driving successful smart metering programmes - smart energy … · 2018-03-14 · driving...

DRIVING SUCCESSFUL SMART METERING PROGRAMMES

A Global Experience African Utility week – 14th May 2013

Alain Bollack - Global Power & Utilities Centre

Eduard Stephenson - SSA Infrastructure

African Utility Week Africa Advisory © 2013 Ernst & Young.

All rights reserved.

Agenda

► Smart Metering

► Geographic Drivers

► Global Adoption Rates

► The African Macroeconomic Environment

► Smart Drivers & The Expected Benefits (Sector, Customer & Utility)

► Driving Successful Smart Metering Programmes

► Smart Benchmarking

► Ernst & Young’s Smart Thought Leadership

► A Call to Action!



Smart Metering

Electricity Supply

Energy Retailer

Data analysis, billing

A Smart Meter is an advanced type of meter that monitors consumption and

communicates automatically via a 2-way link with the supplier

How does a Smart Meter work?

Network

Optimisation

Theft

Reduction

(non

technical

losses)

Operational

Cost

Reduction

(Opex)

Energy

Reduction

Cash

Collection

Enabler of

new services

(Energy

Services, EV,

MicroGen)

Customer Sends automatic meter reads to provider (improved data

accuracy and better forecasting) 1

1

No more physical meter reads (saves opex) 2

2

Customer gets accurate bills (resulting in fewer queries,

disputes and complaints) and can operate on pre-paid 3 3

Customer monitors energy usage and reduces consumption 6

6

Energy retailer can communicate with meter for remote

disconnect (reduce debt) and tariff changes 7

7

Consumption analysis available online 4 4

Consumption analysis sent in real-time to ‘In-Home Display’ 5

5

Better usage data enables better energy service offerings 8

8

Benefits:



Geographic Drivers

Source: EY Global Power & Utilities Centre



Global Adoption Rates

According to a report by Pike Research, “the market for smart grid technologies will grow

from $33 billion annually in 2012 to $73 billion by the end of 2020, totalling $494 billion in

cumulative revenue over that period.”

0

10

20

30

40

50

60

70

80

Ad

op

tio

n R

ate

(%

)

North America

Europe

Asia Pacific

Latin America

Middle East / Africa

Total

Source: Smart Meter Penetration - Pike Research



The African Macroeconomic Environment

Growing

Technology

Appetite

Increasing

Demand

Political Focus on

Developing Energy

Infrastructure

Economic

Growth

Foreign Investment Interest



Smart Drivers & The Expected Benefits

Driver: Reduction in energy

consumption.

1. Carbon savings

Driver: Smart meters will

provide the information

required to power the shift

to a smarter electricity grid.

2. Smart grid enabler

Driver: Through assembly

and/or manufacture plants.

3. Economic growth

Driver: Access to better

information on energy use

and costs which drives

behavior change.

1. Demand reduction

Driver: Pre-pay nature and

access to information on

energy use means

consumers can plan their

expenditure.

2. Financial management

Driver: Customer is

empowered by information,

subject to less billing related

disputes and has access to

multiple ways of recharging

their meter.

3. Customer satisfaction

Sector Benefits:

Customer Benefits:



Driver: Automated

meter reading,

decreased

maintenance costs,

remote disconnection /

connection

possibilities.

1. Reduced site visits

Driver: Lower demand

through reduction in

billing enquiries,

complaints and

outages.

2. Reduction in

customer service

enquiries

Driver: Greater access

to information will allow

quicker resolution of

enquiries.

3. Improved

customer service

delivery

Driver: Pre-pay will

eliminate arrears and

provide a mechanism

to incentivize

settlement of

outstanding debt.

4. Debt management

Smart Drivers & The Expected Benefits (Continued)

Utility Benefits:



Driver: Detection of

theft or technical

losses will become

easier through

increased data

access. Unmetered

customers can also

be indentified.

5. Theft / tampering

detection &

prevention

Driver: Information

will allow for more

efficient resolution of

network failures -

facilitating effective

maintenance and

planning.

