Using Information Technology to Meet the Carbon Challenge
1. Using Information Technology to Meet the Carbon Challenge Jon C. Arnold Managing Director, Microsoft Utilities Group
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3. Utility Industry Market Drivers Energy Technology Consumerization Globalization & Price Pressures Workforce Challenge Resource Adequacy and Operational Efficiency Regulatory Uncertainty Climate Change The drive for sustainable and cleaner energy sources shifts energy efficiency and distributed generation into the hands of consumers. - Gartner May 2007 Costs surge for building power plants due to the incredible demand in China and the rest of Asia for raw materials. – New York Times 2007 More than half of today’s utility work force (about 300,000 workers) will be eligible for retirement over the next 10 years and most of them plan to retire. - U.S. Bureau of Labor Statistics “ We are at the stage where emergency situations are becoming more frequent.” - Rick Sergel, president and CEO of NERC Regulatory certainty and climate now supersede concerns about reliability and fuel costs. – GF Energy CXO Survey 2007 Over 90% of the industry’s CEO’s now expect to implement a global climate strategy. - GF Energy CXO Survey 2007 Note: In “Show mode” Click on a topic box for additional information “pop-out” Click on the same topic box again to make it go away. If you click anywhere else it will go to the next slide
4. Trend in Global Average Surface Temperature Business and Regulatory Environment
5. Shareholders and credit agencies are taking note… Iberdrola’s Emissions Indicators, 2005–2006 Business and Regulatory Environment 229 197 11,297 11,067 48.8 62.3 16,376 58.7 16,077 65.3 C0 2 emissions over the period (gr. CO 2 /KWh): Total 250 C0 2 emissions over the period (gr. CO 2 /KWh): Spain 227 Emission-free production: total (GWh) 10,586 Emission-free production: Spain (GWh) 10,370 Ratio of emission-free production to total production (%) 49.5 Ratio of emission-free production in Spain to total production (%) 61.7 Total emission-free installed capacity: (MW) 15,679 Total emission-free installed capacity: (%) 60.6 Emission-free installed capacity: Spain (MW) 15,372 Emission-free installed capacity: Spain (%) 68.0
Drivers Climate-focused energy policies and regulations Consumer and business awareness and concern with climate change issues Climate change/sustainability attention by investors and credit rating agencies Increased venture capital investment in clean/green technologies
Corporate quarterly reporting beginning to reflect environmental measures and sustainability indexes. Social responsibility reports gain in popularity.
New Twists on Existing Technologies and Services Software Financial (accounting of carbon credits, settlement) EH&S (monitoring and reporting for compliance and voluntary) Supply chain management (inventory, materials sourcing, logistics) Product life-cycle management (design of green products or components) Energy trading and risk management (trading, risk management of carbon emission credits or renewable energy credits) Analytics (analyzing exposure related to asset portfolio or source of electricity, service fleet optimization) Databases (emissions repositories, allocations repositories) Web self-service/ tele-presence (online booking for air travel with purchase options of offsets, reduce commute time Services Carbon management solutions including monitoring, verification, management, trading, risk management Supply chain management solutions including decision support for proximity
AEP recognizes that there were efficiencies to be gained through better business processes and information technology to support compliance. The specific challenges the company faced included: Complex and changing reporting requirements. AEP must report to a multitude of regulatory agencies – local, state, federal – on a variety of measures – air quality and emissions, water, toxic release, health and safety – which require complex reporting. For example, even though Title 5 applies across the United States each facility has its own permit which requires a different technology configuration and reporting requirements for each facility. Or another example - the AEP Northeastern plant must report to the state of Oklahoma within 24 hours of an exceedance. By assuring they have the data required to comply with these regulations, AEP makes sure they reduce emissions in accordance with the regulations. Substantial amount of data to be processed. As with other power generators, AEP is required to install continuous emissions monitors (CEM) to track emissions under the Clean Air Act. CEMs produce a steady flow of time series that that must be transmitted, stored and processed. This requires a system that is capable of handling time series data and tens of thousands of records. Data from these CEMs is used to report to regulators and voluntary registries. It can also be used to manage carbon emissions. Limited access to data for compliance management. Historically, much of the reporting was done manually using spreadsheets and log books. This made for a labor intensive process when the company received inquiries from regulators on compliance data. In addition, it was not easy for environmental coordinators to access information about the status of regularly required (weekly, monthly, quarterly or annual) tasks, taking time away from actively managing compliance activities. Aging workforce. Like other utilities, AEP plant engineers and environmental compliance personnel are reaching the age of retirement. While the company has documented practices for compliance, this documentation is not always easily accessible. Without documentation of the steps to take to stay in compliance, the company was at risk of losing valuable knowledge on the required approach to meet complex regulatory requirements. Variations in business process and technology. In the late 1990s, AEP acquired a Texas utility company and has since been in the process of integrating systems across the plants. Standardization across plants would allow the company to improve on meeting regulatory requirements and, more importantly, develop common practices and approaches to energy efficiency and reduced emissions at the plants. Solution: The standardized approach to compliance management that would: Provide consistency of reporting, Automate the reporting process, Document the compliance process, Be accessible to all personnel needing access to information, and Keep up-to-date the multiple and detailed reporting requirements for compliance across all the jurisdictions where AEP operates. Basic system requirements were the ability to: Scale to handle large data sets (50,000 records or more). Have adequate levels of security. Meet company requirements for performance and user responsiveness. In 2003, AEP