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Transformation Tools for Utilities | Indigo Advisory Group
The document discusses the transformative landscape of the utility industry, emphasizing the urgent need for utilities to adopt innovative digital strategies and tools to navigate the energy transition effectively. It highlights key trends such as regulatory changes, customer engagement, and technological advancements, along with Indigo Advisory Group's capabilities in providing market insights and strategic frameworks to optimize utility operations and investments. Ultimately, it underscores the importance of proactive adaptation and collaboration to leverage emerging opportunities in the rapidly evolving energy sector.
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Transformation Tools for Utilities | Indigo Advisory Group
- 1. TRANSFORMATION TOOLS FOR UTILITIES Digitalstrategies, analysis and approaches to lead the energy transition Capability Primer - September 2016
- 2. 2© Indigo AdvisoryGroup 2016 Transformation Tools for Utilities Digital strategies, analysis and approaches to lead the energy transition About Indigo Advisory Group Indigo Advisory Group works with utilities and energy companies to deliver market leading strategy, technology and innovation services. Our capabilities span the entire energy value chain and our approach is high value and outcome focused. #indigoinsights is our market perspectives and intelligence center, providing analysis and market research for utilities. [email protected] + 212 203 6144www.indigoadvisorygroup.com @indigoadvisory This pivotal moment of transformation in the utility industry is providing large scale and unprecedented opportunity for traditional power providers and those operating at the edge of the grid. In this capability primer, we highlight some of the broader industry technology trends and the resulting tools, approaches and insights that Indigo Advisory Group employs to help utilities navigate uncertainty and create the right strategies.
- 3. 3© Indigo AdvisoryGroup 2016 The Changing Utility Landscape Trends and strategies are emerging across the power sector Policy & Regulation • Energy security, reliability, and resiliency goals • Local and global environmental concerns over air emissions • Global energy access imperatives Revenue and Markets • Flat or declining load in the U.S., EU, and Japan • Increasingly diverse participation in power markets • 60% of grid assets will need replacement this decade Business Model Innovation • New business models emerging at the grid edge • Increased interactions with other sectors Technology Innovation • Renewable energy cost reductions • Innovations in data, intelligence, and system optimization • Increasingly digital operations environments Consumer Behavior • Evolving customer engagement • The rise of the energy “prosumer” Maintain affordable, environmentally clean, reliable & safe supply of electricity Generation Customers Distribution Transmission Markets Policy & Regulation • Regulatory proactiveness and innovation Revenue and Markets • Use of granular of data on power system performance for investment / DER decisions Business Model Innovation • Shifting of capital to strategic grid asset investment • Decisions on asset ownership v services Technology Innovation • Investment in use cases relating to DERMS & DMS • Partnering with the market and fostering innovation • Leveraging corporate venture arms Consumer Behavior • Increasing engagement with customers • Working with other industries and creation of connected home strategies • Developing strategies on how customers participate in energy supply and demand Evolutionary trends………………………. ………………..…..Emerging Strategies
- 4. 4© Indigo AdvisoryGroup 2016 Renewable Portfolio Standards 29 States + Washington DC + 3 territories have a Renewable Portfolio Standard (8 states and 1 territories have renewable portfolio goals) 29 Renewable portfolio standard Policy and Regulation – Driving Utility Transformation RPS, Net Metering and Energy Efficiency State targets are impacting utilities Renewable portfolio goal www.dsireusa.org / August 2016 Net Metering 41 States + DC, AS, USVI, & PR have mandatory net metering rules 41 Energy Efficiency 26 States Have Statewide Energy Efficiency Resource Standards (or Goals) 26 Utility of Future Regulatory Reform 11 States Have initiated regulatory proceedings around the Utility of The Future e.g. REV in NY 11
- 5. 5© Indigo AdvisoryGroup 2016 Driving Factors • Grid security and business continuity • Grid modernization and energy delivery • Clean energy and fuel diversity • Customer focused solutions • Environmental policy adoption and fleet transition Uncertain Factors • Pace of technology change • Ongoing regulatory uncertainty • Increasing competition behind the meter • Increasingly engaged customer segments • Capability development UtilityScaleRenewables EnergyStorage ConnectedHome New Technologies - Utilities are Increasing Investment Investment patterns are emerging on both sides of the meter DistributedGeneration SoftwareandAnalytics NaturalGasGeneration Microgrids AutomationTech DemandManagement The pace of technology investment is accelerating across the industry. For example, as well as pursing a grid edge investment strategy through its corporate venture arm, Exelon plans to invest $25bn on critical infrastructure, smart grid technology and other reliability and customer service improvements at its utilities over the next five years to benefit its 10 million electric and gas customers. Across the country we are seeing similar large technology investments being made by power companies. CarbonCapture Significant Investments Large Investments Moderate Investments
