Advanced Metering Infrastructure & Utility Applications Identifying How to Create Value Across the Grid
Advanced Metering Infrastructure & Utility Applications
Identifying How to Create Value Across the Grid
2
Sample smart grid dataCONFIDENTIAL
There are a number of aspects of advanced metering that we can investigate in order to determine what the true potential for electric utilities
• What are the opportunities associated with advanced metering and other automated distribution
applications?
• What are the different components that come into play and who are some of the system element
providers?
• How can financial analysis help us to determine the viability of differing system solutions?
Overview
3
Sample smart grid dataCONFIDENTIAL
Monitoring and diagnostic systems can be used to provide power quality and control monitoring applications for different aspects of an electric distribution system
• Factors arising as a result of deregulation means utilities need to measure power characteristics in every sector of the power grid
• Increased monitoring requires additional communications infrastructure
AMR Systems
Customer Data
Distribution and Load Management
BPL Applications – Utility Applications
SCADA Systems
Substation Data
4
Sample smart grid dataCONFIDENTIAL
BPL Applications – Utility Applications
Power monitoring and control applications have capabilities that can be fully automated to maximize efficiency and significantly reduce O&M costs
• The systems alone collect and analyze data that can diagnose and locate problems before they happen
• IEDs (Intelligent Electronic Devices) can be installed to fully automate control systems and receive maximum economic benefits
Power Monitoring and Control Applications
Demand Side Management
Distribution Automation
Automatic Meter Reading (AMR)
Monitoring and Diagnostics
5
Sample smart grid dataCONFIDENTIAL
Communications networks may provide a cost-effective, bi-directional, broadband communications platform capable of delivering real-time data to the utility
• Using a communication platform can eliminate the cost barriers historically associated with the installation of SCADA, AMR and Load Management Systems
– There are no payments to telephone utilities for installation fees and rights of way– The approach eliminates the need for high-cost dedicated landlines or dial-up lines that require toll
payments– Fixed wireless networks can be very costly to install on an entire network– Network capabilities can eliminate charges associated with using cellular systems
• Efficiency can be improved by reducing the number of different architectures that need to be supported and managing all systems on one network
• The utility own the meters and the communications system and not have to rely upon another utility or provider
– No interruption of data transmission due to downed telephone or cellular systems– Maintenance and repairs scheduling is completely controlled by the utility
• Labor and operating costs associated with manual data gathering and analysis could be reduced in a variety of areas:
– Head count– Salaries/Benefits– Vehicle Fleet– Overhead
• The potential exists to reduce communications latency between devices
BPL Applications – Utility Applications
6
Sample smart grid dataCONFIDENTIAL
There are numerous vendors that offer a variety of automated distribution functions
BPL Applications – Utility Applications
Vendor Utility Applications Supported
Cannon Technologies• Demand response• AMR• Substation automation
CES International • Outage detection
Sample Customers
• TVA• Louisville Gas & Electric• Kansas City Power & Light
• Southern Company• Baltimore Gas & Electric• Con Edison
DCSI • AMR• PPL• Idaho Power• Bangor Hydro
GE Power Systems • Substation Automation• Hydro Québec • Scottish & Southern• PG&E
7
Sample smart grid dataCONFIDENTIAL
One of the more critical areas within the field of automated distribution lies in the emergence of Intelligent Electronic Devices (IEDs)
• IEDs offer the ability to utilize cost-effective and intelligent monitoring systems and services to the electric utility industry for monitoring the health of distribution infrastructure
– The combination of low cost sensors and communications platforms will enable numerous applications of Distribution Automation
