Antonello Buondonno International Business Development Mob.: Enel Distribuzione S.p.A.

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1 Commission for Energy Regulation, The Exchange, Belgard Square North, Tallaght, Dublin 24. Dear Sirs, Following the invitation from the Commission for Energy Regulation of Ireland to participate in the Consultation on the Proposed National Rollout of Electricity and Gas Smart Metering (CER 11/191), Enel is pleased to submit its answers. First and foremost I would like to thank you on Enel s behalf for kindly allowing us the opportunity to participate in this venture. We take advantage of the occasion to extend our most sincere appreciation towards your organization for promoting this initiative and for enabling the opportunity to share global experience and know-how. Enel s solution is targeted at encouraging energy efficiency, facilitating peak load management and promoting consumer awareness and, as proven by its decade-long experience in advanced metering infrastructure Enel has been committed to diffusing smart metering for over a decade, as it is our belief that it represents the corner stone for smart grids. Enel s proposal not only covers all relevant issues that were requested by your publication/call but also aims at sharing a broad outline of its experience. Given that Enel is the only DSO in Europe that can boast a complete, fullyintegrated and fully-operational national smart metering programme, we were able to draw from considerable experience in filling out our reply. Today, in Italy alone, Enel serves over 32 million points of delivery. We are also currently involved in the deployment of 13 million smart meters in Spain. Testimony to our commitment to smart metering is the fact that the internally designed AMM solution (Telegestore ) was put into service by Enel in 2001, preceeding the binding resolution requiring the rollout of smart meters issued by the Italian Authority by 5 years. Having had no prior means of comparison or benchmark, the decision to embark on this massive deployment project was made based solely on our utmost confidence in Telegestore benefits. Since then we have been able to prove that smart metering indeed achieves the ambitious mission we set to for ourselves ten years ago and have improved services to consumers in important areas including reading, fault monitoring and electrical power quality. In the spirit of sharing experience and know-how, we kindly ask for the opportunity to meet with you for the purpose of discussing this document and addressing the issues and opportunities that will arise from the next phase of the project. Furthermore, we are available to support ESB Networks in undertaking a new technology trial, in order to better assess upsides and downsides of our solution in an Irish context, with particular attention to the communication scenario proposed in this document, and yet to be tested in Ireland. To conclude, in the spirit of a frank and open communication, please find enclosed my personal contact information. Please do not hesitate to contact me should further information be necessary. Sincerely, Antonello Buondonno International Business Development Mob.: antonio.buondonno@enel.com Enel Distribuzione S.p.A.

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3 Consultation on Proposed National Rollout of Electricity and Gas Smart Metering RESPONSE FROM: Enel Distribuzione S.p.A. RESPONSE SUBMISSION DATE: December 13 th, 2011 DOCUMENT TYPE: Consultation Paper REFERENCE: CER11191 DATE PUBLISHED: 15 th November 2011 CLOSING DATE: 13 th December 2011 RESPONSES TO: Gary Martin 2

4 List of Answers to the consultation paper Q1. Respondents are invited to comment on the proposed decision by the CER to proceed with the national rollout of electricity and gas smart metering as outlined in Section 2. Are you in favour of this proposal? Outline reasons for agreement or disagreement. Q2. Respondents are invited to comment on the proposed objectives of the National Smart Meter Programme outlined in Section 3. Are you in favour of the proposals? Outline reasons for agreement or disagreement. Enel is in favour of the CER s proposal to proceed with the national rollout of smart metering, based on the experience gained from smart metering implementation on our electricity network. Although our experience in gas is not comparable, we strongly believe that similar considerations apply. Enel s project stemmed from its knowledge of technology performance, cost- benefit analysis, advanced functionalities, integration with core distribution processes and energysaving programs. We have proven that smart meters can achieve a fast financial payback provided that solutions are reliable, robust and low cost. We also know that the future of grids resides in becoming smart, and such a process can be accomplished only with suitable meters. Experience tells us that smart meter implementation is optimal for any Utility, so long as the right solution is adopted the competitiveness will be improved. Furthermore, ease of switching supplier is essential in competitive market, and is improved by smart meters. Smart meters thus facilitate the growth of competition and engage customers in the energy savings process. Distribution processes can be re-engineered to improve efficiency, process integration and therefore reduce network operations cost for all consumers.. Customers may thus perceive increased transparency and trust through such sharing and thorough checking of information and data. We agree with objectives proposed. Based on our experience, savings from increased efficiency and process reengineering around the meter represents a significant part of the net present value of electricity metering projects. The key objective accomplished by such projects is thus an increase in operational efficiency in all operational processes relating to the distribution network. The quantification of consequential savings can testify to this. For example, it is easier to implement effective and automatic strategies for work force management when advanced metering infrastructure is 3