- 6. 6© Indigo AdvisoryGroup 2016 DERLevel Time Low DER Adoption Stage 1: Grid Modernization Stage 2: DER Integration Stage 3: Distributed Markets Moderate to High Level of DER Adoption Very High DER adoption Smart Grid Investments Aging Infrastructure Refresh Multi-part Transactions & Market Operations DER Integration & Optimization; Dist. Platform Development Customer Adoption Distribution system changes for DER transactions High levels of DERs may provide an opportunity to optimize grid investments and improve overall power system performance and economic efficiency, however, significant coordination and investment is needed across aggregators, system operators and technical architecture design Presently, installed DER capacity interconnected to the PG&E distribution grid is about 8 percent of peak load system-wide Adapted from LBNL, 2015
- 7. 7© Indigo AdvisoryGroup 2016 Time Moving to a Transactive and Dynamic System Many of the trends across the sector are converging on the idea of moving towards a transactive and dynamic energy system, where real time markets, peer to peer transactions and market animation are enabled by new technology developments DERLevel Carbon Market with Distributed Registry Community P2P Markets Transactive Grid Settlement P2P Settlement at the Transmission Level Customer Portals Bundled Services Dynamic Tariffs Direct appliance level control Real-time Switching Dynamic event notification Dynamic electricity consumption forecastingMarket-based demand response Algorithms and analytics for market information/ops M&V for producers and consumers DER power control Real-time load monitoring Power flow control Real time/predicted probabilistic based area substation, feeder, and customer level reliability metrics Automated islanding and reconnection Markets Transmission Distribution Customer
- 8. 8© Indigo AdvisoryGroup 2016 GridChain - Technologies Accelerating the Transition Examples of technology that may accelerate the transition can be found in early stage applications of Blockchain that are being explored globally. By leveraging P2P technology where both computers and people share a distributed ledger, networks of blockchains may interact over time to fundamentally change the market Billions of Consumers Utility Value Chain (G, T, D & Retail) Market Settlement Hundreds of Processes Design of Actors Consumer Facing B2B Markets Trading and Settlement Backend Processes Intermediary Rationalization Removal of balancing groups, fundamental market redesign IT and process reengineering across energy organizations P2P settlement at various market levels, carbon market with distributed registry Transactive grid settlement, real- time asset valuation, products and service design utilizing smart contract functionality Community P2P markets, transactive home energy management, EV charging settlement etc. Adapted from William Mougayar, Indigo 2015 Increasing evolution, complexity & timeframe
- 9. Transformational Capabilities Utility Analytics|EmergingTechnologies|Grid Transformation|Operational Excellence|Utility Strategy
- 10. 10© Indigo AdvisoryGroup 2016 Utility Analytics Use Case Analysis, Analytics Roadmaps, Vendor Analysis & Data Assessments Underpinning all of our services is an advanced understanding that the energy industry is at a pivotal moment of transformation where new technologies and regulations are paving the way for new business models, competitive forces and of course, opportunity. Across all of these services Indigo delivers exceptional outcomes using proven approaches and a collaborative engagement model. Emerging Technologies Technology Assessments, Innovation Analysis & Market Intelligence Grid Transformation Modernization Strategies, Technology Deployments & Business Cases Operational Excellence Program Mgmt., Operating Models, Process Design & Change Management Utility Strategy Strategic Planning, Technology Strategy & Market Assessments Technology Strategy Our Practice Areas – Solutions to Manage the Transition Expertise and solutions to help utilities navigate the energy industry transformation
- 11. 11© Indigo AdvisoryGroup 2016 UtiliPERFORM - Suite of tools for utilities to become operationally excellent UtiliAPP - Methodology for prioritizing data and analytics investments across a utility UtiliGRIDMOD - Processes and tools to embark on large grid modernization programs UtiliSME – Utility strategy management, planning and execution services Our Proven Utility Tools and Resources to Manage the Transition A comprehensive set of tools and approaches for unmatched results UtiliVATION - A series of innovation frameworks and market insights
