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Enterprise

Architecture
Vision
Smart Grid for City of Ottawa

Executive Summary
City of Ottawa
Ottawa is Canadas capital, in the southeastern province of Ontario, near the city of Montreal and
the US border. The City of Ottawa is the corporate entity of municipal government in Ottawa.
The corporation is responsible for provision of services to the public as well as enforcement of
municipal by-laws. It is overseen by the City Manager (Steve Kanellakos) and responsible to the
Mayor of Ottawa (Jim Watson) and City Council.1
The current population of the City of Ottawa is 960,756 with approximately 403,197
households.2 City has more than 25,000 employers, more than 728,000 jobs and is home to the
Government of Canada, Parliament, the Supreme Court, and various other government
organizations.3
There are five main energy types supplied to Ottawa: electricity, natural gas, heating oil, propane
and vehicle fuels. Most of Ottawas electricity is produced by Ontario Power Generation, and
transmitted to Ottawa via the Hydro One grid, which owns 97% of Ontarios 30,000 km of
transmission lines. Energy is delivered from the transmission system to the distribution network
through a number of transformer stations across the city. The largest of these are owned by
Hydro One, while the remainder are owned by Hydro Ottawa. Locally, electricity is distributed
within the urban area by Hydro Ottawa (which is owned by the City of Ottawa) and in the rural
area by Hydro One, with some exceptions.4

Problem Statement
The City of Ottawa is growing at a very fast rate, and the electricity sector has become the focus
of heightened interest in the context of escalating concerns over emissions, security and energy
demand growth. The electricity infrastructure experienced a steady growth during the 1970s and
1980s, as a result the time is now due for most of the aging infrastructure to be replaced. In this
scenario, utilities and policy makers are implementing Smart Grids, rather than just replacing
existing poles and lines, as a means to several ends conservation, energy efficiency, the
integration of renewables, greener communities and sustainable transportation (to name just a
few).
A Smart Grid is a modern electricity system that uses sensors, monitoring, communications,
automation and computers to improve the flexibility, security, reliability, efficiency, and safety of
the electricity system.5 An automated, widely distributed energy delivery network, the Smart
Grid will be characterized by a two-way flow of electricity and information and will be capable
of monitoring everything from power plants to customer preferences to individual appliances. It
incorporates into the grid the benefits of distributed computing and communications to deliver

1 https://en.wikipedia.org/wiki/city_of_ottawa
2http://ottawa.ca/en/city-hall/get-know-your-city/statistics/population-and-households-occupied-dwellingsestimates-sub
3 http://investottawa.ca/why-ottawa-old/city-profile/

4 http://app05.ottawa.ca/sirepub/cache/2/52r5ild322fk0jdpqrvhkqvs/19144410152016034039640.PDF
5paul murphy et. al., enabling tomorrows electricity system: report of the Ontario smart grid forum,
http://www.ieso.ca/imoweb/pubs/smart_grid/smart_grid_forum-report.pdf (September, 2010)

real-time information and enable the near-instantaneous balance of supply and demand at the
device level.6

Figure 1: Smart Grid an Overview7

6the smart grid: an introduction, u.s. department of energy,


http://www.oe.energy.gov/documentsandmedia/doe_sg_book_single_pages(1).pdf (September, 2010)
7 courtesy of florida power & light company

Table of Contents
Executive Summary1
City of Ottawa.........................................................................................................................................1
Problem Statement...................................................................................................................................1
1

Stakeholders, concerns and business requirements..............................................................................7


1.1

Stakeholders and their concerns...................................................................................................7

1.1.1

Customers............................................................................................................................7

1.1.2

Governments and policy makers (Mayor and City Council)................................................7

1.1.3

Regulators............................................................................................................................7

1.1.4

Vendors................................................................................................................................8

1.1.5

Utility providers...................................................................................................................8

1.1.6

Electricity producers............................................................................................................8

1.1.7

Natural Resources Canada...................................................................................................8

1.1.8

Neighboring jurisdictions.....................................................................................................8

1.2

Stakeholder Analysis....................................................................................................................9

1.3

Stakeholder Power Grid...............................................................................................................9

1.4

Stakeholder Map........................................................................................................................10

Business Requirements......................................................................................................................11
2.1

Operational efficiency................................................................................................................11

2.2

Grid resilience............................................................................................................................11

2.3

Environmental performance.......................................................................................................11

2.4

Interoperability...........................................................................................................................11

Strategy Canvas.................................................................................................................................12

Business Goals, Drivers and Constraints...........................................................................................13


4.1

Business Goals...........................................................................................................................13

4.1.1

Wide-area situational awareness........................................................................................13

4.1.2

Demand response and consumer energy efficiency............................................................13

4.1.3

Energy storage...................................................................................................................13

4.1.4

Electric transportation........................................................................................................13

4.1.5

Cyber security....................................................................................................................13

4.1.6

Network communications..................................................................................................13

4.1.7

Advanced metering infrastructure (AMI)...........................................................................13

4.1.8

Distribution grid management............................................................................................13

4.2
4.2.1

Business Drivers........................................................................................................................14
Reliability and quality of supply........................................................................................14
3

4.2.2

The environment................................................................................................................14

4.2.3

Operational excellence.......................................................................................................14

4.3
5

Constraints.................................................................................................................................15

Evaluation of Business Capabilities...................................................................................................16


5.1

Demand Response.....................................................................................................................16

5.2

Facilitation of Distributed Generation........................................................................................16

5.3

Facilitation of Electric Vehicles.................................................................................................16

5.4

Optimization of Asset Use.........................................................................................................16

5.5

Problem Detection and Mitigation.............................................................................................17

Substantial Benefits to Customers.........................................................................................................17


6

Business Transformation Readiness Assessment...............................................................................18


Readiness Factor: Vision............................................................................................................18

6.2

Readiness Factor: Desire, Willingness and Resolve...................................................................18

6.3

Readiness Factor: Need..............................................................................................................19

6.4

Readiness Factor: Funding.........................................................................................................19

6.5

Readiness Factor: Sponsorship and Leadership.........................................................................19

6.6

Readiness Factor: Stakeholder Management..............................................................................20

6.7

Readiness Factor: Accountability...............................................................................................20

6.8

Readiness Factor: IT capacity to Execute..................................................................................20

6.9

Readiness Factor: Ability to Implement and Operate.................................................................21

6.10

Summary of Transformation Assessment...................................................................................21

6.1

Clarified Scope..................................................................................................................................23
7.1

Breadth of Coverage..................................................................................................................23

7.2

Architecture Domain and Levels...............................................................................................23

7.3

Time Horizon.............................................................................................................................23

Business Architecture principles........................................................................................................24

Architecture Vision............................................................................................................................26

10

Target Architecture value propositions and KPIs...........................................................................28


10.1

11

Balance Score Card....................................................................................................................29


Business transformation risks and mitigation activities.................................................................30

11.1

Transformation Challenges........................................................................................................30

11.1.1

Accelerating Change and Complexity................................................................................30

11.1.2

Empowered Buyers, Innovative Solution Providers...........................................................30

11.1.3

From Consumer to Prosumer.............................................................................................30

11.1.4

Decentralization.................................................................................................................30

11.1.5

Disintermediation...............................................................................................................30

11.1.6
12

Supply/Demand Side Equivalence.....................................................................................30

Business Transformation Risks......................................................................................................31


12.1

Transformation Risk..................................................................................................................31

12.2

Operations Risk.........................................................................................................................31

12.3

Enterprise Risk..........................................................................................................................31

12.4

Organizational Risk...................................................................................................................31

12.5

Market Risk...............................................................................................................................31

12.6

Regulatory Risk.........................................................................................................................31

13

Business Risk Mitigation...............................................................................................................32


13.1

Risk Mitigation strategy.............................................................................................................32

13.1.1

Vision.................................................................................................................................32