6. Outage detection

& control

Driver: Greater

information will allow

the operator to more

efficiently identify

where the network

needs reinforcing.

7. Decision

optimization for

electricity network

enforcement

Driver: Information

will allow the

operator to monitor

voltage / power

quality.

8. Power quality

monitoring


Utility Benefits:




Utility Benefits:

Driver: This will

result from increased

revenue collection.

9. Improved cash

flow

Driver: Access to

more information.

10. Better

understanding of

energy

consumption

patterns

Driver: Information

will allow for a more

optimal use of

electricity.

11. Energy

efficiency

Driver: This will

result from increased

awareness of

electricity

consumption

behaviour.

12. Energy smart

customers



Driver: Mandate on the use of

smart systems and time-of-

use tariffs for customers

consuming over 1000kWh

(i.e. National Regulation

773).

13. Regulatory Compliance

Driver: Shift residential load

from Morning & Evening

peaks using Time of Use

(“ToU”) tariffs.

14. Shift load

Driver: Shed commercial,

industrial and residential load

as a result of grid capacity

constraints to the extent

required.

15. Remote demand control


Utility Benefits:



Driving Successful Smart Metering Programmes

What is the optimum

Supply Chain to roll-out

Smart Meters efficiently

and reliably?

How to change the

business to be Smart

enabled?

How to build a positive

experience for the

Customer and drive

future revenue?

Plug-in

hybrid electric

cars

(storage device)

Added green power

sources

Smart appliances

(e.g. thermostats, dynamic controls,

Real-time &green pricing

signals (portal/stats)

Smart Meter

Tele-health

Services

Jobs per day

3.5

UK plc

4.5

UK

plc

9

EU

11-20

EU country

7.5

UK

plc0 20

8-15

Australia

Procurement Logistics Installation & Maintenance

Asset

Manufacturer

(Supplier)

Utility suppliers /

Recycling / disposal

Other MAPs

Field Operative

(Van)

Central

warehouse

(Hub)

Local warehouse

(Sub -Hub)

Customer

(house)

Customer Service

(Appointment Booking)Planning and Order Management

Shared Services (i.e. IT / HR / Finance)

What is the Cost/Benefit

model?

NPV

BenefitsCost

savings

Incremental

revenue Churn improvement

Reduced meter reading

Costs

Installation

costs

Asset

costs

IT &

Com.

Field force cost

Field force efficiency

Meter cost

Meter replacement cost

Hardware, software, SI

Communication cost

Reduced customer care

Working

capitalWC improvement

New customers

Cross-selling

Degree of importance

Meter stranding cost

IHD, comm. unit, battery

L H

Other Reduced energy consump.

Deployment

profile

New customer props

Interim /

Enduring

Solution

Impact on Processes

Smart

strategic

considerations



What is the optimum

Supply Chain to roll-

out Smart Meters

efficiently and reliably?

How to change

the business to be

Smart enabled?

How to build a positive

experience for the

Customer and drive

future revenue?

What is the Cost/Benefit model?

Smart

strategic

considerations



Smart Benchmarking

Asset cost per

meter (cost of the

meter) $0 $154

Installation cost

per meter $0

$60

UK plc 1

mass rollout

est.

$45

UK plc

$107

UK plc 1

Pilot

$97

UK plc

$145

$60

UK plc

Single fuel

$104

DECC

Dual fuel

$76

DECC Gas

$45

DECC elec

$70

DECC elec

$90

DECC gas

$123

UK plc

Gas

$66

UK plc

Elec

$115

UK plc

elec

$130

UK plc

gas

$180

UK plc

Dual fuel

Total business

case cost per

meter

$220

EU

country 1

$408

EU Country

$260

US co.

£146

US co.1

£240

EU country

£172

Australia co.

$315

US co.

