Smarter planet: Energy and Utilities


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To deliver power more responsibly and more efficiently, energy and utilities organizations are working toward a smarter energy value chain: (1) Transformation of the grid, (2) Empowerment of consumers, (3) Ensuring cleaner energy supply.

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Smarter planet: Energy and Utilities

  1. 1. George Mattathil,4/19/2011Let’s Build aSmarter Planet:Energy and Utilities © 2010 IBM Corporation
  2. 2. Let’s build a smarter planet: Energy and UtilitiesThe reality of living in a globally integrated world is upon us. Global financial crisis has had lasting impacts on the overall market. Volatility in price and demand for energy worldwide. Growing concern about the effects of climate change. Increasingly empowered and interconnected consumers.The world is connected:economically, socially and technically. © 2010 IBM Corporation
  3. 3. Let’s build a smarter planet: Energy and UtilitiesThe need for progress is clear.36.8% 170 billion 1/4Projected growth in worldwide Kilowatt-hours wasted each Proportion of worldwideenergy demand by 2030. year by consumers due to CO2 emissions created by insufficient power usage power generation, the information. largest man-made source. © 2010 IBM Corporation
  4. 4. Let’s build a smarter planet: Energy and UtilitiesThe opportunityfor progress is clear.15% $70 billion 14% lowerreduction in emissionspeak loadsIn the Pacific Northwest The U.S. could save up to Smart grid technologyNational Laboratory Smart $70 billion in infrastructure has the potential toGrid project, consumers spending over the next reduce the power sector’sdecreased their overall peak 20 years through better CO2 emissions 14% byload on the grid by 15% management of existing 2020.when offered the opportunity save an average of 10%on their electricity bills. © 2010 IBM Corporation
  5. 5. Let’s build a smarter planet: Energy and UtilitiesFor energy and utilities organizations, this means finding a way tolead in a new environment shaped by three key factors.CLIMATE CHANGE CONCERNSAs the debate over climate change has become much more public, governments around theworld are responding with new energy policies, programs and legislation. Consumers areincreasingly concerned about the environmental impact of the products they buy, includingenergy.CONSUMER EMPOWERMENTEnergy and utilities organizations face an increasingly leveled playing field. Newly empoweredconsumers are leveraging provider choice options, actively managing their usage, movingtoward self-generation of power and making their voices heard through multiple channels.TECHNOLOGY INNOVATIONLower-cost communications, more cost-effective computing and open standards arestrengthening the business case for technology innovation in the energy and utilities industry.Technologies such as smart meters, network analytics and distributed generation arechanging the way energy is created and delivered.Source: IBM, “Plugging In the Consumer” © 2010 IBM Corporation
  6. 6. Let’s build a smarter planet: Energy and UtilitiesThere is an imperative from government and consumers alikefor energy and utilities organizations to transform themselves toensure environmental responsibility, economic competitivenessand national security. By leading innovation throughout the industry, their positive impact will be felt far beyond. LOCAL AND ENERGY AND ENVIRONMENT GLOBAL UTILITIES AND SOCIETY ECONOMIES © 2010 IBM Corporation
  7. 7. Let’s build a smarter planet: Energy and UtilitiesTo deliver power more responsiblyand more efficiently, energyand utilities organizations are working toward a smarter energyvalue chain. TRANSFORMATION OF THE GRID Transforming the grid from a rigid analog system to a dynamic and automated energy delivery system. ENERGY AND UTILITIES EMPOWERMENT OF ENSURING CLEANER CONSUMERS ENERGY SUPPLY Empowering consumers by Meeting stringent providing them with near greenhouse gasreal-time, detailed information emissions targets about their energy usage. while maintaining sufficient, cost-effective power supply. © 2010 IBM Corporation
  8. 8. Let’s build a smarter planet: Energy and Utilities + + = An opportunity for energy and utilities organizations to think and act in new ways. Transform the grid from a Empower consumers and Reduce greenhouse gas rigid, analog system to a improve satisfaction by emissions to meet or dynamic and automated providing them with near exceed environmental energy delivery system by real-time, detailed regulatory requirements driving operational information about their while maintaining a excellence. energy usage. sufficient, cost-effective power supply. © 2010 IBM Corporation