- 12. Utility Analytics Use CaseAnalysis | Analytics Roadmaps | Vendor Analysis | Data Assessments
- 13. 13© Indigo AdvisoryGroup 2016 Accelerated Growth in Utility Data Sensors across the network and behind the meter are providing opportunity The massive increase in installations of intelligent devices and the corresponding rise in data usage will necessitate significant investment in data storage infrastructure and information management programs. Presently, the three key areas of investment by utilities are in the visualization, situational awareness and predictive forecasting domains. 0 200 400 600 800 1000 1200TB TB TB TB TB TB TB AnnualRateofIntake 1 2 3 4 5 6 7 8 10 AMI Deployment Distribution Automation Substation Automation System Demand Response / DSM DERMS Grid Visualization & GIS Operations System Integration Distribution Management Home Energy Management New Connected Home Devices 9 11 Advanced Home Automations Adapted from EPRI, Indigo 2016 Data Warehouses Hadoop In-memory database Event Processing Tools
- 14. 14© Indigo AdvisoryGroup 2016 1. Use Case Analysis Utilizing a comprehensive inventory of use cases, Indigo can quickly map areas of high value analytical investments across domains such as visualization, predication and control 2. Application and Data Assessment Based on our use cases and business requirements approach, we help utilities ensure they have the right data strategies 3. Analytics Roadmaps We have created multiple analytics roadmaps for utilities that have demonstrated proven return on investment and significant organization efficiency impacts 4. Use Case Deployments From use case identification through to implementation we work with utilities to ensure that their use cases are deployed efficiently and are being utilized effectively across the business Indigo is helping power companies across the industry leverage analytical solutions that lower operations and maintenance costs, improve asset and load management, reduce outage management frequency and allow for a sophistication of customer products Advanced Utility Analytics – Our Approach Our Approach is centered on 4 key areas and with industry leading use cases as an input
- 15. 15© Indigo AdvisoryGroup 2016 Example Analytics Use Cases Across the Value Chain We bring over 100 directional use cases to the table for utilities to prioritize Enabling Analytics Infrastructure (warehouse, bus, governance etc.) Generation Customer Distribution Transmission Markets • Generation asset management (Step-up transformers, Steam turbines, Hydro turbines and generators, Fossil turbines, Support systems (batteries, room), GSU breakers, Back-up generators, Switchgear etc.) • Plant availability analytics • Forced outages analytics • Energy Scheduling Billing and Settlement • Market Interaction Validation • Wide-Area Monitoring and Control - Automated Control Functions • Wide Area Control System for the Self-Healing Grid AGC Frequency Control • Adaptive Transmission Line Protection • Hours Ahead Load Optimization • Optimized use of Synchro Phasor data • Reliability • Procurement times • Overload/Congestion Management • Fault Location, Isolation, Service Restoration • DG Monitoring & Voltage Tracking • Real-time Loading Data for Distribution Ops. & Planning • Automatically Map Phasing Information • Weather Forecasting • Demand Response Impact Forecasting • Circuit-level DER forecasting and hourly customer load shapes • Intra-cycle billing alerts • Appliance-level functionality assessment • DER equipment operation and maintenance • Demand-charge estimation by C&I customers • Load disaggregation • Rate comparisons • Gamification • Segmentation • Participation in grid optimizing services
- 16. 16© Indigo AdvisoryGroup 2016 15% 25% 10% 25% 15%10% Customer Grid Load & Voltage Reliability Asset Work Understanding the Value of Analytics Use Cases We prioritize Use Cases based on several factors and unique utility characteristics •Load disaggregation •Rate comparisons •Gamification •Segmentation •Participation in grid optimizing services •Intra-cycle billing alerts •Distribution State Estimation •Switch Order Management •FLISR •Predictive Fault Location •DMS Control of Protection Settings •EV Charge Management •Voltage Monitoring •Load Balancing (LB) •Volt-VAR Optimization •Optimal Network Reconfiguration •Short-Term Load Forecasting (STLF) •Emergency Load Shedding •Distributed Energy Resources Management •Optimal Switch/Recloser Placement •Vegetation Management •Storm Analysis •Reliability Analysis (including outage analysis) •Field Force Performance •Work Management Analysis •Work order management •Conditional Expression based inspections •Barcode scanning, RFID and GIS support •Catastrophic Failure Notice •Capital Planning •Maintenance Optimization •Risk Analysis and Risk Scoring •Dynamic Asset Rating Example Coordinated Capability Investment
