The introduction of smart meters and smart metering systems presents energy providers in Germany with major challenges. It won’t be long now until smart meter infrastructure has to be rolled out on a large scale, and this process needs to be managed efficiently. Participation is mandatory – and expensive. Many distribution grid operators and public utilities, not to mention big energy companies, still have many questions regarding implementation and roll-out. The good news is that some energy providers have taken the initiative and are forging ahead with innovative solutions. These companies don’t want to wait anymore – and are wisely preparing themselves as best they can for the implementation of smart meter infrastructure.
What this demonstrates is that even today – before a single regulation has been enacted to define the exact requirements (at least in Germany) – there are ways for energy providers to optimize the roll-out process and so improve their efficiency and save themselves costs in the short term. Innovative energy providers, listen up!
Roll-out: a mammoth task?
A mammoth task? On the one hand, yes. More specifically, what are the main cost drivers of the roll-out?
On an organizational level…
Energy providers have to get ready to
- Adapt new IT systems to existing IT systems and manage their interaction. Doing so involves:
- More meter replacements;
- Stricter requirements regarding the qualification of installation technicians and service providers; and
- A need for better planning of necessary service trips and avoid repeat trips.
On a technical level…
Energy providers have to
- Adapt and expand their IT landscape plus their installation and operating processes
- Review and expand their metering products.
Also to consider:
- The complex systems necessary to adhere to the rigorous security standards of the BSI (Germany’s Federal Agency for Security in Information Technology).
On a financial level…
Factors to consider include:
- A significantly higher number of devices required (in comparison to the current replacement rate);
- The extra qualifications required by technicians and service providers for the installation; and
- The longer installation times due to the complexity involved and the interaction with IT systems.
- Repeat service trips due to higher error rates early on in the roll-out, as well as
- The need to adapt IT systems / procure new ones.
A mammoth task? On the other hand, perhaps not.
People often don’t realize that while hardware – in other words, the metering technology – does drive costs, choosing the right IT system can lead to significant savings and minimization of risk in terms of organization and logistics (figure 1).
Example: Optimizing the roll-out plan
Plans drawn up for rolling out the metering infrastructure can be optimized according to service or capacity.
In the example (figure 2, top half), the service is optimized by moving up the replacement of 500 meters/metering systems from 2016 to 2015, based for instance on certain device setups or replacement schedules that can be efficiently grouped together. Service optimization relies on appropriate simulations for purposes of personnel planning and is able to factor in geographical proximity, the qualification of resources, and other criteria.
In the other part of the example (figure 2, bottom half), capacity is optimized by transferring five grid regions into grid area 1. This evens out the lot sizes that go to tender from external service providers. Alternatively, available resources from grid regions close by can be called upon to aid in execution.
An important point in this regard: the interplay of roll-out management and workforce management. That is to say, planning data has to match up with specific resource planning, meaning the resources actually available (work calendar). The concrete yearly/monthly planning (forecast) serves as the basis for the energy provider to assess in advance if the commitments made by service providers can be honored – and also to monitor progress (comparison of target vs. actual including non-routine factors such as replacement in the metering product portfolio).
The example shows that advance planning allows energy providers to profit from scale effects by integrating roll-out measures into their existing processes as gradually and with as much automation as possible, while tapping into synergies. Achieving a high degree of automation in installation processes offers considerable savings potential.
Positive knock-on effects on the logistical level result from complementary work procedures such as the processing of electronic delivery notes, creation of order packages for workforce management systems, inventory tracking, and generation of new orders.
Service optimization example 2: Carrying out replacements at metering points in close geographical proximity: If the system detects that there are other metering points close to a metering point at which a replacement is due to take place, it can move up the replacement at these other locations should they be scheduled for a later point, thereby minimizing the need for multiple service trips.
Service optimization example 3: Allocating resources according to qualification: When calculating available resources, tasks calling for higher qualification (installation of smart metering systems) are assigned first to internal employees. Only then are the remaining resources assigned for further tasks. After this, any resources still lacking are supplied by external service providers.
Automation – but how?
For a company wanting to start with the implementation of a roll-out management system in Germany, the greatest challenge it currently faces is that the requirements won’t be firmly defined until some point in the next few months. This calls for flexibility in implementing the roll-out management system. BPM- and BRM-supported solutions are particularly suited to this approach. This way, processes and business rules can both be flexibly adapted to the regulations, which are expected to be issued in Germany by the summer of 2015.
To achieve easy integration with existing systems (SAP IS-U for order and device management, etc.), you need the right system connectors. Software technologies that have proved themselves many times over in other contexts are now a cornerstone of the roll-out management of tomorrow.
Smart metering lays foundation for new business areas
While the organizational and technical challenges in the short term are daunting, public utilities and energy companies stand to benefit from all sorts of opportunities that will arise from the implementation of smart metering systems.
Benefits for energy providers can be expected in the short, medium, and long term:
- In the short term, automating roll-out and replacement scenarios eliminates paper-based order processing and allows for anticipatory optimization of replacement schedules
- In the short to medium term, comprehensive process automation (see figure 3) leads to a simplified design of far-reaching process chains, especially in the roll-out – and therefore to efficiency gains and optimized costs
- Whole new potential business areas and business models open up. Smaller and medium-sized energy providers in particular will group together to harness synergies so that they can bundle multiple services to form new offerings. Ideally, in this process they will themselves make use of software as a service solutions (SaaS) offered to support the roll-out.
- In the medium to long term, the chance to achieve smart grid optimization through optimized management of the power fed into the grid, plus all the benefits that brings in terms of grid stability and a reduction in the costs of grid expansion.
Are you ready for the roll-out?