UTILITY DATA EMERGENCE OF A UTILITY BIG DATA MARKET PLACE: A MYTH OR REALITY? By Sumit Kumar Ray and Anindya Pradhan, Tata Consultancy Services (TCS) Utilities’ value chain is changing The power sector is on the verge of an historic transformation. Consumer empowerment and blurring of industry boundaries is resulting in competition from outside the industry. The advent of consumer-centric new enablers like demand response, electric vehicles, energy efficiency, distributed generation and their convergence can pose an existential threat to a volume-based traditional business model. There is a shift towards new models to enable energy services. Data from smart meters and digitalization provides the potential to enhance the customer experience, create new products and services and make field force more empowered and intelligent. The drive towards innovation, reliability, sustainability and efficiency is also changing the utility value chain – with the consumer becoming the prosumer (producer + consumer), distribution network operators (DNOs) becoming distribution system operators (DSOs), centralized generation competing with virtual power plants and a shift from supply management to demand management. of the grid. We might see marginal energy pricing at post code level. Imminent changes Regulatory reforms are also indicative of more commoditized markets being ready to embrace higher participation. The electricity market reform (EMR) in the UK is introducing capacity markets alongside the existing energy market. The capacity markets will encompass both generation and non-generation resources. In non-generation resources, demand side reserve (DSR) and storage are considered and will receive a predictive revenue stream for providing reliable capacity. The net amount of capacity needed to ensure security of supply will be contracted through a competitive annual auction run by the system operator where both generation and non-generation approaches such as DSR will be able to participate. The reform will encourage aggregators to participate and transact based on resources on the demand side. The intermediate arrangement of demand side balancing reserve (DSBR) allows participants to either reduce or generate energy without attracting penalties in case of failure. The financial returns for a provider when they can deliver service (by reducing demand or increasing generation) are quite attractive and this incentive will attract providers. These are probably early indications of free transaction based markets. In Germany, direct marketing of the energy generated by renewable energy generation plants has become mandatory and the operators of new renewable energy plants will receive the statutory feed-in tariff only in exceptional cases, thus making it more market driven. New enablers like EVs have achieved a higher penetration in certain European countries like Norway, which has the highest EV market share, highlighting a trend towards a transactive grid. Transactive energy is also gaining popularity in the US, with a much greater percentage of intermittent renewables along with a greater role for demand response and dynamic pricing to influence loads. The key to transactive energy is the interaction and coordination between the variable generation and variable load. The Pacific Northwest Smart Grid Demonstration is one Consumer behavior and other factors in grid plays Empowered consumer and new enablers like distributed generation, PHEV (plug- in hybrid electric vehicle) will influence the way the grid is going to operate by bringing in an uncertain and probabilistic element. The operation of the grid will be significantly impacted by: • Economic factors like buy-and-sell decisions based on the market price, government subsidy and feed-in tariff for renewable encouragement; • human factors like consumer preference for green fuels; and • technology factors like smart thermostats and intelligent interactive home appliances. The intermittent nature of renewables, movable loads like electric vehicles and technology influences on human nature, coupled with the constraints of physical distribution infrastructure, will need a finely grained structure to manage the economics METERING INTERNATIONAL ISSUE - 4 | 2014 Figure 1: The big data market place. 63