The SmartGrids ETP Objectives and VP Utilities industry for EMEA SAP SmartGrids ETP Advisory Council

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  • The SmartGrids ETP Objectives and Strategies

    Maher Chebbo, PhD Energy VP Utilities industry for EMEA SAP

    SmartGrids ETP Advisory Council Member, Chairman of « Demand and metering » WG3

    Rome, May 29th 2008

  • © SAP 2008 / EMEA Utilities – FP7 IP Address kickoff – Rome on May 29th 2008 - Maher Chebbo Page 2

    Reasons for Networks failures Reasons for Blackouts Weather, Sudden increase of demand, Operational errors, Human error, MS-Border operability,

    Plant Breakdown & Accidents, Cables failure, Power Line Slides, etc

  • © SAP 2008 / EMEA Utilities – FP7 IP Address kickoff – Rome on May 29th 2008 - Maher Chebbo Page 3

    from toRegulated Deregulated

    from toPublic & National Private & European

    from toTraditional DER and RES

    What makes Energy look Smarter ?

    European member states have to reach 2020 Energy goals. 1000 b€ investments by 2030 European Commission SmartGrids Technology Platform defined the roadmap to 2020+

    from toReactive Assets Mgt Predictive (RCM & Risk Management)

    from toElectrical 1-way DER Electronic 2-ways

    from toPassive Grid Smart internet like

    from toPassive DER

    Active Market Communication

    from toReading Meters Smart Meters & AMI

    from toEnterprise centric Customer centric

    Competitive Market

    1

    2

    3

    4

    5

    6

    Electricity & Gas

    Generation - Exploration

    Transmission

    Distribution

    Metering Operations

    Supply – Retailing Eu ro

    pe an

    Sm ar

    tG rid

    s 20

    /2 0/

    20 in

    2 02

    0

    C

  • © SAP 2008 / EMEA Utilities – FP7 IP Address kickoff – Rome on May 29th 2008 - Maher Chebbo Page 4

    European Energy policy goals (20/20/20) for 2020 : The roadmap of SmartGrids Advisory Council (con‘t)

    Regulation of Monopolies

    Innovation and Competitiveness

    Low Prices And Efficiency

    Primary Energy Sources

    Reliability and Quality

    Cross Border

    Support

    Amenity Preservation

    Climate Change

    Kyoto and Post-Kyoto

    In te

    rn al

    Ma rk

    et Security of Supply

    Environment

    20/20/20

    Eu ro

    pe an

    Sm ar

    tG rid

    s 20

    /2 0/

    20 in

    2 02

    0

  • © SAP 2008 / EMEA Utilities – FP7 IP Address kickoff – Rome on May 29th 2008 - Maher Chebbo Page 5

    European SmartGrids will be the Intelligent Value Chain that will optimize, control, secure and sustain the procurement and supply of Cleaner Distributed Energy anticipating increased demand till 2050

    Distributed Energy Supply Chain Optimization

    Generation Transmission Distribution Metering Customer

    European SmartGrids is the missing piece to making the European 20/20/20 Energy goals a reality

    SmartGrids is mandatory to Optimize the 2050 Distributed Energy Supply Chain (con’t)

  • © SAP 2008 / EMEA Utilities – FP7 IP Address kickoff – Rome on May 29th 2008 - Maher Chebbo Page 6

    SmartGrids goals (TSO vision)

    1. Sustainable grid expansion

    2. Facilitate massive penetration of Renewables

    3. Increased robustness

    4. Integration of European electricity markets

    5. Increased observability, better understanding and predictability of the power system state

    6. Utilization of active distribution grid

    7. Better and more reliable utilization of existing grid

    8. Virtual European TSO

    9. Advanced simulation and analysis tools and methods

  • © SAP 2008 / EMEA Utilities – FP7 IP Address kickoff – Rome on May 29th 2008 - Maher Chebbo Page 7

    European Electricity & Gas market fully liberalized since July 2007 leading to segments Unbundling

    TransmissionMining* Construction* Generation

    Traditional Nuclear Renewable

    Metering Operations

    Distribution Supply & Retailing

    Electricity

    Gas TransportExploration &

    Production* Purchasing & Trading* Storage*

    Metering Operations

    Distribution Supply &Retailing

    Water TransportExploration

    Preparation Metering operations

    Distribution Supply & Customer Service

    Infrastructure Assets Energy services

    2 3 4 5 61

    to Deregulated

  • © SAP 2008 / EMEA Utilities – FP7 IP Address kickoff – Rome on May 29th 2008 - Maher Chebbo Page 8