13.1.2

Orientation.........................................................................................................................32

13.1.3

Business Model Aspirations...............................................................................................32

13.1.4

Platform Evaluation...........................................................................................................32

13.1.5

Organizational Change Readiness......................................................................................32

13.1.6

Strategic Roadmap (Qualitative)........................................................................................32

13.1.7

Strategic Roadmap (Quantitative)......................................................................................32

13.1.8

Long-Term Partner.............................................................................................................32

13.1.9

Program Management Office and Value............................................................................32

13.1.10

Start as Soon as Possible................................................................................................33

13.1.11

Engage an Experienced Implementation Partner............................................................33

13.1.12

Seek Strategic Partnerships to Create Market Advantage...............................................33

13.2

Recommendations for a Successful Business Transformation...................................................33

13.2.1

Adopt a Sense of Urgency..................................................................................................33

13.2.2

Protect Core Revenue........................................................................................................33

13.2.3

Build Long Term Core Capabilities...................................................................................33

13.2.4

Announce a Journey of Discovery.....................................................................................33

13.2.5

Develop a Strategy for both Vertical and Horizontal Integration........................................34

13.2.6

Develop a Strategy for Consumer & Market Engagement.................................................34

13.2.7

Develop a Strategy for Organizational Change & Adaptation............................................34

13.2.8

Conduct a Business Model Canvas Workshop...................................................................34

13.2.9

Understand the Customer...................................................................................................34

13.2.10

Identify and Promote Customer Value............................................................................34

13.2.11

Obtain Customer Validation...........................................................................................34

13.2.12

Create Customers/Develop Markets...............................................................................34

13.2.13

Build an Energy Services Company...............................................................................34

13.2.14

Hold Workshops.............................................................................................................34

13.2.15

Develop a Competency in Partnering.............................................................................35

14

Statement of Architecture Work.....................................................................................................36


14.1

Purpose......................................................................................................................................36

14.2

Project Description and Background..........................................................................................36

14.3

Project Scope.............................................................................................................................36

14.4

Project Objectives......................................................................................................................36

14.5

Stakeholders and key concerns..................................................................................................37

14.6

Architecture Vision....................................................................................................................37

14.6.1

Architecture Content..........................................................................................................37

14.7

Relevant Methodologies and Industry Standards.......................................................................38

14.8

Risks and Mitigations................................................................................................................38

List of Figures
Figure 1: Smart Grid an Overview..............................................................................................................2
Figure 2: Stakeholder power grid................................................................................................................9
Figure 3: Strategy Canvas for Smart Grid.................................................................................................12
Figure 4: Strategy Canvas for Smart Grid Ottawa.....................................................................................12
Figure 5: Business goals for smart grid.....................................................................................................14
Figure 6: Transformation assessment rubric..............................................................................................21
Figure 7: Smart Grid .................................................................................................................................26
Figure 8: Smart Grid Conceptual Model....................................................................................................27
Figure 9: Balance Score Card for Smart Grid Performance.......................................................................29
Figure 10: Conceptual Architecture for smart grid....................................................................................37

List of Tables
Table 1: Stakeholder map..........................................................................................................................10
Table 2: Business Transformation Summary.............................................................................................22
Table 3: The architecture principles and key statements on how to achieve the goals...............................24
Table 4: Smart Grid services and characteristics........................................................................................28
Table 5: Project Objectives........................................................................................................................36
Table 6: Stakeholders and key concerns....................................................................................................37
Table 7: Risk Mitigation for business Transformation...............................................................................38

1 Stakeholders, concerns and business requirements


The success of Smart Grid implementation depends, to a large extent, on stakeholder buy-in.
There have been numerous examples of implementation failures due to stakeholder
dissatisfaction. An example is the class-action lawsuit filed against Pacific Gas & Electric in
California, where the residents claimed that their new smart meters are malfunctioning because
their bills are much higher than before. PG&E, meanwhile, claims higher bills are due to rate
hikes, an unusually warm summer, and customers not shifting demand to off-peak times when
rates are lower.8 The accuracy of the meters has since been verified by an independent study,
vindicating PG&E legally, but they failed to educate customers on the higher costs of Smart
Grids. It therefore becomes essential to engage in the right conversation with each stakeholder
from the get go, and the first step is to identify the stakeholders and their concerns.

1.1 Stakeholders and their concerns


1.1.1 Customers
The end users of electricity are referred to as customers here. There are three types of customers:
residential, industrial and commercial. Smart Grid implementation will involve higher costs, as
compared to the existing electricity infrastructure, in terms of installing smart meters, sensors,
developing new standards and protocols etc. The implementation of smart grids will also call for
the use of smart appliances at homes. These costs will directly, or indirectly, be shared by
customers or the general public. If they are not convinced about the current and future benefits,
they are likely to resist and challenge those costs over time. Customers conventionally were
passive electricity users, in SGs customers should become active market participants in order for
it to be a success.
1.1.2 Governments and policy makers (Mayor and City Council)
SG can become a very powerful tool in reducing greenhouse gas emissions, to which the
government is committed to. Hence governments must make a deep and sustainable commitment
to work together for Smart Grids. SG development aligns well with Canadian climate change
policy.9The federal government must recognize the long term benefits of Smart Grid
implementation and should subsidize the research going on to standardize the standards and
protocols. Also, government should take the lead in educating customers to move to Smart
infrastructure.
1.1.3 Regulators
Canadian Electricity Association (CEA) leads the way in creating a more effective and
innovative regulatory framework for distribution utilities in a restructuring and competitive
electricity market. The Regulatory Innovation Task Group (RITG) is implementing an industry
advocacy strategy for more efficient regulatory processes, in order to improve the Canadian
distribution utilities productivity and competitiveness. Some other regulators who need to be
engaged actively are Canadian Association of Members of Public Utility Tribunals (CAMPUT),
Ontario Energy Board, National Energy Board, International Energy Regulatory Network
(IERN) etc.10
8 PG&E smart meter problem a PR nightmare, November 21, 2009, http://www.smartmeters.com/the-news/690pgae-smart-meterproblem-a-pr-nightmare.html, (July, 2010)
9 Smart grids in the North American context: a policy leadership conference, a U.S.-Canada clean energy dialogue
event summary report (April, 2011)
10 http://www.electricity.ca/industry-issues/economic/regulatory-innovation.php

1.1.4 Vendors
After the tremendous growth in electricity infrastructure during the 1980s, most utilities shed
their R&D arms in order to reduce costs. Hence the utility industry is now reliant on external
technological developers to meet the Smart Grid needs. The vendors should thoroughly
understand the concerns of the major stakeholder customer and should deliver on time.
1.1.5 Utility providers
Ottawas local distribution companies like Hydro One Networks Inc., Hydro Ottawa Limited,
and Ottawa River Power Corporation etc. will have to align their operations, networks and
information systems to be compatible with smart grid infrastructure. This will require monetary
investments which might cause distributors to resist the change. This need to be carefully
handled.
1.1.6 Electricity producers
These are the generators of electricity, for example, Ontario Power Generator. Smart Grid will
accelerate the shift to greener and renewable power generation, reducing the dependence on
fossil fuels. The electricity producers should plan their move to renewable resources side by side
with smart grid implementation, to achieve the goal of environmental performance.
1.1.7 Natural Resources Canada
Natural Resources Canada works to ensure the responsible development of Canadas natural
resources including energy, forests, minerals and metals.11As such, they will keep a close watch
on SG implementation, from an environmental point of view.
1.1.8 Neighboring jurisdictions
The SG technology used should be interoperable with neighboring jurisdictions so as to avoid
cascading of power black outs. The 2003 black out in US, which first started in Ohio, cascaded
to eight US states and one Canadian province. This type of situation can be avoided, or resolved
quickly only when the protocols are interoperable, allowing for communication between
networks. Hence neighboring jurisdictions should be involved in the SG roll out.

