Smart Grid Solutions, Services, and Business Models Focused on Telco

April 23, 2010 Ph.D. Young-Woo Lee (ywlee@kt.com)

I. Introduction

- Background, Definition, Architecture, Business Domain & Opportunities

II. KT’s R&D Results for Smart Grid

- Smart Grid BM, Equipments, Solutions, Widgets, and Services

III. Smart Grid Demonstration Project in Korea

- KT’s Role of Smart Place

IV. Green IT Survey

Contents

2

IV. Green IT Survey

- Green IT awareness, Green activity at home and Green IT services

V. Smart Grid Management

- Telecomm Management vs. Smart Grid Management

VI. Conclusions

Worldwide

�US Energy Information Administration(EIA)

Projects World Engergy Use to Grow 57%

Between 2004 and 2030

�OECD countries Grow 24%, non-OECD

countries Grow 95% by 2030

• Especially in non-OECD Asia, such as India and

� Korea’s Energy Consumption

: 233 million TOE per year

• Ranked 10th in the World, 2.1% of World EnergyConsumption (BP Statistics, ’07)

� Energy Consumption Increase according to the

rise of income and industrialization.

• Home electronic appliances, bigger and diverse

Korea

The worldwide demand for electric power is swiftly increasing.

Especially, anticipating that the increasing in Korea will be noticeable

according to the advent of the digital era and the rise in national income.

1. Energy OutlookI. Introduction 1. Energy OutlookI. Introduction

3

• Especially in non-OECD Asia, such as India and

China where strong projected economic growth drives

the increase in energy use

Annual Growth in Electricity Generation by Region

• Home electronic appliances, bigger and diverse

• Personal digital devices, the number increased :* Most of people In 20s holds 5 PD

(Mobile Phone, PC, MP3, Printer, Digital Camera)

Total Energy

Demand

(million TOE)

2006 2010 2015 2020 2025 2030

Energy

Consumption

per man

* PD: Personal Device

Demand Prediction for Energy Consumption(~2030)

* TOE : Ton of Oil Equivalent

※ Source : EIA, International Energy Outlook 2007 ※ Source : Korea Energy Economics Institute

Background

IT(Information

Technology)

ET(Energy

Technology)+ “Energy Internet”

“Smart Grid”

for energy efficiency

The concept of fused “Energy Internet” appears for protection of the environment

and improvement of energy efficiency. To fulfill it, “Smart Grid” draws the attention.

2. Background and Definition of Smart GridI. Introduction

Definition

4

Smart Grid is an next generation intelligent electricity network which optimize the

energy efficiency to graft Information Communication Technology onto the existing

network and exchange real time information between supplier and customer.

Definition

Charge Decision

Real-time Accounting

Real-time ConsumingCustomer’s

EquipmentAnalysis for Demand

Automation Control

Automation Transport

Intelligent

Power-grid

Electricity Supplier Electricity Customer

Washing

Category Characteristic/Function As-Is To-Be

Supply &

Transmission

of

Electricity

Estimation & Counter Measure

for Electricity Network Error

� Mainly focus on preventive measure

for damage by network expansion

� Power failure/facility breakdown

� Focus on Prevention & Minimization of Customer Impact

� Automatic Sensing for Electric Power NetworkError & Counter Measure

� Network Division, Automation Protection &

Restoration

Optimization of Management for Facilities

� Operation data & assets management

Integration Insufficiency

� Periodic equipment investment, Repair

� Electricity Network Data – Assets

Management Linkage

� RCM/CBM based Investment System

� Equipment life span evaluation &

Smart Grid has the efficient operation by the automated grid management and real time

management of electricity supply and demand to provide diverse services for customers

3. Existing Power-Grid vs. Smart GridI. Introduction

5

Electricity

NetworkError Cancellation

Efficiency Improvement

for Operation� Automation Grid

� Intelligent Operation

� DC supply of electric power, DC Building

All Acceptance

of Power Supply & Storage Equipment

� Large power plant

� Dispersion energy linkage obstacle

� Acceptance of Power Objective

� Acceptance in form of PNP, VPP

Service

Electricity Power Quality for

Digital Economics

� Power failure

� Low interest in Electricity Quality

� Providing of Price Choice

� Diverse Electricity Service

� DC Direct Supply

Customer Participation� No information for customer

� Not available for participation

� Customer Participation by information supply

� Demand Reaction

New Product & Service

Market

� Limited wholesale market

� Limited choice for customers

� Integrated Wholesale Market

� PHEV infra, V2G, Smart Home appliance

� Energy consulting, Home EMS service, HAN

The value chain of Smart Grid is divided into 6 steps, Generation –Transmission – Substation – Distribution – Home/Building – Distributed Generation and Storage, and it has 3-layer architecture as ①Power Infrastructure, ②Information Infrastructure, and ③Service