5 Q3. Respondents are invited to comment on the proposed working assumptions outlined in Section 4 relating to data ownership, display and provision. Are you in favour of the proposals? Outline reasons for agreement or disagreement. 1. Data Granularity already in operation. We generally agree with your proposals, particularly concerning the data security approach. Nonetheless, enclosed please find some additional comments/ observations based on our experience - regarding granularity, billing content and HAN architecture. a. We agree with your proposal. The choice of granularity depends on project objectives and on Irish energy market granularity. However, providing a finer and more customizable granularity (15 minutes) for electricity meters is a cost effective choice, allowing flexibility for possible future changes in the tariff scheme. Whereas the meter may be programmed to record data (load curve) at any given interval, down to one minute, having a 15-minute granularity allows achievement of the following targets: - enhancing consumption awareness in customers; - enabling more effective demand response solutions, peak shaving strategies and demand side management; - providing enough historical data to the Distribution System Operator for network asset planning purposes. Furthermore a finer granularity does not imply a cost increase if specified at the design stage. b. We fully agree 2. Data Access for Suppliers a. Both push and pull are effective solutions, though each with upsides and downsides. The push approach (i.e. meter sends data to central system) has the advantage of being near-real time. On the other hand it adds additional security requirements to the system. The pull approach (i.e. centrally managed data acquisition) has simpler security requirements since each client can be more easily authenticated and authorized centrally. It also has better performance in cases of large 4

6 3. Data Access for Consumers 4. Billing Content amounts of data since they can be downloaded in aggregated form. On the downside, it relies on client pulling for the retrieval of new data which adds latency to processes. The final decision should therefore be based on the requirements of the end-to-end business process. We agree that this issue should be considered further at the design stage and would suggest that a mixed approach (push approach for communication between meter and concentrator; pull approach for communication between concentrator and central system) is preferable as it combines the benefits of both, providing flexibility and efficiency. a. We agree on the ownership of data proposal. Managing and storing data is necessary for the Distribution System Operator in order to: - improve electricity load forecasting - significantly improve anti-theft measures and loss detection features thus achieving the full potential of smart metering. Furthermore, in our view, using a separate data portals for consumers and suppliers is more effective in order to support different service levels and security requirements. Moreover, consumer requests are substantially homogeneous whereas suppliers usually account for a lower number of requests, though each requiring a higher level of customization. b. We fully agree with your position. c. We fully agree, and suggest that when applicable, i.e. following consumer authorization, data be made available on the supplier portal (see 3.a). d. A domestic infrastructure is necessary to combine price data - provided by the energy supplier - and consumption data - provided by the meter, and to make such data available to both consumers and appliances through a HAN. An emerging standard, used by white goods manufacturers in order to enable energy efficiency services is ZigBee. Further details are provided in 6. In-Home Data. a. Smart meters must allow for any billing frequency. b. We fully agree. c. Imposing time of use tariff constraints progressively encourages awareness 5

7 and virtuous consumer behavior. However, suppliers should be able to propose both smart and efficient tariffs (i.e. flat tariffs) to consumers. Regulation can create the conditions to encourage time of use tariffs, this depends on the local market and rules. Smart Meters must support suppliers in offering time of use tariffs in as easy a fashion as possible, including real time and inexpensive changes to the metering/billing processes. 5. Data for Prepayments a. This is a very important point to address. The thin solution, based on telecommunications experience, though more cost-efficient, is not fully effective in the electricity industry because in some circumstances it is useful to centrally issue work orders regarding meter enablement. Enel proposes that the ideal solution is a combination of thick and thin approaches in which activation of energy consumption and credit updating are sent through work orders to the meter. In cases of credit exhaustion disconnection is directly managed by the meter. This solution is: - as cheap as a full thin solution; - as robust and tamper proof as a thick solution. 6. In-Home Data a. We agree with your proposal, however overall cost should be taken into consideration b. We agree with your proposal c. It is important to select effective information to be displayed so that customers are not overloaded, i.e.: current tariff, current power, current reading and average cost per month. Other information, with further elaborations, can be made available on a website. In our vision an IHD is not just a display but a device allowing the consumer to show information on different interfaces (PC, TV, smartphone, ); this will also cater to the requirements for vulnerable customers. d. We agree with this proposal e. For domestic appliances, integration into the HAN is necessary to define a common communication platform for appliances to make such data available to both consumers and appliances through a HAN. An emerging standard, used by white goods manufacturers in order to enable energy 6

