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Cost-efficient smart metering, a dynamic model for optimization of costs and benefits of smart metering

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Cost-efficient smart metering, a dynamic model for optimization of costs and benefits of smart metering

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Cost-efficient smart metering, a dynamic model for optimization of costs and benefits of smart metering

  1. 1. Dynamic model for optimization of costs and benefits of smart metering
  2. 2. <ul><li>Backgrounds for dynamic modelling of smart meter deployment </li></ul><ul><li>Introduction to the model </li></ul>
  3. 3. <ul><li>Split incentive: investments by metering operator provides benefits reaped by consumers </li></ul><ul><li>Projected capital and operational expenses exceed the remuneration for metering services in most cases (emphasis on cost reduction of smart metering) </li></ul><ul><li>Most calculations are based on ‘now or never’ and ‘all or nothing’ scenarios </li></ul>Calculations are based on snapshot whereas implementation and deployment take place in dynamic environment
  4. 4. <ul><li>Current models are based on ‘Incremental innovation’ </li></ul><ul><li>Technical developments enable ‘semi-radical innovation’ </li></ul>Identical business model Changed business model Identical technology Incremental innovation Semi-radical innovation Changed technology Semi-radical innovation Radical innovation
  5. 5. <ul><li>Include strategic fit adjusted to local parameters and legal framework (including remuneration for regulated services) </li></ul><ul><li>Including semi-radical innovation based on a technology roadmap with 10 year horizon </li></ul><ul><li>Include appropriateness of communication technologies (Quality of service and costs) </li></ul><ul><li>Include external costs (i.e. CO2 reduction) </li></ul>
  6. 6. <ul><li>Regulatory framework determines boundaries of strategic fit </li></ul><ul><li>Strategic fit itself includes: </li></ul><ul><ul><li>Future proof </li></ul></ul><ul><ul><li>Interoperability </li></ul></ul><ul><ul><li>Number of suppliers </li></ul></ul><ul><ul><li>Standards </li></ul></ul><ul><ul><li>Geographical applicability </li></ul></ul>Weights assigned to the various factors determine the strategic fit.
  7. 7. - 2010 2010 - 2013 2013 - 2020 Distributed generation Domestic energy savings Plug in vehicles Distribution automation Flexible tariffs Real-time pricing Fraud detection Improved billing Security of supply Sustainability Improved competition <ul><li>Selected functionality determines quality of service for communication technology </li></ul><ul><li>Timing of deployment determines cost for communication </li></ul>
  8. 8. Legend PLC 2 nd gen. PLC 3 rd gen. BPL PLC over MV Wired IP DSL CATV Fiber optics Mobitex (1G) GPRS (2,5G) UMTS (3G) LTE (4G) WiMAX (4G) SMS Meshed RF 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Increasing availability Decreasing availability Constant availability
  9. 9. <ul><li>Average CO2 per dwelling in EU is about 3 tons annually (with significant variations accross EU) </li></ul><ul><li>Based on EUR 17 / ton this represents a value of over EUR 50,- annually </li></ul><ul><li>With projected CO2 reduction of 20 % the benefits add up to over EUR 10,- annually per dwelling </li></ul>How can smart meters contribute to reaping these potential benefits?
  10. 10. CO2 abatement at the demand side is cost effective providing opportunities for smart metering Diagram used with kind permission of McKinsey and company
  11. 11. <ul><li>Direct savings to consumer (reduced energy bill due to savings) </li></ul><ul><li>CO2 benefits to enabling technology (smart meters) </li></ul>Meter operators should be allocated tradable CO2 certificates for abatement facilitated by them
  12. 17. <ul><li>Hans Vrinds (hans.vrinds@capgemini.com) </li></ul><ul><li>Bart Droppers (bart.droppers@brightwell.nl) </li></ul>

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