1.2 Stakeholder Analysis


11 https://en.wikipedia.org/wiki/Natural_Resources_Canada
8

Stakeholder

Ability
to
Disrupt
Change
H
H

Current
Understandin
g

Required
Understanding

Current
Commitment

Required
Commitment

Require
Support

Customers
Govt. and
policy makers
(Mayor, City
Council)
Regulators
M
Vendors
M

L
H

H
H

L
H

H
H

H
H

M
M

M
H

M
M

H
H

M
M

Utility
providers
Electricity
producers
NR Canada
Neighboring
Jurisdictions

M
L

M
L

H
M

H
L

H
H

M
M

1.3 Stakeholder Power Grid

Figure 2: Stakeholder power grid

We have classified each of the stakeholders into a class shown in this power grid, and this is
given in the stakeholder map given below. The means for communicating with each of these
classes are also mentioned in the stakeholder map.

1.4 Stakeholder Map


Table 1:Stakeholder map

Stakeholder

Key Concerns

Class

Communication Plan

Customers

Cost (to upgrade to smart


meter, smart appliances),
Privacy, Security

Keep
Satisfied

Newspaper Articles, Open Door


Educational Seminars, Flyers,
Radio

Govt/Policy
makers (Mayor,
City Council)

Public buy-in, Environmental


Impact, Sustainability,
Budget allocation

Key
Player

Business Footprint Diagram,


Goal/Objective/Service Diagram,

Regulators

Competitiveness,
Productivity

Key
Informed

Business Footprint Diagram,


Goal/Objective/Service Diagram,

Vendors

Cost, Interoperable
standards, Technology
Independent Platform,
Timeline

Minimal
Effort

Project Context Diagram, Benefits


Diagram, Functional
Decomposition Diagram

Electricity
Producer

Sustainable energy
generation

Minimal
Effort

Project Context Diagram, Benefits


Diagram, Functional
Decomposition Diagram

Utility Service
Provider

Cost to change existing


infrastructure, customer
support

Key
Player

Requirement Catalog, Application


Communication Diagram

Natural Resources
Canada

Environmental Impact,
Greenhouse Gas Emissions,
Sustainability

Keep
Informed

Business Footprint Diagram,


Goal/Objective/Service Diagram,

Neighboring
Jurisdictions

Interoperability

Minimal
Effort

Application Communication
Diagram

10

2 Business Requirements
The key business requirements that are to be identified, which will later be addressed in the
architecture engagement are given below.

2.1 Operational efficiency


Operational efficiency with smart grid can be achieved in terms of lowered maintenance and
servicing costs for grid infrastructure, allowing workers to perform some grid repairs remotely,
reducing worker injuries, line loss reduction, new offerings to customers etc. It also has
intangible benefits like the enhanced aesthetics value when the distribution wires are hidden
underground.

2.2 Grid resilience


Grid reliability is very crucial for smart grid implementation. It can be with respect to power
interruptions or with respect to the fact that smart grids are more vulnerable to cyber-attacks than
conventional grid. If grid resilience is not addresses with utmost care, the entire implementation
will turn out to be a failure in the public eye.

2.3 Environmental performance


The smart grid is expected to reduce greenhouse gas emissions resulting from power generation
by using renewable energy sources. It is also expected to provide a momentum to the use of
electric vehicles, so that the use of liquid fossil fuels in transportation can be reduced. Smart grid
will also reduce energy losses within the grid, as well as reduce the energy losses by customers.

2.4 Interoperability
The interoperability to smart grid devices and systems is critical. This calls for the creation of
new standards. The SG infrastructure of the city of Ottawa should be able to communicate with
those of its neighboring jurisdictions, especially when there are any power interruptions. In the
absence of standards, the smart grid technologies will become prematurely obsolete. In Canada,
many stakeholders have identified these issues and are voicing Canadian perspectives through
both American NIST Smart Grid Interoperability panel activities as well as internationally
oriented IEC efforts. A major challenge would be to resolve the discrepancies between NIST and
IEC standards development.

11

3 Strategy Canvas
ELIMINATE

RAISE

Redundancy,

Public involvement,

Aging infrastructure,

Power quality,

Theft,

Use of renewable resources,

Power outages

Use of electric vehicles

REDUCE

CREATE

Load,

Cyber security standards,

Cost,

Communication protocols,

Greenhouse gas emissions,

Distributed energy generation

Worker danger,
Complexity
Figure 3: Strategy Canvas for Smart Grid

Figure 4: Strategy Canvas for Smart Grid Ottawa

12

4 Business Goals, Drivers and Constraints


4.1
4.1.1

Business Goals
Wide-area situational awareness

Monitoring and display of power-system components and performance across interconnections


and over large geographic areas in near real time. The goals of situational awareness are to
understand and ultimately optimize the management of power-network components, behavior,
and performance, as well as to anticipate, prevent, or respond to problems before disruptions can
arise.
4.1.2 Demand response and consumer energy efficiency
Mechanisms and incentives for utilities, business, industrial, and residential customers to cut
energy use during times of peak demand or when power reliability is at risk. Demand response is
necessary for optimizing the balance of power supply and demand.
4.1.3 Energy storage
Means of storing energy, directly or indirectly. The significant bulk energy storage
technology available today is pumped hydroelectric storage technology. New storage capabilities
especially for distributed storagewould benefit the entire grid, from generation to end use.
4.1.4 Electric transportation
Refers, primarily, to enabling large-scale integration of plug-in electric vehicles (PEVs). Electric
transportation could significantly reduce dependence on oil and fossil fuels, increase use of
renewable sources of energy, and dramatically reduce carbon footprint.
4.1.5 Cyber security
Encompasses measures to ensure the confidentiality, integrity and availability of the electronic
information communication systems and the control systems necessary for the management,
operation, and protection of the Smart Grids energy, information technology, and
telecommunications infrastructures.
4.1.6 Network communications
The Smart Grid domains and subdomains will use a variety of public and private communication
networks, both wired and wireless. Given this variety of networking environments, the
identification of performance metrics and core operational requirements of different applications,
actors, and domainsin addition to the development, implementation, and maintenance of
appropriate security and access controlsis critical to the Smart Grid.
4.1.7 Advanced metering infrastructure (AMI)
Currently, utilities are focusing on developing AMI to implement residential demand response
and to serve as the chief mechanism for implementing dynamic pricing. It consists of the
communications hardware and software and associated system and data management software
that creates a two-way network between advanced meters and utility business systems, enabling
collection and distribution of information to customers and other parties, such as the competitive
13

retail supplier or the utility itself. AMI provides customers real-time (or near real-time) pricing of
electricity, and it can help utilities achieve necessary load reductions.
4.1.8 Distribution grid management
Focuses on maximizing performance of feeders, transformers, and other components of
networked distribution systems and integrating with transmission systems and customer
operations. As Smart Grid capabilities, such as AMI and demand response, are developed, and as
large numbers of distributed energy resources and plug-in electric vehicles (PEVs) are deployed,
the automation of distribution systems becomes increasingly more important to the efficient and
reliable operation of the overall power system. The anticipated benefits of distribution grid
management include increased reliability, reductions in peak loads, and improved capabilities for
managing distributed sources of renewable energy.12

4.2 Business Drivers


The strategic driver for smart grid implementation is how will we, as a society, bring together
the elements required to ensure that our energy use is sustainable for future generations.13
The key business drivers for the Smart Grid include:
4.2.1 Reliability and quality of supply
Our society is critically dependent on a reliable supply of electric power. Significant
improvements in the reliability of power supply can be achieved through improved monitoring,
automation and information management.
4.2.2 The environment
Environmental issues have moved to the forefront of the utility business with concerns regarding
the greenhouse gas emissions and its impact on climate change. There should be a greater
penetration of renewable resources closer to end user, and greater reliance on demand-side
management and micro grids.
4.2.3 Operational excellence
Utilities must deal with the challenges associated with an aging workforce, and expectations for
flexibility and improved services by regulators, customers, and the market place. Utilities must
realize that they must shift their traditional business practices from an incumbent-based
knowledge to systems-based knowledge through information management and automation.

