learning curve.

Speed of rollout (depending on some of theparameters in this list and on political decisions).

The faster, the earlier the savings, but the worse thecash ow in the rst years.

Ratio of existing old meter annual replacement(may be around 1% or 2% per year, depending onthe average age of these meters); new meters mayneed to be replaced only at around 0.1% per year;

Number of new residences and refurbishmentsper year (e.g. around 1% to 2%); if the scheduledroll-out takes 5 years, up to 10% of the meters maybe installed in the usual new meters installationprocess;

Number of different types and status of existingmeter cabinets, and therefore ratio of neededreplacement;

Peak shaving and postponement of additional costs(CAPEX);

Available Communication technologies andassociated costs on the WAN (GPRS / EDGE / UMTS coverage, Fibre Optics, PSTN, ADSL);

Existing level of Commercial (Non-Technical) losses if high, sometimes this is even the main businessdriver, especially if associated with high energy costin the country!;

Change Management programme needed atend customer level to get full bene ts from DRprogrammes; this is usually largely underestimated.

Level of prepaid metering: - Normal Smart Meters allow prepayments, but

are much cheaper than speci c prepaid meters;Customer calls are much higher in the oldprepaid segment and CRM savings are higher inthis segment;

Cost of KWh; this depends on the energy mix of a country (nuclear, hydroelectricity, fuel, solar, )and on the level of import/export of electricity atcountry level, and sometimes/often also of politicaldecisions

Average annual KWh consumption per customer It is therefore not really possible in our opinion to

give reliable indicative gures of payback period orROI for a generic Smart Metering Programme. Bestcalculation case we heard of for payback period is5 years and worst case is 20 years.


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E O S DE E S E E S S E S S BES D E D , O BE E B E O E P E

E E DS, D E E O E O E E E OB O .

O S OSmart Metering is no longer a question of GO or NOGO it is now only a question of when? and how?.Smart Metering represents a paradigm change for theenergy sector and provides strategic bene ts fromSmart Grid by transforming current electricity grids intoinnovative real-time interactive (between customers,suppliers, distributors, ) service networks. TSOswere managing the generation side: DSOs will havenow more and more manage the demand side and thesupply side.

By strongly reducing manual reading and interventionson the meters, by allowing renewable decentralizedelectricity generation and storage, by savingdistribution losses, we can state that Smart Meteringand Smart Grid are Green.

We are convinced that new entrepreneurs will takeadvantage in the coming years of the enormouspotential of Smart Metering and Smart Grid to proposenew innovative services.

Bene ts listed in this document, stakeholder bystakeholder, accrue all along the value chain fromthe power generator to the end customer. However,it is not really possible in our opinion to give reliableindicative gures of a payback period or for a ROIregarding a generic Smart Metering Programme:each Smart Metering Project should comprise adetailed Business Case.

We are convinced that this document will help SmartMetering stakeholders manage Smart Meteringprogrammes and make them a success.

We are of course open to discussion and welcomereaders comments and feedback.



Atos WorldGrid is leadingERDF Smart Meteringprogramme (called

AMM Automated MeterManagement) which willculminate in the deploymentof 35 million electricSmart Meters.

ERDF AMM projectERDF is the largest electricity distribution grid operatorin France and is a 100% subsidiary of EDF.

Atos WorldGrid is leading ERDF Smar t Meteringprogramme (called AMM Automated MeterManagement) which will culminate in the deploymentof 35 million electric Smart Meters.

AMM Smart Metering programme provides: remote near real-time metering (up to 10

consumption registers and load shape on a dailybasis with data interval from 10 mn to 1 hour), via700 000 Smart Concentrators

easy switching of suppliers in a liberalized energymarket

remote services on Smart Meters (2 waysintelligent communicating meters, standardized,interchangeable and interoperable) such as dataand load pro le collection, meter disconnectionand reconnection, meter programming of new load

limits, new tariff, and microcode uploading anddownloading remote services on Smart Concentrators (2 ways

intelligent concentrators, communicating withthe meters via an open PLC (Power Line Carrier)protocol, with ERDF IT systems mainly via GPRS,standardized, interchangeable and interoperableand local substation RTU via Ethernet interface andIEC 104 protocol), such as grid surveillance, andmicrocode and software downloading

Net Metering rst Smart Grid services such as grid surveillance

and management, massive switch-off, smart coldload pick-up management, and quality of servicemeasurement on the low voltage grid

the whole metering asset management functions, direct integration to 10+ ERDF IT applications,

communicating with 50+ ERDF IT applications future-proof openness, per formance and scalability administration and monitoring of the global AMM IT

system and communication infrastructure.

ENDESA Sistema de Telegestin BT ProyectoEndesa is a leading Distribution company in Spain.

Atos Origin 85% subsidiary Mundivia (becoming Atos WorldGrid) was in charge of the design anddevelopment of the system architecture including thesoftware for the concentrator and the central servicesin Endesa Smart Metering / Intelligent Network project:

Interoperability: independence from hardware andsoftware providers: no vendor-locking in

Distributed architecture: intelligence in theconcentrator

Predictive attitude: external sensors in thesubstation, Smart Grid Ready.