4. Layered Architecture of Smart GridI. Introduction

Application

Layer

6※ Source : GTM Research

Data transport

& Control Layer

Physical

Power Layer

For “Smart Grid”, Telcos’ business domain where they use their existing ability are

①Communication Network, ②O&M System, and ③ Home/Building

Operations &

Management

System

Info.

Infra Distributed ControlSystem

EMS SubstationAutomationSystem

DistributionAutomationSystem

TransmissionGIS System Info. SystemMarket Operation

System SCADA

Service

DR

National wide

Management Center

Local area

Management Center

Local area

Management Center

2 3

Smart Grid Data Center

Customer Info.System

Customer Portal

RTP

AMI

Smart Grid

New Services

Electricity

Deal Service

New/Renewable

Energy Sale Service

Management &

Control Service

Value Added

Bundle Service

Inter-Industry

Service

5. Business domain of TelcoI. Introduction

7

� EMS : Energy Management System � DR : Demand Response � SCADA : Supervisory Control And Data Acquisition

� AMI : Advanced Metering Infrastructure � RTP : Real Time Pricing

Communi-

cation

Network

Resource

Control

Sensor

Power

Infra

Generation Transmission Substation Distribution Home/Building

Generation Sensor Remote Sensor 배전자동화시스템Substation sensor Distribution sensor Smart Meter Micro Grid

1

Utility Management Domain

focused on Heavy electricity

I

II

Smart Grid ManagementSystem Development1

Smart Grid ManagementSystem Operation2

Home/Building Measuring System

Based on Smart Meter3

Telco’s Business Opportunities

For telco’s business opportunity, there are three categories as follows. Especially, KT has interests and opportunities in home/building centered Last 1-mile service and Micro Grid management domain.

6. Business Opportunities of TelcoI. Introduction

2

Transmission Distribution

34Home/Building

Data CollectionSystem

NMS(TMS, DMS)

Meter Data Mgmt System

Back OfficeLegacy Apps

1

8

Micro Grid Management Domain

focused on Home/Building

New Business Development

Domain based on Micro Grid

Management Platform

III

Based on Smart Meter

Smart Home Building

and Operation Service4

Micro Grid Management System

Building and Operation5

Electricity Retail Sales Business6

Bundle Product Sales Business7

SCC(Shared Service Center)

New Service Business8

Bundle Product Sales Business:Diverse Bundling Product Sales Management Business base on

Customer Management

SSC New Service Business:New Business Development for home/building in Micro Grid, based on Micro Grid Platform

7

8

5

6

Smart MeterHAN

ControlCentre

Micro Grid MgmtSystem

DigitalMeasure

Electricity Retail Sales Business

RemoteMessaging

Micro Grid Management

34

KT promoted the Smart Green Business development, which provides diverse services connecting Smart Grid and an internal device in Home/Building and receiving the customer's Utility Usage Information by Smart Green Center

• Installation of the Smart Box/Tag to monitor and control Home/Building Utility

• Providing Utility saving/management services through 4 Screen Widget, collecting and analyzing

Key Equipment/facility power usage including gas, heating, water, hot water and Usage data

• The business creating a variety of business partnerships with government, KEPCO and related industries

based on the customers’ real-time Utility Usage data stored in SGC(Smart Green Center)

KT’s Business Model

Composition and Components

1. BM & Components for Smart Green ServiceII. KT’s R&D Results

9

kepcoCollaboration

SGC : Creating and Providing

service information analyzing

and processing the utility

usage data

Smart Tag : Transfer to Smart

Box measuring Usage mounte

d on the Utility

Smart Box : Collecting Utility

Usage data and transmitting to

the SGC

Widget : Monitoring informatio

n and control service to custom

ers through N-Screen Widget

Government

Industry

Alliance

Cooperation

Internet

six months’ Quick-win Project was conducted last year for the acquisition and demonstration of key technologies to Smart Green business and developing the Smart Box / Tag prototype and SGC, Widget services

2. Smart Box/Tag and SGCII. KT’s R&D Results

Smart Box

• Home Gateway : A function to connect Customer's home

network to broadband provider's network connections

•Communication : A function to connect Premise information

devices and Smart Tag(Data collected from the Smart Tag)

