© Copyright 2010 IBM Corporation

IBM Proprietary

Smart Grid: An Industry's Strategic Growth Case

Plenary Session 3: Smart Grid: From Concepts to Reality

October 12, 2010

© Copyright 2010 IBM Corporation

Understanding the Whole Utility Enterprise:Moving towards a smart grid requires ongoing attention in three streams

Financial

Government and Regulatory

Business Strategy & Vision

Stakeholder Engagement

Organizational

Program and Project Management

Grid Operations

Value Chain Integration

Customer Experience & Management

Work and Asset Management

Intelligent, Connected Devices

Integrated Communication Networks

System Integration Platform

Applications &Analytics

Presentation

Information Technology

IndividualDomains & Projects

Transformation Management

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Having a Perspective on the Technologies:Smart Grid five building blocks is composed of a number of individual technologies

Advanced Electric Meters

In-Home displays

Personal Computers

Load Control Devices

Smart Appliances

Handheld Data Devices

Advanced Gas MetersAdvanced Water Meters

Electric Vehicles Outlets

Solar Panels

Reclosers

Condition Sensors

Voltage Controllers

Switches

Substation & Grid Devices

Smart MetersIn-home Devices

Ruggedized Laptops

Mobile Devices Distributed Resources

Cell Phones

Wind Turbines

Home Area Network

Neighborhood Network

AccessNetwork

Backhaul Network

ExtranetOffice Network

1. Smart, ConnectedDevices

2. Integrated Communication Networks

3. System Integration Platform

4. Applications & Analytics

CHP

Servers System and Network Management

Storage and Backup

Business Process Management

Computing Infrastructure

Application & DataIntegration

Systems Management

Security Management

Messaging & Web Services

EMS DMS

MDMS

Meter Data Collection Load Control

GISNetwork Analytics

OMSAsset Management

CIS

Call Management

WMS

5. Presentation Employee Portal/Dashboard

Field Employee Mobile Devices

Display Device Interface

Customer Mobile Devices

Customer Web

Paper Bills

Energy Storage

Intelligent

Connected

Integrated

Automated

Informed

Act

Analyz

e

Acqu

ire

© Copyright 2010 IBM Corporation

Look Across the Full Energy Value Chain:Energy and Utility Solution Portfolio addresses a utility’s business and technology needs

Del

iver

y O

ptio

ns

Power Generation

Optimization (PGO)

Plant OperationsFleet OptimizationSupply Expansion

Transmission & Distribution

Operations

Mobile Workforce MgmtAsset Lifecycle MgmtSupply Chain Mgmt

CorporateSupportServices

Human ResourcesAccounting

Payroll

Customer Operations

Transformation (COT)

Customer CareCustomer Management

Customer Systems

Intelligent Utility Network (IUN)

InfrastructureServers, storage, communications networks and equipment and associated services

Solution Architecture for Energy& Utilities Framework (SAFE)

Physical and Cyber Security

IUN Communications NetworksIUN Security

Smart Meter & BeyondGrid Operations

Electric Vehicle/Intelligent Premise

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Customer Operations Grid Operations Work & Asset Operations

Measure/

Monitor/Control

Optimize

Analyze

Transport data to control

Collect

Measure/

Monitor/Control

Analyze

Transport data to control

Collect

Measure/

Monitor/Maintain

Optimize

Analyze

Transport data to control

Collect

One Project is not a Vision:Utility Future State…Connected and Integrated

Optimize

Focus is on improving the reliability and efficiency of Utility

Substation Devices

Equipment MonitoringEquipment MonitoringEquipment MonitoringEquipment Monitoring

Grid DevicesPremiseCustomer Mobile Field ForceAMI Network Assets

Distributed Generation

The Enterprise

EstimateEstimate

MeasureMeasure

More D

ata

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Objective Focus on the Customer:Smart Grid Maturity Model Stewardship Family

SGMM Founders

SGMM Governance, Management and Growth

SGMM Global Stakeholder Representation & Advocacy

•Established in 1923•Representing 95 member countries•Host to World Energy Congress•Mission: "To promote the sustainable supply and use of energy for the greatest benefit of all people"

•20 years stewarding the Capability Maturity Model (CMM & CMMI)•500+ employees•Coupled with Carnegie Mellon University and the Carnegie Mellon Electricity Industry Center

SGMM Data Collection and Reporting

An internationally recognized nonprofit member-based research organization with over 30 years of Systematic Quality and Process Improvement Research

