Man-Yan Ng, ABB Network Management / SMART GRID - TAIWAN, 2009-04-08

Smart Grid drivers

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April 7, 2009 | Slide 1
 Increase in energy demand

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April 7, 2009 | Slide 2
 Growing share of renewable generation

Reference scenario (TWh, globally) Alternative policy scenario (TWh, globally)

2'152

352

1'448
161
Solar Solar
Wind Wind
1'800
667
586 1'287

549 623
114 114
5 111 5 111
1990 2005 2015 2030 1990 2005 2015 2030

Share of total electricity generation

0.0% 0.6% 2.2% 4.1% 0.0% 0.6% 2.6% 6.1%

In the EU, the share of solar and wind electricity generation is

expected to grow to 14-19% by 2030,
© ABB Group
April 7, 2009 | Slide 3
Source: IEA
 Most renewable generation will be distributed
Solar market revenue development End-customer segment
$bn/year Large plants ƒ On-grid solar power systems
>1 MW
~52 ƒ Large STP and PV plants
Large plants
11
- PV (58%)
(21%)
- STP (42%) Commercial ƒ On-grid applications for
+12% industrial or commercial use
12 (6kW-1MW)
Commercial
(23%) ƒ Small plants, roof-tops,
building integrated (BIPV)
~26
4 Residential ƒ On-grid applications for
residential below 6kW
4 25
Residential ƒ Roof-top PV, some BIPV
12 (48%) elements, like windows
1.5
1.8 15
Off-grid ƒ Off-grid applications
7.7 4
Off-grid ƒ eg, portable/mobile devices,
1 2 self-service terminals/meters,
(8%)
remote centralized power
2006 2010 2020

PV: Photovoltaics
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STP: Solar thermal power
April 7, 2009 | Slide 4
Source:Team, Yole PV team 2007, RBC Capital Markets, IEA PVPS
 Smart Grids challenges
Generation
ƒ Optimize ‘spinning’ reserves with
ƒ Efficient operation increased amount of renewable

needed to handle these challenges!

energy
ƒ Reliable power system Transmission grids

Smart Grids technologies

ƒ Maintain grid stability with increased
ƒ Increased integration amount of renewable power
ƒ Reduce transmission losses
ƒ Power quality
Distribution grids
ƒ Manage consumer ƒ Maintain protection system integrity
with increased amount of renewable
options power

ƒ Improve asset ƒ Demand response (regulatory

demand), real-time price information
utilization Consumers
ƒ Demand management
ƒ Optimize electricity consumption –
home automation

© ABB Group
April 7, 2009 | Slide 5
 Characteristics of Smart Grids
ƒ Interactive with
consumers and markets

ƒ Adaptive to changing
situations

ƒ Optimized use of
resources and equipment

ƒ Predictive rather than

reactive

ƒ Integrated, merging
monitoring, control, protection,
maintenance, EMS, DMS etc

ƒ Secured from attack

Source. Based on the EPRI definition

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April 7, 2009 | Slide 6
 Traditional versus Smart Grids – a transition
Traditional Grid Smart Grids

ƒ Centralized power generation ƒ Centralized and distributed

ƒ Uni-directional power flow
ƒ Operation based on historical
experience
power generation (renewable)
ƒ Multi-directional power flow
ƒ Operation based on real time
data

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April 7, 2009 | Slide 7
 Making the Grid Smart, Cost versus Benefit

Cost to Modernize Benefit of Modernization

$165B over 20 years $638B - $802B over 20

years
$127B for Distribution Overall benefit to cost
$38B for Transmission ratio is 4:1 to 5:1
~$8.3B per year (incremental
to business-as-usual)
Current annual investment -
$18B

(Source: EPRI)

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April 7, 2009 | Slide 8
 What drives the introduction of Smart Grids?
Increasing electricity consumption Reliability of
Environmental concerns Security of energy supply
Global electricity consumption will grow by 70-90% between 2005 and 2030 electricity supply
ƒ Reduction of CO2 ƒ Reduced dependency on fossil fuels
Environmental concerns - reduction of CO2 ƒ Aging
infrastructure
Security of energy supply ƒ Aging workforce
Reduced dependency on fossil fuels from sensitive regions ƒ IT security

Growing share of renewable power generation Energy efficiency

Wind will grow from 111TWh in 2005 to 1,000-1,800TWh in 2030 T&D losses – target reduction
Solar will grow from 3TWh in 2005 to 160-350TWh in 2030 of 2% in 2020 (EU)

Significant portion of renewable power Open energy market

generation will be distributed and intermittent Consumer pricing to foster
demand response

Impact on grid stability and efficiency

Introduction of Smart Grids

ƒ Information and control technologies to achieve the required grid stability
ƒ Requires regulatory support (only exceptional business cases) and development of standards

© ABB Group
April 7, 2009 | Slide 9
 Smart Grids – geographical overview
North America
ƒ Government and industry groups driving Smart Grids vision
ƒ Strong trend among utilities
ƒ Strong federal/state involvement
Europe
ƒ Strong interest, mainly from large utilities
ƒ Strong involvement from EU
ƒ Influenced by the NAM vision
Asia
ƒ Emerging interest from larger utilities
ƒ Main focus on adding capacity
ƒ Will emerge in 5-10 years

Middle East Africa South and Latin America

ƒ Some emerging activities

© ABB Group
April 7, 2009 | Slide 10
© ABB Group
April 7, 2009 | Slide 11