$0 $770

Jobs per day

3.5

UK plc

4.5

UK plc

9

France

11-20

EU

7.5

UK plc

0 20

8-15

Australia

No access and

abort rates

20-30%

UK plc and

Australia co

22%

UK plc

30-40%

EU country

0% 100%



Ernst & Young’s Smart Thought Leadership

► The roll out of smart meters provides a challenge to utility companies to transform their relationship with consumers ► This publication explores the sector’s readiness to respond to this challenge. We asked domestic energy consumers how they

viewed their relationship with energy providers

The rise of smart customers – what consumers think

► Launched by the Minister of Energy, this report examines potential benefits that might accrue to the British economy as a result of the development of smart grid, including potential GDP and job creation that could arise through the required upgrades to the UK distribution network

Economic benefits of smart grid

Consumer Attitudes towards Smart Metering

► This article looks into the challenges of maximising the smart opportunity, the motivations for having a smart meter and how important the consumer engagement is for cost efficiencies and revenue opportunities .

► Ernst & Young regularly publishes leading articles on smart grid and metering issues facing utilities ► This article focuses on the capabilities required to manage the major increase in data from smart grid and metering technologies

Big data deluge threatens utilities

Attacking the Smart Grid – Penetration testing techniques for industrial control systems and advanced metering infrastructure

► This publication outlines the changing landscape in Smart grid control system architecture and the implications this has on security.

► Specific penetration testing are explained for each component to provide insight for control system engineers and management into how penetration testing can benefit their organization.

Smart customers – How consumer behaviour will be the UK Driving force

Advanced Metering Infrastructure in CSE countries – current implementation status, plans and perspectives

► This publication describes the current state of electric energy markets in CSE countries – Bulgaria, Cyprus, Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia, Slovenia, and Turkey.

► It then explains the current state of AMI implementation followed by detailed analysis of the state of AMI implementation in these countries.

Smart Control – Transforming controls to reduce cost, enable growth and keep the business safe

► This article reviews how the Smart Meter programme will open up a number of opportunities for energy retailers to really understand their customers and provide targeted, relevant products and services to those consumers to encourage energy efficiency.

► There is a common failure to recognize controls as foundational to all business processes and a key contributor to process costs. Despite this significant spend, today’s control environment is not fit for purpose. This brochure looks into the value of smart control, discovering the pain points in the control environment as well as the approach for achieving smart control

► The smart agenda is forcing Utilities to reassess what their business should be and how they need to operate ► This publication explores the smart customer strategy of 75 business leaders across 12 countries, to find out how the key

players in each market believe the implementation of smart metering will change the relationship between utilities and their customers

The rise of smart customers – what the sector thinks

Smart metering controls: invest upfront to minimise risk

► Ernst & Young published a point of view to address the timing of investing resources to mitigate risks arising from smart metering. The document highlights the key challenges to be considered by suppliers and some ideas of how to mitigate these challenges

Private eyes – Privacy concerns and protection for Smart

► Extensive consumer data usage will be essential to delivering the vision of smart grids and delivering true benefits from the huge investment in smart metering.

► The British Government has made good progress, but creating a flexible approach to governing data access – one that balances protecting the privacy of consumers with enabling data centric innovations – will be a key element of success.

► Ernst & Young’s IT risk professionals recommended ten key measures companies should take to create a solid foundation for a cyber security strategy within a real-time operational technology environment

Cyber security – how safe is your smart grid?



A Call to Action!

► Africa is a near if not at the top of the list of continents that need intervention in our

power sector and especially generation and distribution networks

► “Smart” is definitely seen by the rest of the world as the way to go!

► What does Africa need to do to get its self off the bottom?

Understand the benefits and drivers that form the basis

of the business case – with an

understanding that Africa’s drivers are different to the rest of the world from a financial and social

perspective.

Develop and enforce regulations and standards to assist the market

“find their way” and to attract funding/

Investors.

Manage stakeholders – show them the benefits so

they become “believers” not

“blockers”.

Provide incentives for the adoption of

these technologies – TOU, remote control

of appliances etc.

See smart metering wider than just utility

benefits – it’s an opportunity to create

jobs and develop the supply chain on

the continent.

THANK YOU! Questions?

driving successful smart metering programmes - smart energy … · 2018-03-14 · driving...

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