SMART METER ROLL-OUTSTRATEGIC INSTALLATION AND MAINTENANCEPLANNING WITH SAP

SAP White PaperSmart Meter Roll-Out

CONTENT

4 Introduction

5 New Infrastructure Strategies

6 A Challenge to be Mastered

8 The Solution

11 Benefits at a Glance

The ongoing relocation of productionsites, the change in the global populationstructure, the climate change as well asthe forseeable exhaustion of fossile fuelsforce industrialized countries to breaknew grounds in energy supply. Amongothers, this includes the definition ofnew regulations to guarantee thedelivery of sustainable, secure andcompetitive energy in the future as wellas to define ways on how to improveenergy consumption of privatehouseholds, the public sector andmanufacturing companies.

During the last years several legalrequirements have been enacted, suchas the German Energy SavingsOrdinance (EnEV) or the EU EnergyPerformance of Buildings Directive.These regulations are now to be imple-mented. Moreover, new technologies toreduce fuel consumption are developed.Managing energy consumption andpower generation is as well affected bythe transformation process in the energymarket. The usage of more and morerenewable energy sources requiresalready today a restructuring of the

power system planning and in the supplyof power and energy reserves.

The European Directive on Energy End-Use Efficiency and Energy Services2006/32/EG as well as nationalregulations will change the energymarket substantially. In the future, powersupply companies are obliged to useintelligent power networks to providemore transparent and flexible utility billingdata. Traditional Ferraris meters onlymeasure total consumption and as such,provide no information of when theenergy was consumed. The newly to beinstalled smart meters1 provide aneconomical way of measuring additionalinformation and communicating it via,e.g. the internet or powerline techno-logies, to the backoffice. This allowsutility companies to introduce differentprices for consumption, e.g. based onthe time of day and the season.

By providing information to customers,utility companies assist a change inenergy usage from normal consumerconsumption patterns, either in responseto changes in price or as incentives

designed to encourage lower energyusage at times of peak-demand periods.Furthermore, traditional meter readingwill become obsolete reducing effort ofa manual meter reading.

Based on the European legislation smartmeters shall have replaced the Ferrarismeters in the EU by the year 2022. Dueto this tight time frame utility companiesare confronted with a Herculean taskas millions of meters have to beexchanged within the next 10 years.

The following chapters will show how amass roll-out of utility meters, such aselectrical, water, heat and gas meters,can be efficiently planned and executedbased on a standard SAP product. Thegiven overview scenario is geared to areduced deployment of softwarecomponents. Objective of this approachis to keep the process as simple aspossible. Assuming that the meter roll-out is rather a one-time process, it isimportant to keep an eye on investmentcosts on the one hand and the productlaunch as short as possible on the other.

4 SAP White Paper – Smart Meter Roll-Out

INTRODUCTION

1. A smart meter is an advanced utility meter that identifies consumption in more detail than a conventional meter; and communicates that information via some network back to the local utility company for monitoring and billing purposes (Source: wikipedia.org)

Fact is, the exchange of the analogFerraris meters with new digital metersis required by law and is one part ofrestructuring the national power grids.

The uniqueness of this task requires adetailed and exact process planning,because efficiency improvementsresulting from a trial and error phaseare not to be expected. Moreover,without planning it will be difficult torestrict losses resulting from processmisapprehensions because a controlledroll-out process might not be startedover.

All the more it has to be kept in mindthat when starting to install intelligentmeters utility companies will have tohandle different meter types (digital andanalog) as well as different commu-nciation media at the same time. As thenew meter generation will be managedas part of an IT network, newtechnological knowledge has to begained regarding the installation andoperation of such smart meters. As oftoday, there are no empirical values asit comes to the time required for instal-lation, availability of media for meterdata transmission or meter communica-tion. These data are only hypothetical.

Generally, there are two strategies toexchange old with new meters. On theone hand, utility companies canexchange a meter within the usualmaintenance cycle. On the other hand,the exchange can be planned stra-tegically and defined in a roll-out plan.