- 17. 17© Indigo AdvisoryGroup 2016 Overview – UtiliAPP is a proven method to help utilities determine what the highest business value from analytical investments are and as a result what technical and business requirements need to prioritized. We conduct rapid assessments and develop high-impact roadmaps for utilities ensuring that power companies are leveraging the most out of their data and technology investments. Tools – UtiliAPP consists of several key tools including a repository of use cases that are categorized across load, voltage, work, customer, grid, work, reliability domains. Use cases are also categorized based on application e.g. visualization, prediction and control. Our tools also include industry business cases, vendor capability analysis and industry lessons learned. Approach – The methodology is centered around four key areas. 1) Using a repository of use cases we prioritize based on business need and overall cost to deploy. 2) We then conduct a data assessment to determine the availability and quality of data 3) We then develop a roadmap and for priority use case, develop detailed requirements. 4) Finally, we implement use cases and ensure that benefits are being tracked Outcomes – The value of a targeted analytics programs for utilities can be enormous. Globally, utilities are decreasing the cost to serve, increasing reliability, enhancing customer satisfaction and creating more effective investment portfolios. Our approach and NPV analysis and back end benefit tracking can help utilities understand where the highest value applications exist today across the industry UtiliAPP – Analytics and Application Management Methodology for prioritizing data and analytics investment across a utility Overview Approach Tools Outcomes
- 18. Emerging Technologies Technology Assessments| Innovation Analysis | Market Intelligence
- 19. 19© Indigo AdvisoryGroup 2016 Blockchain UAV’s Efficiency Gamification DSP Event Stream Processing Wearables DERMS Connected Home Energy Storage Microgrids Pilots Grid Dplyd The amount that R&D declined in the sector bewteen 1993 and 2000. Investment is slowly beginning to rebound and new innovation investment models are emerging 74% What’s Hype, What's for R&D and What’s Ready for Deployment The key question for utilities is even when a technology crosses the chasm to commercialization, how they can monetize that or get a return Not yet commercialized but are likely to be commercialized and cost- effective for a significant proportion of end-users over the next few years Commercialized, but currently have penetrated a small % of the appropriate market
- 20. 20© Indigo AdvisoryGroup 2016 Indigo’s research shows that utilities continue to increase their capital investments in new energy technologies, business models and companies since 2013. Typically, as part of dedicated investment arms and in conjunction with other investors we are seeing utilities invest millions into startup funding rounds and taking stakes of 10 to 30 percent. The average joint utility investment round is $19m. E.ON Venture Partners continues to be the most active utility fund. Across the board and over the past 4 years, investment counts peaked in 2015. 2016 is shaping up to be a similar year of activity with European Utilities increasingly making investments in US startups. 34% 17% 15% 10% 9% 8% 6% Distributed Energy Resources O&M Technology Software & Analytics Energy Efficiency (incl. DR) Connected Home Energy Storage Electric Vehicles Percentage of Investments Non Solar Deal Count 2013 - H1 2016 E.ON Exelon Engie EdisonInt. Ibedrola 12 9 5 5 4 Utilities Investing in Innovation at the Grid Edge Indigo tracks and informs Utilities of investments and opportunities
- 21. 21© Indigo AdvisoryGroup 2016 Adapted from Harvard Business Review 2012 Core Utility Business Optimizing existing utility products and services Neighboring Expanding from existing business into “new to the utility” Transformational Developing breakthroughs and inventing things for markets that don’t yet exist HOW UTILTIES CAN WIN WHEREUTILTIESPLAY Using existing utility products and survives and rate of return mechanisms Add incremental products and assets Develop new products and assets Serveexistingutility marketsand customers Enteradjacent markets,serve adjacentcustomers Createnew markets,targetnew customers’needs Developing Innovative Capabilities for new Utility Paths to Growth Key Strategy – In-House Innovation Management managing all value chain lifecycle optimization Key Strategy – Partner with the market to industry participants, research institutions, or developers to bring new products and services to the marketplace and customers Key Strategy – Explore VC options and creation of separate innovation organizations to serve new opportunities Utilities are consistently faced with developing the right strategy to allocate funds among growth initiatives. Understanding where a power company should play and how they can win will inform their market strategy, be that in-house, partnerships or VC options. Using proven frameworks to assess opportunity and risk for a utilities portfolio can provide a valuable starting point.
