Pillar 3: digitisation
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 respond quickly and at acceptable costs to the radical changes taking place in the energy system. Digitisation allows us to quickly detect and even prevent faults, make more targeted investments in the networks and offer customers the data they need to make sensible energy choices. The benefits for customers include reduced outage duration and a more customised service. In this way, we can often restrict the scale of costly network upgrades. Alliander has therefore opted for extensive digitisation of its networks, using state-of-the-art innovations.
Digitisation programme under pressure
We are currently falling short of our digitisation ambitions. We had set ambitious digitisation targets for the year under review, precisely because this is a crucial development. One target was to complete 95% of our planned digitisation programmes, but we only achieved 8%. The main reason was that the renewal projects were more complex and labour-intensive than anticipated. More time is necessary to bring these projects to a successful completion. In addition, we had initially planned to commence the roll-out of smart switching cabinets at our stations in 2016, but this application took longer to develop than foreseen. A shortage of technical, engineering and implementation capacity also prevented us from realising the planned digitisation of medium-voltage stations in 2016. Nevertheless, the roll-out of intelligent networks continues: in 2016 we stepped up the pace of digitisation in the northern part of the province of Noord-Holland and started on the first intelligent network in the province of Gelderland. We will press ahead with these efforts in 2017.
Impact case: Digitisation in the north of Noord-Holland
In the northern part of the province of Noord-Holland, Alliander accelerated the digitisation of its network. In view of the ample supply of local solar and wind energy, this region is a good place to study the impacts of our digitisation strategy. This impact analysis compelled us to determine very precisely what savings we expect from the smart meter, the influence of local generation on our grid losses and, above all, the expected avoided investments in cables. As expected, the financial effects will only become visible once the energy transition starts to accelerate after 2030. The positive effect in terms of CO2 for our customers is already visible during this period.
Smart meter: the progress so far
One crucial link in our efforts to create a more intelligent infrastructure is the smart meter. Customers are increasingly making their own energy decisions. The smart meter helps customers to save energy and use it when costs are low. Or to feed energy into the grid when the electricity price is high. The aim is to offer all our customers a smart meter by 2020. We are doing this in close cooperation with our partners, such as contractors. In 2016, meters were offered at 428,000 addresses, which means we met our target for 2016. Every month, we display the progress made on our website.
During the procurement process for the large-scale offering of the smart meter, Alliander not only considered quality and costs but also corporate social responsibility aspects such as ‘fair’ electronics and ‘circular’ design. The results of these CSR efforts were presented at various events in 2016.
Dilemma: role of network operators in offering the smart meter
In the year under review, a lot of attention was devoted to an investigation into the smart meter by the Netherlands Environmental Assessment Agency (PBL). One conclusion of the PBL was that market parties have so far failed to convince customers of the benefits of an energy management tool that can be connected to the smart meter. The customer is losing out as a result. This is clearly disappointing, because we want the customer to emerge as the winner. The PBL has identified three possible strategies: continue the current policy, revise the policy or experiment with a new approach. As things stand, the role of the network operators is confined to placing the smart meter. However, they could be given a more active role in encouraging public acceptance. For instance, by making real-time usage data directly available so that customers obtain instant insight into how they can save energy. The market can then offer energy-saving solutions in response to the customer's wishes.
Data security and cybersecurity
In 2016, the network operators were collectively confronted with the presumed theft of customer data from the central customer data registers (EDSN). This resulted in strong regulatory and political criticism. And rightly so. For too long, market parties had relatively easy access to the registers containing personal data on connections, annual usage and energy contracts. Customer data must be safe, without impairing the quality of service during changes of address or switches of supplier. Appropriate measures were taken (see also What have we learned?).
The digitisation of the energy networks and the use of the smart meter involves a different type of data security. Our cybersecurity experts keep track of the latest developments and introduce the newest data protection methods. The fight against cybercrime is never-ending and requires permanent vigilance and training. Knowledge from informal sources, such as hackers, is also helpful. We analyse attacks on systems of e.g. banks – also a topical issue in the Netherlands last year – and network colleagues elsewhere in the world. Alliander works closely with the National Cyber Security Centre and regularly carries out spot checks to ensure employees handle data safely.