Smart electrical grids challenges and opportunities
 

Smart electrical grids challenges and opportunities

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presentation by Colette Lewiner, Global Leader Energy, Utilities & Chemicals Practice, Capgemini, May 2011

presentation by Colette Lewiner, Global Leader Energy, Utilities & Chemicals Practice, Capgemini, May 2011

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Smart electrical grids challenges and opportunities Smart electrical grids challenges and opportunities Presentation Transcript

  • Smart electrical grids challenges and opportunitiesColette Lewiner, Energy and Utilities GlobalLeader at CapgeminiSGPARIS 2011Paris, 24-26 May 2011
  • AgendaEnergy Markets OutlookGrid management new paradigmSmart Grid and Smart Metering solutionsMarket opportunitiesKey success factors | Energy, Utilities & Chemicals Global Sector 2
  • AgendaEnergy Markets Outlook • Security of supply • Renewable energy generation • Grid regulationsGrid management new paradigmSmart Grid and Smart Metering solutionsMarket opportunitiesKey success factors | Energy, Utilities & Chemicals Global Sector 3
  • Electricity security of supply is threatened when exceptional weather situations occur Real margin vs. theoretical margin (2009)In 2009-2010, theexceptionally coldweather threatenedelectricity supply in afew countries.In France, in December2009 and early January2010, temperature was6-8 C below normal.Electricity peak went upto a record of92,400MW. France hadto import up to 8,000MWfrom its neighbors duringmany days in a row.This import level wasnear the upper possiblelimit of 9,000MW. Source: ENTSO-E, EirGrid, National Grid – Capgemini analysis, EEMO12 Certain countries as France need more peak power generation. In all cases increasing cross border interconnections will improve security of supply | Energy, Utilities & Chemicals Global Sector 4
  • Balancing Peak Time Load is complex• Peak load demand is nearly the double of low periods load (in France) Yearly load curve in France• During tense situations, grid management is critical• At peak time, all domestic generation plants that are available and connected are utilized• In addition, electricity is imported from neighboring countries• Demand response programs allow lowering demand at critical moments: • They are usually in place for large customers • More has to be done for small businesses and residential customers including: Information, messaging Smart metering equipment, smart home devices Demand response is one of the key Time of use rates answers to peak load management | Energy, Utilities & Chemicals Global Sector 5
  • EU Climate-Energy legislation Primary Energy ConsumptionIn 2007 the EU adopted the Climate Energypackage with three 2020 objectives:• 20% reduction of GHG emissions (compared to 1990). Thanks to the economic crisis and to the plants’ delocalization, this objective should be met.• Primary consumption reduction of 20% compared to 2005. It is a difficult but achievable goal especially if consumer’s awareness is increased• Renewables: The 20% renewable shares target is challenging. To get there, renewable energies generation growth has to be accelerated. In 2009 RES generation continued to grow: 15% for wind and 53% for Renewable Energy solar PV. Wind power is today the first source, PV comes second, with 5.5 GW.• The intermittency of RES generation poses problems in countries where their share is significant. It calls for: • back-up power plants • improved generation simulations and modeling • grids able to smartly balance supply and demand • merit order & trading rules changes: e.g. wholesale spot prices at zero in Spain and even negative in Germany Source: Eurostat, EEA, BP statistical review of world energy 2010, European Commission – Capgemini analysis, EEMO12 | Energy, Utilities & Chemicals Global Sector 6
  • Utilities are divesting from their grid assetsMany Utilities are going through divestmentsin order to restore the balance sheet.Networks, having long term recurrent Hong Kongrevenues, are attractive for funds. Consortium (headedUtilities would comply with the third EU by Li Ka-Shing)directive• E.ON sold its electrical transmission grid to TenneT £5.8bn €885M (NL) for €885m• Vattenfall Germany sold its electrical transmission grid to Elia (BE)/IFM for €810 m £4bn €810M• RTE, French electrical transmission grid: 50% stake transferred to the French nuclear French nuclear decommissioning fund decommissioning• GRTGaz, French gas transportation grid: CDC and fund CNP should take 25% shares• ENI (IT) plans to sell stakes in two major pipelines (Transitgas and TENP). Value estimated at €1.5bn• ENEL sold 80% of its Endesa gas distribution grid to 2 Goldman Sachs’ infrastructures funds for €800m• EDF Energy UK electrical distribution networks sold to a Hong Kong consortium for £5.8 bn• E.ON sold its UK distribution electrical grid to TENP PPL (US) for £4 bn €1.5bn €800MFunds are expanding in the energy infrastructures domain. Are they willing to invest as needed? | Energy, Utilities & Chemicals Global Sector 7
