Smarter Energy and Utilities

1. IBM Energy & Utilities Global Smart Grid: Projects and Best PracticeMatt Futch, Global Policy Director, IBM Energy & Utilities

2. Smarter Energy and Utilities Transforming the Business Model 1

3. The transformation provides tremendous opportunities Changing generation mix Reduction in peak loads Increasing demand 15% 53% 50% when consumers were offered the opportunity to save an average of 10% on their electric bills of new capacity is expected to be from renewable energy sources; by 2035, subsidies for renewables reach almost $250 billion projected growth in worldwide energy demand by 2035 Substantial investment Greater efficiency $38 trillion $70 billion global investment in energy supply infrastructure is expected between 2011 to 2035 (U.S.$) in infrastructure spending could be saved over the next 20 years through better management of existing assets (in the U.S. alone)

4. In a connected world, pressures on utilities continue to increase, underscoring the need for a smarter approach Data explosion Cost and pricing pressures Increasing consumer expectations In the utilities industry, the number of connected devices – participants in the “Internet of things” – is growing exponentially: By 2050, the Electric Power Research Institute estimates that the average electric bill will probably go up by about 50 percent if the smart grid is deployed. >50% of surveyed consumers with an opinion expect smart grid technologies will lower total household costs for energy use. But . . . 45% 49% ca. 400% of consumers were concerned that erroneous smart meter readings would result in overcharges Compound annual growth rate, 2010-2015 is the expected increase in the average electric bill if the smart grid is not deployed

5. DONG Energy, based in Denmark, reduces outage time and saves on capital investment 25-50% potential reduction in outage minutes. Fault search times reduced by one-third 90% estimated capital savings on planned grid reinforcements, when fully implemented Business problem: Develop the capacity to better manage and utilize its electrical distribution network in order to respond to outages faster and more efficiently. Solution: Implement an intelligent utility network by installing remote monitoring and control devices that provide information about the current state of the grid, reengineering business processes, and analyzing the resulting data to improve operations. “It turns out that the real key isn't the fact that we’ve got visibility into the grid, though that was our initial goal. It’s that we now have information available on grid performance that we didn't have before. We can do a lot with that information.” —Peter Vinter, Power Grid Specialist, DONG Energy

6. Enemalta and Water Services Corporations Building the world’s first smart grid island • IBM is partnering with Enemalta, the national utility for the first national smart grid network on Malta complete with 250,000 smart meters that will enable the national utilities and their customers to better manage energy and water use. Solution Components • Real-time monitoring and smart meters can deliver pricing based on time of day, enabling the utility to better manage energy consumption and customers to cut their electrical bills. Malta residents will also be able to track their energy use online and see how to curb consumption habits.

7. A Canadian energy company optimizes the operation of its power grid to avoid outages and power surges Up to 100% more distributed generation allowed into the grid When fully implemented, sensors will report outages automatically, and crews can be dispatched earlier and more accurately Business problem: Accommodate the rapid expansion of external sources of distributed, renewable generation and modernize the distribution system to improve reliability, responsiveness, planning, and overall customer satisfaction. Solution: Develop an advanced distribution grid management system, and implement real-time analytics capabilities to enable better prediction of demand, help ensure the right amount of power is generated, improve monitoring and control of distribution resources, and optimize outage restoration.

8. Pacific Northwest National Laboratory uses innovative ways of managing demand to keep the electric grid healthy in times of stress 50% reduction in short-term peak electricity loads, helping to avoid power restrictions and cascading blackouts 10% Business problem:Wanted to manage electricity demand through a combination of intelligent technology and financial incentives. Solution: After two years of preparation, the PNWSG Demo went live and the Transactive Energy Management went into full effect. Attendees at a launch event at the University of Washington witnessed how the new signal will allow project managers to accumulate energy usage information from all 60,000 households and monitor the energy grid in real time – a capability that was once impossible. average savings on electricity bills $70 billion projected reduction in infrastructure spending over 20 years

9. A group of utilities provide consumers with direct access to their consumption metrics Standard platform across 7.1 million energy meters and 2.5 million consumers, provides visibility into their personal energy use Business problem:Seeking to improve the quality of service they could offer, a group of energy providers wanted to increase transparency within the energy industry and provide consumers with direct access to their consumption metrics. Solution:A public energy tracking solution that allows consumers to closely monitor their personal energy use.

