GLOBAL SMART GRID DRIVERS IEA/SEAI, DUBLIN IRELAND

COLIN MCKERRACHER 12 SEPTEMBER 2012

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CONTENTS

Smart grid: a global market

Smart grid drivers Case studies

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SMART GRID DRIVERS

Need for new generation investment Energy security

Ageing infrastructure System reliability / quality of service Climate change / environmental drivers

Peak demand constraints Increasing distributed energy resources

Demand growth and new loads Increasing renewable generation 0

5

Note: 26 responses received; total 114 votes cast. New loads = electric vehicles, heat pumps etc.

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10

15

20

Source: BNEF Pre-Forum Survey.

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DRIVERS: WIND PENETRATION (% OF INSTALLED CAPACITY) Poland USA France China Belgium Italy UK Sweden India Greece Netherlands Ireland Germany Spain Portugal Denmark

Rest of world Europe

0%

5%

10%

15%

20%

25%

30%

35% Source: Bloomberg New Energy Finance.

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DRIVERS: SYSTEM AVERAGE INTERRUPTION INDICES BY COUNTRY Duration index

Frequency index

300

2.5

250

2

200

1.5

150

1

100

0.5

50

Duration

Germany

Denmark

Netherlands

Italy

France

Austria

UK

Spain

0 US

0

Frequency

Note: 2007 data.

Source: CEER, Bloomberg New Energy Finance.

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DRIVERS: TRANSMISSION & DISTRIBUTION LOSSES IN G20 NATIONS, 2009 (% OF POWER GENERATED) Germany Japan South Korea Australia China France US Italy Canada South Africa UK Indonesia Russia Saudi Arabia Turkey Argentina Brazil Mexico India

NON-TECHNICAL LOSSES

South Africa: $600m/yr

Turkey: $895m/yr

Brazil: $5.1bn/yr

India: $5bn/yr

0%

5%

10%

15%

20%

25%

Source: METI, various national sources, Bloomberg New Energy Finance.

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SMART GRID DRIVERS AND PROJECT TYPES

AMI Distribution automation

HEMS/ BEMS

Energy storage

Demand response

Increasing renewable generation









Improved grid reliability









Reduce non technical losses





EV integration Rising peak demand



Ageing infrastructure



















Source: Bloomberg New Energy Finance..

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CONTENTS

Smart grid: a global market

Smart grid drivers Case studies

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CASE STUDY- AUSTRALIA T&D INFRASTRUCTURE INVESTMENTS (AUD M) ActewAGL (ACT) Aurora Energy (TAS) ETSA (SA) Jemena (VIC) CitiPower (VIC) United Energy (VIC)

SP Ausnet (VIC) Powercor (VIC) Essential Energy (NSW) Endeavor Energy (NSW) Ausgrid (NSW) Ergon Energy (QLD) Energex (QLD) 0

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

Current regulatory period

Previous regulatory period

Regulated asset base Source: Bloomberg New Energy Finance..

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SMART GRID DRIVERS: US VS. EUROPE KEY DRIVERS FOR INVESTMENT

1 ECONOMIC

2 OPERATIONS 3

• $4.5bn stimulus • Job creation • Tech companies

1

• Reduce opex • Improve asset mgmt

2

RELIABILITY

• Improve SAIDI/SAIFI • Manage major storms

4 ENERGY SECURITY

• Energy efficiency • Peak load management • Integrate RE / EV

CLEAN ENERGY

LIBERALISATION 3 MARKETS / INTEGRATION 4

OPERATIONS

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• Efficiency • RE and DER • Electric vehicles • Deregulation • Competition • Service innovation • European power markets

• European super-grid • Reduce opex • Improve asset mgmt 10

BUT, THE PICTURE CAN CHANGE

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STATES AND COUNTRIES WITH OPT-OUT PROVISIONS FOR CONSUMERS TO REFUSE SMART METERS

Canada Europe United States

In place

Australia

Proposed Note: No opt-out programme in UK, but regulator has clarified that consumers cannot be forced to have a smart meter. Australia opt-out is for TOU only.

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Source: Bloomberg New Energy Finance

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COPYRIGHT AND DISCLAIMER

This publication is the copyright of Bloomberg New Energy Finance. No portion of this document may be photocopied, reproduced, scanned into an electronic system or transmitted, forwarded or distributed in any way without prior consent of Bloomberg New Energy Finance. The information contained in this publication is derived from carefully selected public sources we believe are reasonable. We do not guarantee its accuracy or completeness and nothing in this document shall be construed to be a representation of such a guarantee. Any opinions expressed reflect the current judgment of the author of the relevant article or features, and does not necessarily reflect the opinion of Bloomberg New

Energy Finance. The opinions presented are subject to change without notice. Bloomberg New Energy Finance accepts no responsibility for any liability arising from use of this document or its contents. Bloomberg New Energy Finance does not consider itself to undertake Regulated Activities as defined in Section 22 of the Financial Services and Markets Act 2000 and is not registered with the Financial Services Authority of the UK.

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GLOBAL SMART GRID DRIVERS COLIN MCKERRACHER – [email protected] MARKETS Renewable Energy Carbon Markets Energy Smart Technologies Renewable Energy Certificates Carbon Capture & Storage Power Water Nuclear

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