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Technical devices, economic signals and customer attitude impact on Demand Response October 15, 2012 Colette Lewiner
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Page 1: Technical devices, economic signals and customer attitude impact on Demand Response October 15, 2012 Colette Lewiner.

Technical devices, economic signals and customer attitude impact on Demand Response

October 15, 2012

Colette Lewiner

Page 2: Technical devices, economic signals and customer attitude impact on Demand Response October 15, 2012 Colette Lewiner.

2Copyright © Capgemini 2012. All Rights Reserved

Presentation Title | Date

Status on the EU energy efficiency 2020 objectives

Source: BP statistical report 2012, European Environment Agency, Eur’Observer – Capgemini analysis, EEMO14

EU-27 primary energy consumption

1,450

1,500

1,550

1,600

1,650

1,700

1,750

1,800

1,850

1990 1995 2000 2005 2010 2015 2020

EU

-27

Pri

ma

ry e

ne

rgy

con

sum

ptio

n [M

toe

]

Historical evolution of primary energy consumptionPath to reach 2020 target2020 target for EU-27Projection with current measures in place(as per the March 2011 EU Energy Ef f iciency Plan)New objective def ined in the June 2012 EU Energy Ef f iciency Directive

-20%

-17%

-9%

June 13, 2012 new Energy Efficiency Directive:

• 17% decrease of EU’s primary energy consumption by 2020

instead of 20%• Requirement for Utilities to make

energy savings equivalent to 1.5% of their annual sales each

year from 2014 to 2020

Page 3: Technical devices, economic signals and customer attitude impact on Demand Response October 15, 2012 Colette Lewiner.

3Copyright © Capgemini 2012. All Rights Reserved

Presentation Title | Date

In countries as France and Japan, peak shaving is a key issue during extreme weather conditions

3

A holistic approach to manage the peak load needs to be implemented. It should encompass:• Generation capacities development (including incentives for peak power)• Demand response: tariffs or other types of demand response programs

• Incentives for energy savings • Grids reinforcement

Oil-fired + peak

capacities5%

Coal5%

Gas3%

Nuclear58%

Wind2%

Hydro13%

Others6%

Imports8%

Source: RTE

Generation mix on February 8, 2012 at 19:00 • The French electricity peak load reached 102,100 MW at 19:00

• Nuclear plants’ availability largely contributed: 59,165 MW (55 reactors out of the 58 were in operation)

• France imported 7,845 MW from all its neighboring countries (max 9,000 MW)• On EPEX Spot, day-ahead electricity prices jumped to €1,938/MWh• RTE activated it EcoWatt demand response program in Brittany and PACA regions

which resulted in a consumption reduction of respectively 2% and 3%• EnergyPool curtailed 20 MW of industrial consumption which have been used for

Brittany region In 2011, net new generation capacities have been added:

• 850 MW of CCGT• 1,250 MW of renewable energies• 450 MW of fossil-fired plant have been decommissioned

New housing heating gas is regaining market share: close to 60% compared to less than 40% for electricity in 2011 (2008 electrical heating market share was 70%). This has decreased the potential electricity demand at peak hours by 450 MW

But tariff-related demand response capacities have decreased from 6,000 MW in 2004 to 3,000 MW in 2011

Page 4: Technical devices, economic signals and customer attitude impact on Demand Response October 15, 2012 Colette Lewiner.

4Copyright © Capgemini 2012. All Rights Reserved

Presentation Title | Date

Pilot programs results on peak shaving

% peak shaving observed in various pilots worldwide

Peak shaving: the use of displays helps but the customers’ behavior is key

Several means exist for peak shaving and energy savings, that can be combined or not:• Dynamic tariffs (that should

be further developed with the mass roll-out of smart meters)

• Automation such as smart thermostat, smart appliances, in-home displays or web-based consumer portal

• Demand management programs such as customers alerts, social networks communication or feedbacks through bills, web, SMS, smart phones

% peak shaving Range of peak shaving

Source: Capgemini Consulting

Page 5: Technical devices, economic signals and customer attitude impact on Demand Response October 15, 2012 Colette Lewiner.

