smart grids 360 degree analysis - current status and future directions in asia pacific
TRANSCRIPT
1
Smart Grids 360 Degree Analysis: Current Status and Future Directions
in Asia Pacific
Ravi KrishnaswamyVice PresidentEnergy PracticeFrost & SullivanAsia Pacific
2
Agenda
Smart Grids Architecture
Evolution and Transformation
Industry Convergence
Utility Business Model – The Paradigm Shift
Changing Functions
Customer Service
Utility Pain points and Implications
State of Asia Pacific Smart Grids Market
Key Drivers & Restraints
Business Case Evaluation
Country Attractiveness
The information given in this presentation cannot be copied or reproduced without written permission from Frost & Sullivan
3
Smart Grids Architecture
4
Smart Grids - An Answer to Next Generation Infrastructure
Pressure on grids from renewable energy generation
Demand for security of supply and high quality of power
Greater demand for energy efficiency
Harmonisation of electricity markets needs flexible grids
Electric vehicles drive need for sophisticated infrastructure
Electricity Supply-Side Drivers Electricity Demand-Side Drivers
Growth in on-site microgeneration
Global growth and spread of distributed generation
Looming ‘gap’ in power gen capacity in mature regions
Source: Frost & Sullivan.Source: Frost & Sullivan.
5
Smart House with EV car generator
Smart Grid Control Centre
Wind Power
Solar Power
Energy Storage
Hospital
Pre
20
10
Time Frame
Utility Power Generation InfrastructureTopics
Pos
t 2
01
0
Implications on Energy Management
Conventional Grid and Infrastructure
Houses
Power Station
Office Building
Factory
Transformation of Conventional Grid Energy Internet (Smart Grid)
• Centralised power generation resulting in substantial power and transmission losses
• Ageing infrastructure in most regions
• One-way metering of consumption
• Several small generating facilities (including micro-generation) – wind, solar etc.
• Advanced metering infrastructure (AMI) facilitates 2-way communication
• Offices, hospitals selling excess energy back to grid
• Electric vehicles as generators when not in use
• Increased efficiencies and reduced OPEX and environmental effects
Distributed Generation
Timeframe Analysis - Shift towards Smarter Grids
Source: Frost & Sullivan
6
Smart Grid Components
Smart Grid Web
Frost & Sullivan definition“Smart Grid consist of a web oftechnologies aimed at automating,improving efficiency, and increasingavailability of the electric grid rangingfrom generation, transmission, anddistribution levels.Automation also includes tools toconduct predictive, preventative andsupply analysis based on datacollection that is conducted at thetransmission and distribution level.”
Smart Grid
Meter Manufacturers
Energy Storage & Distributed Generation
HAN Appliances
Consulting and System Integration
Demand & Response
Software
Network & Connectivity
Power Transmission & Distribution
7
InternetInternet
Smart metersSmart meters
Data & ProcessData & Process
ModellingModelling
Analytics toolsAnalytics tools
AutomationAutomation
Information & Information & Control Control systemssystems
IntegrationIntegration
EquipmentEquipment
Smart sensors Smart sensors
ICT networksICT networks MaterialsMaterials
Utilities are investing in many technologies….process automation, real-time monitoring & control systems etc to achieve greater reliability and efficiency…
Distributed GenerationDistributed Generation
Energy StorageEnergy Storage
EV & HybridsEV & Hybrids
Key Technological Elements of a Digital Smart Grid
8
Overall Smart Grid Architecture
Smart House with EV car generator
Smart Grid Control Centre
Wind Power
Solar Power
Energy Storage
Hospital
Customer SideGrid Side AMI
In- home displays with real time usage/pricing statistics
Home Energy Management Systems (HEMS)
Automation of the grid Fault identification Outage Management Demand Management Remote Monitoring
Smart Meters Wide Area Network (WAN) Local Area Network (LAN) Home Area Network (HAN) Meter Data Management
Systems (MDMS)
Advanced Applications
Control & Data Management
Broadband Communications
Back office
Integration of front end systems to decision making tools
Software systems
Future Applications
Electric Vehicles Advanced Storage Smart Appliances
Source: Frost & Sullivan
9
Smart Grids - Convergence of Inter-Related Markets
IT Automation & Control
Energy & Infrastructure
Electric Vehicles RenewablesU
tiliti
esC
omm
unic
atio
n P
roto
cols
Ene
rgy Stora
geP
ower E
lectronics
Source: Frost & Sullivan.Source: Frost & Sullivan.