  9. 9. Let’s build a smarter planet: Energy and UtilitiesSmart energy and utilities:Transforming the grid.SMART IS SMART ISKnowing exactly where a power outage Preventing outages before they occur byoccurs and instantly dispatching a crew sensing potential equipment fix the problem.SMART IS SMART ISExtending asset life by sensing and Reducing peak load by communicatingmanaging the stress placed on aging with energy consumers and having themequipment. turn off non-essential machinery or appliances. © 2010 IBM Corporation
  10. 10. Let’s build a smarter planet: Energy and UtilitiesSmart energy and utilities:Transforming the grid.DONG Energy: Installed remote monitoring and control US electric and gas company: Plans to leveragedevices to gain an unprecedented level of information a mix of leading-edge communication technologies,about the current state of the grid, lessening outage smart meters and first-of-a-kind process innovationstimes by a potential 25-50%. to create an intelligent utility network.Energie Baden-Württemberg: Offers residential Pacific Northwest National Laboratory: Usedcustomers smart appliances and meters that enable intelligent measurement devices, smart appliancesthem to adjust electricity consumption based on and a virtual marketplace to help manage stress inprice—reducing waste and easing peak loads. the electric grid, achieving a 50% reduction in short- term peak electricity distribution loads and a 15% reduction in overall peak loads. © 2010 IBM Corporation
  11. 11. Let’s build a smarter planet: Energy and UtilitiesSmart energy and utilities:Empowering the consumer.SMART IS SMART ISAnalyzing customer energy usage and Helping customers conserve energyproviding customized energy products by providing them with tools toand services to meet their needs. proactively manage their energy usage.SMART IS SMART ISEnsuring that customers are billed Helping customers establish a “smartaccurately and on time. home” that turns appliances on and off to reduce energy costs. © 2010 IBM Corporation
  12. 12. Let’s build a smarter planet: Energy and UtilitiesSmart energy and utilities:Empowering the consumer.Energie Baden-Württemberg: Lessened energy A Canadian regulator: Launched a pilot time-of-demand at peak times by offering customers smart use program that rewards consumers for using lessappliances and meters that enable them to adjust power during times of shortage or peak demand,their consumption based on price. leading participants to shift 25% of their usage away from peak hours.Ecotricity: Re-engineered its business processes Pacific Northwest National Laboratory:and systems to enhance the speed and accuracy of Provided customers with smart appliances such asbilling while working toward the ultimate goal of a fully water heaters that can sense impending grid failuresinteractive, automated, multi-channel customer and automatically respond by cutting back on powerexperience. consumption. © 2010 IBM Corporation
  13. 13. Let’s build a smarter planet: Energy and UtilitiesSmart energy and utilities:Ensuring cleaner energy supply..SMART IS SMART ISSmoothing power demand in order to Maintaining a sufficient, cost-effectivetake advantage of off-peak supply power supply while managingsuch as wind. stringent greenhouse gas emissions targets. © 2010 IBM Corporation
  14. 14. Let’s build a smarter planet: Energy and UtilitiesSmart energy and utilities:Reducing greenhouse gas emissions.A German Power Company: Deployed a proof-of- A European Generation Company: Built a tool forconcept Wind Generation Monitoring Solution that optimizing unit commitment, the process of findingwill connect numerous power plants to a central and dispatching power sources at the lowestmonitoring application, enabling better collection possible cost. It allows planners to easily compareand use of raw data. power generation scenarios, programs and production costs and then select the optimal demand coverage at any given time © 2010 IBM Corporation
  15. 15. Let’s build a smarter planet: Energy and UtilitiesHaving access to real-time information about the flow of energyin the grid enables utilities and consumers to make smarter, moreresponsible choices. CONSUMERS UTILITIESTake advantage of variable Automatically monitor pricing by purchasing the health of the grid. electricity when it’s cheapest. Remotely sense Generate their own damage to grid electricity and sell it assets and dispatch back to the grid. repair crews. Decrease carbon Better predict demand emissions by choosing and manage supply clean electricity sources. accordingly. Energy Flow Information Flow © 2010 IBM Corporation
