PIT Presentation by pengtt

VIEWS: 12 PAGES: 48

									         ENERGEX
        Ergon Energy
       SPARQ Solutions

Partners in Technology Industry Briefing
             5 October 2007
Introductions
      Simon Middap (ENERGEX)
       General Manager ICT and Projects

      Greg Ferrero (Ergon Energy)
       Manager ICT Portfolio

      David Black (SPARQ Solutions)
       Acting Client Solutions Manager

      Ian Lewis (SPARQ Solutions)
       ICT Contracts Manager




                                          5 October 2007 - 2
The Companies




Simon Middap




                3
Queensland Electricity Distribution




                               5 October 2007 - 4
ENERGEX

 Electricity distributor SE
  Queensland
 $5b+ Assets
 1.2M customers
 36,000 km overhead lines
 13,000 km U/G cables
 600,000+ poles
 249 substations
 3800+ staff




                               5 October 2007 - 5
Ergon Energy


            $5+ Billion infrastructure
            $1 Billion/yr delivering energy
            1 Million poles
            140,000km of overhead lines
            10,000 modifications to the network in
             progress at any one time.




                                      5 October 2007 - 6
Overview of key issues


   Business As Usual
   Reliability & capacity
   Growth challenges
   The Future Utility
   The role of Smart Meters




                               5 October 2007 - 7
Energy Industry Issues - BaU

                Large geographical footprint with
                 sparse customer density exaggerates
                 operational inefficiencies.
                Energy delivery is increasingly cost
                 ineffective and not economically
                 viable.
                Customer and Stakeholder
                 expectations are rising.
                      Need Intelligent solutions




                                              5 October 2007 - 8
Energy Industry Issues - BaU

        ENERGEX/Ergon Energy has finalised the trade sale of the gas
         assets and retailing electricity and gas activities

        FRC opened on 1 July in accordance with the Government
         timetable

        Some FRC related activity but wholesale prices relative to the
         “safety net” may be limiting some new Retail entrants.
                  13000 transfers completed at end of August
                  35000 pending next meter read


        Changing Regulators – state to Federal – AER.

        SEQ Infrastructure Projects - $82B new investment in next 10
         years


                                                                5 October 2007 - 9
Overview of key issues
  “Physical Environment”
     Natural Environment
        Land Contours and Spot Heights
        Waterways (rivers, creeks, other water courses, floodplains, etc.)
        Coastlines
        Vegetation
        Soil Types and
        Pest Information (eg. fire ant zones).
     Built Environment
        Roads
        Access Tracks
        Bridges
        Rail Lines
        Airstrips
        Heavy Load Routes
        Non-Network Infrastructure (eg. Relevant Telstra infrastructure, Powerlink
            Infrastructure, Power Generators)
        Buildings
     Representations
        Aerial Photographs
        Maps (100K series, 250K series maps)



                                                                                      5 October 2007 - 10
Overview of key issues
     “Social Environment”
      Land parcels, lots, road parcels, easements etc. Local government areas
      Electoral boundaries
      Town/City boundaries
      Suburb boundaries
      Native title areas
      Sensitive ecosystems
      Chemical-free zones
      Fire mitigation zones
      Census demographic and spatial data (externally sourced, eg. ABS)
      Ergon Energy / Energex Organisational Boundaries.
     “Climatic Environment”
      Weather Trends and Forecast
      Rainfall (mm per period and real-time radar imagery)
      Temperature
      Humidity
      Wind
      Lightning Strikes
      Tides and High Water Marks
      Sunset & Sunrise (eg. for streetlight management).



                                                                           5 October 2007 - 11
Update on Network Reliability
     ENERGEX Reliability Performance by Feeder Category
           Category   Measure   MSS 2006-07   2006-07       2005-06


                      SAIDI        20.0        1.27            3.9


     CBD               SAIFI       0.33        0.015          0.02


                      CAIDI                    87.2          170.2


                      SAIDI        145.0       80.2          103.8


     Urban             SAIFI       1.64        1.01           1.41


                      CAIDI                    79.2           73.6


                      SAIDI        255.0      202.67         306.35


     Short Rural       SAIFI       2.70        2.33           3.29


                      CAIDI                    87.1           93.2




                                                          5 October 2007 - 12
Drivers of Growth

   Every working day 150 new, additional homes and businesses
       connect to the south east Queensland electricity grid

                          1996/97       2006/07      % Increase


    Customer Numbers      960,000      1,200,000        25%


    System Maximum        2300MW        4289MW          87%
    Demand

    Household            6,434kWh      10,937kWh        70%
    Average Usage



                                                         5 October 2007 - 13
    Meeting this demand in growth
                                             CAPITAL POW

                 1400
                                                                                 Under review
                 1200
    Nominal $M




