COGENVAD INFERGY (*) SOLUTIONS - EXECUTIVE SUMMARY. July 2002

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1 COGENVAD INFERGY (*) SOLUTIONS - EXECUTIVE SUMMARY This document purpose is to identify persons and organizations in Greece and abroad that would wish to early capitalize on a sound business opportunity soon to be offered by a revolutionary platform, coded, for historical reasons, as COGENVAD. The document structure serves therefore as a brief introduction to the core technical and business aspects and assumptions of COGENVAD; these are concisely described and presented below. The task of completing the full technical and business aspects of COGENVAD is still in progress. Despite an impressive workload already completed, the consortium anticipates two more years till COGENVAD can claim the maturity of a tested industrial solution with all business assumptions, as to deployment modalities and associated economics, fully sorted out. The reader is consequently refrained from viewing this document as any yet elaborate COGENVAD Specification, currently under preparation (table of contents included here). (*) Infergy is a term used to illustrate a core design feature of COGENVAD; its simultaneous delivery of, now converging, energy and information technology services. July 2002 Managed by: Daedalus Ltd, daedalushq@mail.daedalus.gr, tel: (+30) Approved by: The COGENVAD Consortium Written by: Evangelos Mylonas, cogenvad@mail.daedalus.gr, tel: (+30) Nikos Sakkas, nsak@stepc.gr, tel: (+30)

2 TABLE OF CONTENTS 1. The rationale The business model The advantage The customers The competition The technology The initiators The SWOT analysis The COGENVAD technical specification ANNEX: WECON PDP July

3 1. The rationale The open residential space, viewed in terms of its wind and solar energy, represents a serious source of income, which currently escapes, almost completely, all practical reach and serious exploitation. The energy business, especially in its current deregulation spiral, will seek a competitive advantage in offering, next to energy, novel added value services. These can be significantly facilitated and rendered cost efficient chiefly by taking advantage of the existing power network. New and appropriate to the case technology will be required for jointly harnessing the space wind and solar potential for income generation and the energy provider networks for the provision of novel added value services. The COGENVAD solution is based on such a technology and may offer, at a limited marginal cost, a radical and extensive set of add-on services, of an impressive commercial and social impact, together with important savings on the energy bill. July

4 2. The business model To deliver and manage the COGENVAD services, an appropriate business model is required that will take account and clearly assign, both the benefits to be reaped as well as the costs to be borne. Moreover, a number of actors are involved directly or indirectly in the delivery of the COGENVAD solution. This section describes the interplay between the actors, the benefits and the costs in the COGENVAD solution. The Customer (C) and user of the offered energy as well as of all the supplementary services. The Customer is any user of residential, office or (to a lesser extent) industrial space, where the supplementary production/ storage devices are installed. These include (1) the solar and/ or wind energy production set, (2) the hydrogen storage unit, (3) the fuel cells and (4) the necessary system for their remote monitoring (over the electric cables). Optionally, also the domestic automation units. The end customer benefit will be his reduced energy bills and his ability to take advantage of numerous low cost services offered over his power lines (home automation, Internet, security, etc.). The end customer will bear no purchase cost whatsoever for the installation at his premises of all required hardware (energy capturing and storing devices, power line modems, etc.) The Energy Provider (EP) actively, yet fully transparently, actually manages the customer infrastructure. The EP may be any contracting public or private enterprises offering electric energy services, over the existing networks. The EP tele- monitors and optimizes the use of energy as well as the network resources. The EP can offer a number of supplementary services, such as energy economisation, safety services, Internet services, etc. These, he offers either directly, or in the framework of an agreement with a third and specialized party. The energy provider will benefit from leveraging himself from an energy provider to a provider of a wide and ever increasing spectrum of services. The energy provider will also significantly benefit from the optimization of the energy delivery to the end customer. The energy provider will either bear himself the cost of the required hardware installation at the customer site, or return a monthly lease to the financial institution that has borne this very cost. The energy provider will also bear the cost of installing the server side equipment and software for managing COGENVAD. The Financial institutions (FIs) finances the initial set-up cost at the customer premises. Obviously, this financing scheme will be significantly influenced by the exact set of services requested by the Customer. The FIs use the electric network to accomplish these customer or energy provider related transactions. Again, the electric network offers a radical easiness in technically managing this relationship and can be the basis for further commercial services. July

