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Agenda
Copyright © 2014 Accenture All rights reserved. 2
Traditional utility model at a crossroads
Trending insights for utilities companies
Emerging smart grid business models
1
2
3
Copyright © 2014 Accenture All rights reserved.
Major energy challenges are impacting the electricity industry
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Reliability and resilience
Energy security and independence
Rising electricity costs
Changes in demand patterns
Environmental sustainabilityEvolving technologies
Distributed generation in Germany reaches more than 1 million households, Denmark gets more than 30% of electricity from wind
Superstorm Sandy heightens US consumer concern over reliability
The last of Japan’s nuclear fleet goes offline in summer 2013
China’s electricity demand grew at more than 9.5% per year from 2006 to 2010 (EIA)
Average total energy consumption fell by 24.7% in England between 2005 and 2011 (UK ONS)
Solar PV subsidies in Germany cost €8.8 billion in 2012
Natural gas boom continues with the EIA estimating the United States to be net exporter by 2020
Electricity theft estimated to be more than 30% for some Indian utilities (World Bank)
Solar PV reaches grid parity in most of Australia
China aiming to reduce greenhouse gas emissions per unit of gross domestic product by 40% below 2005 levels by 2020
In 2012, an outage in India affected more than 620 million people—about 9% of the world’s population
Copyright © 2014 Accenture All rights reserved.
Major energy challenges are impacting the electricity industry in Turkey as well
4
Reliability and resilience
Energy security and independence
Rising electricity costs
Changes in demand patterns
Environmental sustainability
Upper limit for unlicensed generation becoming 1 MW, and increasing unlicensed generation lead to need of managing discontinuous supply and imbalances
Severe weather conditions during last winter caused gas shortages leading to electricity cuts
Constituting 38% of Turkey’s electricity generation, dependency on NG & foreign imports will continue.
Yet its share is expected to decrease by 9% by 2023
While the last year demand was relatively flat, we expect it to increase in the upcoming years again
Increasing share of renewables in energy mix will continue to secure domestic production
While improvements have been made, theft & loss is still an issue
Solar PV started to take place in the energy mix
Participating in the voluntary market, Turkey aims to reduce greenhouse gas emissions through developing renewables
Daily gas consumption incresing to 180-200 bcm, caused major problems in transporting the required amount of gas
Energy intensity (energy consumption per capita) is expected to increase by 0.1 - 2.0% acc to different scenarios
Evolving technologies
causing distribution networks to respond across three major areas
Copyright © 2014 Accenture All rights reserved. 5
Consumer
New technology threats and opportunities
Asset efficiency and performance
Increase renewables carrying capacity
Enable new load capacity(PEV, storage, etc.)
Reduce retail costs
Reduce theft
Enable demand flexibility
Enable consumer peak and demand reduction
Improve asset utilization
Improve network reliability and outage duration
O&M reduction and CAPEX optimization
Agenda
Copyright © 2014 Accenture All rights reserved. 6
Traditional utility model at a crossroads
Trending insights for utilities companies
Emerging smart grid business models
1
2
3
Copyright © 2014 Accenture All rights reserved. 7
Trending insights –Smart grid becoming mainstream
Smart grid is here to stay. It will become mainstream and a core part of utility operations
Operating models will need to evolve to support the new capabilities, processes and data
Mainstream
The adoption of smart technologies will reduce the costs of upgrading/maintaining the grid by 2030
The example: Outage management
Will smart technology solutions be part of your outage management solution by 2020?
The smart grid is a natural extension of the ongoing upgrades of the electricity network
Source: Accenture’s Digitally Enabled Grid program, 2013 executive survey.
Disagree
Disagree
Agree
Agree
Copyright © 2014 Accenture All rights reserved. 8
Trending insights –Hybrid models will dominate
Utilities will adopt a hybrid model involving traditional and smart technologies
Align smart and traditional asset investments and operating model into an integrated management strategy and investment plan
Which of the following network operating models will best characterize your network by 2030?
Source: Accenture’s Digitally Enabled Grid program, 2013 executive survey.
Copyright © 2014 Accenture All rights reserved. 9
Competition will increase – opportunities and threats
A new set of potential services, with data as a critical asset, will bring increased competition as well as new opportunities
Understand new threats and leverage these to position for growth with emerging opportunities
Competition is expected to increase Impact by 2030: Threats or opportunities?
of Utilities executives expect that energy data markets (i.e., centralized single point of access for integrated energy data, covering consumers, load types, segments etc.) will develop within the next 10 years
83%
% of Utilities executives that believe that increased competition will arise in the following areas within five years:
Beyond-the-meter solutions focused on energy efficiency and demand response
85%
Data-related services85%
Distributed generation85%
Source: Accenture’s Digitally Enabled Grid program, 2013 executive survey.