  • AgendaEnergy Markets OutlookGrid management new paradigm • Grid balance inherent complexity • Aging Infrastructure and aging workforce • New Consumption patterns • Renewables and distributed generationSmart Grid and Smart Metering solutionsMarket opportunitiesKey success factors | Energy, Utilities & Chemicals Global Sector 8
  • Grid management: inherent complexity• Need to balance instantly the grid: • As electricity is not storable, at each moment, the grid needs to be balanced: the sum of the power generated has to be equal to the sum of the power consumed. • If the power consumed is too high, the current intensity will increase and the alternator’s frequency will decrease • This is done in each voltage level dispatching • The needed power is forecasted on a yearly, monthly, weekly and daily basis • In the dispatching rooms the controllers adjust instantly generation to demand• Grid collapse risk: • On the mesh grid, electricity path is not always predictable: it will follow the lowest impedance route • If a line is overloaded, it may disconnect and Big collapses happened in the US electricity will flow through the others in 1978, in France in 1979, in the • If the grid is saturated, the lines will fall one after East coast region, in Germany and the other as in domino plays and the grid will collapse North of France in 2007 • To avoid this catastrophic scenario, the dispatchers will cut-off from the grid some customers | Energy, Utilities & Chemicals Global Sector 9
  • Aging Infrastructure and aging workforceAging Infrastructure Much of the transmission and distribution infrastructure is more than 50 years old For many years, utilities typically underinvested in the grid infrastructure (ex €8bn investment needed in the French distribution area)Aging Workforce A significant percentage of the current utility workforce is nearing the age of retirement, creating a loss of operating and network knowledge. It will be necessary to capture this information and be able to communicate it to the new workforce. This is also compounded by the fact that the current generation has been raised on a different communication media. This change is driving up the need to provide data to the field workforce at a rapid rate | Energy, Utilities & Chemicals Global Sector 10
  • New Consumption patterns Peak load, generation capacity and electricity mix (2009)Residential electricityconsumption stillincreases, peak loadsare increasingConsumers expecthigher quality for theelectricity they receiveboth voltage stabilityand wave spectralqualityHarmonics and otherpower quality issuesthat were confined tothe industrial segment,are now distributed allover the network whichmakes the gridmanagement morecomplex Source: ENTSO-E, BALTSO, Nordic Energy Regulators – Capgemini analysis, EEMO12 Increased request for power quality and security of supply | Energy, Utilities & Chemicals Global Sector 11
  • Renewable Energies impact on the GridWind farms: dealing with variability is tough Existing systems cannot predict what the output of wind power will be 24-48h in advance. New systems have to be installed to support this kind of forecasting Forecasting this output is critical, as it determines when to trigger dams or fossil plants to support days The grid operator has to be ready to react to changes in power output on a very short timelineTo date there are no good answers for massive storage Growth rate of renewable energy sources (2008 for Waste, hydro and Biomass and 2009 for Wind and Solar PV) These problems are the root cause of the 2007 blackout in Germany and North of France Source: Eur’Observer barometers – Capgemini analysis, EEMO12 | Energy, Utilities & Chemicals Global Sector 12
  • Wind Power: the Spanish Example August 27, 2009 November 8, 2009 Source: Enagas, Outlook for LNGMore flexible consumption patterns (i.e. demand response) would allow customers to take advantage of low costs generated by a sudden increase of wind power. | Energy, Utilities & Chemicals Global Sector
  • Distributed GenerationDistributed generation and renewablescreate problems for the distribution networkHarmonics, reactive power, and powerquality are harder problems. • The transmission operators manage reactive power thanks to sensors on their networks • Capacitor banks are helpful in managing reactive power, but they do not exist out in the distribution network • Harmonics and power quality for the smaller customer to date have been ignored as too expensive for the benefits delivered. Integration of many generation sources into existing Energy Managementand Distribution Management Systems, as well as developing the operating rules is another chunk of work. | Energy, Utilities & Chemicals Global Sector 14
  • AgendaEnergy Markets OutlookGrid management new paradigmSmart Grid and Smart Metering solutionsMarket opportunitiesKey success factors | Energy, Utilities & Chemicals Global Sector 15
