EnergyBiz - September/October 2007 - (Page 58) “The current state of the electrical infrastructure in North America is not sustainable. To change its course, utility companies must embrace a fresh approach to managing peak demand and system security.” notification and restoration. These investments must be leveraged to support a broader set of benefits such as: � Aggregating demand response and allowing it to be dispatched to reduce the need for peak generating capacity and ancillary services. � Refining grid planning processes to improve the efficiency and effectiveness of investments in the grid. � Improving grid monitoring and control processes to improve reliability, power quality and reduce losses. � Providing new value-added services to consumers that generate new streams of revenue and income. In addition to leveraging investments over a larger benefits base, performance measures for market participants must be better aligned; we must create a “winwin” environment. Good examples of this include the decoupling underway in a number of areas to allow distribution companies to separate their revenue from consumption. Decoupling gives distribution utilities incentives to truly embrace conservation and demand response programs without jeopardizing their ability to earn a return on their investments in distribution grid infrastructure. The Challenge Utilities that structure their smart metering programs strictly from a revenue management perspective are selling themselves short. There’s much more to smart metering programs than interval reads and time-of-use (TOU) rates. Utilities should leverage their smart metering programs to make near real-time, point-of-use consumption data available to all participants in electrical energy markets. Access to data improves transparency in the market, and as a result, drives market efficiency. Efficient markets offer incentives to both generators and consumers that stimulate balanced investment and consumption decisions and in turn, support economic, environmental and social priorities. But today’s utilities need to look beyond the technology into the opportunities and incentives the technology unlocks. Indeed, utilities must take a more comprehensive view of smart metering. More important than the technology itself is the role it plays in enabling system operators, retailers, load serving entities, aggregators and customers to use real-time load data to improve market efficiency. Another key challenge is influencing the behavior of consumers. When programs provide meaningful and rewarding incentives, customers can, and will, embrace conservation, and as a result, loads can be more effectively and efficiently managed. Capgemini believes the strategy for utilities should be proactive and that programs for action should include: A long-term approach around smart metering and its linkages to operational improvements, conservation programs, demand response, capacity planning and new revenue opportunities. � Engaging other stakeholders in their markets and developing consensus around synergies, critical success factors, required incentives and alignment of performance measures. � Formulating a business solution that is capable of meeting today’s requirements while being scalable to deliver on future demand. � Organizing a team capable of implementing the chosen business solution. � The Smart Solution In Capgemini’s view, effective smart metering solutions share a number of key components: � Meters: Standards-based, two-way communication, remote connect/disconnect and interoperability with in-premise networks and devices. Smart Metering:ThoughT LE adErship – sponsorEd By CapgEmini Security A Fresh Approach to Managing Peak Demand and System www.energycentral.com 3 E n E rgyB i z 59 http://www.energycentral.com
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