Presentation at the metering, Billing/CRM Conference India Mumbai, 14/10/2008 Luiz A.

Garbelotto

AMI pilot project: Brazil

1. Introduction Good afternoon! Its my pleasure to be here in India with you to share our experiences in Brazil, in the metering area, particularly in an AMI pilot project we launched last year. But, by the news I hear this morning, Im sure Ive come here more for learning from you than to teach you anything. Anyway, it will be profitable for you to take a glance at similar country, like Brazil, so that you could have references both from the developed and the developing countries. Brazil is a South American country colonized by Portuguese from 1500 to 1822, when it got its independence. There were aboriginal Indians who mixed with the European immigrant. The remaining Brazilian natives live on the Amazon region. At the turn of the nineteenth to the twentieth century there was a new wave of European migration to Brazil, this time because of the wars and famine in Europe. So Germans, Italians, Russians and Polishes went to Brazil and founded many villages, mostly in the south. Brazil has a population of 190 million, most of them living by the Atlantic coast. So, we have a high population density in many cities, like Sao Paulo and Rio de Janeiro, in what we call the Southeast, and low density on the Amazon and the Pantanal (wetlands). Santa Catarina is a State at the South region of Brazil, where about six million people live. Here again, the same phenomenon repeats: High population density at the coast and low density at the inner part of the state. Celesc Centrais Eltricas de Santa Catarina, which means Power Plants of Santa Catarina, is a state owned company, founded in 1955, which objective was to plan and execute the energy policy of Santa Catarinas government. In 1999, under a new regulatory environment, Celesc was unbundled in Celesc Distribution and Celesc Generation. Celesc Distribution was granted the permission to distribute energy to the whole state of Santa Catarina, except areas where some rural cooperatives had already been in activity.

2. The problem Energy rates in Brazil are determined by the regulators and are recalculated every four years. This year, 2008, in august, Celesc had its rates revised by ANEEL. The rates are determined upon the needed revenue to attend the appointed market, which for Celesc is the state of Santa Catarina. The regulator compares the company with a virtual company, called reference company to determine its needed size and the effort that has to made for next four years. This comparison showed that Celesc exceeds the admitted operational costs at about 84 million dollars annually. This implies that the income will not be sufficient to cover the expenses and that shareholders will have to put their money in the company. The regulator also establishes goals for the betterment of quality electricity supply. So we have these two stresses: Reduction of operational costs and increasing of quality supply. Our organization and our assets are not fit for these demands. An urgent restructuring is necessary. You dont heal a disease, which symptom is fever just putting the sick into the freezer. You can kill him! You must face its cause. Actually, what we face at Celesc is a symptom of a disease spread all over, that manifests different effects at different places: An old structure for a changing business. Our organization is fit for a wholly manually operated network. So, the more the network grows, the more the number of operators grows. And if the way you do your job now is good, the problem is worse, that is, its more difficult to change the way you do it. Electricity distribution business is changing, so metering has to change with it. Metering technology is in pace with the energy business. When you sell something, you measure what you think gives value to your product. All foods are sold by their weight, but their rate is determined by the effort made to bring them to market. So foods difficult to bring to the market or of rare sources are more expensive. We see here some stages of development of the electricity business and the corresponding metering fit to it. Before 1900, all that was needed was a counting of lamps. During the 20th century, at the beginning it was just the amount of energy in kWh and then, for a

more appropriate billing, others variable such as demand, power factor, and also these same variables at different periods of time, like peak, off-peak, dry and wet (we have that in Brazil). Production, distribution and consumption of energy today have a new constraint: environment protection. Never before was so important to avoid the wild exploitation of natures resources without considering its impacts on future generations. What now is cheap may be very expensive in the future. There are sources of energy less aggressive to the environment that can be exploited. And there must be smarter ways of using energy, which cause less impact on the environment. There metering comes into scene: Smart meters for smarter energy utilization.