12 NIST Framework and Roadmap for Smart Grid Interoperability Standards, Release 1.0
13 THE SMART GRID: A PRAGMATIC APPROACH A State-of-Play Discussion Paper Presented by the
Canadian Electricity Association

14

Figure 5: Business goals for smart grid14

4.3 Constraints
Some of the major constraints are given below:
Absence of interoperability and cyber-security standards: NIST and IEC provide separate
standards and the challenge for us is to identify the differences and try to create a
common ground, which can be implemented.
The need for continuous reassessment and updating of standards: The need for
continuous evolution is very high due to the sensitivity of smart grids when it comes to
security and privacy of customer data.
Data tsunami: The challenge is to produce concrete information useful for quality
decision making from the tera- or peta- bytes of data collected.
Early death: What is now a state of the art system could become obsolete in a few years,
hence the smart grid platform should be designed to be technology independent, allowing
for plug and play.
Replace household appliances: Smart grids require appliances that can communicate
within the Home Area Network to get the maximum benefits. However, convincing
customers to bear with this huge indirect cost will be an uphill task, often leading to
public resistance against the implementation.
Protection of customer privacy: Smart grid will create millions of new hackable points,
enhancing the vulnerability to sabotage. This is a major constraint, especially with respect
to what actions can be used against hackers and customers who breach security
protocols? Should the utility cut them off from service or should police be involved, and
at what level?
Cost of pilot projects: Smart grid implementation involves a high initial cost, and
government funding is very much essential to cover these costs. Hence it is a constraint.

14 Implementing the Smart Grid: Enterprise Information Integration, Ali Ipakchi

15

5 Evaluation of Business Capabilities15


Our aim objective is to be a profitable company with a concern for the future of the planet. In
order to achieve our vision our business capabilities need to be augmented or new capabilities
need to be created.

5.1 Demand Response


Baseline: This business capability refers to the capacity of the user or operator to adjust the
demand for electricity at a given moment, using real-time data. Demand response can take the
form of active customer behaviour in response to various signals, generally the price of
electricity at the meter, or it can be automated through the integration of smart appliances and
customer devices which respond to signals sent from the utility based on system stability and
load parameters.16
Target: target of the team is make the demand response effective by customer involvement in the
voluntary utility load programs. Smart grid technologies that promote a reduction in the use of
electricity include the Advanced Metering Infrastructure (AMI) and the Home Area Network
(AM), both of which allow for increased customer control over their energy use.

5.2 Facilitation of Distributed Generation


Baseline: The facilitation of distributed generation is the management of system inputs. One
component of the smart grid allows for both movement and measurement in both directions,
allowing small localized generators to push their unused locally generated power back to the grid
and also to get accurately paid for it.
Target: The smart grid is meant to manage intermittency of renewable generation through
advanced and localized monitoring, dispatch and storage. Improve safety of utility workers by
using real time information in the smart grid and keep the system working reliably.
15 THE SMART GRID: A PRAGMATIC APPROACH A State-of-Play Discussion Paper
Presented by the Canadian Electricity Association retrieved on (October 12, 2016)
http://www.electricity.ca/media/SmartGrid/SmartGridpaperEN.pdf
16 David Biello, The Start-Up Pains of a Smarter Electricity Grid, Scientific American,
May 10, 2010, https://www.scientificamerican.com/article/start-up-pains-of-smartgrid/ (October 11, 2016).
16

5.3 Facilitation of Electric Vehicles


Baseline: The smart grid can enable other beneficial technologies as well. Most notably, it can
support advanced loading and pricing schemes for fuelling electric vehicles (EVs). Advanced
Metering Infrastructure would allow customers to recharge at off-peak hours based on expected
prices and car use patterns, while bidirectional metering could create the option for selling back
stored power during on-peak hours.
Target: Although significant EV penetration is still a medium to long-term projection, some
cities and regions have started experiments and the existence of a smart grid is essential to their
uptake. Many policy makers and car manufacturers correctly point out that widespread charging
infrastructure may help incent customers to switch to electric vehicles.

5.4 Optimization of Asset Use


Baseline: Monitoring throughout the full system has the potential to reduce energy losses,
improve dispatch, enhance stability, and extend infrastructure lifespan. For example, monitoring
enables timely maintenance, more efficient matching of supply and demand from economic,
operational and environmental perspectives, and overload detection of transformers and
conductors.
Target: In addition, network enhancements, and in particular improved visualization and
monitoring, will enable operators to observe the voltage and current waveforms of the bulk
power system at very high levels of detail. This capability will in turn provide deeper insight
into the real-time stability of the power system, and the effects of generator dispatch and
operation; and thereby enable operators to optimize individual generators, and groups of
generators, to improve grid stability during conditions of high system stress.17

5.5 Problem Detection and Mitigation


Baseline: SCADA and other energy management systems have long been used to monitor
transmission systems, visibility into the distribution system has been limited. The current system
of supervisory control and data acquisition (SCADA), much of it developed decades ago, has
done a reasonably good job of monitoring and response.
Target: Intelligent monitoring on a smarter grid allows for early and localized detection of
problems so that individual events can be isolated, and mitigating measures introduced, to
minimize the impact on the rest of the system

Substantial Benefits to Customers18


The Smart Metering Program as a part of smart grid will:
Improve safety and reliability through faster and precise outage notification and a reduction in the
damage caused by illegal electricity diversions.
Enhance customer service by reporting electricity use more accurately, eliminating estimated bills,
simplifying the process of opening and closing an account when moving, and reducing the need for onsite
visits by field crews.
Reduce electricity theft costs that are borne by all legitimate customers.
Improve operational efficiency and reduce wasted electricity through voltage optimization. Lower
operating costs are passed on to all customers in rates.
Support greater customer choice and control by offering optional in-home feedback tools that provide
direct and timely information to customers about their electricity consumption.
17 Methodological Approach for Estimating the Benefits and Costs of Smart Grid
Demonstration Projects, EPRI, January, 2010, p. 421 (July, 2010).
18 https://www.bchydro.com/content/dam/BCHydro/customerportal/documents/projects/smart-metering/smi-program-business-case.pdf
17

Help modernize City of Ottawa electricity system by replacing nearly obsolete meters, and creating the
foundation for supporting new uses of electricity such as electric vehicles, customer generation and micro
grids.

6 Business Transformation Readiness Assessment


Business Transformation implies fundamental and complex organizational changes within as
well as across companies alongside the value chain; business transformation can also radically
alter the company's relations with the wider economic and societal environment. strategy, value,
and risk management set the direction for business transformation, business processes enable the
transformation process. Business transformation readiness assessment is done to understand the
challenge and opportunities in the path of transformation. It will help us assimilate and align our
resources, culture and strategy

6.1 Readiness Factor: Vision19


Vision

City of Ottawa is trying to achieve


smart grid in its utilities sector to
give its residents reliable and
quality services

Indicators of readiness

Management has clearly defined the objectives, in both


strategic and specific terms.
Leadership in defining vision and needs comes from
the business side with IT input.
Predictable and proven processes exist for moving
from vision to statement of requirements.
The primary drivers for the initiative are clear.
The scope and approach of the transformation initiative
have been clearly defined throughout the organization.

