Advanced Metering Infrastructure Deployment at Energa-Operator. 8 December 2010



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Advanced Metering Infrastructure Deployment at Energa-Operator

Agenda AMI deployment purpose and scope Project status Standardization and interoperability Key business aspects Next steps

AMI Deployment Purpose and Scope

The Project will enable ENERGA-OPERATOR to achieve a number of strategic goals AMI Programme objectives Remote control of metering systems and metering data acquisition Facilitating indiscriminate access to the grid Increasing operational efficiency and improving grid management and development Activating recipients as regards energy efficiency and dispersed generation Meeting regulatory requirements for meter reading AMI system will become a basis for Smart Grid deployment

AMI Project key guidelines

Project Status

The AMI Project is structured into four tasks Status of activities in each of the AMI Project areas AMI Project area Conception Tender documentation Tender procedures Implementation Reading the industrial recipients AMI application Meters Communication

Over 500 functional requirements have been defined for AMI AMI functional requirements Requirement category Energy consumption meters Energy balance meters No of 85 77 Description Requirements for end customers meters and devices Requirements for meters and devices at MV / LV stations Intermediate units 48 Connectivity layer 33 AMI application 298 Requirements for network hubs and their communication modules Requirements for communication devices within the System Requirements for the data acquisition, storage and access system

The Project provides for system deployment at industrial recipients sites 16 900 meters will be installed under the Project Solution CONVERGE, Landis+Gyr No of meters within the system 16 786 (99.5% of the plan) Communication technologies GPRS, PSTN, ZigBee Although uniform communication is planned (GPRS), in some exceptional cases we decided to use ZigBee

All company clients using G and C1 tariffs will be covered by AMI AMI Project coverage at Energa-Operator Customer groups: Individual customers 2.5 million Business recipients 300 thousand Scope of deployment: AMI application Telecommunication functions Installation of energy balance meters Installation of energy consumption meters Deployment of AMI at ENERGA-OPERATOR is the most extensive project of this type planned in Poland

Currently, we are at the first stage of AMI deployment Project schedule Checkpoint Project stages 2010 2011 2012 2013 2014 2015 2016 2017 Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4 Deployment preparation Programme management Stage I Stage I under way Stage I verification Stage II Stage III Stage IV Further stages depend on regulatory decisions Stage V Stage VI Stage VII Stage VIII Stage IX 11

3 locations have been chosen as Stage I task sites Drawsko Pomorskie Hel Kalisz Installation of 100 thousand meters is planned under Stage I Hel a base for the Smart Grid Project, intended to verify system operation in the area with a varying land development intensity. Installation of some 30 thousand meters. Kalisz intended for verification of WiMAX technology in the urban area with a high development intensity. Installation of some 35 thousand meters. Base for the Smart Grid Project Urban development area Rural development area Drawsko Pomorskie region chosen for PLC technology verification on low and medium voltage lines in the area with a dispersed land development pattern. Selection of three different locations will enable verification of various communication technologies recommended for AMI

The contracting system is expected to eliminate dependence on suppliers Guidelines for selection of contractors Energy consumption and balance meters Connectivity layer Installation of meters Installation of telecommun ication systems Application development and delivery of IT hardware Legal / managerial support Assumed minimum of suppliers 3 3 For each of PLC and imax technologies Energa Group resources Energa Group resources 1 1/1 Selection of AMI connectivity layer contractors and suppliers of meters will occur in two stages: framework agreements and delivery contracts

Standardization and interoperability

The AMI system will be open-standard based Zone A TAN A TCP/IP required Zone B TAN B TCP/IP required Zone C TCP / IP recommended Zone D MV/LV Meter Main supply terminal MV/LV Information delivered in a close-to-real time Control information delivered in a time up to 3 seconds Control information delivered in a time up to 1 minute Information delivered in a close-to-real time Information received in a close-to-real time Control information received in a time up to 3 seconds Reading information received in a time up to 1 minute Control information received in a time up to 1 minute Reading information received in a time up to 15 minutes Information received in a close-to-real time Assumed data transmission concentration points Open communication protocols for all connectivity layers Co-operation with meters and hubs of various manufacturers Any meter communication protocols will be operational under the system

