Agility in energy Ahead of the challenge, ahead of the change siemens.com/agility-in-energy 2 We are on the verge of a new era, the so-called electricity age. The energy system as we know it is changing dramatically. 3 4 Agility: the key to success The bar is constantly being raised in the changing energy landscape The change of the energy system is characterized by an increasing departure from the use of carbon-based fuels, the deregulation of markets, and environmental awareness. Agility is the basis for future business success in an energy system that is efficiently automated, fully digitally enabled, and seamlessly integrated across borders, system functions, market roles, and forms of energy. Enabling the integration of renewable energy, electricity is becoming an increasingly important, omnipresent energy carrier. At the same time, there’s a shift from centralized large-scale power generation to a highly complex generation landscape characterized by a vast number of independently owned and operated, distributed power producers. Agility in energy This poses new, highly demanding challenges to the power grids and their operators: Small generation units are increasingly being integrated with loads and storage, and the grids must be able to flexibly handle bidirectional power flow and intermittency. At the same time, classic supply side functionalities are being fulfilled more and more on the demand side, and power distribution and metering are growing together. Still, the entire system and all its operations must be kept absolutely safe and secure at all times. While energy management becomes increasingly complex, Siemens remains focused on helping its customers improve reliability and efficiency to stay ahead of the challenge from the control room across the grid out to the consumer. A global powerhouse in the fields of electrification, automation, and digitalization and a leading supplier of technology for the efficient generation, transmission, distribution, and application of electrical energy for more than 160 years, Siemens provides holistic solutions for the consistent automation and digitalization of power transmission and distribution systems. Success in changing times Ensuring the reliability, efficiency, and sustainability of the power supply system and at the same time dealing with completely new technical and market demands requires a high degree of agility – the capability to anticipate developments and approach business operations as well as resources flexibly, consistently, and promptly through comprehensive automation and digitalization. 5 Keeping sight of the objectives Strategic and operational agility is the main key to success in a changing business environment characterized by ongoing disruptive innovation. The demands placed on the energy system and on energy technology have not changed much over the last few decades. However, today’s framework conditions are completely different from what they used to be. Experts say that very few other economic sectors have undergone similar disruptive developments. It has become more important than ever for power transmission and distribution infrastructures to be safe and secure, efficient and affordable, reliable and resilient, and environmentally compatible. 6 That’s why all energy management products, solutions, and services from Siemens have a common denominator: the digitally enabled convergence of information technology and operation technology. They provide the basis for understanding technology and market developments, focusing on the relevant fields of action, and finally acting accordingly. In a nutshell, they make it possible to manage business processes and resources flexibly, consistently, and efficiently and to react appropriately to new technical and market demands in a timely manner. Put even shorter: they enable agility in energy. Reliability Resiliency s dness Cus tom er | cy er Und ennes Op ic acceptance Agility in energy cus s | Trans s ubl par nd |P en us ta Fo Efficiency Affordability M an s Act ag es Sustainability Environment f oc F e or te igh ea b ili t y | A d ta bi lit y ap | a Le nn Safety Security 7 In the new energy landscape, delivering power efficiently, reliably, and sustainably requires agility. All approaches need to enable the thorough understanding of a given situation, clear focusing, and consistent action. 8 9 Understand Increasingly volatile parameters call for new forms of collaboration based on transparent processes, open ecosystems, and farsighted strategies. Openness paves the way Ecosystems that enable open collaboration and acknowledge the importance of other parties’ contributions will be an essential driver of success. Factors such as the rise of the prosumers, the market entrance of nimble specialists, and the convergence of information and operation technology increasingly make proprietary systems with their typical limitations a thing of the past. They call for open system architectures that enable market participants to pool resources, share their expertise, analyze developments, and ultimately utilize their strengths in the most efficient way possible. A great example is Siemens’ new Spectrum Power™ Advanced Distribution Management System (ADMS). It integrates distribution SCADA, outage management, and advanced fault and network analysis under a common roof and offers numerous data input and output options. Comprehensive security solutions, such as Siemens’ cyber security solution make sure that all systems are properly and consistently protected at the same time. Transparency enables better management Comprehensive knowledge about everything that is going on within a grid and related business operations is becoming more and more important. Precise