19 BTEP - A Template for Transformation Readiness Review (2004) retrieved on


October 13, 2016 from
http://www.collectionscanada.gc.ca/webarchives/20071219072748/http://www.tbssct.gc.ca/btep-pto/documents/2004/templates-gabarits/readinessetatprep/readiness-etatprep00_e.asp
18

6.2 Readiness Factor: Desire, Willingness and Resolve20


Desire, Willingness and
Resolve

City of Ottawa Administration


has desire to achieve the results,
willingness to accept the impact
of doing the work, and the
resolve to follow through and
complete the project

Indicators of readiness

There has been debate at city council level


regarding the impact that executing the project may
have on the City of Ottawa, with clear indication of
the intent to accept the impacts.
Assignment of money and key resources to the
project has been sought from the city mayor.
Top executives of City of Ottawa have projected the
clear message that the organization will follow
through, a message that identifies the effort as well
as the benefits.
Timely completion of several key projects indicated
the resolve and the ability of the City of Ottawa to
achieve its goals.
There is agreement throughout the organization that
the transformation initiative is the right thing to
do.

6.3 Readiness Factor: Need


Need

Indicators of readiness

Upgradation of the existing


infrastructure is desired by all key
stake holders.

There are clear statements regarding what the


organization will not be able to do if the project does
not proceed, and equally clear statements of what the
project will enable the organization to do.
There are visible and broadly understood
consequences of project failure.
Success criteria have been clearly identified and
communicated.

6.4 Readiness Factor: Funding


Funding

A source of funds that meets the


projects potential expenditures.

Indicators of readiness

Funds have been allocated for the utilities sector


upgradation for the current Fiscal year

20 BTEP - A Template for Transformation Readiness Review (2004) retrieved on


October 13, 2016 from
http://www.collectionscanada.gc.ca/webarchives/20071219072748/http://www.tbssct.gc.ca/btep-pto/documents/2004/templates-gabarits/readinessetatprep/readiness-etatprep00_e.asp
19

6.5 Readiness Factor: Sponsorship and Leadership


Sponsorship and Leadership

City Council executive members


and the mayor are sponsors of the
project. City mayor has assumed
the leadership role to keep
everyone on board and to project
the goal.

Indicators of readiness

The project is sponsored by an city mayor who is


appropriately aligned to provide the leadership the project
needs and able to articulate and defend the needs of the
project at the senior management level.
The city council executive members are engaged and will
remain engaged throughout the project.

6.6 Readiness Factor: Stakeholder Management


Stakeholder Management

The ability to engage the


involvement and support of all
parties with an interest in or
responsibility to the project with
the objective of ensuring that the
corporate interests are served and
the objectives achieved.

Indicators of readiness

The team has clearly identified stakeholders and a clear


sense of their interest in and responsibility to the
project
City of Ottawa has a culture that encourages
participation towards corporate rather than local
objectives
City of Ottawa has successfully managed activities that
cross interest areas
City of Ottawa has a culture that fosters meaningful, as
opposed to symbolic participation in management
processes
City of Ottawa has a commitment to ongoing project
review and challenge and openness to outside advice

6.7 Readiness Factor: Accountability


Accountability

Indicators of readiness

20

The assignment of specific and


appropriate accountability,
aligning decision making with
areas of responsibility and where
the impact of the decisions will be
felt.

Accountability is aligned with the area where the


benefits of success or consequences of failure on the
project will be felt.
Accountability and responsibility areas align.

6.8 Readiness Factor: IT capacity to Execute


IT capacity to Execute

The ability to perform all the IT


tasks required by the project,
including the skills, tools,
processes, and management
capability.

Indicators of readiness

City of Ottawa recently completed the e-government


initiative from federal government
City of Ottawa has existence of the processes and
discipline
City of Ottawa has accessibility to the skills necessary
to execute the project
City of Ottawa has clear and rational model for
deciding what skills and activities to source externally

6.9 Readiness Factor: Ability to Implement and Operate


Ability to Implement and Operate

The ability to implement the new


system and its related business
processes, absorb the changes
arising from implementation, and
ongoing ability to operate in the new
environment.

Indicators of readiness

City of Ottawa has proven ability to deal with the change


management issues arising from new processes and systems
systems operations, maintenance and support for existing
systems works well and disciplines and procedures are in
place

21

6.10 Summary of Transformation Assessment

Figure 6: Transformation assessment rubric

Each of the readiness factors will be rated using the following elements.
Urgency: If it is determined that a readiness factor is urgent, it means that action is needed
before a transformation initiative can begin.
Readiness Status: Select which best describes the readiness status of each factor.
Low needs substantial work before proceeding
Fair
needs some work before proceeding
Acceptable
some readiness issues exist, no showstoppers
Good
relatively minor issues exist
High
no readiness issues
Degree of Difficulty to Fix: Select which best describes the effort required to overcome any
issues identified.
No action needed
Easy
Moderate
Difficult21
Table 2: Business Transformation Summary

Readiness Factor

Urgency

Readiness
Status

Degree of Difficulty to Fix

21 Reference: Business Transformation Enablement Program A Template for


Transformation Readiness Review, retrieved from on October 13, 2016,
http://www.collectionscanada.gc.ca/webarchives/20071224155741/http://www.tbssct.gc.ca/cioscripts/docs/docs_e.asp?who=/btep-pto/&subj=117
22

1. Vision
2. Desire/willingness/resolv
e
3. Need
4. Funding
5. Sponsorship and
leadership
6. Stakeholder
Management /Governance
7. Accountability
8. IT capacity to execute
9. Ability to implement and
operate

Urgency

Readiness Status

Degree of Difficulty to Fix

Urgent

Good

Easy

Urgent

Good

Moderate

Urgent

Fair

Moderate

Urgent

Fair

Moderate

Urgent

Good

Difficult

Urgent

Fair

Difficult

Not Urgent

Good

Moderate

Urgent

Fair

Difficult

7 Clarified Scope
Following are in the scope of Business Transformation Process
- Identifying the right technology partner
- Identifying the right partner for infrastructure.
- Cyber Security
- Analytics for better service delivery
- Providing online support to customer issues
- Developing a detailed set of specific functional, operational and technical requirements
- Participating in technology and industry standards groups.
- Monitoring the progress and results from utilities and incorporate lesson learned into project
planning
23

- Tracking the market evolution of metering technologies, software products, and in-home energy
management offerings
Following are excluded from the scope of Business Transformation process
- In house technology development
- Legislation requirements
- Technical requirements for smart metering

7.1 Breadth of Coverage


Strategy of City of Ottawa involves rapid implementation, as a result the architecture and its
components need to be addressed at different levels of detail in order to ensure a coherence
within its borders and a global plan which will support our transformation. Our Architecture will
include the standard practices adopted by different entities in the North America.

7.2 Architecture Domain and Levels


The Architecture domain and levels are dependant on the business capabilities targeted in this
transformation process. The layered structure will include all components of the utility
production, distribution, consumption, customers and regulations. The transition scenario to
incorporate the existing infrastructure to the target structure will also be explored.

7.3 Time Horizon


The mandate for the recent city government is 3 years for the implementation of the smart grid
initiative and intermediate architecture, team will look into the possibility of complete transition
to target architecture in 10 years.

8 Business Architecture principles


A successful transitioning to Smart Grid will critically demand highly flexible and adaptive
smart grid architecture. High-level goals and principles are needed to guide the smart grid
architects to develop the architecture that supports the existing complexity infrastructure
operations and to manage it as part of the new smart grid.22 Below are important architecture
principles for the City of Ottawa Smart Grid.
Table below identify the architecture principles and key statement on how to achieve the goals.
22 Smart Grid Reference Architecture Copyright Cisco Systems, Inc., International Business Machines Corporation,
Southern California Edison Company 2011 - All rights reserved.