Software Building Technology
September 201010
Software & Search Engines
Key Variables and Converging Elements
Customer Participation
Energy Consumption
Carbon
Footprint
Mobile Access
Wireless Technology
Remote Control & Monitoring
Billing
Utilities
Source: Frost & Sullivan.Source: Frost & Sullivan.
11
Convergence of Technology Leads to Convergence of Competition
IT PlayersAutomation/Building Control Players
Energy/Infrastructure Players
Source: Frost & SullivanSource: Frost & Sullivan
• IP Networks• Digital Technology• Analysis Software• Wireless Communication• Technology Integration• Network Security• Etc.
• T&D Technology• Power Electronics• Renewable Energy• Integrated Distribution Management• Substation Automation• AMI-Enabled Metering• Etc.
• Building Automation• Demand-Side Management• Connectivity of devices• Monitoring and Sensing• Smart Grid Integration• Etc.
Outlook for the Energy & Power Industry: Smart Energy Players (World), 2010
12
Emergence of Integrated Solution providers
IT Players Automation/Building Control Players
Energy/InfrastructurePlayers
Tier 1 Integrated Solution Providers.
Source: Frost & SullivanSource: Frost & Sullivan
Outlook for the Energy & Power Industry: Smart Energy Players (World), 2010
13
Utility Business Model – The Paradigm Shift
14
New Business Models for Utilities
Current flow
Information flow
Distribution
Future Business Model
Electric
appliances/
devices
Customer
service
Power
generation
Power
transmission
Monitoring
Power distribution
Power from utility
Power
generation
End User/
Grid
Power from Distributed Generation units
Monitoring
Metering and energy portal
Third-party energy
management services
Energy Information Services
Current Business Model
Power
generation
Power
transmission
Electric
appliances/
devices
Customer
serviceMeteringPower
distribution
Distribution
Electricity usage bill
Retail
15
Utility Functions – Now and Future
Supply Energy
Energy Buyers & Sellers
System Integrators
Leasing of
Hardware
Information Service
Providers
Application Developers
Information Aggregators
Device/ Appliance
Supermarket
Energy Managers
Guarantee Reliability
Build Capacity
Collect Revenue
16
Customer Loyalty
Low HighLow
High
Loyalt
y M
ark
et
Op
port
un
ity
Loyalty Market Maturity
Hotels & Airlines
Credit & Debit Cards
Retail StoresRetail Banking Insurance
Private Pensions
Telecoms
Utilities
Other Transportation
17
Countries Financial Regulatory Technological Organizational Operational
USA
EU (Early
Adopters)
EU
(Mandated)
Japan
Korea
Australia
New Zealand
China
Strongest
Utility Pain Points and its Impact on Smart Grids
EU (Early Adopters) includes Italy and Nordic countriesEU (Mandated) includes UK, France and Spain Weakest
18
Key Implications for Utilities
New revenues sources for utilities will be by leveraging “information” and not “commodity”
Even though utilities create infrastructure, it is most likely that third parties will create additional value through out the value chain and hence make more profits
Ability of the utility to create an ubiqutous connectivity between its current data sources and decision making points is critical to success of smart grids
For utilities to adapt to the future would mean they have to focus on “human and intellectual capital” than just on physical assets and processes
“Marketing” as a function becomes more important than ever before for utilities
Customer education and involvement is key to success of smart grid projects
Do not under estimate the investment and over estimate the benefit
19
State of Asia Pacific Smart Grids Market
20
Asia Pacific – Key Drivers for Smart Grid
Integrate Renewable Energy and Electric VehiclesGovernment
Mandates and Support
Operational Efficiency
Enhancing Network Efficiency and Resilience
Shaping Consumer Behavior and providing better features to consumers
Deferring Capital Investments
Reducing Energy Wastage and Emissions
Need for Infrastructure upgrade
Evaluation of Smart Grid Technology and Business Case
21
Asia Pacific – Key Restraining factors for Smart Grid
Massive Organizational Change requirements
Ambiguity around the business case
Lack of adequate support from Regulators Financing of Smart
Grid Investment
Technological Challenges
Public Reaction
22
Value Proposition for Utilities
Higher
Revenues
Cost
Savings
Government
mandates and
