Iberdrola Networks, now i-DE, achieved the highest deployment of smart meters of all six major Spanish DSOs with 99.91% successful completion. The company says it has transformed the obligation into an opportunity by embarking on a wider smart grid programme that will deliver both cost savings and consumer benefits.
Engerati speaks with networks director Armando Martinez about ongoing digitalisation projects, an update on the company’s Start-up Challenge – a collaboration and innovation initiative – and why i-DE sees itself as a utility of the future.
E: What does digitalisation mean to i-DE right now?
AM: We have just completed the deployment of over eleven million smart meters across our country, one of the biggest and most successful of this kind in the world. This is a key milestone that we have achieved in our path towards the digitalisation of our distribution networks. Our aim is to continue with our success story, delivering value to our customers: maintaining prices low, improving the quality of supply, integrating more and more renewables, creating new services and being an open platform for all grid users.
To achieve these goals, we are developing advanced analytics to make use of data from smart meters and automation in order to optimize the planning and maintenance of the network and improve the operation. On the other hand, we are carrying out some proofs of concept and measurements to develop demand models at different voltage levels to anticipate the evolution of the power flows in the system.
The high voltage network has an important degree of digitalisation and the future will be to extend it to the low voltage network where more than 99% of our customers are connected and where most of the distributed generation will connect in the future.
E: How are you making use of the new data arising from smart meters, what more could it be used for?
AM: The most important thing is that we offer customers a wide range of information about their energy consumption or power demand, which they can easily view or download for external processing. This enables them to make adequate decisions about the use of their energy. We also give them valuable information about the estimated recovery times for outages or scheduled jobs, and we are developing other valuable applications related to the use of energy or to optimize the capacity of their facilities.
But not only consumers get advantage of smart meters, they are also an excellent tool to improve our internal business processes, allowing us, for example, to locate faults faster or make a much more efficient network planning.
E: And what’s next in terms of your digital transformation journey?
AM: Our main projects in the near future will focus on:
· Empowering more and more active clients demanding more information, flexible new services, and digital channels with the aim of improving customer experience and being their preferred option.
· After having enhanced the user experience in our channels, we continue to enrich the information and value services we offer. We are working hard, for instance, in delivering meaningful comparisons of energy consumption to our customers. Some other services are related to the new technologies that are being incorporated into the network, for example, simulations of the impact of VE connection in the customer´s facilities.
· We will be a neutral platform facilitator for the decarbonisation and electrification of the economy, and being prepared to attend future demand (EV, heating) and to connect renewable energy sources.
· Both projects will be supported by the massive incorporation of technology to our network and processes.
E: How is digital innovation changing your relationship with your customers?
While we digitise the network, we are also making a significant effort to digitalise our relationship with customers. Our app or web allows us a much more agile and simple contact with customers, and we are sending proactively more and more value information by automatic messaging. In other words, by offering various contact alternatives and using the communication tools our customers use in their day to day, mainly the smartphone, we get closer to them.
E: What regulatory challenges remain for deeper penetration of digital transformation?
The biggest challenge in my opinion is to convince regulators to set up a stable regulatory framework that allows DSOs to further digitalise their networks.
This framework must remunerate the activity with a reasonable rate of return and must also set up adequate incentives that encourage digitalisation, such as quality of service, loss reduction and innovation incentives. DSOs need to be able to convince their regulator that digitalisation creates value for their customers, as it will improve the companies´ operational efficiency as well as it will facilitate new services and products for all grid users. The value that these investments create must offset the higher depreciation costs that this type of assets generally have.
E: How should network charges adapt to changes in system structure and usage?
In some cases, network tariffs need to be adapted to reflect the nature of the costs that underlie behind them. In other words, they have to be designed with the principle of cost causality, so network users are charged for the costs they incur in an efficient and fair manner. Network activities have mainly a fixed cost structure, where costs are dependent mainly on the power that users withdraw/generate, rather than on the amount of energy they consume. In this case, optimal network tariffs structure should reflect this circumstance, and should be based principally on capacity-based terms, like the contracted or demanded power. This policy trend is widely spread across Europe in recent times. Besides, it´s also important to send grid users time differentiated price signals, so prices differ from peak to non-peak hours, to encourage demand response. This will encourage customers to make a more efficient use of the networks. In summary, tariffs need to be well designed and send the correct price signals, so users then take their consumption decisions that believe are best for them based on them.
E: Can you tell us more about your Start-up Challenge?
Last 17th May we launched the first Iberdrola Start-up Challenge. We think establishing collaboration and work with start-ups can be a win-win for both of us. We can get new ideas and develop partnerships with companies that traditionally were out of our scope.
The topic chosen is Resilience to Extreme Weather Events. It is a core topic for our operations. We already have a huge focus on network resiliency and quick and cheap restoration to make sure our customers receive the best service at the lowest possible cost. We have a service area of 1.2 million km2, twice that of France, so imagine how difficult it is to serve our 31.6 m customers under all circumstances. But we also think that new approaches can help us in this field.
1st July was the deadline for receiving proposals, and we got around 150. We are now working on selecting the best one and we’ll be launching a pilot to test its performance before the end of the year. If the process is successful, and I personally think it will, we’ll be working on launching more challenges to enrich our business with new partners.
E: How is the role of the DSO changing?
AM: The distribution network will be the backbone of the energy transition. We face important changes and new challenges, and we will need to address them with a constructive mind-set and always considering the benefits to society as a whole. Distribution networks will be at the heart of all these new developments and trends. Not only because most of the changes will occur at our distribution level, but due to the neutral role that we will need to play facilitating interactions between players. We are in the best position to coordinate with all stakeholders and to guarantee that the transition will maximize the value for society at large.
The role of the DSO will be key as neutral market facilitator to reach the goals of decarbonisation, managing a more complex network, with more active prosumers, providing them with new and better services and information. This will empower them to manage their demand, their generation and maximize their benefit.