Due to the expected advantagesresulting from the deployment of thenew meter generation, the intended roll-out of meters in geographical areas tobenefit as soon as possible from gridusage and particularly due to the abovementioned legally given tight time frame,it seems rather impossible to exchangemeters in their usual maintenance cycle.Only a planned geographical mass meterroll-out can guarantee the in-timeavailability of the new meter readingsystem. Therefore, it is the recom-mended strategy requiring a one-timecalculated investment.

To all intents and purposes it is assumedthat positive effects will be recognizableshortly after the installation of smartmeters and smart grids2. However,prerequisites for a short-time productlaunch is an agreement on internationalstandards and a coordinated approachwithin the next 10 to 15 years.

The upcoming meter exchange mightbe a starting point in revolutionizing theenergy supply. Different standardizationendeavors, such as from EPRI, NIST,IEC, OpenSG3 and others, have to beharmonized and filled with live whenintroducing smart meters to the market.But exchanging meters can only be thefirst step in the further development ofsmart grids and their deployment.

SAP White Paper – Smart Meter Roll-Out 5

NEW INFRASTRUCTURE STRATEGIES

The roll-out process of smartmeters may be divided into thefollowing main phases:

1. Create work schedules as activity templates

2. Data clustering(installation locations)

3. Create planning templates tobe copied for different planningscenarios

4. Group and roughly plan evaluated quantities(as to areas and time slices)

5. Generate orders

6. Order execution

7. Order confirmation

2. Smart Grids are networks to communicate and control power generators, provider, end-user and equipment. Smart Grids deliver electricity from suppliers to consumers using two-way digital technology to control appliances at consumers' homes to save energy, reduce cost and increase reliability and transparency. A smart grid includes an intelligent monitoring system that keeps track of all electricity flowing in the system. (Source: www.wikipedia.de)

3. EPRI Electric Power Research Institute, NIST National Institute of Standards and Technology, IEC International Electrotechnical Commission, OpenSG (open Smart Grid) is an open plattform to provide a cross-system communication of power grids from generation to end-user

Good news first, the required processsteps is baseline process knowledgethat should be available in each andevery utility company. Exchangingmeters is a day-to-day business. Theoperating experience of this processhas only to be adapted to a mass roll-out using IT tools and planningscenarios.

A similar approach can be found in thewaste and recycling industry. Here, it isa (mass) service that has to be delivered,such as the collection of a certain typeof waste in a defined area and on adefined date.

Besides the considered area, workingand travelling processes are evaluatedand key figures calculated. These keyfigures include among others thenumber of similar activities and the totalworking time of a team in a certainarea.

Based on these key figures the dis-patcher can calculate the resultingworkload for each team.

Copying this to the meter exchangeprocess, the process flow might looklike the following.

The installation time depends on differentparameters, such as the meter type, thecommunication media, the concentratorand the MDUS (Meter Data Unificationand Synchronization System) of thetechnical infrastructure (AMI4 system).

The installation of the meter itself canbe executed by company-internal fieldservice teams or it can be outsourcedto specialized local service providers orthe provider of the AMI system. In orderto be always up-to-date on the projectprogress as well as to guarantee billingtransparency, immediate feedback onthe delivered service – internally orexternally – is crucial.

6 SAP White Paper – Smart Meter Roll-Out

A CHALLENGE TO BE MASTERED

4. AMI Advanced Metering Infrastructure refers to systems that measure, collect and analyse energy usage, and interact with advanced devices such as electricity meters, gas meters, heat meters, and water meters, through various communicationmedia either on request (on-demand) or on pre-defined schedules. (Source: wikipedia.org)

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SMARTMETER

PlanningPreparation

Activation

Order creation

Order transmissionOrder execution

(incl. mobile device)

Online informationand dispatching

Order confirmation

Backoffice Planning

Field Service Execution

The following example will illustrate thenecessity of a strategic installationplanning. Based on the Europeandirective analog meters shall beexchanged with smart meters until 2022.The example refers to the UK marketand assumes the following numbers formeters to be exchanged in privatehouseholds and small and medium sizedcompanies:

The following table gives a roughassumption of the time required to installa new smart meter including preparationand confirmation of the exchange.

