InovGrid – towards a smarter distribution grid - Eurelectric

06/06/2013

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InovGrid – towards a smarter distribution gridEurelectric Annual Convention & Conference, Bologna, June 2013

João Torres (CEO)

Presentation outline

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1. Smart Grids at EDP Distribuição

2. The Évora Inovcity Pilot

3. InovGrid project status and next steps

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EDP has grown from a local electricity incumbent to a global energy player in Europe,Brazil and the USA

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UKUK

USACanada

USACanada

PortugalPortugal

AngolaAngola

SpainSpainItalyItaly

FranceBelgiumFranceBelgium

PolandRomaniaPoland

RomaniaChina中国China中国

BrazilBrazil

Brazil

15% of EBITDA• Listed subsidiary: EDP Brasil (EDP has 51%)• Presence since 1996• Power generation: 2.0 GW

(from which 1.8GW is hydro)• 2 electricity distribution concessions

Portugal

46% of EBITDA• Privatization in 1997 (IPO)• Single electricity distributor• Power generation: 9.9 GW

(ex‐wind)(from which 5.4GW is hydro)

Spain

25% of EBITDA• Presence since 2001• Power gener. 3.9 GW

(ex‐wind)• # 2 in gas distribution

Top World levelElectric Sector in

Dow JonesSustainability

Index

#3 World windenergy

company

#1 Portugueseindustrial

group EBITDA 2012 :

Portugal 46%Other 54%

Wind Power

26% of EBITDA• IPO in Jun‐08• Wind Power: 7.6GW• # 3 wind operator worldwide

(present in 11 countries)• Listed subsidiary: EDP Renováveis

(EDP has 77.5%)

#1 Europe hydroproject (+3,5 GWin development)

EDP Distribuição is the Portuguese DSO, serving over 6 million customersin a regulated business with clearly defined responsibilities

Commercialization/ RetailersGeneration DistributionTransmission

RegulatedConcessions

•Low Voltage ConcessionsGranted by the 278 Municipalities for aperiod of 20 years (next concessionsare subject to public tender)

•High/Medium Voltage ConcessionGranted by the government until 2043

Responsibilities

• Planning, construction, operation and maintenanceof the National Electricity Distribution Network;

• Public lighting investment and maintenance;

• Comply with Quality of Service and other regulatoryrequirements;

• Provide market support (switching, metering, ...)

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Over the last decade EDP Distribuição has significantly improved the quality of supply,while also improving operational efficiency

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TIEPI MT – Is the main indicator used by Portuguese regulators to assess the quality of supply and represents thesum off all interruptions, as a time equivalent to the interruption of all the capacity installed in MV/LV substations.

2003

Percentageof regulator

defined target

2012Quality of service

Equivalent Interruption Time (TIEPI MT)

€/customerOPEX/Customer Customers/Employee

# customers/employee

Operational efficiency

minutes

58

454

-87%

20122001

71

94-24%

20122004

1.707

1.053 +62%

20122004

Today we are faced with new challenges, such as the integration of a rapidly increasingamount of dispersed generation, often poorly matched with consumption

(1) “Special Regime Generation” (SRG) includes renewables sources such as windfarms and mini hydro (<10MW), and cogeneration. More than 4.000 MVA ofinstalled capacity connected do the distribution grid at the end of 2012.

(2) According to Portuguese law, plants are considered microgenration up to aninstalled capacity of 5.75kW (or 11kW in specific circumstances).

High consumptiondensity asymmetries

Renewable DG capacity equivalent to44% of peak demand is connected to

the distribution network 1

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PV micro generation isgrowing rapidly 2

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Smart grids address the technical challenges posed by new technologies, whilecontributing to the ever-present challenges of efficiency and quality of service

Smart GridsSmart Grids

Quality ofService

OperationalEfficiency

DistributedGeneration

ElectricVehicle

EnergyEfficiency

Historical Challenges New Challenges

…

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The evolution towards a smarter grid is touching a number of different areas at EDPDistribuição; With project InovGrid we seek an integrated approach to this change process