- 22. 22© Indigo AdvisoryGroup 2016 Customers Ensuring that customer segments are more actively engaged in energy, by assessing appetite for bundled services, new technology demonstrations and new products and services. Partners & Suppliers Ensuring that partners understand and utilities influence product roadmaps. Engage with market leading vendors and provide data access to develop new products and services. R&D Providers Where feasible leverage third party providers in particular domains to decrease product development and commercialization timeframes. Innovation Networks Building communities of innovators in a utilities jurisdiction e.g. partnering with universities, startup incubators and other groups. Employees Encourage that an innovation culture is fostered throughout the organization, enlist ideas, provide time and run idea rapid prototyping sessions. Innovation Mgmt. Team Institute and empower an innovation management team to build out local partnerships and serve as an organizational conduit. Business Function Managers Emphasize importance and empower culture of innovation among department heads. Research & Development Ensure that funding, tools and research roadmap is aligned with the utilities aspirations and ease process of interactions with operations. External Stakeholders Innovation Management Tactics for Growing Long-Term Utility Innovation Internal Stakeholders Ensuring that a utility has the right external and internal innovation strategy throughout a series of stakeholder ‘tactics’ coordinated by a broader innovation roadmap will serve utilities well in a transformational marketplace
- 23. 23© Indigo AdvisoryGroup 2016 Overview – UtiliVATION is a series of frameworks and insights that provide innovation analysis and market intelligence for utilities and grid edge companies. We track, analyze and rate new developments. For utilities we provide analysis on VC, partnership and in house innovation models by having a true understanding of emerging technologies and opportunities across the value chain. Tools – UtiliVATION is a series of tools and methods that includes an innovation prioritization matrix and business case evaluation process. In addition, Indigo brings its repository of submarket trackers and commercial availability analysis to bear on each engagement. Approach – Our commercial availability analysis and market assessment approaches rapidly decreases the time a utility would take to deploy new innovative technologies. For utilities looking to embed innovation as part of their R&D and broader business, Indigo works alongside departments to develop innovation management capabilities and capture highest value opportunities. Outcomes – The rapid deployment of innovative projects and initiatives including technical deployments, new ways of working and business model evaluation and integration. Outcomes also include the identification of investment and partnership opportunities for utilities and grid edge companies. UtiliVATION – Innovation Management for Utilities A comprehensive series of innovation frameworks and market insights Overview Approach Tools Outcomes
- 24. Grid Transformation Modernization Strategies| Technology Deployments | Business Cases
- 25. 25© Indigo AdvisoryGroup 2016 Strategies and programs to manage assets across the network Tactics for the Integration of bulk and distributed energy resources Technology to support wide area and local situational awareness for enhanced grid planning Emerging grid management business model, technologies and partnerships We provide subject matter expertise and implementation assistance in the areas of ISO 55000, monitoring and diagnostic technology and strategic asset management planning We provide business case development, technology assessments and multi-functional process support for renewable integration We provide strategies, organization design and vendor selection assistance for the deployment of smart operation centers We help utilities assess emerging grid transformation business models from both an infrastructure and service perspective Strategy Indigo develops comprehensive multiyear grid transformation and modernization programs for utilities Alignment We ensure alignment across organization for new and existing technology deployments Execution We help utilities track and realize benefits outlined in our business cases Building Grid Transformation Capability From strategy to execution, Indigo helps utilities across the lifecycle of transformational grid programs
- 26. 26© Indigo AdvisoryGroup 2016 Grid Transformation Elements Coordinated investment strategies across all utility domains are the most successful Depending on the level of grid modernization maturity, utilities technology investments tend to follow a path of sensor deployment, communications upgrades and investment in back office applications, all why ensuring that assets are monitored and maintained in an efficient, safe and reliable manner. The use of data analytics applications and techniques to gain insights and situational awareness of the grid in order to increase system reliability, enhanced customer experience, perform predictive reliability planning and expand real time operation of distribution system Analytics Investing to ensure customers have the necessary information to make informed energy management decisions in order to maximize their energy value and to support their access to third party value‐added services and offerings while protecting their privacy Customer Empowerment Investing in tools, resources and technologies to integrated bulk and distributed resources, including the identification of grid services that DER can satisfy and ensuring that overall interconnection process are expedited. In addition, ensure that a utility is pursing appropriate asset ownership opportunities DER and Bulk Renewable Mgmt. Deploy foundational infrastructure and processes to support the integration of a smart grid data and to understand and manage the risks with new technologies while ensuring a single source of the truth and maximum application rationalization Integrated Systems Deployment of secure distributive controlled common smart grid software, hardware and communications layer across a utilities infrastructure Network Automation Address the increased physical and cyber security risks and threats associated with Smart Grid system design, development, implementation, and operations by installing security at all levels of the deployment including equipment Physical and Cyber Security
- 27. 27© Indigo AdvisoryGroup 2016 The creation of business cases with detailed sensitivity and NPV analysis including the assessment of alternatives is a crucial step to define recovery options and align the business to a benefits realization approach Maturity Assessment and Vision Alignment As grid modernization programs are large multiyear complex undertakings, a roadmap that links foundational investments and early quick wins and back ended benefits needs to be sequenced accordingly Indigo works with utilities to define the key capabilities that a grid transformation strategy are trying to achieve. We align executives on key requirements and then finalize a decisive strategy Approach and Tools to Modernize Coordinated investment strategies across a network and in the IT/OT domain are the most successful Strategy Alignment Execution Business Case Creation (DOE aligned) Roadmap and Implementation Planning Utility sees an increasing need for: • Security/Resiliency • Renewables Integration • Reliability, Flexibility • Environment, Economics • Aging infrastructure, etc. Grid Mod will build capabilities to support: • Increased resiliency, Integration of distributed generation • Enhanced situational awareness • Integration of bulk renewables, Improved load/generation forecasting, Optimizing aging transmission & generation assets Grid Mod initiative has agreed to prioritize: • Optimize the utilization of existing generation resources • Ensure efficient compliance to NERC standards in existing and future projects • Etc. Objectives “What are priority areas that the Utility wishes to address?” Capabilities “What are the key solution areas to build?” Drivers “What's Driving this Grid Modernization?”