With TCP/IP protocol, any telecom technology can be used Standardization of interconnection points Interchangeability of telecommunication technologies Standardization of interconnection points Router at the MV station Ethernet Modem at the MV station Modem at the MV station PLC MV Cable connection, e.g. ADSL, optical fiber, dial-up lines, other Microwave transmission line Modem at the main power supply point Modem at the main power supply point Ethernet Ethernet TAN network router at the main power supply point TAN EOP network Router at the MV station Modem at the MV station Modem at the main power supply point Router at the MV station Modem at the MV station IP networks of Internet providers, cable TVs Modem at the MV station Wireless networks, e.g. GSM, WiMax, WiFi

The Project plan provides for purchasing compatible equipment from various suppliers Delivery of intermediate devices and meters from 3 suppliers Intermediate devices and meters installed by one provider within one geographical location (MV/LV station) The supplier obliged to hand over equipment s technical specifications and licences at ENERGA-OPERATOR s disposal

Key business aspects

Deployment of AMI: to the advantage of all energy market participants Deployment of AMI benefit and cost areas Producers TSO DSO Seller Recipient Optimized expenses Growing share of base-load generation Reduced costs of innvestment Reduced risk of unsuccessful projects Reduced cost of new projects Reduced cost of energy balance Increased operational efficiency More justifiable projects Increased operational efficiency Reduced cost of energy In a long-term perspective reduced distribution rate Higher revenue Selling new products Selling new products Prosumer model created Cost of deployment System installation Cost of designing the system Cost of maintenance Cost of connectivity Cost of financing

The assumed cost of AMI deployment: PLN 386 per meter point Cummulated expenses per meter point (PLN) 386,3 207,2 Total expenses (PLN m) Layer of meters Adjustment of NV/LV stations Project expenses Layer of intermediate devices Wide Area Network layer Application layer Layer of energy balance meters Total expenses 645 164 113 90 81 61 48 1,202

Distribution of profits to be gained from deployment depends on tariff decisions Deployment: expenses and gains (in the years 2010-2030, PLN m) Expenses of DSO DSO s gains Seller s gains Net gains Recipient s gains 745 3.025 2.672 4.819 2.538 DSO s gains structure 15% Balance sheet loss reduction Reduction of subcontracted services cost 23% 60% Existing meters retained Other items r.

AMI project will also deliver measurable benefits to customers Some of the benefits: Competition Greater competitivity of the market through facilitated access to metering data Clear bills Bills will be issued based on real consumption New products and services Minimum subsistence level Quality and security of energy supply On-line contact with the customer s infrastructure will enable us to offer new services and products Power limits and limits of energy consumed within a time interval can be imposed Elements of intelligent grid can be deployed based on the AMI greater security of supplys

Successful implementation depends on Project organization Key success factors of the Project Deployment quality control The multi-stage approach and checkpoints allow for synchronization of activities and monitoring the progress Competing suppliers Organization of project implementation activities Using numerous suppliers for the area of communication and meters stimulates competition at every stage of project implementation Obtaining source codes and software licences will eliminate dependence on one supplier Appointing a dedicated implementation management team is a matter of key importance Working on the innovative solution creates personnel development opportunities and enables the organization to identify talents

Next steps

Next step: Hel Peninsula Smart Grid Pilot Project Inteligentny Pó wysep Helski Project Automated control Grid managment provided on a current basis Island mode operation of the distribution system Dispersed generation Connecting prosumers to the grid Selling surplus of energy generated by consumers Creating opportunities for Smart Grid cooperation with intelligent buildings Electric vehicles The grid will be designed to provide electric car charging facilities Electric vehicles can be used as energy storage devices

Thank you for your attention Rafał Czyżewski rafal.czyzewski@energa.pl