Pillar 3: Alliander digitises
Advancing ICT is rapidly unlocking new digital opportunities for managing our networks. Thanks to the installation of smart meters, sensors, remote-controllable switches and a telecom network, we can quickly detect and even prevent faults, make more targeted investments in the networks, and offer customers the data they need to make easier energy choices. Upgrading of the energy network can be limited in this way. Alliander has therefore opted for far-reaching digitisation of its networks, including the innovations necessary to achieve this.
In 2015, our objective of realising the most important digitisation programmes was only partly achieved (64%). The pilot preceding the large-scale roll-out of intelligent networks lasted longer than expected. Our strategic choice for far-reaching digitisation remains a key priority in the coming year.
How intelligent networks help our customers
Alliander has opted for extensive digitisation and innovation of its networks. This includes the installation of sensors, remote-controllable switches and a telecom network. This allows us to respond quickly and at acceptable costs to the radical changes taking place in the energy system. Another advantage of smart networks is their robustness. Smart networks are more reliable than the existing networks as the causes of interruptions are easier to find and resolve. The benefits for customers are reduced outage duration and a more customised service. But digitisation carries risks too. Hence our strong focus on cyber security. Alliander participates in the European Network for Cyber Security (ENCS) to promote the cyber protection of its networks.
One crucial link in our efforts to create smart networks is the smart meter. In the coming five years, all our customers will be offered this new meter. Customers are increasingly making their own energy decisions. The smart meter helps customers to use energy when costs are low. Or to feed energy into the grid when the electricity price is high.
In 2016, we intend to offer the smart meter at almost 450,000 addresses. Last year we made intensive preparations for this large-scale roll-out and sought to minimise the risk of failing to meet the timelines agreed with the Ministry of Economic Affairs. As well as being remote-readable, our smart meter is also sustainable and 'fair'. Key procurement criteria included the use of sustainable materials, the origin of raw materials, the exclusion of child labour, and circularity.
Impact of the smart meter
Combined with apps, the smart meter gives users insight into their energy consumption and how they can save energy. This is how the smart meter can help to reduce greenhouse gases. In 2015, Alliander installed about 280,000 smart meters. The aggregated emission savings during the lifetime of the smart meter can add up to about 255 million kg CO2, equivalent to the CO2 emissions from the energy consumption of almost 57,000 households! These numbers include the - extremely small - negative impact of CO2 released during the production of the materials, the placement of the smart meter and the processing of the old meters.
Other positive effects are the cost savings arising from the lower energy usage of consumers and the reduction in administrative network losses. The annual potential saving for our customers is € 8.5 million. Discounted over the smart meter’ 15-year lifetime, this works out at a cost reduction of more than € 112 million. The lifetime gain from the reduced administrative network losses amounts to about € 5 million, bringing the total savings to over € 117 million. Against these savings, there is an investment of € 50 million for the smart meters placed in 2015.
In the near future the positive impact of the smart meter will increase further when the data are used to track and monitor energy flows. This innovation, alongside the incentives for customers not to use the network at peak times, can help to avoid investments. These benefits further enhance the potential value of our smart meters. Needless to say, our use of the smart meter will at all times comply with applicable privacy and security laws.