1. SUSTAINABLE INVESTMENT STRATEGIES FOR AGING DISTRIBUTION NETWORKS Dr. Eric Jennes 24/7 Netze Mannheim Germany Frankfurt (Germany), 6-9 June 2011 Dr. Eric Jennes – 24/7 Netze – Germany – Session 5 – Paper 0648

2.  Short introduction of 24/7 Netze  Introduction  Asset simulation model  Equipment groups  Budget allocation  Condition Criteria  Condition / significance chart  Target network planning and NPV analysis  Conclusions Dr. Eric Jennes – 24/7 Netze – Germany – Session 5 – Paper 0648 Agenda

3. Dr. Eric Jennes – 24/7 Netze – Germany – Session 5 – Paper 0648 Introduction – 24/7 Netze Network Length Energy 6.300 km4.400 GWh 1.700 km5.700 GWh 1.725 km24,9 Mio m 3 645 km3.000 GWh Electricity Gas Water District Heat 24/7 Netze is the DSO Company of MVV Energie AG, Mannheim, and EVO AG, Offenbach

4.  Decreasing network fees Distribution system profitability is at a risk Financial targets remain the same Re-investment, operation and maintenance budgets have to be curtailed Sustainability of energy supply remains imperative  Asset management approach in four steps Asset Simulation Reliability-centred maintenance (RCM) Target network planning Net present value analysis (NPV) Dr. Eric Jennes – 24/7 Netze – Germany – Session 5 – Paper 0648 Introduction

5. Asset models (age & maintenance measures  breakdown rate) Reliability models (break downs & outages  supply interruptions) Asset base: equipment groups, characterized by quantities and years of construction Specific cost models Rehabilitation and maintenance strategy, budget restricts Asset Simulation Rehabilitation- measures Maintenance- measures Disturbances Allocation of Budget Strategy Development in reliability Development in cost iterative development and optimization of strategies Supply Reliability Cash-Flow Asset simulation: schematic model Dr. Eric Jennes – 24/7 Netze – Germany – Session 5 – Paper 0648

6. Asset Simulation: equipment Groups Dr. Eric Jennes – 24/7 Netze – Germany – Session 5 – Paper 0648  Equipment is clustered in equipment groups  Criteria for clustering Aging behavior Specific cost Reliability impact Voltage level respectively pressure range Technology, material etc. Electricity network Gas network

7. Asset Simulation: budget allocation Dr. Eric Jennes – 24/7 Netze – Germany – Session 5 – Paper 0648  Budget allocation has impact on development of Number of disturbances Number of outages Unavailability Repair cost  Optimized Budget allocation increases sustainability with a limited budget  Budget allocation can be specified on a annual base as well as on a long term base

8. RCM: condition criteria Dr. Eric Jennes – 24/7 Netze – Germany – Session 5 – Paper 0648

9. RCM: condition / significance charts  Condition / significance chart for each equipment group necessary  Prioritization of budget according to condition and significance of the individual equipment  Update of the charts on an annual base needed

10. Dr. Eric Jennes – 24/7 Netze – Germany – Session 5 – Paper 0648 Target network planning and NPV  Measures for rehabilitation of specific equipment become approved with respect to their necessity in a target network  Each target network becomes approved by a economic evaluation (NPV)

11.  24/7 Netze has developed a 4-step method to optimize investment strategy for their aging distribution networks  This approach is applicable not only to gas and electricity but also to water and district heating networks  The method developed ensures Sustainable budgeting and budget allocation Effective prioritization of measures Clear need of equipment Profitability Dr. Eric Jennes – 24/7 Netze – Germany – Session 5 – Paper 0648 Conclusions