Assuming a daily average working timeof 8 hours and 220 workdays per yearyou will need 3,361 FTEs (Full TimeEquivalents) to execute this task.Reducing the exchange time to a periodof 3 years this would amount to 11,203FTEs.

Note that the above calculation isassuming an ideal work flow, i.e. it isassumed that the installation is donecorrect at the first time, there is only asingle AMI system available, there is noemployee turnover and therefore nofluctuation of installation knowledge,and the area to be equipped with newsmart meters is homogeneous as itcomes to meter type, settlementstructure and transmission media.

Example Germany:Experts have estimated that a meterexchange in Germany might provide amarket volume of up to 7 billion Euro.There are 42 million electricity and 22million gas meters to be exchanged untilthe year 2022. The utility companyE.ON, one of the world's largest investor-owned power and gas companies, hascalculated that the network operatorsmight have to pay up to 13 billion Euroto build up the new network includingthe network infrastructure, the com-munication system between meter andutility company and the informationtechnology required to analyze andevaluate the collected data.

(Source: FAZ.Net)

SAP White Paper – Smart Meter Roll-out 7

Private households gas andelectricity meters: 47 Million

Small and medium sizedcompanies gas and electricitymeters: 3.7 Million

In total, there are 50.7 millionmeters to be exchanged withinthe next 10 years.

Process Steps Time in Minutes

Installation on-site 30

Configuration on-siteor remote 10

Average travelling time 10

Documentation 5

Confirmation in backoffice and devicemanagement 15

Total 70

The strategic route planning of SAP(Smart Meter Rollout – BackofficePlanning) will support you in a successfulmass roll-out of smart meters. Keynoteof this solution is, that the actualfunctional location is the relevantplanning element. Planning the roll-outon order level would result in anenormous IT-system workload as eachand every order is highly integrated intoother components e.g. controlling,purchasing, contracting etc. Therefore,it is the functional locations that are tobe planned at first.

These locations can be grouped in smallmanageable portions. And only afterthis planning has been finalized, theactual activities are allocated. Thebiggest advantage of this approach liestherefore in the lower impact on systemperformance.

This approach is already day-to-daybusiness in other industries, such asthe waste and recycling industry.

During the planning phase severalplanning scenarios can be created

based on the following process flow(see illustration 1).

The calculation of the resources requiredto execute the exchange or installationof smart meters in one area is basedon activity points. These activity pointsare defined per installation site andaccording to the expected working time.Based on the resulting key figures, theplanner is able to evaluate and optimizethe created scenarios before activation.

8 SAP White Paper – Smart Meter Roll-Out

THE SOLUTION

Illustration 1: Schematic Process Flow

CreatePlanningRegions

CreatePlanningScenario

Assign Meterto InstallationAreas

CalculateActivity Pointsin InstallationArea

Hand-over toExternal ServiceProvider

Execution Confirmation Billing

CompareInstallationAreas

ExchangeMeter betweenInstallationAreas

ActivateScenario

GenerateServiceOrders

Hand-over toInternal ServiceProvider

Execution ConfirmationInternalActivityAllocation

Each installation area can be dividedinto subareas. These subareas can bestructured, e.g. as to the device typesto be planned, the available regionalstructure, the network operator in thisarea etc.. Planning areas can bedepicted in different colors so thatidentification on a geographical map ismade easier.

Editing area boundaries can be donedirectly on the integrated map as wellmaking the handling of the software veryuser- friendly.

Morover, as GIS data from differentproviders can be embedded it might bepossible to use already deployed mapmaterial.

Having activated the planning area, theservice orders are then created in theSAP ERP system.

This approach allows for a load ba-lancing as planning areas can beactivated step by step and during off-peak periods, e.g. during the night shift.Parallelization is conceivable, as well.

It is recommended to monitor theprogress of order execution in anactivated planning area with regards totime and effort. The performanceanalysis of an activated scenario enablesthe planner to draw conclusions for theplanning of similarily structured areasand might be used to adjust theseplanning scenarios before activation.For example, it might be necessary torestructure a planned but not activatedarea as to its overall size or to orderadditional external support by serviceproviders. Therefore, the planningapproach based on a planning elementallows for an improved planning evenduring the roll-out process.