                 1000
                 800

                 600
                 400
                 200
                   0
                        2005/06   2006/07       2007/08      2008/09   2009/10

                                            Financial Year


   2006/07 financial year – more than $2.5 million every day - upgrading,
    maintaining and operating the electricity network




                                                                                    5 October 2007 - 14
      Changes in Customer behaviour…
60%
                             Summer Peak Demand
                             by Appliance Category
50%
        1992   2005   2015
40%

30%

20%

10%

0%




                                           5 October 2007 - 15
                                                                                      Load Duration Curve
                                                                             Potential Load Duration Curve
                                                                                  2006/07 v's 2011/12


                    7000



                    6000



                    5000
Network Demand MW




                    4000



                    3000



                    2000                                MW 2006/07

                                                        MW 2011/12

                    1000



                      0
                           0%


                                 5%


                                      10%


                                            15%


                                                  20%


                                                           25%


                                                                 30%


                                                                       35%


                                                                                40%


                                                                                      45%


                                                                                            50%


                                                                                                  55%


                                                                                                        60%


                                                                                                              65%


                                                                                                                    70%


                                                                                                                          75%


                                                                                                                                80%


                                                                                                                                      85%


                                                                                                                                            90%


                                                                                                                                                   95%
                            1%                                                  % of Half Hour Occurences




                                  1% = 3 days per year peak
                                         residential demand                                                                                  5 October 2007 - 16
                                                                    Residential A/C Load
                                                           … Arana Hills and Albany Creek
                                                                                    Albany Creek & Arana Hills Substations


                  40


                  35


                  30


                  25                                                                                                                                             17MVA
Temperature (C)




                  20


                  15


                  10


                   5


                   0
                     00

                             00

                                     00

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                                                                                                                Time of Day

                                                                                                           29/11/2006           30/11/2006




                                                                                                                                                                                                                          5 October 2007 - 17
                     Residential Air Conditioning Load
                      … Arana Hills and Albany Creek
                               SSACR & SSAHL

             45.00

             40.00

             35.00

             30.00                             17MVA
Load (MVA)




             25.00                                     29/11/2006 0:00
             20.00                                     30/11/2006 0:00

             15.00

             10.00

              5.00

              0.00
                   00

                   30

                   00

                   30

                   00

                   30

                   00

                    0

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                              Time of Day



 … only 2 – 3 days per year
  peak residential demand
                                                            5 October 2007 - 18
11.37% Price Increase




                        5 October 2007 - 19
                What is the sustainable future?
   The Australian electricity industry is facing increasing challenges resulting
   from the interaction of several driving forces:

 structural changes to the primary fuel markets driving higher costs;
 customers demanding improved service and greater choice / involvement in
  managing their energy needs/costs;
 aged assets coupled with high summer growth rates requiring significant capital
  investments;
 the emergence of the digital economy with a heavy reliance on an “interruption
  free” electricity supply;
 a greater emphasis on environmental stewardship; and
 an emerging technological shift that will offer economic alternatives and
  distribution energy resources (DER).




                                                                         5 October 2007 - 20
       One view of the Future




EPRI


                        5 October 2007 - 21
                               The Role of Smart Meters

 At its meeting in April 2007 COAG endorsed a staged approach for the
  national mandated roll out of electricity smart meters to areas where benefits
  outweigh costs, as indicated by the results of the cost-benefit analysis which
  will be completed by the end of 2007

 In 2006 COAG identified the primary aim of the smart meter rollout as
  reducing demand for peak power

 In April 2007 COAG added that it expects this reform to:
         – improve energy supply reliability;
         – enable consumers to manage better their energy use and greenhouse gas emissions; and
         – help maintain Australia's relatively low energy prices.




                                                                                    5 October 2007 - 22
The Role of Smart Meters

   By March 2008, MCE will agree necessary changes in the
    National Electricity Rules to require new and replacement
    meters to comply with this minimum functionality and enable
    the national roll out to commence.

   During 2008, MCE will implement the necessary rule
    changes to mandate the roll out of smart meters, consistent
    with the outcomes of the cost benefit analysis.

   By end 2008, replacement of existing meters with smart
    meters will have commenced.



                                                        5 October 2007 - 23
The Role of Smart Meters

  AMI – Advanced Metering Infrastructure is a key component of
   enabling the intelligent network
      Customer portal – “participation”
      Price signals


  The transition however is problematic
      Regulatory risk (financial)
      Technology risks – no standard, no off-the-shelf solution
      Customer acceptance
      Role of retailers v. distributors
      Communication platforms




                                                                   5 October 2007 - 24
Queensland Energy




Greg Ferrero

                    25
Technology Services
     Both Ergon Energy and ENERGEX run complex electricity networks.

     Operation of the electricity network is supported by SCADA systems
      in both organisations.