  16. 16. Let’s build a smarter planet: Energy and UtilitiesThe result?A transformed grid that empowers consumersand provides the energy for a sustainable future. TRADITIONAL GRID SMART GRID Coal Solar Energy Storage UTILITY Hydroelectric Nuclear UTILITY Wind Coal Energy Storage Hydroelectric Nuclear Solar Wind Solar Energy Storage Plug-in Vehicle Wind Consumer Power Flow Periodic Information Flow Continuous Information Flow © 2010 IBM Corporation
  17. 17. Let’s build a smarter planet: Energy and UtilitiesWhy must we take action now?VOLATILE DEMAND AND INCREASING COSTChanging business operations will create mismatches of power and high prices due to theircontinuing pressure on our inadequate infrastructure.ENVIRONMENTAL CONCERNSConsumers are increasingly concerned about the environmental impact of the products theybuy, including energy. As a result, they are demanding that utilities provide them with newsources of energy and more information that will enable them to make smarter decisions.CONSUMERS DEMAND A DIFFERENT MODELConsumers desire more information and reliability when it comes to their energy use and thesystem as a whole. Building a smarter infrastructure is a singular way to meet these demandswhile stimulating growth in the greater economy. © 2010 IBM Corporation
  18. 18. Let’s build a smarter planet: Energy and UtilitiesThe imperative for energy and utilities organizations todayis threefold.FOCUS ON VALUE EXPLOIT OPPORTUNITIES ACT WITH SPEEDDo more with less Build future capabilities Manage change Cash/capital focus  Protect and acquire assets  Clearly communicate and talent simple goals Flexibility  Initiatives  Seek and leverageFocus on the core experience Transform your industry Business process Leadership  Bold moves Strategic initiatives  Get the information to act  Position nationally andRe-align relationships globally, where appropriate  Set the agenda Financial solidity Risk and transparency of suppliers, partners and customers  Business performance management and analytics Revisit/renegotiate  Risk management Collaborate © 2010 IBM Corporation
  19. 19. Let’s build a smarter planet: Energy and UtilitiesIBM’s solution strategy is aligned with the needs of energy andutility organizations. ORGANIZATIONS ARE FOCUSED ON… IBM IS DELIVERING… Transformation of the grid  Intelligent utility network optimization  Communications & IT networks  Systems integration & intelligence operations  Advanced metering infrastructure optimization  Enterprise asset management Empowerment of the consumer  Customer focused utility  Customer intelligence and analytics  Revenue assurance management  Retailer strategy  Contact center optimization  Customer channel strategies  Customer systems management  Total data migration Reduction of greenhouse  Plant asset performance management gas emissions  Knowledge management  Energy value chain optimization  Wind power suite  Intelligent plant lifecycle management  High performance computing  Generation virtualization  GHG emissions management © 2010 IBM Corporation
  20. 20. Let’s build a smarter planet: Energy and UtilitiesA smart grid requires an infrastructure that can propel the businessforward while improving service, reducing cost and managing risk. Mobility Facilities Production Technology Communications Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure + + + + We need a dynamic infrastructure. © 2010 IBM Corporation
  21. 21. Let’s build a smarter planet: Energy and Utilities Dynamic Infrastructure…  Enables visibility, control, and automation across the utility network and IT assets.  Is highly optimized to drive operational efficiency.  Enables the utility to make better decisions on energy delivery.  And enables the consumer to make better decisions on energy usage.  Leverages flexible sourcing like clouds.  Manage and mitigate risks by ensuring availability, security and regulatory compliance …delivers superior business and IT services with agility and speed. © 2010 IBM Corporation
  22. 22. Let’s build a smarter planet: Energy and UtilitiesDynamic Infrastructure: Providing the foundation needed toaccelerate the transformation to a smart grid.  Monitor business and IT asset performance online to meet serviceobjectives with service Transformation of management solutions. the grid  Use virtualization and cloud computing to rapidly and securely scale up the transition from pilot to production.  Manage all types of assets on a common platform: Generation (fossil, hydro, nuclear, renewables), T&D and meters, facilities, vehicles and IT assets with asset management solutions.  Create an information infrastructure that supports real-time analysis and visualization to provide enhanced support about electric supply and demand decisions.  Provide a secure and resilient environment that monitors for physical attacks and prevents cyber attacks with risk management solutions.  