5Copyright © Capgemini 2012. All Rights Reserved

Presentation Title | Date

14

18

11 12

10

53

4

23

0.1

0.60.4

0.3 0.3

0.1 0.1 0.1

2021

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8

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14%

12%

12%13%

13%

13%

14%13%

14% 14%

2%

3%

3%

2%

3%

3%

2%2%

2% 2%

7.6

9.1

6.4

4.4

4.9

2.4

1.9 1.7

1.3 1.1

Demand response potential for EU-27 by 2020

Demand Response study 2012 results snapshot

Our study shows that peak shaving potential is significant while electricity savings potential is more limited

In Capgemini Consulting’s Demand Response (DR) study*, the potential of peak shaving and energy savings is modeled on the basis of a baseline scenario:• GDP growth 2010-20: 1.8% in average• CAGR electricity consumption 2010-20: 0.7%• Some existing energy efficiency programs such as

Grenelle de l’Environnement or White Certificates Assumptions are made on:

• Regulation (norms and standards, energy efficiency objectives, tariffs and incentive policies)

• Market design (possibility to monetize DR on wholesale markets, contracts optimization, capacity markets)

• Smart meters penetration and functionalities (for the households segment)

And typical DR offerings are modeled with hypothesis on their adoption by customers

*Demand Response study 2012 - Capgemini Consulting, VaasaETT and Enerdata

1 Normative hypothesis: 1 kWh saves 700g CO2 (average European value considering avoided peak capacity is mainly gas-fired plants)2 Expressed in equivalent of avoided consumption of large size cities (2 mio inhabitants and 150,000

commercials, average consumption of 8.2 TWh/year)3 Expressed in equivalent of avoided construction of power plants (500 MW)

Source: Capgemini Consulting

Forecast scenario (dark bars)

Dynamic scenario (light bars)

Dynamic scenario

% peak shaving

% energy saving

CO2 emissions saving (in Mt)

14%

2%

7.6

Page 6: Technical devices, economic signals and customer attitude impact on Demand Response October 15, 2012 Colette Lewiner.

6Copyright © Capgemini 2012. All Rights Reserved

Presentation Title | Date

Clients marketing and segmentation is key for successful Demand Response

Customers awareness-raising is key for a sustained customers’ behaviors change

• New customer segmentation enabling Demand ResponseSEGMENTATION

• Better customer knowledge to adapt relationship strategy (feedback, advice, Demand Response, diagnosis, …) and channel management (paper, internet, …)

CUSTOMER KNOWLEDGE

• Implementation of a media strategy and related KPIs to measure efficiency of each customer segment, each type of message, each channel and each mediaCOMMUNICATION

• Build specific offerings adapted to the customer segmentation and relationship strategy (ex: advice on internet, in-house displays, electrical appliances remotely switched in/off, …)OFFERINGS

• Set up a pilot’s objectives and expectations, implement a system to monitor and analyze the results, set up customers’ recruitment campaigns, build on lessons learnedROADMAP

EXAMPLES OF SEGMENTATION CRITERIA• Sociological (behaviors…)• Psychological (awareness to technology …)• Economical (power purchase, energy bill …)• Technical (type of heating system, of housing, …)

Page 7: Technical devices, economic signals and customer attitude impact on Demand Response October 15, 2012 Colette Lewiner.

7Copyright © Capgemini 2012. All Rights Reserved

Presentation Title | Date

Mass roll-out finalized

Mass roll-out by 2020 well-engaged

Mass roll-out probably not completed by 2020

IE

NL

CH

SE

DK

NO

FI

EE

LT

LV

PL

SK

ROSI

UK

PT

ES IT

GR

FR

BE

HU

DE

AT

BG

CZLU

Smart meters could be a Demand Response enabler

80% of electricity customers in EU Member States should have smart meters by 2020. All countries required to perform cost benefit analysis by September 2012

In September 2011, France has decided the mass roll out of 35 million meters from 2013 to 2020 but the starting date will be delayed.