     The systems and capability required to support electricity network
      operations are not part of the corporate IT responsibilities.

     Corporate IT managed through:
          Ergon Energy - Business Process & Solutions group
          ENERGEX – ICT and Projects group


        The Network areas of the two organisations have separate areas
        responsible for the SCADA and supporting technology.



                                                                5 October 2007 - 26
The National Electricity Market




 Generation

              Transmission

                             Distribution



                                       5 October 2007 - 27
The National Electricity Market
 Operated by National Electricity Market Management Company
  (NEMMCO)
 NEMMCO manages the dispatch of generation units to produce
  electricity
 Major players in the NEM are:
       Generators
       Transmission companies
       Distribution companies
       Retailers
       Meter Data Agents
 As well as the operation of the NEM, NEMMCO are also responsible for
  the weekly financial settlement by market participants.




                                                             5 October 2007 - 28
Full Retail Contestability
 Not all customers are created equal in the electricity market
 Large customers are those who consume at least 100 MWh / annum
 Small customers are those who consume less than 100 MWh / annum
 As of 1 July 2007 (virtually) all electricity (and gas) consumers in
  Queensland are eligible to choose retailer.
 A site is a fixed physical location which will be within a particular
  distribution area. This is largely fixed.
 At any particular time, a particular customer will be responsible for the
  electricity consumed at that site.
 As of 1 July 2007, that customer may choose from one of the licensed
  retailers to purchase electricity.




                                                                   5 October 2007 - 29
Full Retail Contestability
 For the financial aspects of the National Electricity Market to be
  operated effectively:
     NEMMCO need to know which retailer is responsible for the electricity
      consumed by the customer at a site
     Retailers need to know which customers are on their books so they in turn
      can be billed
     Both NEMMCO and the retailers need to know the electricity consumption
      for individual sites
     NEMMCO needs to settle the market by effectively paying the generators
      and billing the retailers
     Distribution companies bill retailers for the electricity delivered to the
      customers of that retailer.




                                                                       5 October 2007 - 30
Trade Sale
 Sold Competitive Retailers including many systems
  (eg: C&I Billing)

 SPARQ are supporting some systems on behalf of ENERGEX and Ergon
  Energy as an interim measure for some purchasers

 The resultant requirements are different
  eg: required CRM functionality mitigated




                                                          5 October 2007 - 31
The Residual Businesses
  ENERGEX
      Distribution
      Meter Data Agent


  Ergon Energy
      Distribution
      Meter Data Agent
      Non-competitive retailer


  Neither organisation has a competitive retailing business.
  ENERGEX no longer has a gas business.




                                                                5 October 2007 - 32
       Information and
       Communications
         Technology




David Black

                         33
              OWNER & CUSTOMERS
Business                  Shared Vision                        Technology
Focus                    for aligned businesses                Focus
                      Optimising benefits in the
                     joint domain from systems                   Obtaining additional
                       and process alignment                     benefits for the owner
                                                                 and the customers of
                                                                 SE Queensland through
                                                                 alignment and
                                                                 collaboration



              BENEFITS                              BENEFITS



Sharing                                                        Sharing
Innovations                                                    Capability
                     Domain                Domain




                               Sharing
                                                                       5 October 2007 - 34
                              Resources
Joint Planning Mechanisms
                                                                   Control    Outage & Event
           Channels
        Channels                             WW /
                                         Design W FM
                                                                 & Monitoring  Management
                       Contact Centre & IVR    Internet          Email       SMS    Paper / Fax      B2B


          Spatial                                             Risk           Operational
                                                                                             Customer
        Environment        Market         Trading
                                                           Management         Services      Management
           Physical                                                                               Information
         Environment                                                                              Management
                                                                              Analysis
                           Energy        Collection       Data Processing
                                                                            & Forecasting

            Social                                                                                 Interaction
         Environment                                                                              Management
                                                           Monitoring & Outage & Event
                                        Design / FM
                           Network                           Control     Management
                                                          Network Model
           Climatic                                                                         Billing & Revenue
         Environment                     Inventory           Work             Asset            Management
                                        Management         Management       Management
                           ERP                                 HR            Portfolio
                                          Finance
                                                           Management       Management


        Knowledge            Business Intelligence  Document &
                                                         Control
                                & Dashboards / FMRecords Management                Outage & Event
                                                                                    Collaboration etc.
        Management                    Design
                                                              & Monitoring          Management


                                              Technology
                                       Design / FM
                                                      Control
                                                    & Monitoring
                                                                                   Outage & Event
                                                                                    Management