Enable distributed energy resources, such as solar and storage, to seamlessly integrate into the grid through enhanced grid intelligence and monitoring Empowerment of  Create an information infrastructure that supports improved consumer awareness to make smarter and more informed choices on energy usage. the consumer  Implement solutions for consumers to make more informed decisions about their energy usage.  Deliver advanced, globally optimized energy trading, fuel management and greenhouse gas emissions management solutions.  Increase energy output and maximize revenue in renewable plants (ex. wind, solar) by using Reduction of virtualization and high performance computing to model weather scenarios greenhouse  Deliver fleet-wide best practices by standardizing asset management and utilization using gas emissions enterprise asset management.  Move from business automation to business optimization with enterprise information management.  Improve and manage the energy efficiency of the data center, its assets and air conditioning, and align IT to business goals. © 2010 IBM Corporation
  23. 23. Let’s build a smarter planet: Energy and UtilitiesA dynamic infrastructure is the basis and enabler of a smart grid. DYNAMIC INFRASTRUCTURE SMART GRID Solar Energy Storage UTILITY Wind Coal Energy Storage Hydroelectric Nuclear Solar Wind Solar Energy Storage Plug-in Vehicle Wind © 2010 IBM Corporation
  24. 24. Let’s build a smarter planet: Energy and Utilities We’ve only just begun to uncover what is possible on a smarter planet.  The world will continue to become smaller, flatter and smarter. We are moving into the age of the globally integrated and intelligent economy, society and planet.  There’s no better time to start building smarter energy and utilities organizations—focused on providing energy responsibly to empowered consumers. And there’s no better time to invest in creating the kind of society we all desire. Let’s work together to drive real progress in our world. © 2010 IBM Corporation
  25. 25. Let’s build a smarter planet: Energy and UtilitiesWhere is IBM applying its expertise today?WE ARE…  Accelerating the adoption of smart grids worldwide through the Global Intelligent Utility Network Coalition.  Aiding utilities in the development of smart grids by creating the Smart Grid Maturity Model.  Collaborating in the GridWise Alliance and similar organizations around the world to promote smart grids  Participating in the Department of Energys Electricity Advisory Committee and its Smart Grid Subcommittee to help modernize the U.S. electric system  Working on 7 of the 10 largest automated meter-reading projects.  Exploring how to turn millions of electric vehicles into a distributed storage system.  Running a Center of Excellence for Nuclear Power in LaGaude, France.  Driving advanced IT in nuclear power generation through the Nuclear Power Advisory Council. © 2010 IBM Corporation
  26. 26. Let’s build a smarter planet: Energy and UtilitiesSources for statisticsPage 4 Page 121 International Energy Outlook 2008 8 Sam Palmisano speech, November 12, 20082 Ontario Smart Price Pilot report: 9 2006 FERC Survey and 2008 FERC Survey B+Key+Initiatives/Regulated+Price+Plan/Regulated+ Page13 Price+Plan+-+Ontario+Smart+Price+Pilot 10 Sam Palmisano speech, November 12, 20083 The Climate Group and McKinsey & Co., 11 RNCOS, “Global Hybrid Car Market Forecast to “Smart 2020 Report” 2010,” January 2008Page 54 IBM Pacific Northwest National Laboratory case study Page 145 The Climate Group and McKinsey & Co., 12 New Intelligence White Paper from ThinkForward “Smart 2020 Report” website 13 U.S. Department of Energy, “The Smart Grid:Page 6 An Introduction”6 2008 IBM CEO StudyPage 77 IBM, “Plugging In the Consumer” © 2010 IBM Corporation
  27. 27. Let’s build a smarter planet: Energy and UtilitiesTrademarks and notes IBM Corporation 2011  IBM, the IBM logo and are registered trademarks, and other company, product or service names may be trademarks or service marks of International Business Machines Corporation in the United States, other countries, or both. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at  Adobe, the Adobe logo, PostScript, the PostScript logo, Cell Broadband Engine, Intel, the Intel logo, Intel Inside, the Intel Inside logo, Intel Centrino, the Intel Centrino logo, Celeron, Intel Xeon, Intel SpeedStep, Itanium, IT Infrastructure Library, ITIL, Java and all Java-based trademarks, Linux, Microsoft, Windows, Windows NT, the Windows logo, and UNIX are trademarks or service marks of others as described under “Special attributions” at:  Other company, product and service names may be trademarks or service marks of others.  References in this publication to IBM products or services do not imply that IBM intends to make them available in all countries in which IBM operates. © 2010 IBM Corporation