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Logica and SAP in exclusive joint bid for UK Smart Meter data provisioning

Smart meter

The UK has an interesting Smart Meter infrastructure model. Data from all the country’s Smart Meters will flow to a centralised data repository (called the DCC), from where, energy retailers will pull the data for billing purposes. The beauty of this system is that consumers dictate who has access to their data, and so switching energy providers, is not held up by data ownership issues.

The build-out of this system is still at very early stages with RFP’s expected towards the end of the year but SAP and Logica have come out of the blocks early with an announcement that they are going to put in a joint bid to become the data service provider for the DCC.

Logica and SAP are both heavily involved in the utilities sector in the UK, so it makes sense for them to bid for this – the interesting aspect is that they agreed to bid together and that their joint bid is exclusive.

The six main suppliers in the UK are all either involved in trials, or in the process of starting to trial smart meters. All six are using Logica’s head-end system for their trials, so if Logica and SAP win the bid, the transition to the DCC system should be relatively painless.

Talking to Tara McGeehan, Logica’s Head of Utilities UK on Monday, she said that the idea behind the bid was to move the debate away from technology and comms, onto the power of the data to affect things like micro-generation, energy efficiency and smart grids.

Having seen Centrica’s Smart Meter Analytics application, which runs on SAP’s HANA, earlier this year, the proposition that there is gold in them thar data, certainly rings true.

Photo credit Tom Raftery

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Centrica’s Smart Meter Analytics application could make energy management compelling

As I have mentioned here previously, Smart Meters are going to bring a flood of data to utility companies which will need to be properly managed and which can be a source of intelligence for the utility, if they mine it well.

At the recent SAP Sapphire Now conference, UK Energy retailer Centrica showcased their Smart Meter Analytics application running on SAP’s HANA. HANA is SAP’s in-memory computing solution (In-memory computing moves data off traditional storage on servers and into RAM, providing a performance boost over having to read the data off disks).

Centrica are the largest single instance utility on an SAP system with 18 million residential accounts for and one million business accounts. Right now they are billing residential accounts every three months and they are managing 75 million meter reads per annum.

With the move to smart meters, Centrica will take electricity reads every 30 minutes and gas reads once per day. This means a shift from 75 million meter reads per annum to 120 billion meter reads a year. 120 billion – that’s billion with a b. That’s a phenomenal amount of data to have to deal with. Doing any kind of traditional analytics on a data set that large would very quickly get totally bogged down. One of the interesting things about HANA however is that the performance scales linearly with the hardware. If it’s starting to slow a bit with 120 billion meter reads, throw a couple of extra terabytes of ram and servers at it and hey presto you are back in business, or so the theory goes!

In the demo above, Centrica are using the analytics to examine their customer segmentation. They can look at the energy profile of similar businesses in a specific area and where there are anomalies, they can work with those businesses to help them cut their energy consumption until it is more in line with their peers. Increasing pressures to be energy-efficient and to reduce carbon footprints are being looked on by Centrica as an opportunity to open an energy services business, going to customers to help them to become more energy-efficient. The Smart Meter Analytics application is going to be crucial for this new practice within Centrica.

Centrica's Energy Efficiency Scorecard

Centrica's Energy Efficiency Scorecard

In the residential market the Smart Meter Analytics app presents householders with an Energy Efficiency Scorecard. This facilitates charting actual usage patterns against the various tariffs Centrica offers to find the optimal rate plan. The score card also allows home-owners to compare their energy efficiency with similar households in the same area.

This is an impressive use of Smart Meter analytics and it presents hugely useful information but to avoid a short MTKD (Mean Time To Kitchen Drawer – the time it takes for people to get bored with this app and metaphorically stuff it in the kitchen drawer), the scorecard has to keep homeowners engaged. There are several ways of doing this. One of main ones would be to bring in some gamification – make a game of it. The Scorecard could set energy reduction targets for people to meet in the next set period, allot points or awards for achieving reduction targets, build social media in for sharing achievements and put up a leaderboard to add some real competition to the game.

Energy management applications to-date have suffered from the fact that they were working with estimated data a lot of the time, from lack of a significant networked dataset and from a lack of a usable analytics engine. Large energy retailers, like Centrica, have the opportunity now to change that and to make energy management in the home compelling. Let’s hope they make it so.

Disclosure – SAP paid my travel and expenses to attend Sapphire Now.

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The International SAP for Utilities event – focus on renewables and in-memory computing

Joschka Fischer

I attended the International SAP for Utilities event in Mannheim recently. This was the fourth SAP for Utilities event I have attended and it was by far the best. This was the first time I was attending the event as a speaker, not just an analyst and that may well have coloured my opinion of the event, but I don’t think so, to be honest. Why?

Well, there were two main take-aways for me from the event

  1. There was a much higher focus on renewables and
  2. There was a lot of discussion of in-memory computing

And neither of those had anything to do with the topic of my own talk (The New Power of the Customer’s Voice).

I knew I was in for an interesting conference when the opening keynote was from Joschka Fischer. Fischer used his keynote to make a blistering attack on the nuclear industry. Fischer, the former German vice-chancellor and Foreign Minister said “we must say goodbye to nuclear energy – it is not safe, and we don’t know the costs”. He went on to state that Germany “is going to phase out of nuclear energy”. Bear in mind that many of the utilities who were in the room would have significant nuclear plants in their generation fleet.

What will Germany use to replace its nuclear power? Renewables and energy efficiency will be key, he said. Germany will need super grids and a smart grid with gas as a backup technology (from diverse regions because, he said, Russia is not a reliable source).

In his opening keynote, Klaus Heimann, apart from talking up two new SAP Energy Management products, declared that “more than ever before we wish we could generate all of our electricity from renewables” and he went on to assert that “if we spent our resources learning how to capture and store natural power, we’d be in a very different place now”.

And this was the first two talks of the conference!

SAP Research director Orestis Terzidis

SAP Research director Orestis Terzidis

Scarcely a talk went by without some reference to renewables – understandable given that this was taking place in the immediate aftermath of the Fukashima nuclear disaster.

The most data-rich talk on renewables, perhaps not surprisingly, came from Orestis Terzidis, VP SAP Research EMEA. He referenced peer-reviewed research throughout his presentation to make his case that large-scale wind, water and solar systems can reliably supply all of the world’s energy needs at reasonable cost.

Interestingly, on the renewables front SAP has put its money where its mouth is. From SAP’s independently verified Sustainability Report you can see that SAP increased its purchase of renewable energy from 16% in 2009 to 48% in 2010.

Nice – obviously 100% would be better than the current 48% but renewables are not available for purchase in all geographies. Yet.

The other core topic heavily referenced in the event was in-memory computing (In-memory computing moves data off traditional storage and into RAM, providing a performance boost over reading data off disks).

Given that utility companies deploying smart grids will be moving from a maximum of one meter read per month to a situation where they will have more data coming from smart meters (more data fields) and coming in more often (one read every 15 minutes means around 2,880 reads per month), utilities are about to face in influx of data like they have never seen before.

In-memory computing is a natural fit for performing any kind of real-time analytics on this tidal-wave of data. Not surprising then that one of SAP’s first in-memory products is going to be a Smart Meter Analytics for Utilities solution.

The next SAP for Utilities event will be the US one this coming September in San Antonio. Given that this one was so good – the pressure is really on conference organisers The Eventful Group to try to exceed, or even just to match this conference.

Full Disclosure – SAP are a GreenMonk client and SAP paid for me to attend and speak at the SAP for Utilities event.

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Photo credit Tom Raftery