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HV network

VHV/HVsubstation

HV/MVsusbstation

MV network

MV/LVsubstation

LV networkConsummers

Microgenerationintegration

EV chargenetwork

GIS andWork Force

Management

Remote publiclighting meteringand management

MV automationand telecontrol

DG and storageand VPP

Improved networkoperation and

quality of service

New tools forsmarter network

managementEnergy services

(efficiency, DR, …)

New tariffs andpricing mechanismsSystem integration

and cybersecurity

Informationmanagement and

data mining

WAN HAN

EDP BoxHead-end systems

LAN

DTC

Wide area network Local area network Home area network

Smar

t grid

s app

licat

ions

and

busi

ness

driv

ers

SG e

nabl

ing

infr

astr

uctu

reD

istrib

utio

nne

twor

k

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The first deployment of project InovGrid took place in the Portuguesemunicipality of Évora and was concluded in 2011

InovCity store

Efficiency Case-studywith selectedCommercial Clients

EV charging points

MicroGenerationintegration

New products and Services toDomestic Clients

DTC installed inall secondarysubstations

Energy Efficiencywith PublicLighting

Évora municipality: - around 55 thousand inhabitants- 1.300 km2, with a mix of urban and rural areas

InovGrid deployment: - around 30k smart meters (EDP Box)- 350 DTCs in secondary substations

Today Évora is a living lab for project Inovgrid, were we cantest different technical aspects and explore the social dimensionof smart grids to develop effective consumer engagement strategies.

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The technical architecture deployed in Évora goes beyond smart metering

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HV network

VHV/HVsubstation

HV/MVsusbstation

MV network

MV/LVsubstation

LV networkConsummers

EDP BoxHead-end systems DTC

Wide area network Local area network Home area network

SG e

nabl

ing

infr

astr

uctu

reD

istrib

utio

nne

twor

k

HANLANWAN

EDP Box (EB)

Installed near thecustomer, EDP’s smartmeter includes supportfor in-home energymanagement and localpower quality monitoring.

Distribution TransformerController (DTC)

Located at the LVsubstation is works asdata concentrator andsubstation monitoring.

Central IT systems

Head-end systems includethe MMS and the SCADA.These systems are thenintegrated with othercommercial and technicalsystems.

Narrow band PLC+ GPRSGPRS

ZigBee+ Wifi

DTC Cell

DTC add-on module forautomation and remotecontrol of medium voltagecells.

The InovGrid deployment in Évora was used as a case study to illustrate Eurelectric and JRC’srecommended methodology for cost-benefit analysis of smart grids projects

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InovGrid has beenselected among 220smart grids projects byEurelectric and theJoint Research Centreof the EuropeanCommission (JRC) assingle case study fortest and validation of aproposed Business Caseassessmentmethodology (EPRI)

“The proposedevaluation methodologyconsists of seven steps[...]. The paperdescribes each step andthen gives practicalexamples from theInovGrid project […] ledby the Portuguesedistribution systemoperator EDPDistribução to informthe adaption of themethodology for itsapplication in Europe.

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The Évora pilot allowed the test of several concepts and value drivers and was usedto validate EDP’s business case for smart meter deployment

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CommercialLosses

OperationalEfficiency

EnergyEfficiency

TechnicalLosses

TechnicalEfficiency

RenewablesEmerging Tech.

TechnicalQuality Service

CommercialQuality Service

• Reduction TechnicalLosses

• Network simulation basedon actual data

• LV energy balance

• Sensors in LV substations• Reductions O&M costs• Avoided visits• Improved Asset

Management

• Reduction ofInterruption Time

• Outage detectionthrough contact center

• Power Quality Module

• Improved fraud detection• Revenue Assurance initiative

• >80% remote operations• >95% invoicing based on

real consumption(without estimates)

• Statistically significant impact in efficiency• New Products and Services pilot• LED, Public Lighting remote management

• Client Satisfaction• Reduction back office costs

• Analysis of data of >200micro producers

• Integration of EV charge

Commercial Technical

The cost-benefit analysis of the project established the clearly positive business case andemphasized the importance of energy efficiency gains

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20

11

9

41

100

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ReducedOil Usage

TotalBenefits

1

Reduced CO2Emissions

2

ReducedElectricity

Cost

DeferredDistribution

CapacityInvestments

1

ReducedElectricity

Losses

Detection ofAnomalies

relatingContracted

Power

5

ReducedElectricity

Theft

ReducedOutages

(excl. DA)

