WEF Digital Transformation Initiative 2016 The electricity industry: uncovering value through digital transformation

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1 WEF Digital Transformation Initiative 2016 The electricity industry: uncovering value through digital transformation Shalabh Srivastava Principal Director 1 Analytics Opportunities for the Indian Utility 8 th March 2107 India Smart Grid Week

2 WEF World Economic Forum Fourth Industrial Revolution Global Challenge Initiative: Future of the Internet Digital Transformation Initiative Electricity Industry 2

3 Global Trends in Electricity Industry Decarbonization Decentralization Intelligent Enterprise Customer Centricity 75% of global energy supply currently is non-renewable Energy sector represents 2/3 of global GHG emissions CO2 emission from energy rose from 16 to 32 Bn tonnes from 1973 to 2012* Rapid technological development is making accelerating distributed generation + energy storage solutions Consumption is 3.3% CAGR globally, while decentralized 40% faster Machines are becoming smarter Software is being embedded M2M communication is spreading Big Data + Advance Analytics Smart Data Cost of cloud computing is falling Mass personalization of services Multi channel customer engagement Beyond the electron Shift to renewables Focus on Analytics led business transformation *Source: IEA 3

4 Digital themes and initiatives Generation Market Operational Trading Transmission Distribution Smart Meters Smart Home / Building Asset Lifecycle Management Asset Performance Management Digital field worker Smart Asset Planning Grid Optimization & Aggregation Energy Aggregation Platforms Real time supply and demand platforms Real time network controls Connected & Interoperable devices Integrated Customer Services Energy Storage Integration Energy management Digital customer model Energy solution integration Beyond the electron Smart city related services Energy efficiency services Security & convenience products 4

5 Digital Theme #1. Asset life cycle management Optimize asset life cycles: from generation to distribution Digital Initiatives Asset Performance Management Digital field worker Condition monitoring, Predictive Forecasting, and Reliability-centred Maintenance enabled by analytics and robotics Electronic work packages across end-to-end work cycle.. Improving performance of Planners, Schedulers, Field Workers, Data Entry & Reporting operators Potential Value to be Unlocked Increased asset life Improved productivity Optimized site selection for renewables Smart Asset Planning Predictive analytics, machine learning, robotics Renewable generation forecasting A marginal improvement in the operating efficiency of generation, transformers or power lines will have an exponential effect once scaled across the industry. 5

6 Digital Theme #2. Grid Optimization and Aggregation Build a more flexible and resilient electricity grid Digital Initiatives Potential Value to be Unlocked Energy Aggregation Platforms Real time supply & demand platform Real time network controls Connected and inter-operable devices Bring small distributed renewables on to a single platform as a virtual power plant Monitor & communicate current load supply and demand, paired with a discriminatory pricing framework Enable real time adjustments to changing loads Network Devices: Seamless connectivity to the Grid Consumer Devices: Smart Car, Electrical Appliances, Wearables, Phones, Smart Home / Building, Smart Cities Real-time optimization Demand aggregation System flexibility Loss Reduction Real-time pricing 6

7 Digital Theme #3. Integrated customer services Reinvent customer service through digital innovation Digital Initiatives Energy Storage Integration Energy Solution Integration Energy Management Integrate energy storage devices into the Grid....Including storage at domestic level Branded solution providers help customers optimize energy production and use Energy information display and control empower prosumers to manage generation, consumption and storage Potential Value to be Unlocked Transparency between Utility and customer / citizen Enhanced customer experience Digital Customer Model Customer interacts through web, phone, social media, et al 7

8 Digital Theme #4. Beyond the electron Enable Utilities to enter non-energy services Digital Initiatives Smart City related services Energy efficiency services Fully integrated citizen services, such as transport, waste management, etc. For which, DISCOM can provide the anchor platform to build all non-energy services Enable Industrial Services such as power management, energy optimization, safety, lighting, etc. Potential Value to be Unlocked Data monetization Gateway to other services Security & Convenience Products Smart Home / Building, enriched by sensors based connected devices and real time analytics 8

9 Success Stories : Select Examples Digital Initiatives Asset Performance Management Success Stories 75% breakdowns eliminated by energy companies through predictive maintenance: US DOE Digital field worker Ausgrid, Australia, deployed IT solution for field data collection, across its distribution operations covering 250 power stations, 500,000 poles, 30,000 small substations, 50,000 km cable network (OH + UG) ~72% improvement in productivity was recorded. 1 Smart Asset Planning US DOE s Sunshot programme has made multiple mapping applications open-source to assist in siting decisions; they factor inter alia site location, time zone, sun path, nearby weather station data, etc. to optimize site selection for solar plants Avoka Technologies; 2. PVMapper.org 9

10 Success Stories : Select Examples cont d Digital Initiatives Energy Aggregation Platforms Success Stories Next Kraftwerke, Germany, launched a Virtual Power Plant in 2009 based on distributed generation capacity, with a central platform managed by a control room in Cologne. By 2013, it aggregated 1GW of capacity from 2,400 installations and traded 2,500 MU mostly from biogas, biomass, combined heat & power plants. Real time supply & demand platform Reposit Power, Australia, enables consumers to sell back electricity to the grid by placing bids back into the market, thereby turning residential properties into micro power plants. Real time network controls Nordic Power Market, (Denmark, Sweden, Norway, Finland), trade electricity through aggregation at scale across 4 country borders; day-ahead scheduling with minute-wise generation & consumption data for each country enables real time coordination in operations. 10

11 More Examples: Use of Smart Meter Data AMI analytics (A US example) Estimated potential value of applied analytics could approach $40 to $70 per electric meter per year: Total net benefit 100% = $64.1 per meter per year 11