long-term planning as well as maintaining the reliability of increasingly complex grid infrastructures are only possible on the basis of 10 comprehensive data and meaningful analysis results. And the more market players and stakeholders are involved, the more important it becomes to consider influencing factors outside the grid itself – from generation capacity estimates to climate and demographics. Moreover, transparency contributes to cost-efficiency in daily operation. It is the basis for fast reactions in the case of faults and it helps optimize systems. Siemens has developed powerful system planning, simulation, data management, and analysis tools, such as the Power System Simulator PSS®Product Suite, to assist engineers and operators in their work, while distribution automation solutions from Siemens enable remote monitoring and control of power distribution grids. The future is already here The ability to foresee market developments and dynamics in order to react to emerging business opportunities and ensure sustained business success is a must in complete systems. At the same time, foresightedness also enables clear guidance and a stringent roadmap that ensures protection against wasted investments or unnecessary moves that damage current success. Siemens’ Compass consulting and analysis methodology, for instance, provides comprehensive support in the development and implementation of business strategies and technology for the future energy system. Canada: A clear understanding of more flexible, intelligent, and efficient energy management NB Power, the chief electrical utility in the Canadian province of New Brunswick, decided to become a “utility of the future,” providing load-following generation capabilities and sustainable electricity while also placing even more focus on its customers and reducing rate increases. In the framework of a multiyear agreement, Siemens applied the Compass methodology to design a roadmap for NB Power based on a comprehensive key performance indicators catalog. 11 Focus Customer alignment and public acceptance are essentials in the increasingly dynamic energy market. 12 Great Britain: Focusing on customer demand with an open network management system Siemens supplied a significant contribution to the ambitious “Customer Led Network Revolution” (CLNR) project operated by the British electricity distribution business Northern Powergrid: A network management system based on openstandard platforms and protocols that can integrate more data from various sources as well as existing and new IT platforms and automatically adapt network operation according to identified constraints. The customer is always right Unobstrusive technology is a winner Since distributed small-scale generation by private households started mushrooming a couple of years ago, the relatively fixed value stream in the electrical energy business has turned into to a constantly changing variable. Electricity markets have become much more volatile, and customer behavior has changed completely within a short period of time. Collective switching schemes, for example, enable electricity customers to group together and use their collective buying power to negotiate a better price for their energy – a development many market players would not even have dreamed of just a couple of years ago. In several countries, such collective switching schemes are even promoted by local councils, and the number of consumers who switch their supplier keeps rising. Along with the changes in customer behavior, the general public has become much more sensitive to the environmental aspects of power transmission and distribution. Today, new projects experience much closer public scrutiny. Time-consuming planning procedures including numerous planning permission hearings often render the outcome of a project uncertain, while quick and clear answers are required to master a given challenge. The increasingly complicated technical framework as well as market mechanisms that are sometimes difficult to understand and to predict require highly adaptive solutions on the side of distribution system operators and utilities, perfectly tailored to the individual company’s situation and strategic agenda. Enterprise trading and risk management (ETRM), for instance, a software solution based on Atos’ Power Trading and Retail System (PTRS) solution and Siemens‘ joint Resource Optimization and Scheduler (jROS) solution, connects generation and trading, this way ensuring the best possible combination of risk reduction and profit optimization across the entire value chain. With the development of new technical solutions, as well as with the continual improvement and optimization of existing technology, Siemens has helped improve the public acceptance of transmission and distribution projects substantially. Extremely compact gas-insulated highvoltage switchgear makes it possible to bring power on high voltage levels right into urban centers by placing substations inside buildings such as multilevel parking garages; gas-insulated lines offer an attractive alternative wherever electromagnetic emissions are an issue; and the low losses of high-voltage DC transmission help reduce the space requirements and ground area of power lines. 