• There are a number of typical functions supported by IEDs:– Detection and location of faults– Measurement of power quality– Identification of grounding and cable insulation issues– Detection of power theft– Detection of unanticipated loads– Confirmation of recloser, sectionalizer and other switch operations– Support capacitor-switching algorithms– Monitoring disturbed generation
BPL Applications – Utility Applications
8
Sample smart grid dataCONFIDENTIAL
The development of network infrastructure can allow for a better communications platform to enable automated distribution applications
BPL Applications – Utility Applications
- Test of Underground Sensor Equipment -
Source: GridCom International
9
Sample smart grid dataCONFIDENTIAL
Overall, there are a number of different players in the overall value chain
BPL Applications – Utility Applications
Switch Gear Manufacturers
System Integrators
Sensor Manufacturers
IED Manufacturers Networking Specialty
Products
Vendors • Cooper Power
• S&C Electric
• Kearney
• ABB
• GE
• Itron
• Fisher Pierce
• Lindsey
• Square D
• CHK
• Energy Line
• Fisher Pierce
• Domosys
• Intellon
• Richards
• GE-Harris
Applications & Products
• Reclosers
• SCADA
• Switches
• AMR
• Distribution automation
• Fault testing
• Line sensors
• Capacitor banks
• LAN • Cable joints
• RTUs
10
Sample smart grid dataCONFIDENTIAL
AMR systems have been delivering increasing value with lower costs and more robust capabilities
BPL Applications – Utility Applications
AMR Project Payback
2.9
3.9
4.9
5.9
6.9
7.8
8.8
9.8
-
2.0
4.0
6.0
8.0
10.0
12.0
$30 $40 $50 $60 $70 $80 $90 $100
Year
s
Past meter prices
Current meter prices
11
Sample smart grid dataCONFIDENTIAL
Communications
CommunicationsElectricityElectricity
• Choose suppliers• Select tariff• Monitoring usage• Respond to price
signals• Monitor appliances
and devices• Remotely program
operations• Consolidate bills• Outage detection• PQ monitoring• Security• Data
• Choose suppliers• Select tariff• Monitoring usage• Respond to price
signals• Monitor appliances
and devices• Remotely program
operations• Consolidate bills• Outage detection• PQ monitoring• Security• Data
The concept of supporting a number of distribution applications through one system has been promoted by EPRI
Source: EPRI
12
Sample smart grid dataCONFIDENTIAL
Shares a vision of a total solution approach
Feature an entrepreneurial
approach
Has a utility-centric focus
Possess proven technology capabilities
When choosing a technology partner/vendor, make sure to choose a complete system that supports a number of system priorities
13
Sample smart grid dataCONFIDENTIAL
Customers
Channel Provider
Technology Developers
Technology Vendor
Application Software
Developers
Data Handling Providers
Partners & AlliancesIt is very common to integrate a number of players from different portions of the overall value chain in supporting distribution technology application delivery
14
Sample smart grid dataCONFIDENTIAL
Each vendor can be “graded” based on the overall fit they bring to the proposed project
Ability to Invest
Shared Vision
Utility Focus
Entrepreneurial
Technology Capability
Manufacturing Capability
Vendor A Vendor B Vendor C Vendor D Vendor E
Channel Strategy – Technology Developers
15
Sample smart grid dataCONFIDENTIAL
Sample Overview
For one utility we worked with, we identified six distinct areas of opportunity within the field of “internal utility applications”
Automated Distribution
Demand Side
Management(DSM)
Distribution Transformer Monitoring
Outage Notification
Customer Service
Automatic Meter
Reading(AMR)
Power Quality
Monitoring
The immediate opportunity lies in the
ability to read multiple meters
The “beyond the meter” capability
will enable a robust
Demand Side
Management program to
be instituted
The Current and Voltage
measurement will enable
Transformer Diagnostics and Failure Prevention
The location of the
sensors in the electrical grid provides opportunity
to detect outage
information
Sensors can enable the delivery of enhanced
services that can be
marketed to the customer
base
The Voltage Sampling
Rate in the design will
enable Harmonic Distortion Analysis
16
Sample smart grid dataCONFIDENTIAL
Provides a new electric meter and data collection device
Stores multiple customer energy usage data at a single location point
Accepts and stores other multi metering data at a single location point (gas and water)
Enables backhaul of collected data to NOC (Network Operation Center)
Plurality of ports for utility and communication providers (CATV, DSL, BPL, Home Security, etc.)