5 The various Service Providers (SPs), who in a way lease the use of the electric network (although other alternative networks can still be used) to offer various information based services to the Customer. In the same way SPs can offer services to the EPs or any other contractors to the COGENVAD business relationship. Various State and Social Institutions (SSIs) that may be involved in a number of, public interest, transactions. Typical examples may by statistical services, planning services, etc. The following figure illustrates the basic functionality of COGENVAD, illustrating the above referenced co- operation between all involved actors. Figure 1: COGENVAD- The 5 basic actors of the service July

6 3. The advantage The competitive and strategic advantage of the COGENVAD platform is that it will offer a practical and early capitalization of what is estimated as a major trend in the forthcoming years, i.e., the emergence of energy providers in a complex and challenging role of a multi service provider. The more tactical advantage of COGENVAD is that it will offer significant economies in the energy bills and also offer connectivity to residences, with all that this implies for the developing knowledge society. These benefits, although noble on their own, also bring the indirect benefit of shifting the cost-benefit curve of traditionally costly experiments (e.g. domotics) towards a more feasible, economically, point. July

7 4. The customers COGENVAD addresses primarily the residential sector. According to the Figure below, in the US this sector amounts to the 12% of the total use of energy. However, a part of the commercial sector also fits in well with the COGENVAD architecture. According to the above figure, it is expected that the particular uses of services and offices are also candidates for COGENVAD. On average, COGENVAD may be relevant to the 20-25% of the total energy use. Data in the EU should not be much different. July

8 5. The competition COGENVAD is based on a radical view of bridging energy and IT services. It has been nurtured as a concept over many years and has reached such an implementation soundness that it can justly claim that in terms of maturity it has a clear head start. It is obvious that the field is too lucrative for anyone to stay alone, even in the mid term. In 3-5 years from now the energy provider profile will have fundamentally shifted. There will be other solutions and other offerings around supporting this shift. The challenge for COGENVAD is to reach a real world implementation status by year July

9 COGENVAD- Infergy Services 6. The technology The following picture concisely illustrates the integration of renewable energies in the residential environment. Figure 2: Integrating renewable technology in the residential environment The technology of COGENVAD clearly includes many elements of energy, environmental and IT technologies that may be put to work together in an integrated and seamless way. At the annex of this document a specific Daedalus product is introduced. It has resulted from many years of research in many diverse fields, combing and integrating various (patented) novelties. The current phase is that of industrial prototyping. Therefore, the keen interest to embark on the set up of the appropriate alliances for full commercial exploitation. In follow up versions of this document further elements of the COGENVAD solution may be briefly presented. July 2002 The Daedalus Group, Public Communication 9