- 28. 28© Indigo AdvisoryGroup 2016 Overview – UtiliGRIDMOD is a process that helps utilities evaluate their maturity across smart grid technologies and embark on large scale grid technology transformation programs. The approach alleviates the complexity of cross functional planning and centers on building not only infrastructure within a utility, but also capability. Tools – UtiliGRIDMOD’s suite of tools centers on standard business cases, market assessments, technology maturity assessments, roadmapping and dependency management analysis and a host of lessons learned from smart grid deployments globally. Our consultants have built several large and successful smart grid programs globally. Approach – Our approach centers on three main areas including Maturity Assessment and Vision Alignment, Business Case Creation (DOE aligned) and Roadmap and Implementation Planning. Integrated programs generally fall into the categories of Analytics, Customer Empowerment, DER and Bulk Renewable Mgmt., Integrated Systems, Network Automation and Physical and Cyber Security. Outcomes – With thorough business analysis we have helped utilities achieve a range of operational, financial and services benefits all while developing capabilities across renewables integration, situational awareness, improved reliability and resiliency and improved customer satisfaction. UtiliGRIDMOD – Grid Modernization Tools Market leading process and tools to embark on large Grid Modernization programs Overview Approach Tools Outcomes
- 29. Utility Strategy Strategic Planning| Technology Strategy | Market Assessments
- 30. 30© Indigo AdvisoryGroup 2016 The Importance of Utility Strategic Planning Today Strategy has never been as critical for the power sector as it is today. From corporate strategy to planning for pointed strategic issues and opportunities, utilities face a host of uncertainties to manage. •Capacity Requirements •Regulatory Requirements •Integration of Renewables •Market Design Changes •Accelerated Grid Modernization Efforts •Increased Proliferation of DG and DR / Efficiency Programs •Customer Satisfaction •Rate case development •New business model / revenue analysis •Internally Generated Funds •Internal Capability Requirements •Technology acceleration Select Drivers Select Constraints Grid Modernization & Maintenance IT and Business Infrastructure Strategic Imperatives and Innovative Investments • Energy storage • Innovative R&D • Grid data and analytics innovation •Business Model & Process Optimization •Network Operations Centers •IT Initiatives • Life cycle asset management • Communications Infrastructure • Sensor Network and Network Automation Strategic Planning Investment Decisions and Trade-offs • Life extension programs • DER and Bulk Renewable Mgmt. •Data Infrastructure, virtualization, management and applications • Options to deal with retirement of generation assets • Creating a smart operations centre
- 31. 31© Indigo AdvisoryGroup 2016 Vision & Mission Compelling mission and vision formation that captures aspirational direction and purpose for utilities Strategic Goals Creation of goals that are specific, measurable, achievable, relevant & time bound Strategic Initiatives Initiative identification and business case development to ensure strategy and tactics align Metrics and KPIs Measures that align the organization and ensure that benefits realization is central to the overall plan Implementation Plan Detailed implementation planning, including, costs, resources, schedules and governance planning Indigo utilizes a thorough and proven strategic planning process that contains all the critical elements of creating an effective strategic plan, including industry overlays, opportunities and lessons learned. From vison and mission through to implementation planning our process will ensure the right outcomes are achieved. In addition, our scenario planning framework, will also ensure that Utilities are employing the least regrets strategy in today’s market. Strategic Planning – Vision Alignment Our Approach is centered on achieving the development of five key areas
- 32. 32© Indigo AdvisoryGroup 2016 • Key Questions Addressed: What industry trends are being observed and where do we believe the industry is headed? What key challenges and opportunities specific to the utility will arise as a result of the expected industry developments? • Key Deliverables - Scenario Planning , External and Internal Outreach and Environmental Scan, List of challenges and opportunities • Key Questions Addressed: What is the Utilities current strategic focus? How does the Utilities focus and performance compare to industry best practices? What should the utility look like in the future in order to respond to the identified challenges and opportunities, and how does it compare to existing vision, mission and goals? • Key Deliverables - Gap Analysis, List of challenges and opportunities, Vision, mission and strategic goals • Key Questions Addressed: Which short- and medium-term goals should be established in alignment with the overall strategic ambition? Which key performance metrics will let us