•Automatic Meter Reading (AMR) : Metering and Remote

Control feature of the Smart Tag

• Communication : Individual unit for transmitting information

10

Smart Tag

• Communication : Individual unit for transmitting information

and controlling electric device(supports high-speed Ethernet

communication as well as high-Speed PLC Communication)

•Metering : Individual devices connected to the Smart Tag

Measuring power consumption

•Measuring power consumption of Control : Individual devices

connected to the Smart Tag for Power Supply Control

SGC(Smart Green

Center)

• Acquisition of real time Utility Usage data through Smart Box

• Analyzing and processing the collected data to generate and

offer information for billing /Smart Green services

•Calculating the amount of Utility Carbon emissions by unit

Through green service application on N-Screen Widgets implemented in SoIP terminal, iPhone and PC, monitoring home energy usage and controlling electricity devices are available.

3. Smart Green Widget ServiceII. KT’s R&D Results

SmartGreen뉴스

Widget날씨

Widget

SmartGreen

News

Widget

Weather

Widget

Widgets

• Energy usage monitoring/control through video Internet phone

• Providing various home energy management service including real-time electricity usage fee

• Providing current/ accumulated electricity usage, carbon emissions and etc.

SoIP phone structure and Widget operations

SoIP Phone

11

※ DD(Dynamic Delivery Server) : handling dynamically variable contents

※ SD(Static Delivery Server) : handling statically variable contents(roles of image server and Widget program repository)

※ DCD(Dynamic Content Delivery) : processing business logics of the platform

• OS : Embedded Linux

• Application F/W : Mizi (Windriver) Prizm

• Widget Engine

- based on Flash Lite

- Version management, Download management

- Interworking server data

- Providing API and management of Widget MMI

* SoIP(Service over IP) phone : High performance Internet phone developed by KT, providing video communication, Internet access, and etc.

DD

SD

DCD(B/L처리)

Contents

관리

BSS,OSS

연동

외부 CP

Widget ServicePlatform

GreenWidget

Widget EngineApp

(Voice)

App(Media)

WidgetWidget

DD

SD

DCD

Contents

Management

BSS,OSS

I/F

CP

Widget ServicePlatform

GreenWidget

Embedded Linux

Prizm(App F/W) drv, m/w

Widget Engine

WidgetWidget

KT is planning and developing various types of Smart Green Service BM targeting home/building customers mainly.

� Energy Usage Alarm Service

- providing total and/or individual household electricity usage in real-time

- forecasting monthly/yearly electricity usage and alarming accumulated electricity usage fee

- providing carbon emissions converted from electricity usage

� Standby Power on/off Service

- functions using Smart Box/Tag and IT system

� Remote/Automatic Control Service of Home Utility

- functions using mobile terminals including iPhone

4. Smart Green ServicesII. KT’s R&D Results

Home

12

- functions using mobile terminals including iPhone

� Energy Saving Helper Service

- providing consulting information for energy saving in home

� Telematics Services and Integrated e-Billing Service

� Marketing operations Service based on the Information of Smart Green Customer

� Green Mileage Service

- giving mileage/points to smart green service subscriber who makes energy saving

� Utility Remote Control Service

- Remote monitoring/control about power utilities of building/company, emergency

mobilization and consulting service

� Peak Power Alarming and Load Balancing Service

Building

Smart PlaceIII. Smart Grid Demonstration Project

Main Grid

Smart Home (400 Household)

Smart Home (552 household)Total Operating

Center

WCDMA

3G• Smart Meter

• Smart Appliance

• Smart Meter

• Smart Appliance• Smart Box/Tag

• N-Screen

Main Grid

Smart Home (400 Household)Smart Home (400 Household)

Smart Home (552 household)Smart Home (552 household)Total Operating

Center

WCDMA

3G3G• Smart Meter

• Smart Appliance

• Smart Meter

• Smart Appliance• Smart Box/Tag

• N-Screen

KT has been joining in Jeju Island to build a Smart Grid infrastructure as a test bed to demonstrate various concepts and to have a pre-field test since December 2009.KT has a plan to prove an integrated home/building/Factory energy management service and to improve energy usage efficiency by utilizing renewable energy and energy restoration media in Smart Place area and Smart Transportation one.