    Utilities Privatization requires Peer Financial Performance (con’t)

    100 120 140 160 180 200 220 240

    2000 2001 2002 2003 2004 2005 2006

    Operating revenue (2000 = 100)

    Gross Profit Margin (%)

    Avg from Nuon, Essent, Eneco, Delta, Vattenvall and RWE Delta Industry best

    0

    5

    10

    15

    20

    2000 2001 2002 2003 2004 2005 2006

    EBIT Margin (%)

    Vattenfall

    50

    75

    100

    125

    150

    175

    200

    2000 2001 2002 2003 2004 2005 2006

    Collection Period (Days Sales Outstanding)

    RWE 0%

    10%

    20%

    30%

    40%

    50%

    DE LT

    A Va

    tte nfa

    ll En

    eco Nu on RW

    E

    Es sen

    t

    to Private & European

  • © SAP 2008 / EMEA Utilities – FP7 IP Address kickoff – Rome on May 29th 2008 - Maher Chebbo Page 9

    2005 2007 Research

    Product Definition Deployment

    European Market Harmonization

    European IDEX Product Portfolio

    European Market Convergence Asymptote

    National Law changes

    to Private & European

    Deregulation National requirements will be harmonized with time and become European

  • © SAP 2008 / EMEA Utilities – FP7 IP Address kickoff – Rome on May 29th 2008 - Maher Chebbo Page 10

    Visionary Danish Energy policy 2025 : 50% Wind electricity (EcoGrid)

    to RES & DER

    Distributed Generation :

    Requirement for non- discriminatory and fair grid connection rules

    Adjustment of active power reserves (balancing markets)

    Voltage & reactive power management enhancements

    Losses

  • © SAP 2008 / EMEA Utilities – FP7 IP Address kickoff – Rome on May 29th 2008 - Maher Chebbo Page 11

    Evolving to Preventive and Reliability Centered Maintenance (con’t)

    to Proactive

  • © SAP 2008 / EMEA Utilities – FP7 IP Address kickoff – Rome on May 29th 2008 - Maher Chebbo Page 12

    Evolution of Asset Management towards Reliability Centered and Risk Management per Role

    Equipment and Asset Information Mgt; Document Mgt; Inventory Mgt

    Maintenance Planning and Execution

    Preventive Maintenance and Emergency Repairs

    Advanced Procurement and Contractor Management

    Advanced Project and Resource Mgt (Shutdown planning)

    Conditioned-based Maintenance

    Reliability Centered Maintenance

    Operational Risk Analysis

    Equipment and Asset Information Mgt; Document Mgt; Inventory Mgt

    Maintenance Planning and Execution

    Preventive Maintenance and Emergency Repairs

    Advanced Procurement and Contractor Management

    Advanced Project and Resource Mgt (Shutdown planning)

    Conditioned-based Maintenance

    Reliability Centered Maintenance

    Operational Risk Analysis

    66

    55

    77

    88

    33

    11

    44

    22

    6 5

    7 8

    3

    1

    4

    2

    Fi na

    nc ia

    l R et

    ur n

    0%

    40%

    Roadmap EAM

    Long-term financial returns increase through the EAM roadmap

    66 55

    77 88

    33

    11

    44

    22

    Fi na

    nc ia

    l R et

    ur n

    0%

    40%

    Roadmap EAM

    Long-term financial returns increase through the EAM roadmap

    to Proactive

    Role Management, Outsourcing & SLA between :

    Asset Owner

    Asset Manager

    Service Provider

  • © SAP 2008 / EMEA Utilities – FP7 IP Address kickoff – Rome on May 29th 2008 - Maher Chebbo Page 13

    G GGeneration

    Transmission

    Distribution Demand

    Traditional one-way supply system

    G

    Generatio n

    G

    Bi-directional supply system

    Supply

    Generation

    Future requirements Flexible : user-centric, service oriented & designed for future

    Accessible : connect all users

    Real Time: Adaptive Demand and Supply

    Reliable: security of supply in a digital age

    Economic: best value -> innovation, efficiency & competition

    SmartGrids 2 ways communication “internet like” (con’t)

    to Electronic 2-ways

    to Smart internet like

  • © SAP 2008 / EMEA Utilities – FP7 IP Address kickoff – Rome on May 29th 2008 - Maher Chebbo Page 14

    Internet like, Networks will need to “speak” to consumers

    to Electronic 2-ways

    to Smart internet like

    Integration of large scale Distributed Energy Reso