embarked on a project to enhance the way it measures and reports environmental compliance, including emissions and subsequently water and waste. The MESH project – managing environmental, safety and health – would have an information technology component – iMESH and bring AEP into compliance with ISOc 14001 standards. The goal is by 2010 to have all facilities (including all generation plants) working on the same system. In 2003, the company piloted the use of software as a service (Saas) in a test site at one plant. After the initial pilot, AEP elected to utilize the solution by Enviance for compliance management and reporting. The software as a service provides compliance reporting for multiple jurisdictions and types of compliance, workflow, and compliance task management. Getting to Software Plus Services Senior leadership at AEP have expressed a commitment to achieve the greatest level of transparency in the organization so that all levels of the organization, especially executive level management, can see how well the company is doing against goals, based on data that is accessible and verifiable. According to one executive, "It is important that all employees of AEP see the overall picture, and that the picture is consistent and allows them to make progress against the goals that the company is committed to." AEP envisions a combination of Saas and internal IT applications and application infrastructure as the next phase in the development of systems for emissions management. Figure 7 displays the data hub that AEP is considering. This hub will allow the company to do sophisticated analysis of hourly trends in emission data. Besides the compliance division, there are numerous other business units that need different breakdowns of emissions data – by operating company, percent ownership, stack, and others – or what some term as business or operational intelligence. Increased Efficiency Freeing Time for Compliance Activities – doubled their capacity for work Now that the system is rolled out to X plants, AEP is reporting an increase in accuracy and efficiency of compliance reporting. With the combination of the Saas, plus new business processes, the staff - AEP has 125 staff dedicated to day to day compliance support - have doubled their capacity for work. For example, toxic release reporting was typically done every five months through a manual process of collecting data and reporting via multiple spreadsheets, now one staff person is able to generate monthly toxic release reports. Documented Processes to Mitigate Aging Workforce Another significant benefit of the installation was obtained through the process of implementation. Not only did exercise yield common business practices, but the company was able to implement more precise and well documented procedures. The steps for meeting certain regulatory requirements are clearly documented. This is especially helpful for those tasks that are not required to be completed every day, but only every 2 or 3 years. Then too, as employees retire or change position, a system which contains full documentation of compliance procedure eases the transition to new staff and helps assure the company will remain in compliance going forward. Improved Visibility and Collaboration Speeding Resolution Under the previous system, an environmental engineer in Dallas would enter compliance tasks into a log book that stayed in the plant. Now appropriate Columbus-based employees with approved access can log onto the Saas and view the task and know whether it has been completed. At the same time, collaboration between personnel has been made easier. An engineer based in the Columbus headquarters can communicate with the plant operator while looking at the same data, and thus more quickly come to resolution and a plan of action. The fact that the Saas is based on a Microsoft platform and is engineered to work with Microsoft desk top applications, has contributed to collaboration. Staff can easily draw data into a spreadsheet, manipulate and analyze that data and XXX Reduced Notices of Violation Platform to improve performance by raising employees awareness of events that could be potential risks and providing the analytical tools and a communication path for preventive action
ETrac Project Team Bob Schnelle, Sr. Project Manager Challen Bonar, Project Lead ETrac is enabling Duke to minimize business disruptions and fines through significantly improved compliance management Standardized on SQLServer 2005 for the ETrac requirements, across Development, Test, QA and Production environments Use Microsoft Sharepoint for all EMIS needs, as a document repository and communication vehicle Also using Microsoft Reporting Services More Business Benefits: Greater executive visibility of compliance issues – company’s officers need to know the issues, risks and costs associated with compliance Creates a compliance process within the organization, and knowledge capture, that mitigates the risks associated with an aging workforce Improvements in role-base productivity: assignment of tasks for compliance issues makes plant manager accountable for his compliance requirements, while the VP of Operations becomes accountable for more macro compliance issues ESS Essential Compliance Manager TM Essential Task Manager Essential Air TM Essential Water TM Essential Waste TM
Caption: Illustration showing hot and cool areas in a server row. Data centers visualize this information to ascertain areas of excessive heat and overcooling. Overcooled areas are a waste of energy and areas that are too hot jeopardize equipment performance. Microsoft Releases a Set of Best Practices for Energy Efficient Data Centers Infoworld writes on Microsoft's release of a set of best practices for Energy Efficiency Data Centers. Microsoft will release a set of best practices for administrators running datacenters, focusing on energy-saving strategies the company is implementing in its own operations, CEO Steve Ballmer said Monday. Those tips will covers issues such as how to pick a good site for a datacenter, how to deal with heat, and how to manage power consumption, Ballmer said during a keynote presentation at the Cebit trade show in Hanover, Germany. The move is in response to growing concern over the release of carbon dioxide, one of the byproducts of burning fossil fuels to create electricity. In addition, power demands are ever-increasing, Ballmer said. "If you look at non-travel power consumption in the world today ... information technology is one of the most rapidly growing power consumers on the planet," Ballmer said. "We think we have a real responsibility ... to reduce power consumption by the IT industry." White Paper at: http://download.microsoft.com/download/a/7/b/a7b72ab1-ca17-4589-923a-83b0ff57be6d/Energy-Efficiency-Best-Practices-in-Microsoft-Data-Center-Operations-CeBIT.doc
