CBI energy conference: Jon Bentley

© 2010 IBM Corporation

What will Smart Grids mean for Energy Users? Jon Bentley London, September 15th 2010

IBM Global Business Services | CBI Energy Conference


IBM | Smarter Energy

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2. Affordability keeping price rises to a minimum (2011+)

3. Emissions keeping within 2-4oC (34% by 2020, 80% by 2050)

Lets first remind ourselves of Why? we need Smart Grids

1. Security keeping the lights on (2016/17 – 2022/25)



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1. Demand managing down consumption increases

2. Efficiency reducing unnecessary consumption and loss

3: Generation reducing emissions from / dependency on fossil fuels

Which means we need these Outcomes? from Smart Grids?

4: Cost avoiding the need to build (even more) new capacity

5: Price reduced volatility from global (gas) markets



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2. Losses managing the network more efficiently to reduce distribution & generation losses and costs

1. Information informing consumer choice and influencing behaviour by showing them what they use

3: Incentives using price signals to increase perceived energy value and shift the shape of the demand curve

So How? are Smart Grids expected to help?

4: Automation providing tools / services to make it easier for energy users to manage their energy

5: Control direct demand management by utilities / ESCos to limit demand / shift time of day usage

6: Optimisation balancing increasingly variable and distributed generation and demand



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A Technical definition (slightly abridged)

“A Smart Meter is an advanced meter that records consumption in intervals of an hour or less and communicates that information at least daily via some communications network back to the utility for monitoring and billing purposes. Smart meters enable two-way communication between the meter and the central system”Wikipedia



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A Goals-based definition

“Smart metering is designed to provide utility customers information on a real time basis about their domestic energy consumption. This information includes data on how much gas and electricity they are consuming, how much it is costing them and what impact their consumption is having on greenhouse gas emissions." European Smart Metering Alliance



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Ofgem – Smart Metering prospectus 2010

“Smart grid can be defined as “an electricity network that can intelligently integrate the actions of all users connected to it - generators, consumers and those that do both - in order to efficiently deliver sustainable, economic and secure electricity supplies” Electricity Networks Strategy Group



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Reality check 1: We need to be clear on What? is a Smart Grid

Smart Meters

Intelligent Homes & Appliances

Smart Grid

Intelligent Network



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Smart Meters: 2012-2020 2016?

Smart Home: 2012? 2015+?

Smart Grid: 2020+?

Intelligent Network: 2015-2020?

Reality check 2: We need to be clear on When? we will get it



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SmartMetering

Smart Meters are the first step in a wave of change across the energy system

Improving billing accuracy

Reducing operational costs

Providing meaningful consumption information

Reducing overall and peak demand

Accelerate electric vehicle adoption

Enabling more micro-generation

Supporting implementation of smart grids

Improving efficiency of industry processes

Proactively managing customer debt

Utilising electric vehicle storage capability

Integrating intelligent devices and appliances for demand management

Enabling increased use of intermittent energy supplies

Services beyond the meter

Operation of “virtual power plants”



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Achieving these changes requires much greater engagement with customers

SmartMetering

Providing meaningful consumption information

Reducing overall and peak demand

Accelerate electric vehicle adoption

Enabling more micro-generation

Proactively managing customer debt

Utilising electric vehicle storage capability

Integrating intelligent devices and appliances for demand management

Enabling increased use of intermittent energy supplies

Services beyond the meter

Operation of “virtual power plants”

Increasing customer… …behaviour changes

…investments

…collaboration



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Near-term Gradual increase in energy services and tariff structures sustained reduction in emissions, demand pattern shift, willingness to “co-create” change with utility

Roll-out High consumer engagement with information and tools behaviour change, reduced usage, lower bills and GHG emissions, closer relationship with energy and utility

In 5 years? New technology-based utility / customer business models automated demand, EV and microgen management, willingness to allow utility control for mutual benefit

What should be the Impact? on energy consumers?



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Near-term Choice in terms of tariffs, time of use (ToU) pricing, energy saving services higher bills for those that don’t engage? Mistrust?

Roll-out Impact depends on consumer engagement with the information provided zero for a large number of people? Ambivalence?

In 5 years? Dynamic ToU pricing, programmable usage, utility-managed demand & microgen management reduced usage and (relatively) lower bills at the sophisticated, educated, wealthy end of the market?

What could be the Impact? on energy consumers?



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2 Customer interest and engagement typically fades and information-driven change is in any case limited (6-10%) – so automation and price-signals are needed to drive and sustain increased benefits, which requires greater levels of trust and customer participation

1 Customers can – and do – seriously derail Smart Meter programmes when trust breaks down

2 Key Lessons from other Smart Metering trials and programmes



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Take the customer with you – build trust

Design for future solutions - implement in steps

Co-create solutions that work for customers - share value

[email protected]/think/uk

Copies of this presentation are available on request

CBI energy conference: Jon Bentley

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