1

ReducedDistributionEquipment

MaintenanceCost

2

ReducedDistributionOperation

Cost

ReducedMeter

Reading Cost

Details of the quantified Benefits of InovGrid (%)

OperationalEfficiency Gains

(30%)

Illustrative

EnergyEfficiency Gains

(45%)

Reductionof Losses

(15%)

AssumingConservative

estimate of 2%

Other Non-quantified BenefitsEx: DG, EV, RES,…

Energy efficiency is the most important value driver

Increasing uncertainty

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Consumer engagement is key to unlock Smart Grids’ potential and promote energy efficiency

Smart Grids’ potential

Cons

umer

eng

agem

ent

Improved DSOefficiency

Improved billinginformation

Advanced energyefficiency services

Complex services(e.g. DR, VPP) Attract

Involve

Inform

InvolveInvolveEngage

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Challenge: the average consumer interacts with his provider for 9 minutes a year*

* source: Revealing the values of the new energy consumer – Accenture 2011 and 2012

In Évora a combination of initiatives was used to raise awareness about the projectand create a special InovCity dynamic, promoting costumer engagement

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InovCitywebsite andlocal socialnetworks andblogs

3D Model atInovCity Storein City Centre

Customerresearchand Socialstudies

EnergyBus inÉvora

Presencein localpress

Mailing andinformationto Consumers

Test of newproducts andservices

VIPvisits

Smart Gridsconferencesand meetingsin Évora

MonthlyNewsletter toEnergy relatedprofessionals inÉvora region

Collaborationwith ÉvoraUniversity

Involvement ofthe Town Hall andother local publicAuthorities

Key stakeholderswere identified

Multiple initiativeswere designed totarget specificcustomer groupsand otherstakeholders, suchas schools, energyprofessionals andlocal authorities.

Surveys were usedto continuouslymonitor customerattitudes and guidecommunicationdecisions.

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A pilot group of residential consumers in Évora was used to study the impact ofinnovative products and services enabled by the smart grid infrastructure

Source: Estudo da Adesão das Comunidade Locais à Energy Box no Contexto do Projecto ÉvoraInovCity, ISCTE-IUL (Sociological Study on Local Community relating Energy Box perception)

2,5

5,46,25,86,05,8

7,37,06,7

Pre-paidTariff

ConsumptionSegmentation

Tariff

Intelligentsystem

connectedwith Smart

meter

Softwarewith

information

DisplayAlerts

Displayinstalation

Suggestionabout idealTariff plan

Alert about"Contracted

Power"

Alert whenConsumptionvaries more

than xx%

Alerts Displays Information Tariffs

Costumer Interest in New Services related with Energy Efficiency (1-10)Customers showedinterest in typicalsmart grids services,but not in pre-paidenergy offers.

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Alerts(SMS, email and mail)

Direct feedback(real time)

Tariff simulation

Consumption level Power use High-consumption periods/days

Displays with real timeconnection to the EDP Box

3-period TOU tariff Progressive tariff Tariff with savings targets

Products and Services tried in Évora:

Web

por

tal

• Consumption reduction1 of 3,9% vs. independent control group (2,1%, error margin for a 95% confidence interval);

• Invoicing based on real consumption; Real-time access to detailed consumption data at the site EDP Online;

Exposure to project promotion initiatives and generic energy efficiency tips..

• Results are persistent2.

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(1) Results recorded from March 2011 to February 2013.

(2) From 2010 to 2011 there was a generalized reduction in consumption in Portugal,probably attributable to the sudden deterioration of economic conditions.

The results from Évora demonstrate the potential of smart grids to promote energy efficiency

Inovcity Effect (Évora population)

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2010 2011 2012

Évora

Control Group

Evolution of consumption per customer from 2010 e 20121

Inovcity Effect

-3,9% -3,8%

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• Consumption reduction1 of 5.3% for consumers with access to reports, alerts and special tariffs (5,2% error marginfor a 95% CI);

• Consumption reduction1 of 6.6% for consumers with access to displays/monitoring software (4% error margin for a95% CI).