8 efficiency services is ZigBee. 7. Data Security and Protection a. We fully agree with your proposal. All communication between central system and meters should be encrypted while access to devices (i.e. meters, concentrator) should be authenticated or even mutually authenticated AES 128 bit encrypted keys. b. We fully agree. 8. Vulnerable Customers a. We agree with your proposal. In our experience, information regarding vulnerable customers is stored and managed by the Distribution System Operator, as an independent body to suppliers. The central system should be designed to take into consideration vulnerable customer needs, but process ownership usually belongs to DSOs. Q4. Respondents are invited to comment on the proposals outlined in Section in relation to the electricity smart meter functionality requirements. Are you in favour of the proposals? Outline reasons for agreement or disagreement. We generally agree with your proposals, particularly concerning data and information necessary to DSOs and customers. Enel believes that the availability of complete and accurate information is a fundamental advantage of smart metering and one which has been subject to great improvement following Advanced metering infrastructure implementation. Nonetheless, enclosed please find some additional comments/ observations based on our experience - regarding granularity, time of use tariffs structure and HAN systems. 1. Half-hourly profile data We agree with your proposal. In our experience, even if the Irish market is settled on basis of 30 minute blocks, providing a finer and more customizable granularity for electricity meters (15 minutes - please see Q3. 1a) adds flexibility for possible future changes in tariff scheme. The system may be programmed to record data at any given interval, down to one minute, however 15 minutes granularity is considered a baseline to serve the two-fold purpose of billing accuracy and a satisfactory storage of historical data available to suppliers and to DSOs. Moreover our experience suggests extending the profile data/load curve to include: Positive active energy (imported) (A+) Negative active energy (exported) (A-) Positive inductive reactive energy (R+L) 7

9 Positive capacitive reactive energy (R+C) Negative inductive reactive energy (R-L) Negative capacitive reactive energy (R-C) Power Peak Power Peak Time Stamp Reactive Power Peak Reactive Power Peak Time Stamp 2. Time of Use It is very important to design a cost effective electricity meter. In our experience 4-6 Time of Use registers cover 90% of time of use tariffs proposed by suppliers / regulator to consumers. Providing more time of use registers will cause an exponential increase in meter and software cost. For each time of use register, up to 10 measurements can be stored (see comment Q4.1.). A finer tariff granularity can be achieved through load curve management, using rate registers to control and certify consumption. In this mechanism concentrators download the load curve every day, however each curve is stored for up to 38 days for quarter hourly curves and 76 days for half hourly. 3. Import and Export Measurements We fully agree, for details see above comment Q Wattless Energy Measurement We fully agree, for details see above comment Q Power Outages monitoring We agree with your proposal, in our experience it is cost effective to design a meter recording Voltage Interruption and Voltage Variation according to EN Tamper alert We agree with your proposal. Aside from traditional tamper alerts, theft prevention and detection capability can be augmented by means of an algorithm for the discovery of fraudulent consumption and of energy load balance at the substation level. 7. Voltage / Power Quality Monitoring We agree with your proposal. A useful feature is Voltage interruption and Voltage variation detection according to EN Further requirements, such as flicker recording, etc are very expensive and European technical regulation is still unclear at the moment. 8. Remotely operable switch A remotely operable switch can be extremely useful. Our suggestion is to provide an easy-to-use reclosing strategy for reconnection by an in-home general 8

10 switch through a latching relay. 9. Legacy Load It is technically feasible that an electricity meter can control the legacy load. This decision implies a cost increase in meter and in central system. In this phase it could be useful to assess a distinct solution in order to control the legacy load independent from the electricity smart meter. 10. Load Limiting Capability We fully agree with your proposal, in our experience a system allowing load shedding capabilities enables a more efficient load management. 11. Upgradeable firmware We fully agree 12. Strong Encryption We fully agree. See point above point 7a of Q3 13. Data Storage We agree with your proposal, the meter can store the billing data of up to 3 billing periods so that, in case of contingencies or data verification, back-up readings can be carried out less frequently (e.g. every couple of months) without any loss of information. For the same reason, as described in Q4.2, meters could store load curves up to 38 days at 15 minutes resolution or up to 76 days at 30 minutes resolution. 14. Meter lifecycle We agree with your proposal. All cost benefit analysis we have seen confirm that a 15-year lifespan is the best choice for balancing meter cost and durability. 15. Communications module This is actually the most important point to address. From a technological point of view it is feasible that an electricity meter could act as a hub. However from this choice three additional issues arise: - all electricity meters will be more expensive (up to 20%) due to the presence of a communication module; - the maintenance and life cycle of electricity meters will be seriously affected by the presence of such a built-in communication module; - communication becomes less reliable, robust and secure. We believe that a WAN communications technology scenario based on: - PLC communication between electricity meters and data concentrators - PLC communication between micro generation electricity meters and data concentrators - MHz between gas meters and data concentrators to be built both in rural areas and in urban ones is the most reliable, robust, easy 9