Jeju Island Smart Grid Project

� The first smart grid test bed in the world

- real site, the biggest collection of applications of Smart Grid

� Large-scale project of 5 areas

13

Smart Town (48 household/6 town)

Public Relations

Office

Customer Care

Center

Technical Support

Center

FTTH

KT Control Center

Smart Building (3 buildings)Smart Factory (2 factories)

3G

IP Premium

WiBro

• Smart Meter• FEMS

• Smart Control Panel

• Smart Meter• BEMS• Smart Control Panel

• Recharger

• Smart Meter• Smart Box(town) • Renewable Energy Storage

• Electric Car Charger

• Smart Appliance• Smart Box/Tag• 4-Screen

• Renewable Energy Generation/Storage

• Electric Car Charging

FEMS : Factory Energy Management System BEMS : Building Energy Management System

Smart Town (48 household/6 town)Smart Town (48 household/6 town)

Public Relations

Office

Customer Care

Center

Technical Support

Center

FTTH

KT Control Center

Smart Building (3 buildings)Smart Building (3 buildings)Smart Factory (2 factories)Smart Factory (2 factories)

3G3G

IP PremiumIP Premium

WiBro

• Smart Meter• FEMS

• Smart Control Panel

• Smart Meter• BEMS• Smart Control Panel

• Recharger

• Smart Meter• Smart Box(town) • Renewable Energy Storage

• Electric Car Charger

• Smart Appliance• Smart Box/Tag• 4-Screen

• Renewable Energy Generation/Storage

• Electric Car Charging

FEMS : Factory Energy Management System BEMS : Building Energy Management System

� Large-scale project of 5 areas

- Smart {Place, Transportation, Renewable, Electricity Service, Power Grid}

- Smart Place : 4 consortiums joined over 100 companies

� Aims

- To validate the Smart Grid technology and BM

- To provide ways for economical power usage together

- To ease customers’ power usages

- to enhance competitive advantages of Korean industries

Green IT awareness Customer expectation of green IT

72% of customers know the green IT, and they expect that green IT services like smart grid service*, video conference can help to reduce energy and money.

�Customers expect that green IT services can help to

reduce their energy consumption and money.

�Also, customers think the companies have to

introduce the services that can reduce energy

consumption.

Don’t know

Know well

(7.8%) [ Willingness to use ]

Green IT awareness About green service

1. Green IT awarenessIV. Green IT Survey

� Most of customers know the green IT and they realize

the importance of the green IT for green economy.

- 72.2% of customers know or heard green IT,

75.1% of customers answered that green IT is important

to green economy .

14

Don’t know

(27.8%)

Heard once or

twice (41.1%)

Know(23.3%)

Not

important

5.8%

Don’t

know

19.0%

important

48.3%

Very important

26.8%

70%

Smart grid

service

Integrated online

bill of utility

Green mileage

telemedicine

Virtual PC

Green Office

Video conference

Telecommuting

78.7%

78.7%

74.9%

56.2%

52.9%

87.3%

76.8%

67.6%

[ necessity ]

The importance of the green IT for green economy

* Smart grid : the service that can monitor the usage of electricity and optimize consumption

Customers prefer green mileage and smart grid services. 26.5% of customers are willing to pay for green IT services.

[ Green activity at home] [ The reason why customers do

nothing for energy saving at home]

[ Service preference ]

Green activity at home and green IT services

�Most of customers can’t practice energy saving activities, so they prefer the services that can help them like green

mileage, smart grid.

�Customers are willing to pay for green IT services. The more they have high incomes, the more they are willing to

pay.

28.3%27.3%

Green activity at homeWillingness to pay

for green IT services

2. Green activity at home and Green IT servicesIV. Green IT Survey

15

Irk, tiresome

(76.3%)

Too busy

(21.1%)

et cetera (2.6%)Separate the

recyclable

waste

Activity for

energy saving

To buy high

efficiency

appliances

To manage

appliances’

life cycle

71.4%

69.2%

38.4%

16%

Expec-

tation

High

low

28.6%

30.8%

61.6%

84%

Do Don’t do

nothing for energy saving at home]

[ willingness to pay]

10

15

20

25

30

35

40

~2million ~5million 6million

38.5%

30.2%

21.2%

17.4%

Income

(won)

Green

mileage

Smart

grid

One

online

bill of

utility

Virtual

PC

telemed

icine

28.3%27.3%

23.2%

15.6%

5.7%

total

26.5%

~3million

� Monitoring and

Control of NEs

NecessaryTechnologies

Operation &

Management

System

Communi-

cation

Info.