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The results from Évora demonstrate the potential of smart grids to promote energy efficiency

(1) Comparison of 2012 vs. 2010.

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Alerts Type 2 (SMS, email)Load diagram

PC Software + Display

Enhancedconsumptionmonitoringdevice

Alerts Type 1(SMS, email)

Display Type 2

Progressivetariff

Cons

umpt

ion

Leve

l 1Le

vel 2

Leve

l 3

Contracted Power (kVA)

Level 2 Level 3Level 1

Display Type 1+

Time-of-usetariff

New products & services test group

The pilot in Évora clearly demonstrated the benefit of the technology in terms ofincreased efficiency of operations

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0%

100%

Deploymentprogress (%o metersinstalled)

Success rateof remotereadings (%)

Success rate of remote meter readingsduring the deployment process

Remote readings

Remote operations

>95%

>80%

Optimized LVsubstation

maintenance

Optimized outagemanagement process

Reduced need forlocal visits due toremote monitoring

EBs and DTCs providealert/confirmation ofLV outages to callcenter and OMS

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Careful management of the deployment process is crucial to guarantee a positive initialattitude of customers towards smart meters

Source: Estudo da Adesão das Comunidade Locais à Energy Box no Contexto do Projecto ÉvoraInovCity, ISCTE-IUL (Sociological Study on Local Community relating Energy Box perception)

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• Customer engagement is crucial to achieve impact interms of energy efficiency;

• Implement an effective communication plan;

• Fine-tune meter installation processes;

• Invest in dedicated crew training for the meterreplacement campaign;

• Minimize inconvenience for customers and use visitsto communicate the new possibilities the technologyoffers.

• You can never have too much bandwidth, butreliability and consistency are more important;

• For new PLC technologies, network parameters(timeouts, retries, TTL, etc.) have to be optimized;

• Benefits only start to materialize once the newfunctionalities are integrated in business processes;

• Smooth integration between new and legacy ITsystems is critical to achieve success.

KEY LESSONS

DecNovOctSepAugJulJunMayAprMarFevJan

201120102009

# of customer contacts during EB deployment

Deploymentperiod

3,43,53,1

0

1

2

3

4

5

GlobalDomestic ClientsCommercial Clients

Consumer satisfaction with EB installation process (1-5)


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In 2012 the Portuguese regulator (ERSE) introduced an incentive to smart grid investmentsthat provides higher returns in exchange for technological and business risk

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Remuneration Rate with risk premium over“traditional” investment:

Additional OPEX efficiency targets included inRPI-X formula:

X

Adicional XRI

EDPD assumes technological risk(equipment substitution, obsolesce,…)

+ 1,5% premiumAt the beginning of theregulatory period 2012-2014 the Portugueseregulator (ERSE)introduced an incentiveto “innovative” smartgrid investment thatprovides higher returnsin exchange fortechnological andbusiness risk

While there is still no formal decision from the Portuguese Government about a country-wide rollout, it is an increasingly likely considering the European background

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European countries’decisions and CBAoutcomes regarding asmart meter rollout, asof January 2013*

In 2012 the Portugueseregulator conducted a CBA ofsmart grids in Portugal, witha clearly positive outcome,

very much aligned withEDP’s own analysis.

* In Smart Grid projects in Europe: Lessons Learned andCurrent Developments – JRC, 2013

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Following the Évora pilot, EDP Distribuição is extending the deployment of smart meters tosix additional locations, in order to consolidate knowledge and test different technologies

2010 2011 2012 2013 2014 2020...