The generated SAP customer serviceorders can then be completed based onthe standard PM processes in thecustomer system. If such processeshave not been defined yet, they can beimplemented during the meter exchangeprocess as well.

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Illustration 2: Part of planning tree with regional cluster

Illustration 3: Example Integration Google Maps™

LogisticalProcessing

CommercialProcessing

OperationalRoute Planning

SAP Smart MeterRoll-out - Backoffice

Planning

Order Transmission

SAP Smart MeterRoll-out – Mobile

Execution

Order Confirmation

SAP Smart MeterRoll-out – Mobile

Execution

ServiceOrder

New Category – Work Center – From-To-Dates

Maintenance Plan

Functional Locations – Old Device – Regional Structure

Plan Districts

Plan Elements

Task Plan

Device Category

10 SAP White Paper – Smart Meter Roll-Out

The customer service orders areprocessed commercially (SAP MaterialManagement) on the one hand, andlogistically on the other (SAP SmartMeter Roll-out – Backoffice Planningand Mobile Execution).

As already mentioned, order executioncan be outsourced to external serviceproviders or can be done by internalservice teams. If the order execution isnot outsourced, it is recommended tosupport the process with the operationalroute planning of SAP (Smart MeterRoll-out – Backoffice Planning) incombination with the mobile solution(SAP Smart Meter Roll-out – MobileExecution).

Based on these solutions, orders canbe directly sent to mobile devices makingthem immediately available in the field.This allows for the allocation of ordersto service teams on a daily basis.

Moreover, you might integrate an SAPHCM system already deployed in thecompany in order to check availabilityof employees when allocating orders.

Generated SAP customer service orderscan be clustered and sent as daily routesto the mobile devices of a service team.Through a mobile client orders can beconfirmed online, such as used materialsand completed orders. The status confir-mation then triggers the technical andcommercial implementation of the meterand finalizes the activation of the meterin the backoffice system. Thesefunctions do not require the set-up ordeployment of an SAP PI system.

Communication with the SAP ERPsystem in the backoffice is done viasecure WebServices that are providedby the product add-on. Certainly, amanual order confirmation is possibleas well using available SAP standardprocesses and functions.

The described solution has beendeveloped in close cooperation betweenPROLOGA GmbH and SAP AG.

SAP and PROLOGA can look back ona long and successfull developmentpartnership. Together, the companieshave launched several industry solutionson international markets.

PROLOGA has leveraged its years ofindustry experience to develop best-in-class solutions that are applicable acrossindustries. While SAP benefitted fromthe in-depth industry and process know-

how of PROLOGA, PROLOGA hasfound a reliable partner in SAP providinga sound and developable softwareplatform.

During the last years both companieshave successfully pursued an outside-in approach to ensure a wide customerapproval of the launched products.Generalizable software components thathave been tried and tested are pooledin an add-on package which is contin-uously being enhanced.

BENEFITS AT A GLANCE

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STRONG PARTNERS

The solution described in this whitepaperprovides an end-to-end approach torealize a cross-departmental operationalas well as strategic planning of a smartmeter roll-out. The advantages of an ITsupported roll-out planning with SAPare among others:

Depict all relevant information in onesoftware system

Generate reliable planning results witha minimum resource investment (withrespect to time as well as to personnel)

Smart planning strategy embedded tohandle mass data planning

Reduce commercial risks through optimization of device and work time management

Access near real-time data to supporttimely management decisions

Increase customer loyalty through a detailed planning of areas and

therefore speed-up implemenation offlexible tariffs

Send out customer information letterwith activation of planning scenarios

Identify room for improvement duringplanning phase

Increase customer satisfaction throughimproved need recognition

Reduce errors in data acquisition andconfirmation through deployment of mobile devices

Integrate external service providers to execute meter exchange

„With the growing networking ofbusiness processes it seems onlylogical that these processesdevelop cross-industry standards,differentiated ‚only’ by theirdistinctive features. Analog theorder-to-cash process, thisapplies more and more for theplanning of orders as well.”,Stefan Blum, Solution Managerof the industry solution SAPWaste and Recycling, SAP AG.

www.sap.com/contactsap

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