funding
• The governments across Asia Pacific have been pushing the idea of Smart Grid through regulatory mandate as well as funding for Smart Grid implementation
• Australia, South Korea and Japan have already committed a total of US$ 258 million for Smart grid development
• Government push is the most important reason driving the Utilities towards Smart Grid
• Peak Load Power Requirement, Manpower cost and Line Losses are the major cost components to the utilities
• In several countries the power requirement ‘peaks ‘ at certain times of the year. To provide for this excess power Utilities have to build special power plants. By implementing a sound Demand Response system, the Utilities can save Billions of dollars by removing the need for these plants
• Manpower cost for Meter Reading, Meter Disconnection is huge for most Utilities. Also countries like Japan and South Korea are fighting with problems of an aging workforce. Hence, Smart Grid can help such Utilities save cost of workforce as well as solve the problems of ageing work force
• Outage Recovery can help Utilities sell more power• US Economy currently loses $150 billion every year
due to power outages• In certain countries like New Zealand Distribution
companies can even expand their consumer base by providing better service
1
2
3
3 key reasons why the Utilities would move towards Smart Grids
23
Asia Pacific on a typical Smart Grid development Roadmap
AMR for CNI consumers
AMI infrastructure
Regional Demonstration/
Pilot projects Transmission and Distribution
network improvement
Renewable Energy
connectivity and Energy
storage
Enabling of Electric Vehicles connectivity to
the gridComplete Smart
Grid system deployment
MalaysiaIndonesiaThailand
Philippines
Japan
AustraliaNew Zealand
Singapore
South Korea
High Medium Low
Degree of focus on activityTime
A snapshot of the current focus of
activities for different countries
24
Asia Pacific - Utilities Business Case Evaluation Meter
Higher Revenue Potential
Government Mandates and Funding
Cost Savings Potential
Low HighKey :
South Korea Low High1 52 3 4
Low High
1 52 3 4
Low High 9
New Zealand Low High
1 52 3 4
Low High
1 52 3 4
Low High 9
Australia Low High
1 52 3 4
Low High
1 52 3 4
Low High 11
Japan Low High
1 52 3 4
Low High
1 52 3 4
Low High 8
Singapore Low High
1 52 3 4
Low High
1 52 3 4
Low High 8
Rest of Asia Pacific Low High
1 52 3 4
Low High
1 52 3 4
Low High 7
Overall Score
1 52 3 4
1 52 3 4
1 52 3 4
1 52 3 4
1 52 3 4
1 52 3 4
25
Asia Pacific - Utilities Business Case Evaluation Meter
New Zealand
Australia
China
Singapore
South Korea
Japan
Actual Roll Out
Low High
Low High
Low High
Low High
Low High
Low High
1 52 3 4
1 52 3 4
1 52 3 4
1 52 3 4
1 52 3 4
1 52 3 4
Pilot Projects and
Future Outlook
Low High
Low High
Low High
Low High
Low High
Low High
1 52 3 4
1 52 3 4
1 52 3 4
1 52 3 4
1 52 3 4
1 52 3 4
State of Utility
Low High
Low High
Low High
Low High
Low High
Low High
1 52 3 4
1 52 3 4
1 52 3 4
1 52 3 4
1 52 3 4
1 52 3 4
Low HighKey :
26
Country attractiveness in Asia Pacific
Australia
Singapore
South Korea
Japan
New Zealand
Malaysia
Indonesia
Philippines
Propensity towards Smart Grid Investments
Deg
ree o
f Im
ple
men
tati
on
HighLow
Low
High
The shift would happen as the utilities having realized the necessity of Smart Grid or mandated by the governments, manage to raise capital from governments or the external agencies like UN or WB. A lot of them would also like to learn from others experience
Despite no government mandate New Zealand remains attractive due to continued investment by the Utilities in Smart Meters
CHINA
Thailand
27
Asia Pacific Summary
Leading countries in Asia Pacific
In terms of evolution and opportunity being offered the major APAC countries rank in the following order:1.Australia2.New Zealand and South Korea3.Singapore, China and Japan
Route to market
Typically a Utility chooses a consortium of players offering a complete AMI package to them, which could mean a metering company tying up with a Network provider to provide Smart Meters to the Utility. Such an arrangement ensures a single window communication between the Utility and vendors. An integrator or a Consultant may play a role in integrating the services offered by different vendors and ensure a seamless integration of all products into the grid.