10 7. The initiators At the current phase, COGENVAD is at the stage of producing a full COGENVAD specification, which will be the guide for a number of activities and contacts with interested entities in the public and private sector alike. However, the need for acting in common with the appropriate industrial and financial entities is also a solid requirement in order to build the critical mass and open the path to industrial implementation. DAEDALUS Informatics Ltd. Daedalus Informatics has the technical and business supervision of COGENVAD. Daedalus Informatics has a many year international exposure in the area of renewable energies, with a particular focus on wave energy, where it has developed and marketed the revolutionary WECA product range and recently has completed the aeolic series (WECON PDP-3/10/50 (Pressure Dynamics Processor) of small wind turbines. A very brief description is includes at the annex of this document. Also, Daedalus Informatics develops for more than 10 years especial server side software for monitoring the data telephone networks of residences and for offering security, fire protection, etc. services. This technology is now reviewed under the code name ECOHOME, and will serve as the basis of the EP controlling software Daedalus Informatics has obviously extensive experience in the IT sector and has delivered a number of related products. LEI Crete (Laboratory of Environmental Informatics - Crete) LEI Crete will assist in supervising the issues related to environmental, energy and functionality specifications. It is part of the TEI of Crete and also of the newly founded Cretan Center of Technology (CCT), and especially of its Environment section. It has a close collaboration with the Institute of Aeolic applications, also part of TEI of Crete. The LEI Crete has also extensive exposure to business planning exercises and has delivered products (intelligent and energy saving dust filter) and process automation solution to important Hellenic industries (e.g., Plastics of Crete). It is present in the EU R&D framework activities and takes good advantage of all respective funding opportunities for the transformation of COGENVAD in a stable industrial solution. DUTH (Democretus University - Thrace) DUTH will assume the responsibility for analysis and modeling of building applications. It possesses significant experience in the area of complex systems. SmartHome - Greece SmartHome-GREECE represents today in Greece and the broader Balkan region Smarthome, the largest international provider of solutions in the home automation area, compliant with the X- 10 standard. It will supervise the analysis and application of the Domotics part of the COGENVAD platform. July

11 Universal Security Systems USS represents a many year knowledge and experience in the application and support of integrated security systems. It will supervise the pilot trials, applications and telemonitoring of multipurpose installations, of residential and industrial or commercial use. July

12 8. The SWOT analysis The major strength is the vision of the COGENVAD approach and its conformance with emerging business patterns in the energy sector in anticipation of the heavy competition that is coming up as deregulation establishes. The major opportunity is to establish in about 3-4 years as a key market provider of joint energy- IT solutions (Infergy solutions) based on intelligent domestic connectivity and on the harnessing of an important energy potential, right over our heads (most often!). Major weakness is, for the moment at least, the lack of strong industrial support. Major threat is the collapse of core assumptions with regard to the COGENVAD design. Such are, the fast deregulation of the energy sector, the developments on the hydrogen technology front and the institutional support for the penetration of renewable energy at the residential sector. July

13 9. The COGENVAD technical specification Follows in this section the table of contents of the full COGENVAD technical specification, currently under preparation. COGENVAD technical specification- Table of Contents I. Market literature 1. Energy consumption patterns and associated costs at the residential and commercial sector 2. Renewable energies at the residential level. Requirements and benefits 3. Hydrogen and fuel cell technology 4. Trends in value added services in the energy sector, with a focus on residences II. Technology 1. The COGENVAD-Energy architecture. Technical specification 2. The COGENVAD-IT architecture. Technical specification 3. COGENVAD Client-Server Communication. Technical specification 4. Added value services a. The DOMOTICS add- on. Technical specification b. Security services add- on. Technical specification c. Document services add- on. Technical specification III. Business issues 1. Cost & Benefit analysis. Requirements, cost profiles and deployment modalities 2. Running the service: Human Resources, Pricing, Quality and Maintenance issues 3. Global partnerships IV. Various 1. Formal analysis of the COGENVAD environmental impact July

14 ANNEX: WECON PDP 3 The machine proposed is that of a flexible, simple design, economic and robust aeolic unit, in the 3 KW, power range that may be used in diverse and often stressful environments with the potential to jointly deliver the following: Α) electric power, Β) desalinated water (out of sea water), C) hot or cold water, with no electric intervention, a fact that results to a most efficient use at a residential environment. Also, a number of secondary uses, such as irrigation, water pumping, fire extinction, etc. can be also effectively managed. The three above types of applications are of a high international interest in that they offer solutions to vital needs of developed and developing countries alike. The production of a unit that can offer a simultaneous solution to the three basic above needs opens a vast commercial opportunity for global exploitation in industrial, agricultural, commercial and residential settings. This solution builds upon two distinct Daedalus developments. Daedalus is currently in full position to complete the remaining R&D part of the WECON PDP3 machine and to deliver a demonstration unit in a period between 6-12 months. Figure 3: WECON PDP-3 July