24

Table 3: The architecture principles and key statements on how to achieve the goals 23

Principles
1. Customer Value
2. Coordination

3. Interoperability

4. Security

5. Economic Development

6. Go Green

Statement
Smart Grid must provide benefits to customers
Smart Grid distributors should coordinate and share their
information.
- Sharing information such as lessons learn and results of
pilot projects among distributers help smoothen the
transition and to achieve economic scale.
Adopt recognized industry standards; SCADA, NERC.
- Adopt recognized industry standards will support the
exchange of meaningful and actionable information
between and among smart grid systems and enable
common protocols for operation.
Ensure cyber and physical security to protect data from any
malicious attacks.
- Ensure security of information systems and physical
infrastructure meet recognized standards and up to date.
Encourage economic growth and create more jobs.
- Encourage economic growth and job creation within the
City of Ottawa. Wherever practical, actively encourage
the development and adoption of smart grid products,
services, and innovative solutions from local-based
sources.
Promote and integrate clean energy.
Promote the integration of clean technologies,
conservation, and more efficient use of existing technologies to
reduce the environmental footprint of the electricity and
transportation sectors.
Provide consumers opportunity to provide services back to
the electricity grid such as small scale renewable generation and
storage.
Enable flexible distribution infrastructure to increase
distribution of renewable generation.

7. Efficiency and reliability

Improve efficiency and reliability of the grid system.


- Taking into account the cost-effectiveness of the
electricity system.
- Maintain reliability and optimizing efficiency which
reduce the impact and frequency of outages.

8. Access, Visibility and

Provide accessible data to authorized parties to support and

23 http://www.ieso.ca/Documents/smart_grid/materials/20100209/MEI%20Smart%20Grid%20Principles%2020100208.pdf

25

Control

9. Enable Customer choice

10. Education

11. Smart meter


12. Quality energy
13. Innovative

14. Customer Privacy


15. Safety

enhance customer Visibility and Control the home energy


system.
- Improve network visibility of grid conditions where
identify needs.
- Improve self healing grid to automatically recognize and
respond to system and infrastructure disturbances.
Enable more customer choice and improve customer interaction
with electricity service providers.
- Improved channels through which customers can interact
with electricity service providers.
Actively educate consumers about smart grid and encourage
involvement.
- Present customers with easily understood material that
explains how to increase their participation in the smart
grid and the benefits.
Integrate smart meter program for in-home device.
- Smart meter will help customers interact and monitor
their utility bills.
Maintain and provide quality energy quality of the power
delivered by grid and improving it.
Support the future innovative applications.
- Encourage innovation to improve flexibility.
- Support electric vehicles
- Encourage innovation and the smart grid related
information sharing across agency, distributors and
government
Respect and Protect customer privacy information.
- Integrate privacy requirements into smart grid planning
and design from an early stage.
Maintain Health and Safety protections.
- Strictly follow Health and Safety protocols and improve
electrical safety wherever practical.

9 Architecture Vision
Smart Grid incorporates movement from power from generators to different level of consumers
through intelligent grid system by enhancing interactive communication, IT, and secure
monitoring system efficiently. It is also optimized power consumption, manage demands, reduce
outage and yield environmental friendly. Figure below show a high-level communication flow
between different components in Smart Grid.24

24 https://www.csiac.org/journal-article/the-efficacy-and-challenges-of-scada-and-smart-grid-integration/
26

Figure below shows a high-level communication flow between different components in a Smart
Grid

Figure 7: Smart Grid 25

The City of Ottawa Smart Grid domain includes Customer, Market, Service Provider, Operation,
Bulk Generation, Transmission and Distribution which explained in section 6. The domains are
group of business capabilities providing related business function, which required similar skills
and expertise.
The comprehensive high-level architecture needed to support the utility business domains and
common enabling services uses a model that assumes a service-oriented governance process
exists supporting the fundamental characteristics of layered services architecture. These provide
a variety of services for systems and subsystems to accomplish business functions.
Governance provides a framework to define the relationships and processes used to direct and
control grid activities, as well as the actions, authority and metrics used to realize business
benefits while balancing risk versus reward.26
Figure below shows the City of Ottawa utility domains as groupings of common capabilities. A
utility may elect to combine some domains (i.e. distribution and transmission) and plan a single
logical infrastructure to support the Smart Grid.
25 Power Stream Smart Grid, MaRS Market Insights, Ontario Utilities and the Smart Grid: Is there room
for innovation? January 2012

26 Smart Grid Reference Architecture Volume 1, SCECiscoIBM SGRA Team July 14,
2011
27

Governance

Netw
ork
Oper
ation
s
Enter
prise
Mgnt

Distrib
ution

Market

Service
Provider

Netw
Operat
Operations
ork
ions
Exten
Planni
sion
ng and
Recor
Plann
optimi
d
&
ing
Mainte
zation
Asset
nance
Bulk
Mgnt
and
Energ
Constr
y
uction
Mgnt

Transmi
ssion

Mete
ring
Cust
omer
Servi
ce

Communication
Security
Data Management
Analytics
Smart Grid Control
System Management

Custo
mer

Bulk
Generatio
n

Figure 8: Smart Grid Conceptual Model27

10 Target Architecture value propositions and KPIs


Smart Grid transitioning is very challenging and time consuming for each task. The City of
Ottawa required balancing the energy policy goals and market profitability. The KPIs will
indicate to what extent of the Smart Grid projects are progressing and whether it met the
expected of outcomes. Furthermore, it is a tool to assess profitability of the investments28
27 Figure 8 page 14 Smart Grid Reference Architecture Volume 1, SCECiscoIBM
SGRA TeamJuly 14, 2011

28

Smart Grid services and benefits are linked to the City of Ottawa goals that are driving the Smart
Grid deployment. They can be considered as useful indicators to evaluate the contribution of
projects toward the achievement of the goals.
Table below addresses Smart Grid services and characteristics to define the ideal Smart Grid
Table 4: Smart Grid services and characteristics29

Smart Grids Services and Benefit


Enabling the network to integrate users with
new requirements

Characteristic
Accommodate all generation and storage
options

Enabling and encouraging stronger and more


direct involvement of consumers in their
energy usage and management

Enable active participation by customers

Improving market functioning and customer


service
Enhancing efficiency in day-to-day grid
operation

Enable new products, services, and markets


Optimize asset utilization and operate
efficiently

Enabling better planning of future network


investment
Ensuring network security, system control and
quality of supply

Operate resiliently to disturbances, attacks and


natural disasters
Provide the power quality for the range of
needs

Architecture value propositions and KPIs is the indicator of a successful smart grid system that
needs to be addressed and carefully delivered. To ensure the implementation of Smart Grid is
useful to achieve strategic goals, conducting suitable metric and key performance indicator is
critical.

10.1 Balance Score Card


We will apply Kaplan and Norton Balance Scorecard for the elaboration of the Value proposition
and Key Performance Indicators, see figure below.

28 Assessing Smart Grid Benefits and Impacts: EU and U.S. Initiatives, Joint Report EC JRC US DOE,
2012
29 Page 21, Table III - Smart Grid services and characteristics to define the ideal Smart Grid, Assessing
Smart Grid Benefits and Impacts: EU and U.S. Initiatives, Joint Report EC JRC US DOE, 2012

29

Figure 9: Balance Score Card for Smart Grid Performance

Figure above represents major Key Performance Indicators to evaluate progress toward strategic
goals, which is progress toward the integration of Smart Grid services. Key indicators in each
group measure the progress also work together to balance sections of strategic goal.

