Smarter Power for a Smarter Planet Overview Shlomo

Smarter Power for a Smarter Planet Overview Shlomo Shamy E&U Solutions manager Global Technology Unit (GTU) IBM Israel Feb 2011 © 2010 IBM Corporation

Smart Energy for a Smarter Planet A globally integrated world 6 x Increase in global water usage since the 1900 s, twice the rate of human population growth 40% to 70% The losses of electrical energy due to inefficiency - around the world 85% Idle computer capacity 70¢ per $1 Spent on IT maintenance 100 million People worldwide pushed below the poverty line by personal healthcare expenditures $11. 5 billion Worth of produce is wasted in India because of outdated post-harvest infrastructure $78 B lost 3. 7 B lost hrs 2. 3 B gallons of gas Annual impact of congested roadways 2 $40 billion Annual consumer product and retail sales lost in United States due to supply chain inefficiencies $100 billion Lost annually in the US due to healthcare fraud 22% of total port volume in North America is empty containers © 2010 IBM Corporation

Smart Energy for a Smarter Planet What is happening? Organizations will need to optimize their use of energy and water and minimize GHG emissions. WATER Water is needed to generate energy and energy is needed to provide water. CO 2 emissions contribute to climate change, which impacts water systems. ENERGY CARBON Energy production results in CO 2 emissions. 3 © 2010 IBM Corporation

Smart Energy for a Smarter Planet Market Forces Market forces, impacting the landscape of utilities around the world, requiring the transformation of industry business models. Climate change and environmental concerns New entrants and disruptive technologies Growth in renewable generation and distributed resources Aging asset performance with increased expectations on reliability Increased pressure on operational efficiency and workforce productivity Increasing desire by consumers for a role in energy management and conservation 4 © 2010 IBM Corporation

Smart Energy for a Smarter Planet What can be done? To deliver power more responsibly and more efficiently, energy and utilities organizations are working toward a smarter energy value chain. TRANSFORMATION OF THE GRID Transforming the grid from a rigid analog system to a dynamic and automated energy delivery system. ENERGY AND UTILITIES EMPOWERMENT OF CONSUMERS Empowering consumers by providing them with near real-time, detailed information about their energy usage. 5 ENSURING CLEANER ENERGY SUPPLY Meeting stringent greenhouse gas emissions targets while maintaining sufficient, cost-effective power supply. © 2010 IBM Corporation

Smart Energy for a Smarter Planet Why should we act? There is an imperative from government and consumers alike for energy and utilities organizations to transform themselves to ensure environmental responsibility, economic competitiveness and national security. ENERGY AND UTILITIES LOCAL AND GLOBAL ECONOMIES ENVIRONMENT AND SOCIETY By leading innovation throughout the industry, their positive impact will be felt far beyond. 6 © 2010 IBM Corporation

Smart Energy for a Smarter Planet Intelligent Utility Network How should we act? Our world is becoming INSTRUMENTED Our world is becoming INTERCONNECTED Virtually all things, processes and ways of working are becoming INTELLIGENT 7 7 © 2010 IBM Corporation

Smart Energy for a Smarter Planet Intelligent Utility Network + + = An opportunity to think and act in new ways— economically, socially and technically. 8 8 © 2010 IBM Corporation

Smart Energy for a Smarter Planet Intelligent Utility Network What does it mean to become Smarter? Measuring, Monitoring, Modeling and Managing Metering Real Time Data Integration Real Time + Historical Data Modeling + Analytics Visualization + Decisions 9 Feedback to user and data source; Incentives and actions to change behavior Sensing § Data collection § Data Integration § Comparison of historical data, with newly collected data § Data modeling and analytics to create insights from data to feed decision support and actions Source: IBM Corporate Strategy © 2010 IBM Corporation

Smart Energy for a Smarter Planet Intelligent Utility Network Proof-point - Beacon Institute 10 © 2010 IBM Corporation

Smart Energy for a Smarter Planet Intelligent Utility Network What is the Intelligent Utility Network Solution ? The Intelligent Utility Network solution is a suite of offerings to help utility companies develop a smarter grid supporting Transformation Management, Information Technology and Individual Domains & Projects 11 © 2010 IBM Corporation

Smart Energy for a Smarter Planet Intelligent Utility Network Energy and Utilities market forces are creating the need for an evolution in the energy value chain. Traditional Grid UTILITY DYNAMIC INFRASTRUCTURE Coal/ Gas SMART GRID Solar Hydroelectric Energy Storage Nuclear UTILITY Wind Coal/Gas Hydroelectric Solar Energy Storage Nuclear Wind Solar Energy Storage Plug-in Vehicle Wind Consumer Power Flow Periodic Information Flow Continuous Information Flow 12 A transformed grid that empowers consumers and provides the energy for a sustainable future. © 2010 IBM Corporation

Smart Energy for a Smarter Planet Intelligent Utility Network Integration of the physical and digital instrumentation points and across disparate systems 1 Advanced Meter Infrastructure 1 2 3 4 5 • Meter • Head-End Device • Meter Data Management System (MDMS) • Communications Layer • Home Area Network Transmission & Distribution Network 1 2 3 4 5 • • 1 2 3 13 • Fossil / Nuclear plant devices monitoring (Non-Operational) • Distributed Generation Communications Layer • Distributed Generation Assets (Wind, Solar, Hyrdo, Diesel) Renewable Generation 3 2 Transmission Network Utility Operation Cente Substation 4 Mobile Workforce Communications Layer Data Historians SCADA RTU Substation Assets (not managed by SCADA) • Electrical Grid Field Assets (downstream of substation) Power Generation Central Generation 1 1 2 2 3 4 Distribution Network 5 5 2 Distributed Generation 5 1 4 3 2 Commercial Customer 4 3 4 1 5 Residential Customer 1 5 Data Communication Network © 2010 IBM Corporation