Self con guration, self recovery capabilities Lean-budget mindset Single data repository with links to Metering

System, Business Systems and Technical Systems Use of XML, SOA, EDA, IP standards

ERDF SAR / GEC ProjectSAR and GEC applications are bespoke developmentsby Atos WorldGrid for ERDF:

SAR is an automated massive meter reading andprogramming system for Commercial & Industrial(C&I) electricity meters.

GEC is the associated meter asset managementsystem.

These projects were ful ly developed by AtosWorldGrid, from design to nal acceptance. Theyinvolved integration with several external applicationssuch as Data VEE / settlements and Contractmanagement applications for SAR.

SAR also interfaces with GEC: SAR receives meterscon guration from GEC and transmits alarms andmeter maintenance data to GEC. SAR is used for:

Daily Meter data reading: Status information,Interval Data, Energy Data Readings (index,maximum power demand, exceeded demands,functioning time), Con guration data (loadlimit,), Energy Quality Data (events, defects,outages, ) of 500 000 C&I Meters

OS O D DS ExPE E E S E E D S D


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OS O D SP S DE E OPED O P E E S S EO O B E E E D E S O E E E

E E , E E E E O O D E E.

Meter con guration: all con guration operations arepossible in a remote way:- Synchronize the meter clock (and generate

alarms when there are important time shifts) - Program changes of legal time (Daylight Saving

Time) - Program load limits

Operations management (data acquisitionscheduling, calling zone management, authorizationcheck, communication optimization, completionfollow up, failure management)

Data processing (normalization, ltering, up to 24months storage in a Data Base, dispatch to otherERDF applications, auditability, traceability, )

GEC is used for: Asset description (including links between

the different assets, equipment trees, assetcon guration and characteristics)

Work requests and Intervention management(scheduling, follow-up)

Condition Monitoring of the metering equipments

ERDF Telerel project Atos WorldGrids Smart Metering Competency Centreis maintaining ERDF Telerel project.

This project is a PLC protocol experimentationconducted with Landis+Gyr, for data collection of 5000industrial and residential meters.

Several types of equipments are supported, up to15 different meter types and 3 different concentratortypes. The application provides AMR (AutomatedMeter Reading) functions, concentrator administrationfunctions (for con guration purpose), network andtopology supervision

ENEFGY Project Atos WorlGrid in Spain has developed a completesystem to contribute in a real time and easy way tothe Energy Ef ciency, a key element to avoid climatechange. The main business issues are:

Platform for energy ef ciency, open, and broadfunctionality for both, end users and suppliers of energy ef ciency services and other actors in theenergy sector.

Integrates several meters from different approvedmanufacturers.

Strong social model, inspired by models of socialnetworks, with integration mechanisms in the mostsigni cant market.

Powerful data analysis, enabling a highly re nedanalysis of the information captured Smart Grid R&D Projects



We are involved inWAVEGLOVE project for theGoverment of Cantabria(Spain) which mainobjective is to developed anend-to-end solution for theacquisition, monitoring andcontrol of a buoy park whichcan generate power fromsea waves. Moreover, it canbe integrated with externalsystems.

Atos WorldGrid is involved in several Smar t Grid initiatives: We are the Coordinator of the OpenNode (Open architecture for secondary

nodes of the electricity Smart Grid) consortium for the European Commissionwith Iberdrola, EDF,EDP, Siemens, Kema, Nucleo and ITE. Atos WorldGridmanages three work packages out of eight. This project focuses on SmartSecondary Substation Nodes (SSN) as substantial component to monitor andcontrol the Smart Distribution Grid. OpenNode will focus on research anddevelopment of: - an open secondary substation node which is seen as an essential control

component of the future Smart Distribution Grid - a middleware to couple the SSN operation with the Utilities systems for grid

and utility operation; and - a modular communication architecture based on standardised

communication protocols to grant the exibility required by the stakeholderdiversi cation and to cope with massively distributed embedded systems inthe distribution grid

We are involved in WAVEGLOVE project for the Goverment of Cantabria (Spain)which main objective is to developed an end-to-end solution for the acquisition,monitoring and control of a buoy park which can generate power from seawaves. Moreover, it can be integrated with external systems.

We are part of the Energy and Environmental Working Group of the Rhne-AlpesCompetitiveness Pole TENERRDIS in connection with the French Governmentinitiative known as Grenelle de lenvironnement. This competitiveness forum

relates to home energy control and new energy technologies, major componentsof sustainable development We are involved since the beginning of 2009 in a research project funded by the

French Ministry of Economy. This project relates to an innovative platform forSmart Grid and we are the integrator of the consortium with EDF R&D, SchneiderElectric, Grenoble University.