13 Act Highly adaptable, lean, and easily manageable structures and processes enable the reliable control of all relevant parameters and assets in the most efficient manner. The right move at the right time The energy business has become a highly dynamic industry and requires market players to adapt swiftly to new developments. Siemens has developed a comprehensive range of tools to manage this increasingly complex situation. The Siemens Demand Response Management System (DRMS), for instance, is a proven software platform that allows utilities to manage all aspects of their demand response programs through a single, integrated system. And Spectrum Power is a trendsetting energy management solution that helps increase the availability of a network, swiftly adapt an electric power system to new conditions and respond more effectively to malfunctions, and to reduce the risk of system disturbances and outages. Jettison ballast, streamline operations Digital technologies also provide the opportunity for existing market players to become leaner, faster, and more efficient from organizational structures to business models, while new market entrants can focus on their core business without having to establish too much of an administrative overhead. Systems and services such as software as a service, cloud-based applications, and managed services help keep costs at a minimum and unlock time and capital for new ventures and the development of new business models. SICAM DC, for example, is a data concentrator that can be controlled directly at the installa14 tion site without the need to connect a notebook or computer, and the Decentralized Energy Management System (DEMS) communicates with the connected generation, load, and storage systems without any need for additional communications software. Hardening a sensitive system Reports say that there was a tenfold increase in major power outages in the U.S. between the mid-1980s and 2012, and that weather caused 80 percent of all outages between 2003 and 2012. In view of such figures, grid resilience and the manageability of faults and outages are at the top of the list of priorities. New solutions need to be implemented swiftly and reliably, according to a clear roadmap with a sustainable case for action. Solutions from Siemens, such as microgrid management systems and advanced fault detection and location systems that support self-healing applications and even comprise workforce management to ensure fast restoration, help ensure maximum security of supply. Easy-to-use products with a no-frills feature set and customer-friendly interfaces help operators remain on top of things and maintain a reliable supply at all hazards. Germany: Acting today to be ready for the future with an intelligent grid controller German distribution system operator Netze BW and Siemens are implementing a grid automation solution for the catchment area around the town of Niederstetten, which is characterized by multiple renewable energy sources, such as wind power and photovoltaics. Distributed grid intelligence makes operation of the distribution grid very energy- and costefficient while deferring the need for cost-extensive grid expansions. The pilot project will serve as a model for future projects. 15 Distributed energy system Protection Grid applications Industrial cogeneration Small power plant Onshore wind District heating and cooling Automation Storage e-Mobility Energy mgmt. and control Photovoltaics Traction converter Gas/Diesel generator Storage Distribution and consumption Transmission Transmission control center Transmission substation HVDC/ grid access Central power plant Offshore wind Electrification 16 Gas/Diesel generator Automation Distribution substation Pumped storage power plant Digitalization Communication Evolution means opportunity Metering Private photovoltaics Prosumer applications The future energy system offers promising prospects for agile minds and businesses. Combined heat and power Microgrid control Heat pump Transformer substation Residential area Distribution control center The energy value chain in most markets will be turned upside down within the next decades, but the emerging future energy system will be full of opportunities for agile energy businesses that are prepared for the change. Siemens supplies trendsetting, workable automation and digitalization technology, processes, and financing options that provide the basis for exploiting all opportunities to the full. A comprehensive range of one-stop solutions is readily available to address changing customer behavior, a changing energy mix, and changing network operation requirements head-on and optimize all key domains of a utility’s business within a comprehensive strategic framework. Opportunities multiply as they are seized Infrastructure Industry In this context, digitalization unlocks synergies and becomes a catalyst for even more success. The data obtained from intelligent demand management, substation automation, and the grid integration of energy storage, for instance, can be used for the development of new business opportunities that range from digital services such as the management of virtual power plants to flexible pricing and pay-as-you-go schemes. Siemens offers safe navigation toward profitable market sectors with a comprehensive portfolio for power systems of any voltage level in both public and private power supply, expert knowledge and vast experience, and fully customized solutions for every individual project. 17 18 First and foremost, agility is a mindset. It’s an attitude. It has the power to enable every individual player in the industry to gain and keep an upper hand: Agility in energy – ahead of the challenge, ahead of the change. 19 Printed on elementary chlorine-free bleached paper. Subject to change without prior notice. The information in this document contains general descriptions of the technical options available, which may not apply in all cases. The required technical options should therefore be specified in the contract. Siemens AG Energy Management Division Freyeslebenstrasse 1 91058 Erlangen, Germany Article No.: EMCG-B10005-00-4A00 Dispo No.: 06200 fb 6642 WS 10150.5 Printed in Germany