© 2010 IBM Corporation

The Development of Smart Grid is a Journey with Several Stages

Smart Grid MaturityLevel 1 & 2

Smart Grid MaturityLevel 3

Smart Grid MaturityLevel 4 & 5

As-Is To-Be/VisionIntermediate

Intermediate Stage of Smart Grid needs to be addressed

DOMAIN SILOSINFORMATION SILOS

Vertical IntegrationMinimal Transverse Integration

DOMAIN TO DOMAIN INTEROPERABILITY

Vertical IntegrationTransverse Integration between

DomainsHave to overcome adoption of

emerging information standards & data access issues

ENTERPRISE INTEROPERABILITY

Open data access environmentInteroperability standardsUtility vendors on common

standardsIntegration middleware is

‘Smart’ & services basedStrategic Business Goals

Improve Reliability Increase Customer SatisfactionIncrease Regulatory Capital Drive Sustainable Earnings

LAN

SensorsDigital Relays

Automated Substations LAN

SensorsDigital Relays

Automated Substations

Lines Substations

Mon

itor

Manage M

onito

r Manage

OptimizationBenefits

OptimizationBenefits

OptimizationBenefits

Customer. Meter

Equipment MonitoringEquipment Monitoring

Crews

Mon

itor M

anage

Equipment

Customer Operations Grid Operations Work & Asset

Management

Strategic Business GoalsImprove Reliability Increase Customer Satisfaction

Increase Regulatory Capital Drive Sustainable Earnings

LAN

SensorsDigital Relays

Automated Substations LAN

SensorsDigital Relays

Automated Substations LAN

SensorsDigital Relays

Automated Substations LAN

SensorsDigital Relays

Automated Substations

Lines Substations

Mon

itor

Manage M

onito

r Manage

OptimizationBenefits

OptimizationBenefits

OptimizationBenefits

Customer. Meter

Equipment MonitoringEquipment MonitoringEquipment MonitoringEquipment Monitoring

Crews

Mon

itor M

anage

Equipment

Customer Operations Grid Operations Work & Asset

Management

CustomerOperations

Work & AssetManagement

GridOperations

InformationExchangeServices

CustomerOperations

Work & AssetManagement

GridOperations

InformationExchangeServices

CustomerOperations

Grid Operations

Work & AssetManagement

Inte

llige

nt In

form

atio

n

Exch

ange

Ser

vice

s

Intelligent Information

Exchange Services

Intelligent InformationExchange Services

CustomerOperations

Grid Operations

Work & AssetManagement

Inte

llige

nt In

form

atio

n

Exch

ange

Ser

vice

s

Intelligent Information

Exchange Services

Intelligent InformationExchange Services

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Smart Grid is an Engineering Project to be Thought Through:The Seven Phases of the IUN Method

Assess

Mobilize

Optimize

FormulateDeliver

IUN Method

DefineDesign

Launching the engagement

Analyzing the current situation

Designing solutions within individual projects

Deploying solutions within individual

projects

Maximizing benefits of the strategy

Creating the enterprise-level strategy

Prioritizing, defining and launching projects

© Copyright 2010 IBM Corporation

SAFE Framework

Build on a Foundation: The Solution Architecture For EnergyFramework for transformation that creates flexibility and accelerates deployment and integration of multiple energy & utilities software solutions

Utility Business Domain

Third Party Access Domain

Service Oriented Architecture

Corporate Shared Services

Communications Network Domain

Device Domain

Power Generation Customer OperationsTransmission and Distribution

Intelligent Utility Network

Business Integration Layer

Enterprise Asset Mgmt

Enterprise Asset Mgmt

Advanced Meter Mgmt

Advanced Meter Mgmt

Network Automation & Analytics

Network Automation & Analytics

Customer Care

Customer Care

Customer Mgmt

Customer Mgmt

Customer SystemsCustomer Systems

Plant Operations

Plant Operations

FleetMgmt

FleetMgmt

Supply Expansion

Supply Expansion

Process Integration Informed Decision Making

Security Solutions

Asset Monitoring and Management

Work ManagementInteractive Customer

Experience

Regulatory, Risk & Compliance Management

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Seeing is Believing:Energy and Utilities Solution CentersComprehensive Industry Knowledge and Analysis

Demonstration center which showcases innovative solutions for the E&U Industry

- Advanced Meter Management- Energy Monitoring with Cognos- Security- EAM Maximo- BI with ILOG- Intelligent Plant Life Cycle

Management- Knowledge Management with FileNet- High Performance Computing

10+ integrated, solution prototypesDemonstrations can be projected in live video anywhere in the world

A reference implementation for the E&U industry based on SAFE, featuring advanced, leading edge technologiesShowcase for IBM technology integrated with key business partners

- Itron- muNet- OSIsoft- Siemens- Sisco

Industry standards business processes and data Customized briefings and trainingProof of Concepts

Solutions Experience Lab at IBM Austin

Energy & Utilities Solution Center at IBM La Gaude

Key Solution Underpin for E&U engagement and delivery, acting as ONE team for E&U bold play in GMUStrategic partnership with Key influencer in IUN / Nuclear / Wind, contribution in Eco-System buildingReplicable and sustainable solution/asset with high value for both customer and IBMWW contribution to both GBS & SWG E&U solution/asset portfolio

