The Evolving World of Power Delivery Business Striking a balance between Sweating-the-Assets vs New Infrastructure Build Koustuv Ghoshal Siemens Business Services

State of the Energy Delivery industry globally today Historically investment on T&D infrastructure has been approximately a third of Generation investment Still a regulated business – and thus lack of “burning platforms” Guaranteed rate of return has created an entitlement approach Risk-takers are not rewarded! Regulatory, environmental and political forces do not allow for rapid infrastructure deployment Operational factors such as Reliability has typically not been monetized: Thereby delaying deployment of smart-technologies Too many standards in the industry: Deters investment by suppliers

How is the situation changing globally? This industry behaves on “trigger points”: The North East blackout of 2004 Europe blackout of 2004 Insatiable growth has stretched the grid capacity to the maximum Impact of government regulations on power delivery industry: US Energy Bill of 2004 India’s Electricity Act 2003 Going back to basics on the focus upon availability of cheap and reliable power: Regulators putting increasing focus on service quality and reliability Yet… the infrastructure doesn't exist to support the new needs Mandates around penetration of renewable sources of energy System and “commercial” losses are at a point of severe financial impact Particularly in developing countries where “theft of power” is considered part of the welfare system

How does the industry respond to the challenges? “Sweat the Assets” vs “Build new today”: Operate the network close to its limits Involve the customer in the energy management process: The silent evolution of the Energy Conservation mind-set Evolving framework of the Meter-to-Cash value chain: Making the customer respond to real-time price signals For the supplier community – think globally but act locally: Incentives to affordable technologies Impact of technology and knowledge-based systems on power delivery decision-making process: The concept of sensor-based smart electricity grid: De-centralize grid intelligence! Reward Risk takers

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