We participate to the CIGRE committee D2.25 Information and CommunicationSystems in the deregulation of electricity sector

We work for ETSO organisation regarding standardization of data exchangesbetween the different players of the Energy supply chain. Currently, ETSOand IEC 57 Working Group 16 are in touch for normalization of the standardselaborated by ETSO

We are the Coordinator for SINARI project won with EDF R&D, CEA, TelecomParis Tech, INP Grenoble, and FP Conseil from ANR (French Research Agency).

The topic is the security of the electrical distr ibution systems used in the frame of deregulated market: electrical networks, IT infrastructure, telecom networks.

We are a member of the Rhne-Alpes GREENLYS answer to ADEME (FrenchEnergy Savings Agency) call for proposals regarding Smart Grid, along withERDF, GDF-Suez, Gaz Electricit de Grenoble, Schneider Electric, Alstom,Grenoble INP

OS O D D S O ED

SE E S D ES


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E DE E O E SO O S O S E E ,S PPO O E S S EED E B S ESS OBjE ES

E EE O S E DE D, O P EE O S D O S O E O E Ex E E E.



AC: Alternative Current AC: Air Conditioning / Air Conditioned ADSL: Asymmetric Digi tal Subscriber Line AMI: Automated Meter Infrastructure AMM: Automated Meter Management AMR: Automated Meter ReadingCAPEX: CAPital EXpenditureCIGRE: Conseil International des Grands Rseaux

ElectriquesCO 2: Carbon DioxideC&I: Commercial and IndustrialCRE: The Regulator in FranceCRM: Customer Relationship ManagementDC: Direct CurrentDECC: Department of Energy and Climate

Control, UK DER: Distributed Energy ResourcesDG: Distributed GenerationDR: Demand-ResponseDSO: Distribution System OperatorDSM: Demand-Side ManagementEC: European CommissionEDA: Event Driven Architecture

EDF: Electricit de FranceEDP: Energias de PortugalEDGE: Extended enhanced Data rates for

GSM EvolutionEDNS: Expected Demand Not SuppliedEIR: Energy Index of ReliabilityERDF: Electricit Rseau de Distribution FranceERGEG: European Regulators associationETSO: European Transmission System Operators

associationEU: European UnionEV: Electric VehicleFLOL: Frequency of Loss Of LoadFO: Fibre OpticsFP7: Framework Programme 7GEC: GEstion des CompteursGEG: Gaz Electricit de GrenobleGHG: Green House GasGIS: Geographical Information System

GPRS: General Packet Radio ServiceGPS: Global Positioning SystemHAN: Home Area Network HV: High VoltageI&C: Industrial & CommercialIEC: International Electrotechnical CommissionIP: Internet ProtocolIT: Information TechnologyLAN: Local Area Network LOLE: Loss Of Load ExpectationLOEE: Loss Of Energy ExpectationLV: Low VoltageMV: Medium VoltageNIMBY: Not In My Back YardOFGEM: The Regulator in the UK OPEX: OPerating EXpensesPEV: Plug-in Electric VehiclePHEV: Plug-in Hybrid Electric VehiclePLC: Power Line CarrierPSTN: Public Switched Telephone Network R&D: Research & DevelopmentROI: Return on InvestmentRTU: Remote Terminal Unit

SAR: Systme Automatique de RelveSCADA: Supervisory Control And Data AcquisitionSG: Smart GridSLA: Service Level AgreementSM: Smart MeteringSMS: Short-Message ServiceSOA: Service Oriented Architecture

TSO: Transmission System OperatorUMTS: Universal Mobile Telecommunication

SystemUSA: United States of America

VEE: Validation, Editing, Estimation VPP: Virtual Power Plant V2G: Vehicle to Grid VHV: Very-High VoltageWAN: Wide Area Network WIFI: Wireless Fidelity

XML: eXtended Mark-up Language

O S


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About Atos Origin Atos Origin is a leading international Information Technology (IT) services company,providing Hi-Tech Transactional Services, Consulting, Systems Integration andManaged Services to deliver business outcomes globally. The companys annualrevenues are EUR 5.1 billion and it employs 49,000 people.

Atos Origin is the Worldwide Information Technology Partner for the Olympic Gamesand has a client base of international companies across all sectors. Atos Origin isquoted on the Paris Eurolist Market and trades as Atos Origin, Atos Worldline and

Atos Consulting.

For more information:www.atosorigin.com

About Atos WorldGrid Atos WorldGrid, an international entity of Atos Origin, is a world leader in smartenergy. With an unprecedented track record in the energy & utilities market ofmore than 35 years, it brings together all its technological solutions for intelligentproduction, transport, distribution and marketing of energy. Atos WorldGriddelivers solutions to optimize various operating processes in its clients informationsystems. Atos WorldGrid has over 1,000 engineers, and generates annual revenuesof 150 million. For more information on Atos WorldGrid, visitwww.atos-worldgrid.com

For further information, please contact:

[email protected]

DD B S ESS E O O E S E - E O E SO O S.

101 atos smartmeteringbusinessdrivers

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