InovGrid deployment schedule

30k EBs(Évora InovCity)

+100k EBs(6 new locations)

+200k EBs(keep expansion)

6M EBs(full rollout)

Rollout date tbd

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Pending government decision

2015

• New technologies (PLC PRIME, RF Mesh)• Different environmental (social/economic)• Different grid conditions• New smart grids applications• Increasing business process integration

Ener

gy B

oxde

ploy

men

tLV

subs

tatio

n au

tom

atio

nan

d m

onito

ring DTC deployment

in 15% of existingLV substations

Remote metering &management of 100% ofPublic Lighting circuits

Remote metering of100% of distributiontransformers

MV circuitautomation usingDTC Cell add-on

InovgridSupervisionCenter

Beyond the deployment of smart meters, EDP’s smart grids transition is under way, withemphasis on data integration to improve LV grid operation and energy balance

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EB TP

EB IP

DTCEB LV

Information flows depicted from a conceptual point of view

- Substationenergymeasurement

- Public lightingcontrol and

consumption

- LV consumption/generation- LV monitoring- LV monitoring

- Asset manag.sensors

- MV monitoring- MV automation

MV operation center Contact centerInovgrid Supervision Center

Frauddetection and

handling

LV networkmonitoring

and operation

Inovgrid infra-structure

supervision

DTC Cell

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Looking forward towards 2020 some challenges stand-out

• Adequate incentives and competitive rates of return;• Stable and clear regulatory environment, defining rules and roles for

new services (e.g. DR, EV, DG, VPP, energy efficiency services);

People

Regulationand Funding

Processes

Technology

• Increased customer engagement (capturing value, privacy issues, …);• New smart grid skills for DSOs (marketing and CRM, telecom

engineering, data and business analytics, ...);

• Active network management, automation and support for newservices (DG management, DR, VPP, …);

• Improved asset and risk-management capabilities• Management of increasing volumes of data and large scale

automation of operations

• Smart grid end-to-end integration• Cyber security• Standardization and interoperability

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EDP Distribuição participates actively in several international forums and projects,collaborating with peers and other institutions on issues such as standardization and policy

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SG Task-Force

Smart Grids TFRenewables

Aggregators

ConsumersDistributed Resources

Storage

Metering

Security

Electrical Vehicle

Business Case

Single Case StudySmart MeteringMandate M/441

Smart GridsMandate M/490 Smart Cities

Micro Generation

S3CSuSTAINABLE

Meter-ONReservices

TClouds

Stabalid

Grid+

EcoGrid

PlanGridEV

envolvDSO InSmart

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We remain focused on giving an increasingly well defined and coherent shape to thebroad concept of “smart grids”

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CampaignManagement

Processes andOperations

End-to-endIntegration

EV ChargeNetwork

Integration

HV/MV/LVControl Center

EconomicImpact

SocialImpact

DistributionAutomation

PowerQuality

Testing andQuality

Assurance

Storage

RevenueAssurance

Infrastructureand dataquality

WFM –Work Force

Management

LV Substation& Pub. Lighting

Metering

GIS

Architecture &componenetSpecification

Ciber-Security

DemandResponse

Communic.Technology

Pilots

InformationSystems

EnergyBalance

REIVEProject

AssetMonitoring &Management

EuropeanProjects and

Funding

SG BusinessModels

New Productsand Services

EnergyEfficiency

DataManagement& Governance

TechnicalLosses

CommercialOperations

ComplaintsManagement

InstitutionalComunication

Project Lines

1

2

3

4

13

14

17

18

23

21 29

30

6

5

7

32

33

34

35

12

20

22

19 36

8

9 26

25

15 24

27

28

10

ProjectOffice

ProjectOffice

OrganizationalDevelopment

PMOEuropeanProjects

11

16

DistributedGenerationIntegration

37

InovGridOperations

SolutionDevelopment

EuropeanInitiatives

System &Process

Integration

Automation& Telecontrol

EnergyManagement Custommer Business

ImpactElectricMobility Technology

Implementation platform

Regulation

31

Public LightingTechnology

38

EMFSafety

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More than 1000 delegations and personalities from all over the world have visited Évora’sInovCity – You are invited!

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The Prince ofWales visits

ÉvoraInovCity,

29/03/2011

ERSE - Prince Charles - China Three Gorges - Czech Republic - EDP Bandeirante-Corpoelect - DR ENER CE-Zhuai – France –Romenia - Ilhas Montanha - Macau Fleming - DRC - Universidade Unioeste - Fundação Getúlio Vargas- Japan-Indonesia -ADREM - ERDF - ABDI-Sentec - Basildon Council -Tuas Power-Australia - Qren – Novabase – Moçambique -Singapure…

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Thank [email protected]

InovGrid – towards a smarter distribution grid - Eurelectric

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