know if we are on track to achieve our strategic ambition and tactical goals? • Key Deliverables - Industry best practice analysis, Defined tactical goals and performance targets • Key Questions Addressed: How do our existing capital portfolio support the revised strategic ambition and tactical goals? What other investments should be considered in order to achieve the tactical goals? How should we implement and communicate the plan? How should we measure progress? • Key Deliverables - Portfolio of strategic initiatives to enable strategic ambitions, KPI’s, Implementation plan Components of Strategic Planning We work with utilities over a series of workshops and through detailed analysis to create holistic, measurable and market leading strategic plans Environmental Scans and Outreach Current state and future ambition Short-term goals and targets Strategic initiatives and Implementation Planning
- 33. 33© Indigo AdvisoryGroup 2016 Overview – UtiliSME is a proven strategic planning methodology that identifies opportunities, creates direction, manages stakeholder expectations and aligns resources. As strategic planning is as critical as ever within the industry we also employ scenario planning and quantitative analysis to ensure that our clients strategies built with the least regrets. Tools – Across the entire strategic planning and implementation lifecycle we employ proven tools such as benchmarked KPIs, vision and mission creation processes, workshop facilitation and breakout group session planning, rigorous NPV and sensitivity analysis playbooks and example roadmaps and sequencing guides. Approach – By conducting a thorough current state assessment up front and creating a robust set of goals, we will help utilities begin the planning process in a holistic and comprehensive manner. From there, we work collaboratively to develop strategic options and initiatives to ultimately provide a structured and comprehensive planning process with clear actionable outcomes. Outcomes – The creation of an effective and compelling strategic planning can bring large scale financial and organizational benefits to a utility. It can also ensure that a utility effectively manages the pace of regulatory and technology change in the least risk manner. UtiliSME – Strategy Management and Execution Leading strategic planning, management and execution approaches Overview Approach Tools Outcomes
- 34. Operational Excellence Program Mgmt.| Operating Models|Process Design | Change Management
- 35. 35© Indigo AdvisoryGroup 2016 Optimize With limited CapEx and OpEx budgets becoming the new norm, utilities are under increasing pressure to reduce their cost to serve while balancing operational excellence. At Indigo, we help utilities map and optimize their processes. We focus on all level 1, 2 and 3 utilities process from meter to cash trough to transmission and generation operating process. Whether the focus is on reducing cost, improving revenues, increasing customer satisfaction or the integration new ways pf working, Indigo has the solutions. Indigo also works with utilities to help create target operating models and organization design from processes through to tasks, roles and job design -- we employ top down and bottom up operating model creation methodologies. Our specific services include: Process and Organizational Design • Process Design • Operating Models • Transition Planning • Maturity Assessments & Change Tracking • Organization Sizing • Program Assurance & Management
- 36. 36© Indigo AdvisoryGroup 2016 Capabilities to become Operationally Excellent Tools to ensure that Utilities are operating in the most efficient and effective way Capability Maturity Assessments across all functions and innovative change measurement and action planning tools Maturity Assessments & Change Tracking Level 1, 2 & 3 externally benchmarked process designs for utilities and implementation of lean principles Process Design FTE model development and organization design for large complex programs and existing operations Organization Sizing Program health checks and delivery assurance. Management of large complex, multi-release and multi geography implementations Program Assurance & Management Bottom up and top down operating model designs that are aligned to processes and externally benchmarked Operating Models Transition project and initiative process to core operations and BAU environments Transition Planning