Revenues
Copyright © 2014 Accenture All rights reserved. 10
Trending insights – Regulatory strategy gains importance
Current regulatory models are increasingly under pressure due to the challenges facing distribution companies
Collaborate with regulators to help shape the regulatory models to accommodate demand reduction and competitive threats
Do you believe that regulatory or legislative changes are necessary to help you manage the grid effectively?
of Utilities executives believe that the lack of regulatory and policy support is one of the main barriers for the deployment of smart solutions for their network
56%
No.1 biggest challenge to successful full-scale smart metering deployment is the lack of supporting policy/regulation
Source: Accenture’s Digitally Enabled Grid program, 2013 executive survey.
Copyright © 2014 Accenture All rights reserved. 11
Trending insights –IT capabilities are stretched
Smart technologies will require new IT capabilities to maximize benefit realization
Address the need for new skills, tools and capability requirements without compromising on asset and financial performance. IT becomes a core competency, tightly linked with OT
The needs Current hurdles
Cyber security and privacy management will be critical or important for managing the complexity of the network
Access to the right IT skills will be critical or important to manage the increasingly large data volumes and integration
Need to improve analytical capabilities for IT/OT integration
Advanced analytical/statistical tools will be critical or important to manage the increasingly large data volumes and integration
Data management will be critical or important for managing the complexity of the network
Need to improve data governance
Need to improve analysis toolsets
Barrier for North American & European Utilities executives for deployment of smart solutions: Lack of mature technology solutions
No.1
96%
92%
90%
88%
Source: Accenture’s Digitally Enabled Grid program, 2013 executive survey.
94%
88%
100%
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Closing the skills gap is vital
Copyright © 2014 Accenture All rights reserved.
Real insights will come from analytics that correlate data across the whole enterprise
Securing access to skills which blend IT and OT will be critical to address the opportunity associated with analytics
The skills imperative
How well positioned do you believe your company is to compete for analytic skills in the market?
Importance of skills to manage the increasingly large data volumes and integration (important + critical):
Maturity of current analytic capabilities (% of respondents indicating a significant need for improvement):
Only 25% very well positioned
Access to the right IT skills
Availability of statistical/data science skills90% 84%
Data integration
Statistical analysis/data scientist skills
Data governance53% 46% 33%
Sources: Accenture’s Digitally Enabled Grid program, 2013 executive survey; Accenture analysis.
Agenda
Copyright © 2014 Accenture All rights reserved. 13
Traditional utility model at a crossroads
Trending insights for utilities companies
Emerging smart grid business models
1
2
3
Evolving Business Model – determine the "smart" plan and timing for your strategic response
Deployment of smart grid to support external growth opportunities
Deployment of smart grid for internal operations
Copyright © 2014 Accenture All rights reserved. 14
Smart grid challengerPriorities• Funding for a portfolio of pilots and proactive support for
smart solutions• Innovate to meet consumer expectations• Build consumer relationships to support active participation • Targeted investment in key enabling capabilities (including
communications and IT/OT)• Opportunistic pursuit of new revenue streams using alliance
partners to reduce risk
Incremental traditionalistPriorities• Protect existing revenues• Maintain pace with regulatory expectation• Proven solutions with slow scaling• Avoid investment at risk of stranding• Minimize business disruption• Lowest risk approach in the short term
Smart grid embracerPriorities• Aggressively pursue new revenue streams • Make significant smart investments without
guaranteed regulated returns• Engage in major business and operating model
change including mergers and acquisitions • Actively drive change in regulation to disrupt the
status quo
Utility excellence – assumes low competitive threat
Low risk in the short term, nonsustainable long term
Utility of the future
Noneffective
Copyright © 2014 Accenture All rights reserved.
Accenture’s Digitally Enabled Grid program
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Accenture’s Digitally Enabled Grid program provides insights and recommendations around challenges and opportunities utilities face along the path to a smarter grid, including views from utilities executives around the world
Assessment of the drivers for smart grid adoption and the approach to defining an optimal route toward a future digital grid
Investigation of the critical factors for the deployment of smart meters and the extraction of greater value through the adoption of advanced solutions
Consideration of the impacts of changing energy requirements on grid operations and the role that smart solutions can play in cost-effectively delivering reliable electricity supplies
Examination of the central role that analytics will play in extracting value from smart solutions and detailing of the key factors that utilities must address to enable this vital capability
Forging a Path toward a Digital Grid: Global perspectives on smart grid opportunities
Realizing the Full Potential of Smart Metering
Optimizing Grid Performance through Advanced Operations
Unlocking the Value of Analytics