                                                                                                                 5 October 2007 - 35
Joint IT Value

Model of savings opportunity estimated for the Joint IT Options

                                                                          % Impact for
          Sharing Options
                                                                       Implementation Type
Procure     Procure,   Procure,             Cost Element
            Design,    Design,
            Build      Build &                                         Template          Joint
                       Run
                            X     IT Operations - Internal Labour          25%                30%
                            X     IT Operations - External Resources       25%                30%
                X           X     Project - Internal Labour                  5%               30%
                X           X     Project - External Resources               5%               30%
    X           X           X     Hardware maintenance                     7.5%               7.5%
    X           X           X     Software maintenance fee                 7.5%               7.5%
    X           X           X     Hardware acquisition                     7.5%               7.5%
    X           X           X     Software acquisition                     7.5%               7.5%


                                                                                  5 October 2007 - 36
Joint IT Value
                                       ICT Expenditure as % of ENERGEX Expenditure

                                                                                                       ICT OpEx (excl Deprecn)
    0.08
                                                                                                       ICT CapEx

    0.07                                                                                               ICT OpEx + ICT CapEx

                                                                           SparQ
    0.06                                                           Solutions commenced
                                                                          July 2004


    0.05



    0.04



    0.03



    0.02



    0.01



      0
           Act 2001-02   Act 2002-03             Act 2003-04       Act 2004-05           Act 2005-06         Bgt 2006-07




                                                                                                          5 October 2007 - 37
The SPARQ Solutions Business
      Now, ICT Services provider to ENERGEX Limited,
       Ergon Energy Corporation Limited, Services
       Essentials and Nexium.

      Headcount around 400-500 depending on
       project works

      Staff also are located in client and project
       premises throughout Queensland but
       concentrated on Brisbane and Rockhampton.

      Three lines of business:
          Operations
          Change
          Joint IT




                                                        5 October 2007 - 38
Environment Scan
      Reduction in Cost to Serve is a key driver.
       The regulator is looking for continuous and sustainable
       reduction in costs

      Ability to Execute warrants careful management
       SPARQ deliver requirements for multiple parties

      FRC and Trade Sale
       The bigger programs have warranted focus




                                                          5 October 2007 - 39
The Consolidated ICT Environment
      Operating Budget approximately $60 million p.a.
      Change Budget approximately $100 million p.a.

      7000 PCs; 800 servers; 1000+ applications

      Windows XP; MS Office, MS Exchange
      Windows 2003; HPUX; Solaris; Oracle DBMS; BEA




                                                         5 October 2007 - 40
Key Systems Today
        ERP / EAM: Mincom Ellipse
        FFA: Advantex, GT FMC
        GIS / Design: Smallworld, ESRI AutoCAD and Microstation
        SCADA: ABB and SNC Lavalin
        Billing: PEACE and FACOM
        Energy Management: ITRON, Datec TOHT
        IVR: Avaya and a managed service




                                                         5 October 2007 - 41
The Forward Plan
      Joint IT Roadmap currently in development

      12 year horizon (2 + 5 + 5)

      This will form the base of a regulatory submission

      This will substantially inform the Application Footprint for
       the 5-7 year horizon




                                                             5 October 2007 - 42
Approaches to Market
     Systems and services likely to be refreshed in the near term:

        Distribution Management System
        MIS Partner
        ERM / CRM
        Data Centre Services
        Monitoring and Management
        Backup and Recovery

     Not all are confirmed at this time




                                                           5 October 2007 - 43
Near Term - Unlikely
     Recently refreshed systems and services:

        Telco Carriage
        Personal Computers
        Billing Systems
        Service Desk
        ERP
        FFA




                                                5 October 2007 - 44
Criteria Considered in Procurement
    ENERGEX, Ergon Energy and SPARQ comply with State
     Purchasing requirements

    Desirable vendor attributes
          Queensland GITC signatory
          Accommodate SPARQ ownership of assets for use by the Joint IT partners
          Long term sustainability
          Value added services & ability to work collaboratively with the businesses
          Flexibility & on-time delivery against contracted obligations
          Strong relationship management capability

    Key factors affecting our buying decision
        Demonstrated ability to execute and deliver
        Standing Offer Arrangements with Government Agencies mitigate SPARQ’s
         procurement costs
        Demonstrable value for money outcomes
        Sharing of risk and reward




                                                                             5 October 2007 - 45
Questions




            5 October 2007 - 46
Contact Details

 Simon Middap                 Greg Ferrero
 simonmiddap@energex.com.au   greg.ferrero@ergon.com.au
 (07) 3404 1880               (07) 32282143




 David Black                  Ian Lewis
 david.black@sparq.com.au     ian.lewis@sparq.com.au
 (07) 3407 6004               (07) 3005 7247




                                                   5 October 2007 - 47
Disclaimer

      The information provided in this briefing has been provided
       for information purposes only and is subject to change
       without notice.




                                                          5 October 2007 - 48

								
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