30

11 Business transformation risks and mitigation activities


11.1 Transformation Challenges30
Six of these challenges are outlined below. Of all these changes, two are the most destabilizing
(threatening) to the current utility business model: decentralization and disintermediation.
11.1.1 Accelerating Change and Complexity
Change is accelerating and the environment is growing more complex; the utility environment
has been relatively stable throughout its history, so this growing trend represents a monumental
challenge for utilities to become flexible and adaptable to a highly dynamic and unpredictable
environment.
11.1.2 Empowered Buyers, Innovative Solution Providers
A maturing internet economy has empowered buyers, who leverage internet procurement to buy
commodities at the lowest price. In response, successful sellers avoid this commodity trap1 by
becoming innovative solution providers, thereby maintaining margins and profitability.
11.1.3 From Consumer to Prosumer
New technologies and innovative business models drive the creation of new products and
services, which enable consumers with increasing autonomy and control. As consumers mature,
they become producers as well, i.e., prosumers.
11.1.4 Decentralization
Our modern economy is organized centrally, with distributors serving consumers. But newly
empowered consumers benefit from technology change that puts value out at the edge, i.e.,
decentralization. As our economic foundation increasingly leverages on-site elements,
decentralized and centralized resources coexist, but new operating paradigms will be needed.
11.1.5 Disintermediation
As entrepreneurs and large companies outside the electric industry take advantage of new tools
and business approaches to insert themselves between existing businesses (incumbents) and their
long-term customers, they use value as a wedge to upend long-established relationships, i.e.,
disintermediation.
11.1.6 Supply/Demand Side Equivalence
As utilities (supply) and energy consumers (demand) each seek to optimize their condition, the
opportunity for market equivalence emerges. A co-optimization approach begins with each side
pursuing their objectives with the goal of minimal disruption to the other side, but ultimately
evolves when the two sides actively seek synergy and leverage. Decentralization and
disintermediation have historically acted to create disruption, largely independent of incumbent
control. Utilities are Poorly Positioned to Respond to Rapid Change.

30 Business transformation white paper, accessed on October 14, 2016 retrieved


from https://w3.usa.siemens.com/smartgrid/us/en/business-transformationservices/Documents/BTS_WhitePaper.pdf
31

12 Business Transformation Risks


12.1 Transformation Risk
A broad term that includes at least five subcategories, which take their place alongside such
traditional utility risks as reserve margins, system outages, cyber security, market exposure, longterm planning and capital expenses, etc.

12.2 Operations Risk


Increasing levels of Distributed energy resources (DER) on the edge where the grid terminates
at the customer site will make the grid increasingly difficult to operate under the current system
paradigm, including the new risk of power backflow on heavily loaded circuits.

12.3 Enterprise Risk


The introduction of the phrase Utility Death Spiral, where rate increases become necessary when
sufficient DER penetration reduces utility revenues. But besides making utility financial
statements whole, rate increases also accelerate grid parity and enhance the appeal of DER,
driving even more penetration, making further rate increases necessary. The end result is a
negative self-reinforcing cycle that earns the scary title Death Spiral. Sounds like a Black Hole
stay away! But not so fast, as many still dispute the nature or even possibility of such an
outcome. That said, the risk of flat or declining revenues is real, and reduced revenue constrains
a utilitys ability to respond to changes by becoming more flexible and adaptable.

12.4 Organizational Risk


This next subcategory begins with the well-documented challenge of replacing aging utility
workers, but expands when organizational changes in job descriptions, business processes and
business model are contemplated. Slow to change, utility organizations find it difficult to
mobilize against threats. This challenge is compounded when most utilities have been through
reorganizations and budget cuts that have left them leaner, but with slim resources to manage
necessary changes. As workers take on additional tasks, their core job functions face the risk of
disruption.

12.5 Market Risk


The rise of a more mature energy consumer, adopting new consumption patterns and encouraged
by energy service companies to leverage DER, creates this next subcategory of risk. Utilities will
have to open up to collaborate with a more empowered energy consumer with more demanding
expectations of the utility, or risk losing their natural role as local energy subject matter expert to
those more willing to engage with energy consumers in new ways, on new terms. And as the
utility loses its historic role in the community, loss of revenue opportunities are sure to follow.
12.6 Regulatory Risk
Finally, monopoly utilities are still regulated in various degrees, their fates intertwined with
regulators as both contemplate transformation. As regulators adjust their thinking and evaluate
their options for industry transformation, this subcategory of risk for utilities includes managing
business transformation inside their organizations and industry transformation expectations of
the regulators who set their rates and guide their investments. Utilities must seek to guide

32

industry transformations to be in alignment with their best interests, or suffer actions or inactions
by regulators that confound their plans.

13 Business Risk Mitigation


13.1 Risk Mitigation strategy
The low-risk high-value business transformation should be approached with a managed
transition that includes some version of each of the following steps, as the utility designs a plan
that will integrate grid optimization with new business models and other necessary changes.
13.1.1 Vision
Craft a vision of the utility of the future to kick off a strategy planning effort, with initial
widespread acceptance at the leadership level;
13.1.2 Orientation
Understand strategic threats and risks from the perspective of the individual utility using analysis
and assessments;
13.1.3 Business Model Aspirations
Evaluate alternatives for new business models to determine the best fit and to understand from a
comprehensive level the interactions of channels, product, pricing, etc.; tools such as the
Business Model Canvas are well suited for this step;
13.1.4 Platform Evaluation
Consider technical alternatives to create a platform for management of disaggregated energy
market elements, but also engagement of energy vendors and potential partners;
13.1.5 Organizational Change Readiness
Assess the readiness of employees to begin a transformation process, surveying all levels of the
organization and using educational tools to ensure widespread awareness of the issues associated
with change within the organization;
13.1.6 Strategic Roadmap (Qualitative)
Design a qualitative understanding of new business models, capabilities, and aspirations and the
integration of technologies to craft a rough draft of a long-term plan; evaluate regulatory
challenges and strategy, organizational impacts and readiness, and external stakeholder
alignment and mobilization;
13.1.7 Strategic Roadmap (Quantitative)
Craft a detailed quantitative assessment of costs and benefits of a transformation program to
produce a value-based business transformation roadmap;
13.1.8 Long-Term Partner
Identify and engage one or more long-term partners with the necessary subject matter expertise,
experience, and resources to assist with the transformation;
13.1.9 Program Management Office and Value
Establish the program management office (PMO) and begin the long-term implementation
project, with a focus on consistent value creation and logical, progressive skill attainment; and
Three critical aspects will lower risk helping to ensure a successful managed transition to a
business transformation: Start Early; Engage an Experienced Implementation Partner; and Seek
Strategic Partnerships to Create Market Advantage

33

13.1.10
Start as Soon as Possible
It is vital to start early for a successful business transformation. Time is a critical aspect of
success, given that time, resources and quality are three points of a dynamic triangle that affects
all projects, with each working in a dynamic relationship with the other. Emphasis on any two
will necessarily lead to a relaxation of the third constraint. For instance, if the project must be
completed in a short amount of time and with limited resources, then quality is likely to suffer.
Conversely, if the project must be quick and high quality, then greater resources will be needed.
13.1.11Engage an Experienced Implementation Partner
Use of an experienced partner will lower the risk of a long-term business transformation. When
considering a long-term transformation project, the selection of an external change agent who
can also act as a subject matter expert reduces project risks as follows:
unforeseen outcomes may be anticipated and avoided with the use of best practices and
by leveraging lessons learned from outside the utility;
third party experts can take greater risks, generate a sense of urgency and push the project
harder than an internal team can; and
a third party partner lowers political risk and second-guessing later in the project, when
difficult decisions are encountered, or when public doubts arise
13.1.12
Seek Strategic Partnerships to Create Market Advantage
As change accelerates, it will become more and more difficult for a utility to do all that is
necessary to cope, without outside help.