Enables two way interactive communication between the device, the consumer, service providers, data handlers, and the utilities
Enables “grid-smart” applications (distribution portal)
Empowers consumers to “Smart Home” technology (consumer portal)
Utility Functionality
A system was developed to support AMR, DSM, outage detection, and other utility applications
Sample Concept
17
Sample smart grid dataCONFIDENTIAL
The overall electric applications revenue opportunity for the total system offers significant value
Revenue – Electric Applications
Revenue - Electric Applications
$3.40$5.78
$8.16$10.55
$12.93 $12.32 $12.61 $12.90 $13.21 $13.52
$0.65
$1.96
$3.27
$4.57
$5.88 $6.61 $6.77 $6.93 $7.09 $7.26
$0.11
$0.32
$0.53
$0.74
$0.95 $1.07 $1.10 $1.12 $1.15 $1.18
$0.96
$2.87
$4.78
$6.70
$8.61 $9.68 $9.91 $10.14 $10.38 $10.63
$1.89
$5.69
$9.48
$13.27
$17.06
$19.17$19.63
$20.09$20.56
$21.05
$-
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
($M
M)
Customer ServicesMonitoringRemote Meter ManagementDSMMetering
18
Sample smart grid dataCONFIDENTIAL
Metering is projected to yield the largest immediate potential benefit of all of the electric applications
• Read-to-bill benefits are heavily loaded up front as deployments lead to immediate cash flow benefits
• Meanwhile, pure AMR benefits and corrections of faulty billing increase as more meters are brought on-net
Revenue – Electric Applications
Key Assumptions
2006 electric meters 1,837,193
Annual growth 2.4%
AMR value $0.53
Faulty meter rate 1.5%
Slow:fast meter rate 9:1
Net loss for slow meters 15%
Average annual bill $844
Read-to-bill benefit $5.47
Unregulated benefit rate 75%
Electric Metering Benefits
$-
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
($M
M)
AMRFaulty BillingRead-to-Bill
19
Sample smart grid dataCONFIDENTIAL
A demand side management program could yield over $7 million in annual benefit once the entire network is equipped
• The primary measure of DSM program performance is the TRC (Total Resource Cost) of Energy Savings
• The TRC is expressed in units of Cents/kWh so that it can be directly compared to a utility’s avoided cost in order to determine the cost-effectiveness of the DSM program
Revenue – Electric Applications
Key Assumptions
Energy savings/meter 135 kWhr
Total resource cost $.032
Unregulated benefit rate 75%
Demand Side Management Benefits
$-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
($M
M)
20
Sample smart grid dataCONFIDENTIAL
Off cycle reads can result in significantly higher costs that normal monthly reads
• The deployment is projected to last five years, after which point approximately one million dollars is returned in value per year
Key Assumptions
Off cycle reads/year 7%
Off cycle meter read $10.00
Unregulated benefit rate 75%
Revenue – Electric Applications
Remote Meter Management Benefits
$-
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
($M
M)
21
Sample smart grid dataCONFIDENTIAL
Implementation of the system devices can support more efficient operation of distribution transformer monitoring
• Remote troubleshooting can reduce labor required for in-person visits
• Furthermore, efficiency in dispatching in the event of a transformer failure can be increased as well
Key Assumptions
Customer troubles/year 8.3%
Hours per trouble call 1.5
Labor rate $60.00
Trouble visit reduction 75%
Calls involving OT 25%
Failure rate per meter .013%
Hours per failure 4.0
Dispatching efficiency gain 10%
Revenue – Electric Applications
Distribution Transformer Monitoring Benefits
$-
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
($M
M)
22
Sample smart grid dataCONFIDENTIAL
Customer services like surge protection and electrician services can easily be supported by a deployment of a total system solution
• The high margin nature of the business supports immediate cash flow generation
Key Assumptions
Surge penetration 1.3%
Surge monthly fee $7.99
Surge net margin 95%
Electrician sales rate 25%
Customer charge $500
Electrician margin 82%
Revenue – Electric Applications
Customer Services Benefits
$-
$5.00
$10.00
$15.00
$20.00
$25.00
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
($M
M)
Surge SuppressionElectrician Services
23
Sample smart grid dataCONFIDENTIAL
Going forward, the next steps will be to identify how to proceed with a metering and automated distribution strategy
• Confirm management interest in utility applications – and the nature of the interest
• Build the business case to support a viable strategy
• Begin discussions with technology vendors to evaluate technology fit
• Initiate tests of technology options
• Customize analysis of opportunity for your community
• Identify partnerships with key operators – ISPs, CLECs, network integrators – and negotiate terms and roles
• Project manage the deployment of the network
Next Steps
There may exist an opportunity for cities to work together to jointly evaluate the potential of these kinds of system approaches
24
Sample smart grid dataCONFIDENTIAL
Questions?
Questions
David Shpigler
(845) 348-7801
www.shpigler.com