1. All Rights Reserved © Alcatel-Lucent 2010 1 | Smart Grid | 2010 Smart communications for the Smart Grid Peter Johnson June 2010

2. All Rights Reserved © Alcatel-Lucent 2010 2 | Smart Grid | 2010 Today utilities are facing a storm of issues… Satisfy Customers quality power Innovate renewable energy sources Gain Market ShareNew Technologies Deploy secure networks of distributed generation Increase the Bottom Line Automation… Cope with Regulatory Rules Retain Talent with aging workforce in fast growing energy consumption and demand context reduce carbon emissions to manage uninterrupted, constant flow of transition to Execute faster than the others Meet the challenge Be GreenEfficiency Security Asset Return

3. All Rights Reserved © Alcatel-Lucent 2010 3 | Smart Grid | 2010 Diverse business goals Common drive that will transform utilities High Power Quality with RES …driven by different requirements of “the smart grid” US Japan Australia China Europe Secure electricity supplies Boost energy conservation Renewables integration Operational Efficiency Asset Optimization Shave off seasonal peak Reduce peak-hour Promote micro-generation Secure electricity supplies Distributed Generation Asset Optimization Brazil Africa Canada

4. All Rights Reserved © Alcatel-Lucent 2010 4 | Smart Grid | 2010 Dividing up the smart grid into manageable pieces Power Delivery Non-stop energy delivery, despite… Rising seasonal demand Advent of electric vehicles Aging infrastructure Green Energy Pressure on CO2 footprint: Mass smaller scale renewables Management of energy losses Power Quality A legal requirements, despite… Mass small scale renewables Increasingly “noisy” loads Customer intimacy Creating value for customers Operational efficiency Better cost control, requiring… Improved operational processes Better asset utilisation

5. All Rights Reserved © Alcatel-Lucent 2010 5 | Smart Grid | 2010 Smart Grid is IT and communications intensive Distributed generation, renewables Smart meters Demand response Home area network Secure, highly reliable, scalable PHEVs Distribution management Procurement and Market Ops T&D operations Executive dashboards Customer services CRM/GenesysMDMS AMI Head-end Business processes and data exchange DWMSOMSGIS T&D planning and engineering Asset mgmtCMMSSystems planning SCADADSM EMSDMS Bidding and schedulingTrading and contracts Planning & forecastingSettlements Telecommunications infrastructure Advanced metering infrastructure Distribution automation Substation automation Transmission operations Plant operations Energy infrastructure and customers

6. All Rights Reserved © Alcatel-Lucent 2010 6 | Smart Grid | 2010 Communications is understood and evolving… Single, unified systems for all operations Supporting all operational services Providing simple flexibility and management Optimization Simplification The evolution to IP is not in question: The question is “when?” and “how?”

7. All Rights Reserved © Alcatel-Lucent 2010 7 | Smart Grid | 2010 An example of IP / MPLS transformation Modernizing the operational communications network, requiring: Seamless transition from legacy to a carrier-class MPLS network infrastructure Reliable, secure and integrated communications network supporting −Mission-critical electric utility applications −Continued smart grid growth plans One of first utilities in North America to plan an integrated IP/MPLS solution Services supported: Teleprotection, SCADA, Operational voice NERC cyber security, security surveillance Metering, corporate communications, network management and provisioning Outcome: Altalink now evangelising IP/MPLS in utilitieswww.utilitympls.comwww.utilitympls.com The first utility to transport of mission-critical teleprotection traffic over IP/MPLS First teleprotection circuits now live

8. All Rights Reserved © Alcatel-Lucent 2010 8 | Smart Grid | 2010 Flexible data management will be as important as effective communications management … but what about data? Traditionally Data has been vertically integrated with its application Data volumes have been small Smart grids will change this Tomorrow’s data paths risk becoming a tangle of logical connections The large volumes of real-time data from large volumes of sensors Perform’ Mgt Outage Mgt Energy Mgt Network Mgt Retail systems Remote controls SCADATelemetry Smart Meters RES Demand Response Condition monitors Network facing devices Operations facing systems

9. All Rights Reserved © Alcatel-Lucent 2010 9 | Smart Grid | 2010 Smart Grid Enablement Data mediation and intelligent security Flexibility will only be achieved through intelligent data management Network facing devices Operations facing systems Remote controls SCADATelemetry Smart Meters RES Condition monitors Perform’ Mgt Outage Mgt Energy Mgt Network Mgt Retail systems Demand Response Data handling & security layer Security systems Data aggregation Data correlation Data mediation

10. All Rights Reserved © Alcatel-Lucent 2010 10 | Smart Grid | 2010 Benefits of this approach Flexibility Enables secure data sharing on an as-needed basis Enables future applications to use today’s data sources, without the necessity of second-guess the requirements Security Ensures flexibility does not sacrifice security One security policy applied globally Manageability Provides the tools to manage uncertainties Operational efficiency Enables the optimum use of data Turns a smart grid revolution into an intelligent evolution

11. All Rights Reserved © Alcatel-Lucent 2010 11 | Smart Grid | 2010 An example project: the ultimate objective of the project Solar Panels Fuel Cells Geothermal Energy Micro Wind Thermostat Water Heater Pool Pump Energy Orb Smart Appliances Smart Meter and 2-Way Communication Customer Information Portal IPTV - WWW Personal Load Mgmt. Market Price Signals Electric Vehicles Matching local generation to local demand Financial benefit to consumer… and to operator Utility’s service Electric Vehicles Domestic loadDomestic supply

12. All Rights Reserved © Alcatel-Lucent 2010 12 | Smart Grid | 2010 Taking the first bite: executing phase 1 of the project Delivering smart metering, demand side management, automated outage notification Dispatch Sensors in distribution network Smart meters Using the existing FTTH communications network Energy Mgt Systems Smart Meter Mgt System

13. All Rights Reserved © Alcatel-Lucent 2010 13 | Smart Grid | 2010 What the future might look like Automating the energy network to become an information driven utility Smart Meter Mgt System Energy Mgt Systems More sensors in distribution network Smart meters Data correlation Outage Mgt Systems Incident Mgt Systems System mgt

14. All Rights Reserved © Alcatel-Lucent 2010 14 | Smart Grid | 2010 Conclusions Smart Grids is about assuring and improving  Power Delivery  Power Quality  Operational Efficiency  Green Energy  Customer intimacy Data and communications are going to be key enablers Becoming a data driven utility should be an ultimate goal This makes it easy to divide up the elephant called smart grids

15. All Rights Reserved © Alcatel-Lucent 2010 15 | Smart Grid | 2010 Evaluation of this session A

16. All Rights Reserved © Alcatel-Lucent 2010 16 | Smart Grid | 2010 Evaluation of this session  Please take 2 minutes to fill out the evaluation form, distributed to you by the speaker  Please fill out as title of this presentation: « Unified Management »  Submit the form when leaving the room or put it in one of the boxes that you find everywhere in the venue THANK YOU

17. All Rights Reserved © Alcatel-Lucent 2010 17 | Smart Grid | 2010 www.alcatel-lucent.com