Smart Grid Overview US Chamber of Commerce Kieran McLoughlin Smart Grid Solution Leader

1. Smart Grid Overview US Chamber of Commerce Kieran McLoughlin Smart Grid Solution Leader Global Energy & Utility Industry November 5th 2008

2. Agenda • What is Smart Grid? • Why is Smart Grid Happening? • Utility Smart Grid Development, a Journey • Investments in Smart Grids…Opportunities • Questions

3. The most important commodity for a utility to manage, other than electricity, is information.

4. What is Smart Grid? • At the highest level it is about the transformation, modernization, automation and digitalization of the Electricity Supply Chain • It is the Trojan Horse for change, for achieving a 21st century intelligent electricity network needed to support and enable a 21st century growing economy in an ever competitive global market • The term "smart grid" refers to the use of advanced communications technologies and modern computing capabilities ..(engineering & materials as well).. to upgrade the electric power grid, effectively making it more intelligent, enabling it to operate more reliably and efficiently, and allowing customers enhanced support, opportunities, and direct involvement in controlling power consumption. In the face of increasing electricity demands and concerns over the environment as well as problems with assuring operational efficiencies, smart grid technologies promise critical solutions for tackling national energy and environmental problems. For business and industry, smart grid solutions could be a boon

5. It is the continuous sensing, information network which overlays and connects together a utility’s equipment, devices, systems, customers, partners and employees. It enables ‘on-demand’ access to data & information which is used tobetter manage, automate & optimize operations and planning processes throughout the utility, throughout the electricity supply chain – for the customer’s benefit Smart Grid from an Information Perspective …Intelligent Utility Network

6. The advancement of network automation, communications and information technologies is leading a transformation in the electricity supply chain • Impact: • Standards • Management • Communications • Security • Transparency • Scale • Price Performance Central Distributed Networked

7. Why is Smart Grid happening? Regulatory &Policy Environment Financial Mkts Expectations Security Energy / Fuel Competition & Cost Customer Demand & Expectations Aging Infrastructure Alternate Energy Distributed Generation Changing Workforce

8. China N. America Europe S. Asia E. Asia Africa S. America Other Developed Other Frontier Middle East Russia Smart Grid is Global.. China ranks #1 in geographical breakdown of electric power T&D investment forecast 2005-2030 1.6 USD TR While Chinese T&D infrastructure investment mainly focuses on new installations for power stations, substations, power grids, etc, European and US expenditure on T&D networks 1.4 1.2 1.0 0.8 0.6 0.4 0.2 Distribution Transmission Economies grow on the back of a reliable electricity supply chain Source: International Energy Agency

9. The Development of Smart Grid is a Journey As-Is Intermediate To-Be/Vision DOMAIN SILOS INFORMATION SILOS • Vertical Integration • Minimal Transverse Integration DOMAIN TO DOMAIN INTEROPERABILITY • Vertical Integration • Transverse Integration between Domains • Have to overcome adoption of emerging information standards & data access issues ENTERPRISE INTEROPERABILITY • Open data access environment • Interoperability standards • Utility vendors on common standards • Integration middleware is ‘Smart’ & services based Smart Grid Maturity Level 3 Smart Grid Maturity Level 1 & 2 Smart Grid Maturity Level 4 & 5 The potential value of the Information which Smart Grids can generate is being explored in pieces from the bottom up 9

10. The Smart Grid Vision. Interoperability & Information Exchange Animated SGMM L5 Innovating & Optimizing along the Supply Chain SGMM L1/L2 Invest in Domain Infrastructure SGMM L4 Optimizing the Enterprise Customer Operations Grid Operations Work & Asset Management Widespread SGMM L3 SGMM L3 Automated Measured Optimize Optimize Optimize => And/Or And/Or Analyze Analyze Analyze Collect Collect Collect Limited Communications Estimated Information Manual Processes Transport data to control Transport data to control Transport data to control Field Measure/ Monitor Field Measure/ Monitor Field Measure/ Monitor SGMM L0 Silos SGMM L3 Domain to Domain Integration. Optimizing Domains SGMM = Smart Grid Maturity Model Utility Information is being designed from the top down

11. Smart Grid Roadmap Smart Grid Initiatives Smart Grid Roadmap Strategize Development Initiate Launch Smart Grid Initiatives Design Build Deploy Run Solution Operation & Maintenance Solution Acceptance & Pilot Solution Build & Test Solution Deployment & Rollout Solution Macro Design Solution Micro Design Establish PMO Initiative A Strategic Roadmap Smart Grid Development Maturity Model Component Business Model Initiative B Iterative Process Initiative X Proof of Concepts Establish & Maintain Governance Model

12. Utilities are investing in many technologies….process automation, real-time monitoring & control systems etc to achieve greater reliability and efficiency… Internet Integration Information & Control systems Automation Analytics tools EV & Hybrids Automation and Digitalization Distributed Generation Energy Storage Data & Process Modelling Smart sensors Equipment Smart meters ICT networks Materials

13. Developing the Customer Domain, Market Opportunity Distributed Generation & Storage Hybrid Vehicles

14. Developing the Grid Operations Domain, Market Opportunity Distributed Generation & Storage

15. Developing the Work & Asset Domain, Market Opportunity Distributed Generation & Storage

16. Equipment Equipment Monitoring Monitoring Optimizing the Utility, Optimizing the Electricity Supply Chain New Business Models, New Products, New Offerings IT Network Services Back Office Systems Financial Management Systems Financial Management Systems Financial Management Systems External Information Systems Purchasing Inventory Systems Purchasing Inventory Systems Purchasing Inventory Systems Communications Networks Services Customer Information Systems Meter Data Management Systems HR Management Systems Account /Billing Systems External Information Systems IT Network Services Communications Networks Services Communications Networks Services IT Network Services External Information Services Communications Networks Services IT Networks Services Business Intelligence IT Networks Analytics Applications Field Device Management Services Planning & Design Applications Operations Analysis Tools Field Device Management Services Management Services Operations Support Systems Call Management Systems Utility Data Model Framework Geographical Information Systems Work Management Systems Geographical Information Systems Work Management Systems Demand Side Management Systems Asset Management Systems Geographical Information Systems Demand Side Management Systems Outage Management System MRO Management Systems Work Management Systems BI/Analytics Framework Common infrastructure: Communications, IT, Security, Standards, BI/Analytics Framework, Network Monitoring, Applications, Data sources, Data models, Services, Tools, timing, portals Operations Frontline Systems Distribution Management Systems Customer Portal Meter Data Collection Engine Transmission Management Systems Distribution Management Systems Equip Condition Monitoring Mobile Data Systems Mobile Data Systems Mobile Data Systems Account for Geospatial Distribution, Time Scale Distribution, Intelligence Distribution Communications Networks, Firewall & Security Services Field Based Systems Field Based Devices Distributed Generation & Storage Customer Premise AMI Network Substation Devices Grid Devices Assets Assets Mobile Field Force

17. Conclusions • Smart Grid is the Transformation of the Electric Utility Industry and Electricity Supply Chain • Electricity is a precious commodity which has been taken for granted in the US • Alignment of Drivers …Social, Economic, Competitive and Technical • There are opportunities all along Smart Grid development journey • ‘Do nothing’ is not an option

18. Information is Power Thank You & Questions