Renesas Electronics America Inc. © 2012 Renesas Electronics America Inc. All rights reserved. Smart Grid, Smart Home for the Smart Society

© 2012 Renesas Electronics America Inc. All rights reserved.2 Renesas Technology & Solution Portfolio

© 2012 Renesas Electronics America Inc. All rights reserved.3 Agenda Introduction What is the Smart Grid? Residential customers and Home Devices An introduction to SEP 2.0 Market drivers Customer participation in the Smart Grid The technical challenges Summary

© 2012 Renesas Electronics America Inc. All rights reserved.4 Two-way data communications system used in conjunction with the electric power grid Save energy Reduce cost Increase reliability and transparency Enable new applications and markets Smart Energy Profile 2.0 (SEP 2.0) is the protocol that enables the Smart Grid HAN for the residential customer SEP 2.0 works in conjunction with multiple communication technologies (physical layers) What is the Smart Grid?

© 2012 Renesas Electronics America Inc. All rights reserved.5 Increased use of digital information and controls technology to improve reliability, security, and efficiency of the electric grid; Dynamic optimization of grid operations and resources, with full cyber-security; Deployment and integration of distributed resources and generation, including renewable resources; Development and incorporation of demand response, demand-side resources, and energy efficiency resources; Deployment of "smart" technologies (real-time, automated, interactive technologies that optimize the physical operation of appliances and consumer devices) for metering, communications concerning grid operations and status, and distribution automation; Integration of "smart" appliances and consumer devices; Deployment and integration of advanced electricity storage and peak-shaving technologies, including plug-in electric and hybrid electric vehicles, and thermal storage air conditioning; Provision to consumers of timely information and control options; Development of standards for communication and interoperability of appliances and equipment connected to the electric grid, including the infrastructure serving the grid; and Identification and lowering of unreasonable or unnecessary barriers to adoption of smart grid technologies, practices, and services. Characteristics of a Smart Grid as described by Title XIII of the Energy Independence and Security Act of 2007:

© 2012 Renesas Electronics America Inc. All rights reserved.6 Under the Energy Independence and Security Act (EISA) of 2007, the National Institute of Standards and Technology (NIST) has "primary responsibility to coordinate development of a framework that includes protocols and model standards for information management to achieve interoperability of smart grid devices and systems…"Energy Independence and Security Act (EISA) The Role of NIST

© 2012 Renesas Electronics America Inc. All rights reserved.7 The Smart Grid Conceptual Model Source: NIST Framework and Roadmap for Smart Grid Interoperability Standards

© 2012 Renesas Electronics America Inc. All rights reserved.8 The Customer Source: NIST Framework and Roadmap for Smart Grid Interoperability Standards

© 2012 Renesas Electronics America Inc. All rights reserved.9 The Home Area Network (HAN) allows home owners and their devices to participate in utility programs Lower Bills Earn rewards Go green Smart Energy Profile 2.0 (SEP 2.0) is the protocol that enables the Smart Grid HAN Started under ZigBee Alliance – Now partners with WiFi and HomePlug Alliance and others – CSEP formed for common interoperability and certification SEP 2.0 works in conjunction with multiple communication technologies (physical layers) The Home

© 2012 Renesas Electronics America Inc. All rights reserved.10 What is SEP 2.0? Networking and application integration platform for messages between customer devices and energy services providers – Zero Device Configuration – Secure Is small inexpensive embedded downloadable software that resides on consumer devices and appliances Scalable and addressable – IPv6 protocol centric and is physical layer Independent What does it do? Peak load shaving – By deferring the consumer high energy loads. E.g. Air Con, Pool Pumps Modify consumer behavior – By providing real time energy usage with in home displays – Real time or time of use pricing Manage Residential Loads/Generation – Electric Vehicles/Renewables – By Intelligently managing the load and generation, to prevent local distribution issues Supported today by the major Utilities in the US, Korea and Australia Rest of Asia and then Europe expected to follow Smart Energy Profile 2.0 Overview

© 2012 Renesas Electronics America Inc. All rights reserved.11 The Home Area Network - Connectivity Portable Display EMS Energy Management System Home Area Network (HAN) Wired Wireless Both PC DSL/Cable/Fiber Modem ESI/Gateway Internet Sub-Meter (EUMD) Thermostats SE1 to SE2 Application Layer Gateway (if required) Backhaul: Radio, PLC etc. Smart Meter Energy Storage Water, Gas Meter Appliances Loads E.g. Pool Pumps Solar, Wind Electric Vehicles EVS E

© 2012 Renesas Electronics America Inc. All rights reserved.12 IEEE (or ZigBee) Low power WPAN Up to kbit/s, Mesh IEEE WiFi physical layer - WLAN Will become popular for consumer driven applications Participated in a public live demonstration PLC Competing standards – P and and G.hn SAE/ISO Electric Vehicle Charging – HP-GP Other DECT Bluetooth Ethernet SEP 2.0 can support all of these physical layers SE2.0 Physical Layers