Key Factors to promote Smart Grids
While the drivers promoting Smart Grid may be different in different countries, on a broad level the three key reasons in that order why countries would move towards Smart Grid are : 1.Government Mandates and Funding2.Significant cost benefits due to peak power plant and manpower cost reduction3.Higher Revenues due to outage recovery
28
Asia Pacific Summary
Way Forward
Governments across APAC have shown inclination to support the move twards a smarter grid infrastructure, even though at varied pace. Exactly what features a country needs shall vary as per a country’s energy policy, existing infrastructure and eventual objectives of investment. However, broadly speaking, Smart Grid in some form is increasingly inevitable for any country to meet its Green objectives
The Utilities across APAC region would need to keep a track of three major factors: The government mandates/ funding making Smart Gris implementation necessary and/or profitableTechnological advancements in Smart Grid area and they effect the business case for implementing a Smart GridDifferent vendors/firms involved in Smart Grid space including Metering Companies, Network Solution providers, Software firms, Integrators, Consulting firms etc and understand what product/service offerings they would need from them to help implement their own Smart Gris in the best possible manner
The Vendors and firms involved in Smart Grid area see a very dynamic market currently. The opportunity surely exists for them and to make the most of this opportunity they would need to stay ahead of the competition by keeping a track of how regulatory, technological and business environment changes in different countries. Matching an utility’s requirements would involve understanding its long term plans and coming up with suitable solutions to fulfill those plans. Given the fact that common standards are not necessarily expected in the near future, significant focus would be how well a firm can customize its products to meet the requirements of different Utilities.
Gov
ernm
ents
Util
ities
Vend
ors
29
About Frost & Sullivan
49 years of ExperienceAbout 49 years of experience providing clients with in-depth research and
analysis from which to make critical business decisions
36 Offices Around the
World
1,700+ industry analysts, growth consultants, and staff in 36 offices around
the world, ensuring that our clients have in-depth regional and global
perspectives of their markets
10 Industries and 32
MarketsCover broad spectrum of 10 industries and 32 markets
10,000+ Clients
Worldwide
Partner with 10,000+ clients worldwide, including emerging companies, the
global 1000, and the investment community
3-tiered Growth SystemOffer the exclusive 3-tiered Growth System, including: Growth Partnership
Services, Growth Consulting and Growth Team MembershipTM
TEAM Methodology
and the
360 Degree Perspective
Developers of TEAM Methodology, a proprietary approach to ensure that
clients receive a 360 Degree Perspective on technology, markets, and
growth opportunities
30
For Additional Information
Donna JeremiahCorporate CommunicationsAsia Pacific+603 6204 [email protected]
Carrie LowCorporate CommunicationsAsia Pacific+603 6204 [email protected]
Ravi KrishnaswamyVice PresidentEnergy & Power Systems+65 6890 [email protected]
Thank you