Infra 발전제어시스템

EMS

변전자동화시스템 배전자동화시스템

송변전지리정보시스템

배전정보시스템전력거래시스템 SCADA

Service

DR

전국전력망센터 지역전력망센터 지역전력망센터 Smart Grid Data Center

고객정보시스템

Customer Portal

RTP

AMI

Smart Grid New Services

전력거래서비스

신재생에너지판매 서비스

홈/기업 전국관리/제어 서비스

부가 서비스별Bundle 서비스

이종산업제휴 서비스

Operation &

Management

System

Communi-

cation

Info.

Infra 발전제어시스템

EMS

변전자동화시스템 배전자동화시스템

송변전지리정보시스템

배전정보시스템전력거래시스템 SCADA

Service

DR

전국전력망센터 지역전력망센터 지역전력망센터 Smart Grid Data Center

고객정보시스템

Customer Portal

RTP

AMI

Smart Grid New Services

전력거래서비스

신재생에너지판매 서비스

홈/기업 전국관리/제어 서비스

부가 서비스별Bundle 서비스

이종산업제휴 서비스

Operations & Management System of Smart Grid

Business

Operations of

Integrated Utility

Network

Operations and

Management

If Teclo’s inherent competence of the experience and the knowhow about developing management technologies and operating management systems is customized and adapted in constructing Smart Grid O&M System,TIME and COST will be reduced more efficiently.

1. Customization and AdaptationV. Smart Grid Management

16

� System

Interworking

� Platform

Construction and

Operations

� Real-time Data

Processing

cation

Network

Resource

Control

Sensor

Power

Infra

발전 송전 변전 배전 수용가

대규모 발전에너지수집 원거리 감시sensor 배전자동화시스템변전자동화sensor 배전자동화sensor Smart Meter Micro Grid

cation

Network

Resource

Control

Sensor

Power

Infra

Resource

Control

Sensor

Power

Infra

발전 송전 변전 배전 수용가

대규모 발전에너지수집 원거리 감시sensor 배전자동화시스템변전자동화sensor 배전자동화sensor Smart Meter Micro Grid대규모 발전에너지수집 원거리 감시sensor 배전자동화시스템변전자동화sensor 배전자동화sensor Smart Meter Micro Grid

Telecomm O&M System

Management

Communication

Data Gathering,

Local Control

and Automation

Network

Configuration

and Control

Customization and Adaptation � Smart Greed Needs

Telecommunication Management Layer Smart Grid Management Layer

OSI 7 Layer Business Business

Application Application

Business Business

Services Services

Management Layer(ITU-T)Smart Grid

Framework(EPRI)

7. Application7. Application

• Power Services

• Distribution Control

• Power Market Operation

Elements

• ICT Services

• BMS

Description

• Power services to

customers

• Local or national wide

management center

Description

The management layer of Smart Grid has a similar architecture with the standard recommendations of telecommunication management layer, and so there is no problem to adapt it to Smart Grid cases including customization of Smart Grid needs.

2. Telecomm Management vs. Smart Grid oneV. Smart Grid Management

17

※ EPRI : Electric Power Research Institute , ICIS : Information Customer Integrated System,

Data

Integration

Data

Integration

Communi-

cation Infra

Communi-

cation Infra

Control

Sensor

Control

Sensor

Power InfraPower Infra

Services

Management

Services

Management

Network

Management

Network

Management

Element

Management

Element

Management

ElementElement

7. Application

6. Presentation

5. Session

7. Application

6. Presentation

5. Session

4. Transportation

3. Network

4. Transportation

3. Network

2. Data Link 2. Data Link

1. Physical1. Physical

Operation

• SCADA, AMI

• Communication

Network

• Metering• Transmission/Substation Sensor

• Generation• Transmission• Substation• Distribution

• SMS

• NMS

• EMS

• Network

Elements

• Energy/Elements

management systems

• Communication

network for O&M

• Sensors for gathering

datas

• Physical elements

IV. Conclusions

� Smart Grid

- Next generation intelligent electricity network : IT + ET

- Business domains of Telco : Communication Network, O&M System, Home/Building(last-1 mile)

� KT’s Activities for Smart Grid

- Smart Grid solutions : management systems, applications, widgets, Smart Box, Smart Tag

18

- Service/Business Model : focused on last-1 mile for creating new business models

- Smart Grid Demonstration Project in Jeju : Smart Place, Smart Transportation

� Smart Grid Management

- not new any more : ICT Management Experience/Knowhow + Smart Grid Needs

Q & A

Thank You.

19