China Development Lab E&U Solution Center

Value Proposition

Demo center for E&U solutionsPoC and PoT with engagement teamAsset and solution harvesting & enhancement for reuseNew asset development with key valueInvestment on strategic partnership program

Business Scope

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The Grid is Global:Smart Metering and Smart Grid Engagements

American Electric PowerBC HydroBELCOCenterPoint EnergyConsumers EnergyDominion EnergyEntergyEPCORHydro OneHydro OttawaHydro-QuébecIESOLondon HydroNB PowerNYC-based utilityOncorOntario Energy BoardPacific Gas & ElectricPacific Northwest National LaboratoryPECOPepco Holdings IncProgress EnergySempra EnergySouthern California EdisonToronto Hydro

Country EnergyEnergy Australia NDPLShanghai Power

AEM TorinoASM BresciaDONG EnergyEDFEDF EnergyEDPEnBWEnemaltaEnelEon

EnergiMidtESB NetworksGöteborg EnergiOxxioRWE npowerScottish & Southern

Energy30 Italian distributorsE-EnergieTerna

© Copyright 2010 IBM Corporation

Lessons Learned from Smart Grid ProjectsGrids are Asset and Capital Intensive:Asset Condition Based Monitoring is Important

Prove It, then Replicate It:Intelligent Grid Proof of Concept is a Good Way to Learn Before Scaling Up

Never Forget the End User:Substation Remote Asset Monitoring Should have a Familiar Graphical Interface

Smart Grid Incorporates Distributed Intelligence:Smart RTU – Streaming Waveform via Intelligent Grid Live Portal is an Example of Design of High Frequency Data Design

Electricity is Real Time – Find Information Fast:Intelligent Grid Smart Sensor Drilldown Assists in Quickly Finding all Relevant Data

Smart Grid is an Evolution:One can Begin with a Revision one and a Revision Two Architecture, and Refine During Implementation, and Reduce Not Risk of the Unknown

© Copyright 2010 IBM Corporation

The Grid is Part of a Total Environment:Applying innovative information technology and services that really matter to businesses, governments, people, and the planet

Intelligent Transportation SystemsMeasure & improve transportation usage

Reduce traffic congestionReduce CO2 emissionsIncrease mass transit usageReduce energy usageImprove environment

Intelligent Utility NetworksMeasure & improve energy mgmt

Improve efficiency usage, Reduce outagesImproved grid managementMange distributed energy

Energy Efficient Technologies & ServicesCreate & manage efficient IT

Active energy managementIT facilities infrastructure efficiencyIT operations efficiencyMonitoring and verification of efficiency goalsDemand-side efficiency

Carbon ManagementMeasure & reduce carbon emissions

Carbon Mgmt StrategyCarbon Mgmt IntelligenceSupply chain managementProperty, buildings, workplace

Advanced Water ManagementMeasure and manage water systems usage and quality with real-time knowledge

Weather event mgmt; flood managementReal-time monitoring and analytics for water usage and water quality

© Copyright 2010 IBM Corporation

THINK:Multi-faceted thought leadership program

Software Labs and Smart Grid Demonstration CentersIBM energy industry software labs in Austin, TX and La Gaude, France along with demonstration centers build with utilities, such as CenterPoint Energy in Texas and Country Energy in New South Wales, promote the value of smart grids to the industry and public

The Energy and Utilities ProjectAnnually since 2001, IBM and Montgomery Research (now mThink) have published a collection of papers exploring the challenges that lie ahead for energy and utility company executives

IBM Institute for Business ValueOne of latest publications of this global institute, Lighting the Way,provides insights into the new smart energy consumer based on a global survey of 5,000

IBM ResearchThe world’s largest industrial research organization with about 3,000 scientists and engineers. Energy and utilities related research spans solar cell technology to the application of social computing for energy conservation

© Copyright 2010 IBM Corporation

Belong to the Industry:Driving industry transformation through its active participation in leading industry organizations

GridWise Alliance formed in 2004 as a public private partnership working to transform the US power supply system by moving the grid into the information age. Expanded in 2008 via formation of Smart Grid Australia, plans underway to launch in India in 2009. IBM chairs the council.

GridWise Architecture Council formed in 2004 working to shape the guiding principles, or architecture, of a highly intelligent and interactive electric system. IBM chairs the council.

Electricity Advisory Committee formed in 2008 to provide advice to the US DOE on implementing EPACT 2005 and EISA 2007, and modernizing the nation’s electricity delivery system. IBM chairs the Smart Grid subcommittee.

IEEE P2030 Draft Guide for Smart Grid Interoperability of Energy Technology and Information Technology Operation with the Electric Power System (EPS), and End-Use Applications and Loads