  • A grid with more intelligenceA grid with more intelligence has to be designed. The challenge is very clear; the oldelectro-mechanical network cannot meet the needs of the new digital economy.The future grid should be able to produce faster fault location and power restoration,hence lesser outage time for the customer and manage many small powergeneration sources.The system network architecture will need to change to incorporate multi-way powerflows, and will be much more intelligent than a series of radial lines that just openand close.The future data volumes will require large data communications bandwidth andcommunication network technology The key is to build a vision and architecture that allows them toleverage today’s investment while maintaining flexibility to evolve the Grid as technology advances. | Energy, Utilities & Chemicals Global Sector 16
  • From “Electromechanical Grid” into “Digital Smart Grid” Two-way communicationOne-way communication Accommodates distributedBuilt for centralized generationgeneration Network topologyRadial topology Monitors and sensors throughoutFew sensors Self-monitoring“Blind” Semi-automated restoration (self-Manual restoration healing)Check equipment manually Adaptive protection and islandingEmergency decisions by Monitor equipment remotelycommittee and phone Decision support systems,Limited control over power predictive reliabilityflows Pervasive control systemsLimited price information Full price informationFew customer choices Many customer choices | Energy, Utilities & Chemicals Global Sector 17
  • Smart Grid: The Process Interrelated Cycles / Loops Physical 1Min Grid Asset 1 Day 1 Month Control Measurement OBJECTIVES & CONSTRAINTS systems & monitoring Activity Data management transmission 1 Hour DATA, TRIGGERS, ETC. DecisionDecisions Data & Plans management Data management Integral management Data Decision processing support 1 Min Analysis Uncertainty tools analysis Interpretation & modeling Model visualization Model management 1 Sec 1 ms Models Adapted from presentation POSC SIG - L. Dodge, S. Daum, 22 May 2003 London | Energy, Utilities & Chemicals Global Sector 18
  • Grid Hardware Sensors on existing hardware on the grid, from meters at the home to reclosers and sectionalizers, transformers and substations will need to be deployed in a prioritized fashion. The key is to understand which sensor readings can bring operational value to your smart grid effort. Control Regulators - Power Flow Alarm Notification Load Management Capacitor Bank Remote Fault Anticipators Second Generation Remote Operators Device - Self Reporting Load Control Devices Management of Supply Fault Detecting and Reporting Appliance Reporting Remote Sensors – Wireline, Wireless Device to Manage Load Broadband over Power Auto Sensing Voltage Sag Shapes - Remote Control Line Correctors Intelligent Building SCADA Network Auto Sensing GridGrid Hardware Penetration Segmentation Capacitors Switched Distributed Revenue Metering Resource Smart Metering - Fixed Protection Distributed Read System, Fixed Capacitor Protection Resource Network, Networked, Circuit Breakers for Feeders w/Automatic Interconnection Broadband Sensing & Re-closing Low cost DG Metering - Two Way, Re-closer, Single Phase Interconnect Kit Pre Paid | Energy, Utilities & Chemicals Global Sector 19
  • Communication Backbone To support all those data sources on the grid, a communication infrastructure must be in place. A wide range of wired and wireless communications technologies are available to transport. Any smart grid initiative will have to pick 2 or 3 communications methods and mix and match as required to get to the level of coverage required Transport - Wireless Networks Transport - Wired Mobile Radio (RF) – 800/900 WAN: Wide Area POTS (Plain Old Telephone MHz BandsCommunication Network System) Cellular Technologies Backbone MAN: Metropolitan Area PSTN (Public Switch (GSM/GPRS) Network Telephone Network) Wireless LAN (WiFi) LAN: Local Area DSL (Digital Subscriber Wireless WAN (WiMAX) Network Line) ZigBee VAN: Vehicle Area Fiber Optic Network Free Space Optical (FSO) PLC (Power Line Carrier) Satellite | Energy, Utilities & Chemicals Global Sector 20
  • AgendaEnergy Markets OutlookGrid management new paradigmSmart Grid and Smart Metering solutionsMarket opportunitiesKey success factors | Energy, Utilities & Chemicals Global Sector 21
  • Smart Metering: North American Market• North America has 158 million metered electricity customers. Annual demand for electricity meters is in the range of 10–15 million units.• Penetration for smart meters, providing comprehensive functionality was 10% at the end of 2009. By 2015, the rate should increase to 45%, driven by large rollouts by leading utilities• The average capital expenditure per metering point is in the range of US$ 200–250 for medium to large projects. The aggregate investment cost for the deployment of 63 million smart electricity meters between 2010 and 2015 is thus projected to around US$ 13.4 billion.• Communication will account for 25% of total costs. IT-related costs for system integration, meter data management systems and similar account for around 30% of a typical project budget Smart Metering capital expenditure by category (North America 2009-2015) 35% 25% 10% 30% Source: Berg Insight | Energy, Utilities & Chemicals Global Sector 22 22