Smart Energy for a Smarter Planet Intelligent Utility Network Smart Grid building blocks are composed of many individual technologies from both Operations & Information Technology Fields …. We are seeing the Convergence of IT and OT 14 © 2010 IBM Corporation

Smart Energy for a Smarter Planet Intelligent Utility Network Smart Grid Implementation Progression Summary Participatory Network Measure & Control Gain observability over the network and automate control functions One-way Flow Basic Functionality 15 15 August 10 2010 Integrate consumers and providers with the network & enable participation & conversation Converse and share information, analyzing and acting upon it to balance supply with demand given realtime conditions Optimize network functions based on rules & constraints Orchestrate the network and its participants to continuously assure an optimized, secure, balanced and reliable network Orchestrate Optimize Analyze & Act Connect Participants Monitor & Automate (Network) Maturity over time Advanced Functionality © 2010 IBM Corporation

Smart Energy for a Smarter Planet Intelligent Utility Network Smart energy and utilities: Transforming the grid. SMART IS Knowing exactly where a power outage occurs and instantly dispatching a crew to fix the problem. Preventing outages before they occur by sensing potential equipment failures. SMART IS Extending asset life by sensing and managing the stress placed on aging equipment. Reducing peak load by communicating with energy consumers and having them turn off non-essential machinery or appliances. 16 © 2010 IBM Corporation

Smart Energy for a Smarter Planet Intelligent Utility Network Smart energy and utilities: Transforming the grid. DONG Energy: Installed remote monitoring and control devices to gain an unprecedented level of information about the current state of the grid, lessening outage times by a potential 25 -50%. US electric and gas company: Plans to leverage a mix of leading-edge communication technologies, smart meters and first-of-a-kind process innovations to create an intelligent utility network. Energie Baden-Württemberg: Offers residential customers smart appliances and meters that enable them to adjust electricity consumption based on price —reducing waste and easing peak loads. Pacific Northwest National Laboratory: Used intelligent measurement devices, smart appliances and a virtual marketplace to help manage stress in the electric grid, achieving a 50% reduction in shortterm peak electricity distribution loads and a 15% reduction in overall peak loads. 17 © 2010 IBM Corporation

Smart Energy for a Smarter Planet Intelligent Utility Network Smart energy and utilities: Empowering the consumer. SMART IS Analyzing customer energy usage and providing customized energy products and services to meet their needs. Helping customers conserve energy by providing them with tools to proactively manage their energy usage. SMART IS Ensuring that customers are billed accurately and on time. Helping customers establish a “smart home” that turns appliances on and off to reduce energy costs. 18 © 2010 IBM Corporation

Smart Energy for a Smarter Planet Intelligent Utility Network Smart energy and utilities: Empowering the consumer. enemalta: A major electric and water utilities provider in the country of Malta selects IBM for a 70 million euro, five-year agreement to design and deliver a nationwide Smart Grid implementation. A Canadian regulator: Launched a pilot time-ofuse program that rewards consumers for using less power during times of shortage or peak demand, leading participants to shift 25% of their usage away from peak hours. Ecotricity: Re-engineered its business processes and systems to enhance the speed and accuracy of billing while working toward the ultimate goal of a fully interactive, automated, multi-channel customer experience. Pacific Northwest National Laboratory: Provided customers with smart appliances such as water heaters that can sense impending grid failures and automatically respond by cutting back on power consumption. 19 © 2010 IBM Corporation

Smart Energy for a Smarter Planet Intelligent Utility Network Smart energy and utilities: Ensuring cleaner energy supply. . SMART IS Smoothing power demand in order to take advantage of off-peak supply such as wind. Maintaining a sufficient, cost-effective power supply while managing stringent greenhouse gas emissions targets. 20 © 2010 IBM Corporation

Smart Energy for a Smarter Planet Intelligent Utility Network Smart energy and utilities: Reducing greenhouse gas emissions. A German Power Company: Deployed a proof-ofconcept Wind Generation Monitoring Solution that will connect numerous power plants to a central monitoring application, enabling better collection and use of raw data. 21 A European Generation Company: Built a tool for optimizing unit commitment, the process of finding and dispatching power sources at the lowest possible cost. It allows planners to easily compare power generation scenarios, programs and production costs and then select the optimal demand coverage at any given time © 2010 IBM Corporation

Smart Energy for a Smarter Planet Intelligent Utility Network Which comes first: the smart grid or the electric car? To provide all this electricity for all these e-vehicles, power grids must become smart grids—capable of sending and receiving data along with energy. Utility companies, are planning: - peak demand reduction, - carbon management -cost reasons And completing plans and participating in standards bodies to prepare for the: - energy increase, - peak variability and - storage mobility 22 © 2010 IBM Corporation

Smart Energy for a Smarter Planet Intelligent Utility Network Energy Storage Electricity can’t be commercially stored - Energy can: Thermal Storage Pumped Energy Storage Others: Mechanical Biological, Chemical, … Electric Vehicle: May practically become the first ever commercially mean to store electricity 23 © 2010 IBM Corporation

Smart Energy for a Smarter Planet Intelligent Utility Network What is Watson? 24 © 2010 IBM Corporation

Smart Energy for a Smarter Planet Intelligent Utility Network We’ve only just begun to uncover what is possible on a smarter planet. For more information: Shlomo Shamy shamy@il. ibm. com IBM Israel 94 Em Hamoshavot st. Petha Yikva. Let’s work together to drive real progress in your business or organization and the world. Thank you for your time 25 © 2010 IBM Corporation