10. VESTAS wind energy optimizes the siting and production value of their wind farms through forecasting and data analytics 97% Reduction in response time for wind forecasting information 40% IT footprint and costs and decreases energy consumption by "We can now show our customers how the wind behaves and provide a solid business case that is on par with any other investment that they may have.” —Lars Christian Christensen, Vice President, Vestas Wind Systems A/S

11. DNO TSO REP REP IBM EV Platform REP REP REP REP TSO - Transmission System Operator DNO - Distribution Network Operator REP - Retail Electric Provider Irish Utility ESB - EV platform for nationwide EV infrastructure Irish utility is deploying 1,000 EV charging stations and is partnering with IBM to develop a transaction management system SERVICES INCLUDE • User management services including enrollment and issuance of RFID card • Charge Calculation based on the identified user’s appropriate rate • Prepay and Post-pay services • Transaction clearing and settlement services between DNO and REP • Management of interruptible tariffs for spinning reserves • Integration with TSO / DSO for usage forecasting • Charge health monitoring and reporting of status • Web and mobile interfaces for charge post location and viewing of relevant data

12. Public Private Partnerships Developing an eco-system of knowledge 11

13. As a global integrator weverages three foundational capabilities to deliver end-to-end solutions. SOLUTION DEVELOPMENT AND DELIVERY POLICY AND REGULATION INDUSTRY THOUGHT LEADERHSIP Solution Development IBM Research Global IUN Coalition Nuclear Power Advisory Council Solution Delivery Partner Ecosystem @IBMSmartrEnergy

14. GLOBAL SMART GRID FEDERATION IBM established and manages the Global Intelligent Utility Network Coalition – advancing smart grid for over 150 million consumers around the world 13 13

15. Solving the Puzzle – Partnerships TURKEY UNITED STATES IBM is working with GRIDWISE Alliance and other members on Federal energy and regulatory policies that enable the next transformational step for smart grid in the US market. IBM working with national smart grid association and regulator on best practices for market structure, system operations, and technology platforms for smart meter data management. EUROPEAN UNION MALAYSIA IBM partnering with European utility association to develop market structure, regulatory reform and investment recommendations enabling energy infrastructure innovation and network reliability IBM working with Malaysian Energy Commission to provide best practices on regulatory reforms enabling smart grid. National smart grid road mapping also part of activity. Multiple utilities and vendors part of the work effort. 14

16. Global Intelligent Utility Network Coalition Coalition Overview – Current Membership Raleigh, NC USA Optimized energy value chain minimizing need for new fossil generation units, AMR-to-AMI strategic transition, advanced feeder modeling Paris, France Sensing & control, asset optimization for fault prevention, smart grid for Co2 reduction, AMM & communications network Arnhem, The Netherlands Organization-wide smart grid vision and strategy, smart grid PMO, fraud detection Dallas, TX USA Advanced metering system implementation, integration and PMO, MDM, Business Analytics, Security, Smart Meter Texas Washington, DC USA IUN blueprint, outage management, notification, AMI Copenhagen, Denmark VPP, EDISON, DMS integration, CBM Düsseldorf, Germany Efficiency, Renewables Integration, Grid Quality, Intelligent Substation San Diego, CA USA Smart grid system implementation, condition based maintenance, OMS/DMS, smart grid communication strategy Tokyo, Japan Low carbon generation, EVs, Rooftop PV, Efficient buildings, AMI, Storage, Grid Reliability Seoul, South Korea Nuclear generation, Jeju test bed, Renewable integration, EVs, Grid automation Houston, TX USA Advanced metering system implementation, integration and PMO, MDM and HAN, Smart Meter Texas Queanbeyan, Australia IN strategy and customized IN blueprint, organizational impact of smart grid, IN Research & Demonstration Center New Delhi, India Smart grid governance structure, smart grid roadmap (in planning) Campinas, Brazil Smart Metering Center, loss reduction, communications

17. Universal policy foundation for Smart Grid Develop a Robust Consumer Education Plan Create a Long Term Roadmap with Milestones Create Regulatory Incentive for Utility Investments Adopt or Establish Interoperability Standards Establish Clear Data Privacy and Security rules 16

18. ありがとう * شكرا * 謝謝 * Merci * Danke * शुक्रिया * תודה * terima kasih * با تشکر از شما * gracias * tack * آپ کا شکریہ * σας ευχαριστώ * * شكرспасибо * gratias agimus tibi * Thank you! Matt Futch, Global Policy Director IBM Energy & Utilities mgfutch@us.ibm.com 303-638-9412