3. Celescs solution To tell you the truth, when we started our pilot project we thought that we were just testing a new metering technology, but then we discovered that its not just that. We are at the beginning of the transformation of the electricity distribution business. We searched available technologies, tested prototypes, invested in R & D projects, visited companies that had implanted Advanced Metering Infrastructure AMI and asked suppliers to show their solutions. The projected vision is of a system for data collection from all consumers and all distribution transformers and remote operation of customers' switches. The collected data would serve as inputs to the technical and commercial areas of the company, like planning of the electric system, market studies, operation, maintenance, energy efficiency, billing, call center, revenue protection, etc. With this established vision, we passed to the most difficult phase: how to accomplish it? There is a gigantic abyss separating todays way of operating a distribution company from this other imagined for tomorrow. What bridge to build? What strategy to choose? We have more than two million points. How much would cost a system of this size? What about human impacts? What about the permanent resistance to changing? How would employees react facing the new and unknown? And the clients, what would they say? Launching such an enterprise would be a colossal challenge, a true odyssey. But, it says an old Brazilian adage: Slow down the sedan chair because the statue is made of clay. Prudence lies between

boldness and caution. Here is the answer: Neither more prototypes nor full-scale deployment, but a system miniature operating in real conditions, a pilot project. With a pilot project one can align every technological, human, economic and organizational vectors. Technical challenges, human dramas, budget restrictions, proofs of the organizational model, all of them burst out in a pilot project. The success of the pilot project validates the application of its concepts on the full-scale deployment. However, succeeding doesnt mean that everything will be all right. In spite of all that science and technology benefited man, he still thinks that he has not got enough and that is what keeps him searching betterment and development. Celescs pilot project covers 5,166 low voltage costumers, 106 medium voltage customers and 113 distribution transformers, all connected to two feeders of a substation in Blumenau, a city founded by Germans, north of Florianopolis, our capital city. Celesc named the project SAM acronym of Sistema Automatizado de Medio, in Portuguese. Nansen, a Brazilian meter manufacturer is responsible for the execution of the turnkey contract. Basically, the system is comprised of three levels: Control centre, substation communication equipments and remote communication equipments. The Control Centre, located at Celescs headquarters in Florianopolis, is the operations centre of the system. It is constituted of a server, where the softwares for parameterization, monitoring, operation and maintenance of the system are installed. Data coming from the remote communication equipments are stored in it. The substation communication equipments are a set of devices for intermediating communication between the remote communication equipments and the control centre. They are installed in a substation in Blumenau. The remote communication equipments are installed jointly or inside the premises' meters and perform the exchanging of signals with the substation communication equipments. The communication system is a fixed network between the RCE and the SCE, using Aclaras PLC technology called TWACS Two Way Automatic Communication System. Signals originating in the RCE go throughout low voltage network wiring from customers point of connection, cross through distribution transformers, without any

coupling device and then they go on propagating through medium voltage conductors up to the substation, where they are detected by devices of the SCE. Signals from SCE to RCE follow the same path. A Celesc communication channel is used between the SCE and the control center. Equipments installed at the substation can cover all meters belonging to feeders connected to the same MV bus of the substation, which is characteristic of the TWACS technology. Our pilot project has the following functionalities:

Interval data collection, permitting to obtain each consumer load profile; Energy balance at each distribution transformer, allowing evaluation of technical losses, detection of non-technical losses and verification of the transformer loading; Remote service connection and disconnection of 50 premises in case of non-payment; Integration with the billing system; Monitoring of faults and restoration of supply.

Now we are starting a new project, a demand response project. Florianopolis is situated in an island where tourists flood during summertime. We have a substation at the north of island light loaded all year long, except for two days: December, 31th and Carnival Saturday, which is a mobile holyday. During these days we have had blackouts year after year. The problem is not the substation, but the transmission line, which supplies it. There is a project for doubling its capacity, but each time Celesc tries to build it, it copes with environmental restrictions and community opposition. So, we are working in a demand response project, which aims to spread load profile of the transmission line, via controlling customers loads, like air conditioning and pool pumps, and to offer critical peak pricing. We live in a new context. Conventional energy sources are not endless; natural resources are limited; global warming threats the quality of life of future generations. Rational and efficient use of energy is the theme of the day. Networks capacity must be exploited to the utmost degree and smart grid has much to contribute to this.

Finally, a final word about automation: Automation is total or partial replacement of human intervention in the execution of tasks that otherwise would require more physical or intellectual effort from man. Besides human effort reduction, automation frequently conveys more efficiency, shortens execution time, increases accuracy and reliability, diminish accidents risk and increases uniformity of results. It is not its goal jobs posts elimination, but generally has this consequence. The capitalist enterprise, profit focused, is generally in search of means to reduce operational costs, to which automation has much to contribute. A principle for sound automation is: Do not man do what machines can do and do not machines do what man should do. Thank you very much, for your attention.