11 to maintain and secure. Given our understanding of the Irish network, we think PLC for urban and rural is possible. Furthermore we decided to proceed with RF for gas smart meters because feasibility studies we have conducted indicate it as the most promising solution. Such a solution provides two additional benefits: - less expensive electricity meters without any additional communication module - electricity meters for micro generation are the same as those used for customer points of delivery (PoD). As a downside of the proposed solution, the old generation of gas smart meters would cause a cost increase due to the necessity to buy, install and operate a separate RF communication module. By 2012 a new generation of gas smart meters will be available, featuring a built-in RF communication module and a built-in antenna, avoiding the previousrly mentioned downside. Data concentrators, installed at substations level, could easily act as a hub for all devices. In the Irish case, this could reduce the number of communication modules down to just 227,000 instead of 2.2 million. Q5. Respondents are invited to comment on the proposals outlined in Section in relation to the gas smart meter functionality requirements. Are you in favour of the proposals? Outline reasons for agreement or disagreement. Q6. Respondents are invited to comment on the proposals outlined in Section in relation to the Wide Area Network (WAN) functionality and technology. Are you in favour of the proposals? Outline No comments. Enel is currently preparing its study and strategy on this subject. We agree with the approach proposed in the consultation paper, of specifying a high-level design. We would comment at this stage that PLC based WAN - is widely accepted and considered the most cost-effective solution for electricity smart metering. An alternative solution based on radio frequency can indeed increase costs significantly, by 10-15%. 10

12 reasons for agreement or disagreement. - is effective for both urban and rural electricity meters; - can achieve a higher reliability rate. can be used for gas and water metering (see Q4.15 for details). Q7. Respondents are invited to comment on the proposals outlined in Section in relation to the Home Area Network (HAN) functionality and technology. Are you in favour of the proposals? Outline reasons for agreement or disagreement. Utility HAN 1. The exploitation of the electricity meter as a communications hub is technically feasible, although it is not the most effective solution from a communication flexibility and cost effectiveness point of view (see Q4.15). 2. Electricity meters should be able to communicate via PLC, directly to the data concentrator. 3. We agree. In the Irish case, as well as in most European business cases, benefits are mainly to be attributed to electricity smart metering (usually no less than 2/3 of total) it is hence logical to deduce that water metering benefits are less evident, therefore the extension requires further analysis. Non-utility HAN The integration of domestic appliances in the HAN requires the definition of a common communication platform that supports energy efficiency services. In this new platform the data managed by the smart meter can be used thanks to IHD. The former is responsible for collecting data via PLC from the meter, making it available to the HAN, and acting as a hub for non utility devices. Today the emerging standard for HAN concerning domestic appliance integration appears to be ZigBee. However, the solution we propose is quite flexible: in cases of Wi-Fi/HAN communication technology improvement or updating, the in-home device can be easily replaced, avoiding interference with the overall smart metering system. It also allows the exploitation of robust and secure communication over PLC. Q8. Respondents are invited to comment on the proposals outlined in Section in relation to the procurement model. Are you in favour of the proposals? In We fully agree with your proposal. We believe it is better to separate the procurement of electricity from that of gas, this way the respective processes are greatly simplified and implementation risks are reduced. 11

13 particular, which of the two IHD provision responsibility options outlined do you prefer? Outline reasons for agreement or disagreement. Q9. Respondents are invited to comment on the proposals outlined in Section 6 relating to the implementation approach and timelines. Are you in favour of the proposals? Outline reasons for agreement or disagreement. The proposed organization of procurement activities implies a different and distinct timeline for the deployment of electricity meters and gas meters. In our experience, electricity smart metering technology is more mature and ready- for-market. Furthermore benefits deriving from electricity smart meter deployment are more than 65% of the whole project. By starting rollout in 2013, the project will be completed years before forecasts, allowing: - preparation of the communication infrastructure for gas meters; - capturing benefits years before the current timeline. To conclude, we do not believe that there are significant synergies in installing electricity and gas smart meters at a once, as these works are performed by workers with different skills. Furthermore, separate deployments allow to reduce complexity, interferences and provide a faster and more reliable tuning of both metering systems, less than offset by a potential smoother impact with customers. END 12