By the end of the year more than 30 million electricity low voltage meters will be connected to the Telegestore communication network, and Enel and all its customers will benefit fully from this new system.
This has been a challenging and successful year for Enel. The main goals have been to focus on complete meter replacement, to increase the number of meters remotely read and managed, and to launch new services for the customer. Moreover Enel has entered into a successful alliance with IBM to offer the AMM solution to other utilities worldwide,” states Vincenzo Cannatelli, Chief Operating Officer of Enel’s Market and Infrastructure and Network Business Unit. “The revolution in tariffs that we started in January 2005, launching six new tariffs for domestic and two for business customers, is a turning point in the Italian electricity market and opens a new era in marketing and sales; it positions Enel at the edge in customer orientation”.
The basic functionalities of remote management of the contract and remote reading are on track with the replacement plan (see Table 1). In addition, the main results that Enel has achieved in the past 18 months on the AMM side (see Table 2) are the launching of the eight new and innovative tariffs, a new procedure of remote disconnection of overdue customers, remote execution of more than 30,000 transactions per day, remote reading of consumption data from over 700,000 meters per day, as well as bi-monthly reading for domestic customers and monthly reading for business customers.
THE ENHANCED FUNCTIONALITIES
In January 2005 Enel started a marketing and sales revolution with the launch of the new tariffs, which are fully based on the technology of the Telegestore system.
Enel’s main objectives in launching the new tariffs are:
• To establish the future competitive scenario and gain a foothold in the deregulated market.
• To strengthen the Enel brand with innovation.
• To customise the new offers according to the lifestyle of our customers.
• To reduce peak demand.
• To optimise network usage.
The tariffs are targeted to different kinds of customer – resident and non-resident, large families and singles, low income households (eg. pensioners) and holiday home owners. They will all benefit from this ‘revolution’, saving up to 80 euros on their annual electricity bills.
Thanks to the AMM solution, Enel is at the forefront of the international scene, and has been able to launch a wide range of services as a result of understanding customers’ needs. At national level the shift from a standardised tariff to new differentiated tariffs that allow customers to choose the one that best suits their needs, and thus to save on energy bills, represents a turning point in the electricity market. More than 18 million customers (those who are already remotely metered) have been involved in this offering, and take-up is about 3%. That is regarded as high for a new product in such a conservative commodity market. And this is just the start; as soon as the market is liberalised (January 2007) Enel will be more innovative still in tariff design.
At the same time Enel has reaped the benefits of demand side management on the production side. AMM allows peak demand to be shed, with expected savings of 3,000 MW of capacity in Italy alone. This is an important benefit for the nation too – to move 1% of consumption from peak hours to off-peak hours is the equivalent of switching off a 3,000 MW power unit. This means that inefficient power plants are not required to produce energy for only a few hours a year.
Now that the successful implementation of the system has been proven, the Italian Authority is pushing for a massive installation throughout the country, via a mechanism of penalties to distributors. This will allow all Italian customers and the country to benefit from the AMM system.
Another important innovation is the management of bad payers. Previously customers who did not pay their bills were directly disconnected, and after a while the contract was cancelled. Now, thanks to the load shedding function, Enel can curtail the energy available by 90%, allowing the customer to use some lights and a refrigerator. This also allows customers to understand the situation and to pay their bills. If a customer still does not pay, Enel disconnects him remotely, avoiding possible risk to the person who would have performed the disconnection manually. But this procedure also allows Enel to:
• Perform the remote disconnection of overdue customers and avoid unauthorised connections with certainty.
• Limit the credit activity of overdue customers.
• Limit unauthorised energy consumption and irregular usage.
• Get immediate access to accurate information about overdue customers.
Another benefit of the electronic meter is the storage of load profile data. Enel is starting to download customer load profiles for two reasons:
1. In the case of business customers, the regulator has laid down that bills have to be based on load profiles.
2. For domestic customers, load profiles help to better understand consumption habits and thus to tailor tariffs based on customer needs. It also allows Enel to benefit from demand side management, and to make better forecasts of energy consumption.
By the end of this year Enel will use load profile data to cluster customers and to make specific offerings based on consumption habits.
Of course the Telegestore system continues to evolve – there are plans for many new functionalities to be added, as well as new development of the meter itself. For instance, Enel has launched a pilot test of multi-metering with our sister company Enel Gas, the second-largest gas provider in Italy.
Enel and IBM are also testing sub-metering systems for business customers, for instance hotels and resorts, to measure the con-sumption in each room or apartment. Other future developments will be the monitoring of service quality and energy balances in secondary substations. IBM has also launched a pilot test, with Enel’s support, of an AMM system for low voltage networks based on peer-to-peer connection. This has meant that a GSM modem has been integrated into Enel’s electronic meter. A product such as this brings together both PLC and telecommunication technology, and is suitable in several situations – for example for energy resellers and for energy providers who want to offer prompt metering services to their customers.
BUSINESS DEVELOPMENT IN OTHER COUNTRIES
Utilities in other countries have shown great interest in the Enel project and in Telegestore technology. In March 2004 Enel teamed with IBM to deliver Enel’s advanced automated metermanagement (AMM) system solutions to utilities worldwide.
The agreement combines IBM’s global delivery capability, systems integration skills and business transformation services with Enel’s expertise in electricity distribution, involving the use of advanced hardware and software systems for the management of energy consumption data.
IBM and Enel estimate that the potential worldwide market for AMM solutions is worth more than 120 billion euros. Enel is the only utility to have applied and tested this technology on a large scale.
IBM has now contacted more than 200 utilities and national authorities all over the world, with significant results. The first utility to adopt the Enel-IBM solution was ASM Brescia, an Italian multi-utility with 200,000 customers. The project is halfway, and has already shown that the system is suitable for smaller utilities. Other small Italian companies are adopting Telegestore, and IBM is at an advanced stage of negotiation with utilities in Europe, Asia-Pacific and North America, with strong interest being shown by Latin America and Africa. The major benefits of the system are not restricted to remote meter reading – improved field operations and revenue protection also make a great contribution.