4 technologies experimented for gas smart meters (18,500 meters) in France. Final mass roll-out decision should be taken in 2013

In Europe the Value Chain unbundling

regulation, impacts negatively the return

on smart meters investment and slows

down decisionsSource: ESMA, GEODE – Capgemini analysis, EEMO12, updated March 2012

NorwayE Draft regulation issued in Feb. 2011

80% roll-out by 2016, 100% by 2018

FinlandE Legislation into effect. At least

80% roll-out by end 2013

EstoniaE Mandatory nationwide roll-

out under discussion

SwedenE 100% smart meters

implemented in 2009

DenmarkE Deployment by several

DNOs. No national plan

GermanyE 50 trials from 10 to 115,000 meters

Nationwide roll out under discussionCustomers can opt in or out

G Similar to electricity

PolandE Legislation should be ready in 2012

Pilots run by all UtilitiesG Similar to electricity

Czech RepublicE National roll-out under discussion

Several pilots under wayAustriaE Legislation adopted in 2010.

Pilots from 10,000 to 240,000 meters

G Legislation under discussion

BelgiumE No legislation yet

Several business case studies under way

G Similar to electricity

FranceE Decision for roll-out of 35

million smart meters by 2020 taken in 2011.

G GreenLys pilot, decision for mass roll-out by 2013

GreeceE Roll-out under way

G Plans for extending the electricity system to water and gas meters

ItalyE 100% smart meters

implemented in 2009G 80% smart meters to be

installed by 2016

HungaryE Legislation adopted in 2011

G Legislation under discussion

UKE 27 million smart meters should

be implemented by 2020G Similar to electricity

NetherlandsE Legal framework for voluntary

installation adoptedSeveral pilots under way

PortugalE Smart meter substitution plan

presented by the regulatorSeveral pilots (30,000 to 50,000 meters) run

SpainE 100% smart meters should be

implemented by end 2018

IrelandE National roll-out

planned for 2014-17G Studies under way

for gas

Electricity and gas smart metering projects in Europe

Page 8: Technical devices, economic signals and customer attitude impact on Demand Response October 15, 2012 Colette Lewiner.

8Copyright © Capgemini 2012. All Rights Reserved

Presentation Title | Date

Time-of-Use tariffs are important DR triggers: Ontario example

2.4% peak shaving (on a 6-hour period, from 11:00 until 17:00)

5.7% peak shifting (on a 3 or 4-hour period) Off-peak consumption shifting hardly quantifiable 6% consumption reduction

Some peak consumption reductions haven’t been reported (notably lighting) during off-peak periods

This dynamic tariff has an indirect effect on consumption patterns

3% savings on bills under the dynamic tariff (compared with the standard tariff)

75% customers have made bills savings

The dynamic tariff is promoted as a tool allowing customers to analyze their consumption and control their bills

This program resulted in peak shaving as well as peak shifting

Regulated Time-of-Use tariffs (c$/kWh)

SU

MM

ER

WIN

TE

RW

EE

KE

ND

HO

LID

AY

S

Lessons learned

Page 9: Technical devices, economic signals and customer attitude impact on Demand Response October 15, 2012 Colette Lewiner.

9Copyright © Capgemini 2012. All Rights Reserved

Presentation Title | Date

Visual tariff signal has also a significant impact on DR: Energy Orb example

“Energy Orb” from PG&E (Pacific Gas and Electricity) is a visual indications to clients involved in energy demand management programs

The device alerts business customers before and during an energy consumption reduction period

Many technical devices exist to trigger consumption reduction. They are often expensive and their profitability remains to be established. Customers are reluctant

to invest in these equipments and services and consumption reductions are not always fitting their expectations

Page 10: Technical devices, economic signals and customer attitude impact on Demand Response October 15, 2012 Colette Lewiner.

The information contained in this presentation is proprietary.© 2012 Capgemini. All rights reserved.

www.capgemini.com

About Capgemini

With more than 120,000 people in 40 countries, Capgemini is one of the world's foremost providers of consulting, technology and outsourcing services. The Group reported 2011 global revenues of EUR 9.7 billion.Together with its clients, Capgemini creates and delivers business and technology solutions that fit their needs and drive the results they want. A deeply multicultural organization, Capgemini has developed its own way of working, the Collaborative Business ExperienceTM, and draws on Rightshore ®, its worldwide delivery model.

Rightshore® is a trademark belonging to Capgemini


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