  • Europe: 80% of the population should benefit from smart metering by 2020 Electricity Source: ESMA, GEODE - Capgemini analysis, EEMO12Uncertainty created by the Gasvalue chain unbundlinglead to an uncertain ROI.This explains the slowadoption in Europe.Country by countrysituation:• Italy and Sweden are leading the adoption of smart meters in Europe with full installation in 2009.• Large experiment in France (300,000 meters) launched in 2008. After return of experience, compulsory deployment of smart meters for 95% of citizens by 2016.• New legislation is expected in Netherlands, Ireland and Norway• The UK government decided to introduce similar requirements, but financing is unclear presently Total expenditure on smart metering will reach €2.8 billion by 2014. 20% will be for system operation and communication services. | Energy, Utilities & Chemicals Global Sector 23
  • Smart Grid InvestmentsSmart grid investments Communication• Worldwide: from 2008-2015: Technologies $200bn ($53bn in the US). Network Device and Events Ops Management (Pike Research).• US stimulus grants: $3.4bn• Europe: € 1bn EU funds Back Office ApplicationsICT systems: Cisco sees $15-20 bn investment opportunities Renewablesto link smart grids with ICTsystems over the next 7 years. Advanced MeteringJohn Chamber, Cisco CEO, Enhanced Power Gridsays that it might be bigger Digital Communications and Control Plug-Inthan internet. Hybrids Smart Meters & Control Building Automation Interface However it’s not going to happen overnight. A lot of regulatory and standardisation issues have to be worked out. | Energy, Utilities & Chemicals Global Sector 24
  • AgendaEnergy Markets OutlookGrid management new paradigmSmart Grid and Smart Metering solutionsMarket opportunitiesKey success factors | Energy, Utilities & Chemicals Global Sector 25
  • Key success factors (1)• Smart grids implementation will necessitate new investments: • The transmission and distribution tariffs will have to increase and by consequence the electricity prices. • Regulators, governments and customers will have to accept these prices increases.• Industrial R&D is needed to develop new equipments (as large competitive storage) or improve existing ones (as HVDC connections).• Communication standards are crucial: • US is mobilized at the government (Department of Energy) and equipment manufactures levels • Europe is not considering seriously enough this question • Equipments conceived with the internationally adopted standards will have a clear advantage | Energy, Utilities & Chemicals Global Sector 26
  • Key success factors (2)• Efforts on simulation and modelling are needed: • For the transmission grid there is a need to build a new European High Voltage grid management model. • On the distribution side, the retail market has to evolve and modelling is needed. Interesting experiences initiated by regulators and involving all stakeholders (Utilities, equipment manufacturers, IT service companies, local authorities..) have been launched in Victoria (Australia), Texas (USA) and France.• Next steps for Utilities: • Establish their vision on the technical, economical and management future models as smart grid implementation will change drastically their management mode. • Launch prototypes with part of the financing coming from the EU or Member States. | Energy, Utilities & Chemicals Global Sector 27
  • About CapgeminiCapgemini, one of the worlds foremost providers of consulting, technology andoutsourcing services, enables its clients to transform and perform through technologies.Capgemini provides its clients with insights and capabilities that boost their freedom toachieve superior results through a unique way of working, the Collaborative BusinessExperienceTM. The Group relies on its global delivery model called Rightshore®, whichaims to get the right balance of the best talent from multiple locations, working as oneteam to create and deliver the optimum solution for clients.Present in more than 35 countries, Capgemini reported 2009 global revenues of EUR8.4 billion and employs over 100,000 people worldwide.With EUR 1.13 billion revenue in 2009 and 12,000 dedicated consultants engaged inEnergy, Utilities and Chemicals projects across Europe, North America and Asia Pacific,Capgeminis Energy, Utilities & Chemicals Global Sector serves the business consultingand information technology needs of many of the world’s largest players of thisindustry.More information about our services, offices and research isavailable at www.capgemini.com/energy. | Energy, Utilities & Chemicals Global Sector Rightshore® is a trademark belonging to Capgemini © 2011 Capgemini. All rights reserved. 28
  • www.capgemini.com/energyThe information contained in this presentation is proprietary. ©2010 Capgemini. All rights reserved