12 More Examples: Use of Smart Meter Data 1. Improve the Customer Experience Initiative Description Example(s) Customer Engagement Personalized Energy Management Advice Enhanced Bill Presentment Marketing Leveraging Realtime Usage Digital Capabilities Usage Visualizations & Comparisons Advice on how to manage and reduce energy bill based on usage. Can be delivered though digital. Bill redesign to incorporate detailed usage information, comparisons, and personalized tips Campaigns designed to use real-time usage information to engage customers Digital (portal and app) capabilities to view energy usage, compare to others and overlay data PG&E British Gas Vestforbræn dingsdg&e AGL, BC Hydro Initiative Description Example(s) Usage Based Alerts & Notifications Community Based Energy Management Platform Smart Tariffs & Billing Time of Use Tariff Options Tariff Comparison Based on Usage Customized Billing Periods Notifications customers can sign-up for or are automatically sent based on usage / bill forecast Energy management platform leveraging real-time data designed for use by groups or communities with energy insights for the group / community Tariffs that change based on time of day (e.g. free evenings & Saturdays) Tools to allow comparison of different tariffs based on past usage Ability for customer to select their preferred bill date or to request a bill on demand Alabama Power, Southern Comp. Toshiba Reliant Energy Centerpoint NV Energy, SDG&E 12

13 More Examples: Use of Smart Meter Data 2. Optimize Revenue Initiative Description Example Customer Insight Load Disaggregation & Analytics Enhanced Customer Segmentation Next Best Action Value Added Products Digital Prepayment Offerings Energy Audit Analytics that break down customers usage to see what devices and appliances are using electricity Improve customer segmentation with insights on usage and lifestyle from smart meter data Leverage usage information and segmentation to enable intelligent recommended actions for call center and in digital channels Develop digital pre-payment offering that allows customers to top-up in digital channels Leverage smart meter data to do energy audits on customers and provide recommendations Bidgely PG&E AGL Powersh op, E.ON BGE Home Initiative Description Example Connected Home Services Smart Building Services (Small businesses) Product Recommendations Demand Management Energy Demand Management Programs Third Party Data Integration & Sharing Third Party Promotions & Advertising Use real-time data to help enable connected home services and inhome devices Use real-time data to help enable connected building services and energy management Leverage usage data and customer insights to suggest additional products to customers Use smart meter to enable programs to manage peak usage (e.g. peak pricing, AC control) Create API to enable sharing of smart meter data or usage insights with third parties Leverage usage insights to provide a platform to advertise to customers on behalf of third parties British Gas, ComEd Green Mountain AGL ConEd, So. Cal. Edison SDG&E, PPL AGL 13

14 More Examples: Use of Smart Meter Data 3. Increase Operational Efficiency Initiative Description Example(s) Commercial Loss Reduction Automate Customer Connections, Disconnections & Investigation Requests Theft Analytics Automate the process to connect, disconnect or re-connect customers electricity service. Initiate investigation requests to the network company if there are anomalies in usage. Analytics to analyze energy usage and identify customers who may have tampered with the meter or be stealing power. This could be offered as a service to the network company. Outage Management and O&M Optimization BC Hydro Florida Power & Light Initiative Description Example Network Optimization Workforce Optimization Optimized Demand Forecasting Degrees of control/influence on network costs (TUoS, DUoS, etc.) with Grid relationship Efficient use of workforce for outage management and fault repairs with the help of integrated system Use smart meter data and analytics to optimize demand forecasting and energy trading strategies PG&E ComEd Reposit Power, AGL Outage Notifications & Alerts Send customer notifications proactively when electricity is out and provide alerts on restoration time and status updates. May be offered by network company rather than the retailer. Center point, ComEd 14

15 Relevance & Applicability to Indian Utility 1. What may not apply to India 2. What additional factors would apply specifically to India 3. What is commonly applicable across India and developed countries 15

16 Relevance & Applicability to Indian Utility 1. What may not apply to India Manpower Cost Reduction Headcount Reduction / Job Loss 16

17 Relevance & Applicability to Indian Utility 2. What additional factors would apply specifically to India Commercial Loss Reduction Push customers towards cashless bill payments Large scale of deployment 17

18 Relevance & Applicability to Indian Utility 3. What is commonly applicable across India and developed countries Open Access Separation of carriage & content Retail Competition Net Metering Electric Vehicles Full scale prosumer / aggregator based market Full scale charging infrastructure, tariff policy, TOU incentives Falling price of renewables + storage + computing = Potent mix for explosive growth CERC : Penalty on variance between scheduled and actual renewable generation Focus on Energy Efficiency LED + PAT Not if, but when 18

19 Relevance & Applicability to Indian Utility Cont d 3. What is commonly applicable across India and developed countries Smart City Smart Buildings / Campus / Township Connected Citizen Digitalized Infrastructure & Facilities DISCOMs are the best incumbent to anchor Smart City initiative, as it already has readymade database of all premises, all households and all organisations in a city. Unlike TELCOs in the developed countries, in India, it is DISCOMs who should own and drive the smart city initiative, in collaboration with Urban Local Bodies, and other authorities like UIDAI. 19

20 Concluding Thought BC (Before Cloud Computing) AD (After Digitalization) Gold In Gold Out Gold In Nothing Out Analytics of Businessas-Usual caliber Garbage In Garbage Out Silver In Gold Out Advanced Analytics 20

21 THANK YOU Contact: Acknowledgement: All people and organisations involved with WEF-DTI initiative, referred to in detail at digital.weforum.org 21