13.2 Recommendations for a Successful Business Transformation


13.2.1 Adopt a Sense of Urgency
We recommend that City of Ottawa leadership engender a sense of urgency throughout the
organization to promote the pursuit of a new business model and customer engagement, which
will in turn highlight the necessary organizational changes.
13.2.2 Protect Core Revenue
In the face of strategic threats, it is critical that the City of Ottawa address revenue and financial
viability by taking steps to protect revenue from kWh sales as the city develops the capacity to
generate revenue from energy service sales. Growing closer to customers and tailoring services
to meet their needs will support protecting revenue.
13.2.3 Build Long Term Core Capabilities
We recommend that the City of Ottawa get closer to the customer and the market by taking a
series of actions to seek out third party opinions and recommendations on new core capabilities
associated with greater flexibility and adaptability, and incorporate the feedback into corporate
planning
13.2.4 Announce a Journey of Discovery
By admitting that innovation and creativity also come from customers, the City of Ottawa may
pursue the rapid acquisition of new core competencies, experimenting with new approaches with
its customers in multiple iterations. This approach represents a Journey of Discovery with a
defined mission:
1) protect our shared investment in a critical infrastructure; and 2) secure our future with new
services that we develop together.

34

13.2.5 Develop a Strategy for both Vertical and Horizontal Integration


Ensuring effective operations across the five strategic areas, beginning by evaluating Consumer
& Market Engagement, Organizational Change & Adaptation, and Regulatory Engagement, to
consider how actions involving those three areas may affect the other two Technology
Implementation and Business Model Reform.
13.2.6 Develop a Strategy for Consumer & Market Engagement
We recommend that the City of Ottawa initiate a more coordinated and focused approach to
Consumer & Market Engagement, the third strategic area beyond Technology Implementation
and Business Model Reform.
13.2.7 Develop a Strategy for Organizational Change & Adaptation
We recommend that executive attention be devoted to the organizational design and core
competencies that will be required to support the requirements of a corporate strategy to be a
Utility of the Future and to execute a Smart Grid Program.
13.2.8 Conduct a Business Model Canvas Workshop
Business Model Generation, with nine components: Customer Segments, Value Propositions,
Channels, Customer Relationships, Revenue Streams, Key Resources, Key Activities, Key
Partnerships, and Cost Structure.
13.2.9 Understand the Customer
We recommend that the City of Ottawa take steps to craft a business model strategy that is based
on a deep understanding of the customer and their relationship with energy what it has been
and what it is becoming.
13.2.10
Identify and Promote Customer Value
We recommend that the City of Ottawa identify and promote customer value in addition to low
kW hours as the standard in the marketplace, shifting emphasis from the commodity of
electricity to the value it enables.
13.2.11Obtain Customer Validation
This is a good opportunity for the City of Ottawa to align closely with communities that it trusts,
to lower the risks associated with delivery of prototype products and services.
13.2.12
Create Customers/Develop Markets
We recommend that the City of Ottawa build on its early success with early adopters by
understanding the nature of demand and devising ways to grow demand into a viable market for
new energy services.
13.2.13
Build an Energy Services Company
The City of Ottawa will need to develop a management structure and workplace culture to
address a significant new energy services business, for instance, developing functional
departments with the flexibility and adaptability to provide a fast response to new market
opportunities as they develop.
13.2.14
Hold Workshops
Workshops offer a valuable approach to partnering. For instance, potential partners may view the
City of Ottawa as a potential buyer of services more than a partner in the beginning. We
recommend that the City of Ottawa explore core competencies internally by engaging in core
competency workshops with key staff.

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13.2.15
Develop a Competency in Partnering
We recommend that the City of Ottawa establish strategic partnering as a core competency and
work to develop its internal capacity to partner. As the City of Ottawa proceeds with its Energy
Service Provider business model and builds a Smart Grid, it will have increasing opportunities to
partner with companies whose business capabilities and business strategies align well with its
own.31

31 Business transformation white paper, accessed on October 14, 2016 retrieved


from https://w3.usa.siemens.com/smartgrid/us/en/business-transformationservices/Documents/BTS_WhitePaper.pdf
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14 Statement of Architecture Work


14.1 Purpose
The purpose of this document is to provide a Statement of Architecture Work for the Smart Grid
implementation for City of Ottawa.

14.2 Project Description and Background


The project aims to propose an architecture model for the implementation of Smart Grid for the
City of Ottawa. The current grid infrastructure of the city is outdated, and instead of simply
replacing the aging infrastructure, City has decided to implement Smart Grids. Smart Grids will
help the city to conserve energy, optimize the use of available resources, eliminate power
disruptions during severe weather conditions and to reduce the greenhouse gas emissions.

14.3 Project Scope


Project scope is restricted to the geographical area of the City of Ottawa. The timeline for the
implementation of intermediate architecture is 3 years and aiming for a complete transformation
within a span of 10 years.

14.4 Project Objectives


Table 5: Project Objectives

Objectives

Description

Wide-area situational
awareness

Understand and ultimately optimize the management of power-network


components, behavior, and performance, as well as to anticipate,
prevent, or respond to problems before disruptions can arise.

Demand response and


consumer energy efficiency

Cut energy use during times of peak demand or when power reliability is
at risk.

Energy storage
Electric transportation

New storage capabilitiesespecially for distributed storage.


Enable large-scale integration of plug-in electric vehicles.
Encompasses measures to ensure the confidentiality, integrity and
availability of the electronic information communication systems and the
control systems.
Identification of performance metrics and core operational requirements
of different applications, actors, and domains.
To implement residential demand response and to serve as the chief
mechanism for implementing dynamic pricing.

Cyber security
Network communications
Advanced metering
infrastructure (AMI)
Distribution grid
management

Focuses on maximizing performance of feeders, transformers, and other


components of networked distribution systems and integrating with
transmission systems and customer operations.

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14.5 Stakeholders and key concerns


Table 6: Stakeholders and key concerns

Stakeholder

Key Concerns

Customers
Mayor and City Council
Govt/Policy makers
Regulators

Cost (to upgrade to smart meter, smart appliances), Privacy, Security


Customer engagement, success of the implementation
Public buy-in, Environmental Impact, Sustainability, Budget allocation
Competitiveness, Productivity
Cost, Interoperable standards, Technology Independent Platform,
Timeline
Sustainable energy generation
Cost to change existing infrastructure, customer support

Vendors
Electricity Producer
Utility Service Provider
Natural Resources
Canada
Neighboring
Jurisdictions

Environmental Impact, Greenhouse Gas Emissions, Sustainability


Interoperability

14.6 Architecture Vision


Smart Grid incorporate movement of power from generators to different level of consumers
through intelligent grid system, by enhancing interactive communication, IT, and secured
monitoring system efficiently. It has also optimized power consumption, manage demands,
reduce outage and yield environmental friendly.
14.6.1 Architecture Content
The conceptual model for Smart Grid architecture is shown below.

Figure 10: Conceptual Architecture for smart grid

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14.7 Relevant Methodologies and Industry Standards


Project uses TOGAFv9.1. The architecture is based on the standards developed by NIST.
Another major industry standard is that of IEC, which we have referenced for our option
analysis.

14.8 Risks and Mitigations


Table 7: Risk Mitigation for business Transformation

Risk
Transformation
risk

Operations risk

Enterprise risk
Organizational risk

Market risk

Regulatory risk

Description
This broad category incorporates
traditional utility risks as reserve
margins, system outages, cyber
security, market exposure, longterm planning and capital
expenses, etc.
The risk of power backflow on
heavily loaded circuits.

The risk of flat or declining


revenue.
The risk of resistance from aging
utility workers
The risk of not being able to
interact as a local subject matter
expert with newly educated
energy customer.
The risk of managing business
transformation inside their own
organizations and industry
transformation expectations of
the regulators.

Mitigation Plan
Engage an experienced implementation
partner.

Consider technical alternatives to create a


platform for management of disaggregated
DER elements, but also engagement of
DER vendors and potential partners.
Protect core revenue.
Develop a strategy for organizational
change and adaptation.
Develop a strategy for consumer and
market engagement.
Develop a Strategy for both Vertical and
Horizontal Integration, ensuring effective
operations across the five strategic areas,
beginning by evaluating Consumer &
Market Engagement, Organizational
Change & Adaptation, and Regulatory
Engagement.

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