- 37. 37© Indigo AdvisoryGroup 2016 1 2 3 4 5 Strategy and Guiding Principles Current State Assessment Draft a Target Operating Model Refine Target Operating Model Roadmap for change and seek funding • Create a shared view of the desired outcomes across the organization • Define the strategy/vision and assign accountabilities across the organization • Document a set of ‘design criteria’ for target vision that maps the strategy on to clear objectives • Map the ‘As-Is’ logical representation of the organization at an appropriate level (defined by project) • Identify FTE numbers and costs • Conduct a capability analysis • Best Practice Benchmark • Identify ‘hot spot’ problem areas and root causes • Prioritize against initial guiding principles and drivers for change • Identify a set of opportunities to resolve core issues and to incorporate design criteria • Draft a logical target operating model • Refine the target operating model with the business • Identify new roles and accountabilities in the TOM • Develop customer journeys and scenarios • Identify priority opportunities and develop business case for each • Identify any quick wins • Identify a set of projects to deliver the TOM and change opportunities • Work with the business to understand the impact BAU • Prioritize projects into releases and map a roadmap • Seek funding for a phased release change approach Creating a Utility Operating Model of the Future Create a strategy aligned Utility of the Future Operating Model As utilities build out new capabilities and teams in the areas of grid modernization, monitoring and diagnostic centers, emerging technology teams and centralized distributed energy resource management, there is a need to move from project execution to transition organizations and ultimately a utility of the future target operating model. 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Inputs Benchmarks for tender management Gaps in process controls, skills, training, performance and knowledge management, management information, technology High-level requirements and evaluation criteria for supporting tools 5. Develop Roadmap High-level action plan prioritised by importance and feasibilityStandard tender management process Detailed tender management process 3. Assess Gaps
- 38. 38© Indigo AdvisoryGroup 2016 Overview – UtiliPERFORM is s suite of tools and process that helps to ensure Utilities are operating in the most efficient and effective way. Our tools have been leveraged to achieve results in large scale initiative implementations, to help programs transition to BAU and to build operating models. In addition, in this capability we also design business processes and provide program delivery assurance. Tools – UtiliPERFORM is made up of a suite of operational excellence tools including change measurement and tracking tools aligned to commitment curves, process redesign frameworks aligned to lean principles, FTE and Org Sizing models that come pre-populated with industry implementations and a suite of programs management tools. Approach – Our approach centers on six main areas -- Process Design, Operating Models, Transition Planning, Maturity Assessments & Change Tracking, Organization Sizing and Program Assurance & Management. Across all of these areas we bring approaches that have been developed and proven specifically for the utility sector. Outcomes – The tools and approaches in UtiliPERFORM help utilities deliver programs that are off track or are technically and organizational complex from a deployment perspective. Across people, process and technology our suite will ensure that programs are delivered with high performance and that organizations are built for the future. UtiliPERFORM – Operational Performance Tools Suite of Operational Excellences tools and methods for proven outcomes Overview Approach Tools Outcomes
- 39. 39© Indigo AdvisoryGroup 2016 GenerationPractice Areas Markets Transmission Distribution Utility Analytics Emerging Technologies Grid Transformation Operational Excellence Utility Strategy Customers Our Approaches – Bringing it All Together Expertise and solutions to help utilities navigate the energy industry transformation Service Overview - Proven approach to structure high-value and outcome focused data and analytics programs Example Deliverables - Use Case Analysis, Analytics Roadmaps, Vendor Analysis & Data Assessments Indigo Tools: UtiliAPP - A repository of use cases, business cases, market tools and analytical approaches Service Overview – Our innovation analysis and market intelligence provides leading investment and deployment insights Example Deliverables - Technology Assessments, Innovation Analysis & Market Intelligence Indigo Tools: UtiliVATION – Market tracker, capability analysis and utility innovation acceleration methods Service Overview – Approaches for coordinated deployment of sensors, communications and software for utilities Example Deliverables - Grid Modernization Strategies, Grid Technology Deployments & Business Case Development Indigo Tools: UtiliGRIDMOD - Maturity assessments and vision alignment, business case dev & roadmaps Service Overview – Large complex technology program mgmt., utility op model design and specific process objectives Example Deliverables - Program Management, Operating Model Design, Process Design & Change Management Indigo Tools: UtiliPERFORM – A research based change measurement and performance assessment method Service Overview – Assist IOU’s and Public Power Organizations develop decisive, integrated and innovative strategies. Example Deliverables - Strategic Planning, Scenario Planning, Technology Strategy & Environmental Scans Indigo Tools: UtiliSME – Proven strategic planning process that culminates in transformative action planning
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