© 2012 Renesas Electronics America Inc. All rights reserved.13 Utility Driven Smart Energy Market Drivers 1.Peak energy issues Rising energy demand Decommissioning old/dirty coal plants Cost of peak generation Return on new generation capacity 2.New requirements on the grid Electric Vehicle Charging Renewable Generation 3.Rising consumer energy bill 4.Customer Support 1.Peak Shaving with Demand Response 2.Intelligent Load Management Price Management Green Energy Usage 3.Information Phone, Tablet, Computer, Display Energy Management Systems 4.Best in class product design Simple, robust, ease of use Non-utility business opportunity ProblemSolution

© 2012 Renesas Electronics America Inc. All rights reserved.14 Broad Market Drivers Intermittent Renewables growth Peak Demand and Margin Threat of rolling blackouts in several parts of the NA Electric Vehicles Plug in vehicles will tax the grid beyond its current capabilities Economic Cost to utility to serve peaks very large Government stimulus Leverage infrastructure put in place by Utilities Desire to be more “Green” Economic Consumers desire to save money on energy OEM Revenue opportunity Industrial Utility Consumer The Internet of Things M2M – Industrial Control/Diagnostics – Home Appliance Control/Diagnostics – Security/Surveillance – Health – Home Automation

© 2012 Renesas Electronics America Inc. All rights reserved.15 Margin forecast have improved overall 80% recession 20% demand response Specific issues in 2015 in Texas and Canada Near term challenge is old generation is replaced with Intermittent renewables Solution is demand side management Peak Margin Improvements Reference: NERC 2008 and 2010 Long Term Reliability Reports backu p

© 2012 Renesas Electronics America Inc. All rights reserved.16 Texas deregulated market stimulated demand and reduced investment in generation due to a large number of small competitors Ontario economy is predicting a fast recovery Solution is demand side management Peak Margin Issues in Texas and Ontario Reference: NERC 2010 Long Term Reliability Reports backu p

© 2012 Renesas Electronics America Inc. All rights reserved.17 NERC 2010 Reliability report highlighted the major issues for the NA Electricity Grid Intermittent Renewables which replace old or environmentally challenged generation is an issue that requires demand side management Demand Side Management Addressed by SEP 2.0 backu p

© 2012 Renesas Electronics America Inc. All rights reserved.18 Air conditioning is the largest load during peak periods Thermostat replacement is inexpensive and easy to install Smart Thermostats can be 20% to 30% more efficient than manual thermostats Consumers that opt-in to an HVAC program will save money Examples of Demand Response: Smart Appliances Many loads can be deferred or reduced during peaks Whirlpool has announced that all electronically controlled appliances sold will be Smart Energy compliant by 2015 Other manufacturers’ products include refrigerators, ranges, microwaves, dishwashers, washer/dryer, pool equipment, water heater, HVAC, etc Smart Thermostat

© 2012 Renesas Electronics America Inc. All rights reserved.19 Problem: Dependency on foreign oil Increasing gasoline costs Electric grid local infrastructure not designed to support wide-scale deployment of electric vehicles Replacing 74% of cars and light trucks with EVs would reduce US oil imports by 52% There is enough generation and transmission capacity to do this today The Smart Grid and SEP 2.0 enables coordination of EV charging Allowing charging during off peak Allowing EV sub metering (subsidies) Allowing charge roaming Allowing public charging stations EV as storage Plug in Electric Vehicles backu p

© 2012 Renesas Electronics America Inc. All rights reserved.20 Consumer Desire to Lower Energy Costs A bill at the end of the month does not help consumer to identify wasted energy Daily and hourly consumption information has shown to save between 5-15%

© 2012 Renesas Electronics America Inc. All rights reserved.21 SEP 2.0 Technical Challenges Challenge Cost Sensitivity Keep processor and memory footprint Zero configuration No customer programming Interoperability Zero field issues Security Grid security and privacy Standards International standards i.e. IETF Solution Product was built from ground up Apple Bonjour or xmDNS/DNS-SD to discover resources Over a year of multi- vending testing Three layers of security High re-use of existing standards or a subset

© 2012 Renesas Electronics America Inc. All rights reserved.22 Summary The Smart Grid meets the consumer in the next year We can no longer just built power plants to supply the peak Consumers can participate and be rewarded for saving energy Utilities will become more efficient and pass on the savings Home appliances and devices will become more intelligent and will integrate into the Smart Grid We need Smart Energy and so does our Planet!

© 2012 Renesas Electronics America Inc. All rights reserved.23 Questions? Questions?

Renesas Electronics America Inc. © 2012 Renesas Electronics America Inc. All rights reserved.