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September 21, 2017

Co-innovation model fuels smart, clean energy solutions for Japan’s ‘Society 5.0’

By ITU News

Leading Japanese multinational provider of information technology services and products, NEC Corporation, has partnered on a co-innovation business model to deliver smart energy solutions for electric utilities in Japan and eventually, neighboring countries in the Asia Pacific region alongside Sacramento Municipal Utility District (SMUD) and advanced analytics innovator SpaceTime Insight.

The collaboration aims to foster innovative solutions for electric utilities and retail energy providers to maximize operational efficiency, as well as advance smart energy products, services, and solutions to give customers more insights and control over their energy usage.

In an increasingly resource-limited world, the challenges of meeting the electricity demands of ‘Society 5.0‘ while incorporating renewables into the electrical supply are shared the world over.

“The transformation occurring across the world’s electrical systems represents one of the greatest technological challenges industrialized societies have undertaken.” –Tony Tibshirani, SpaceTime Insight

This collaboration is poised to blend combined expertise to create solutions that will give a competitive edge to existing players as well as new entrants into the deregulating Japanese power retail market and act as a model for other countries as they plan to shift towards renewable and mixed energy sources.

“The transformation occurring across the world’s electrical systems represents one of the greatest technological challenges industrialized societies have undertaken,” says Tony Tibshirani, Executive in the Office of the CEO at SpaceTime Insight, speaking to ITU News. “Reconfiguring a grid designed to carry power one way from reliable generation sources managed by few participants to a system increasingly laden with unreliable wind and solar energy while involving hundreds more participants using advanced technologies will introduce a high degree of uncertainty and variability into the future grid. These changes potentially threaten reliability of electrical supply and must be carefully choreographed and analyzed to avoid widespread variability in cost, reliability, and efficiency.”

Japan’s new energy landscape

Last year, the deregulation of the power retail market for small-scale users such as households was enacted, building on a 2015 reform to increase private sector competition and lower prices for consumers, following the establishment of the Organization for Cross-regional Coordination of Transmission Operators (OCCTO) to manage Japan’s electricity flows across regions as phase one.

Since then, more than three hundred new entrants have arrived into the power retail market, including players from non-electricity sectors such as gas, telecom and oil. Previously, the energy market was dominated by 10 regional monopolies, to which consumers were bound by contract according to region.

As NEC’s Smart Energy Division Manager, Kunio Katsura and Assistant Manager, Anh Tran explained to ITU News, Japan’s deregulating energy market environment requires that both emerging and established Japanese electricity companies transform their business models and create new customer services.

The reforms come as a response to the energy shortages caused by the inability of the regional monopolies to transmit energy beyond their respective regions, as well as the soaring costs following the 2011 Fukushima Daiichi Nuclear Power Plant disaster, after which Japan’s nuclear capacity came to a halt, leaving a 27% gap in the electricity supply.

Today, out of Japan’s 42 commercially operable reactors only 3 are in commercial operation.

“The visualization and analytics platform created and used by SpaceTime and SMUD would allow distribution companies to have a data-based visualization of the distribution assets in Japan, many of which are aging.” — Kunio Katsura and Anh Tran, NEC’s Smart Energy Division.

Following the nuclear shutdowns, less than 10% of Japan’s total primary use has been met by domestic energy resources. The deficit was replaced primarily with liquefied natural gas imports, as well as coal and oil. The substitution has led to increased electricity prices — by 20% for household consumers and 30% for industrial consumers — as well as revenue losses for electric utilities companies, and higher government debt.

Although renewable energies made up about 8% of Japan’s total electricity generation in 2015, the Japanese government plans to boost its share in the electricity generation mix to 22-24% by 2030 and has encouraged the effort with government subsidies and incentives such as Feed-in-Tariff schemes (FiT).

Technology solutions for electricity and utility providers

NEC aims to address these challenges by coupling its unique position with Japanese utility companies, as well as its own technology capabilities, with SpaceTime’s expertise in advanced technologies such as machine learning and analytical models, as well as SMUD’s know-how in public utility operations and experience overcoming similar challenges as the first major utility in California to meet the renewable portfolio standard in 2010.

“SMUD’s advanced metering and improved customer analytics will help these utilities reach their goals as quickly as possible.” — Mark Rawson, SMUD

“Utilities in Japan are in the process of deploying an advanced metering infrastructure. They’re just starting to have an accurate view of how consumers use energy, and they’re looking to use technology to develop innovative programs that will provide customers with more choice while still accomplishing other objectives, such as energy efficiency,” explained Mark Rawson, manager of new business development at SMUD speaking to ITU News.

“SMUD’s advanced metering and improved customer analytics will help these utilities reach their goals as quickly as possible,” he added. “Also, more specific temporal and spatial data on customer energy use is giving utilities more insights into distribution operation and maintenance issues.”

This is where SpaceTime’s proprietary Asset Intelligence technology fits in. By pulling data from disparate systems and sources and by analyzing and visualizing results they can deliver deeper insight into the operations of utility companies.

“Asset Intelligence includes essential analytics, including various models for calculating and indexing the health of specific assets and building financial models for increasing operating and capital efficiency,” says Mr. Tibshirani of Spacetime Insight. “Using SpaceTime software, operations can more readily determine maintenance priorities, downtime effects, and capital spending needs.”

He believes that the technology would provide the framework for the partnership’s solutions and allow electric utilities to gain “systematic views on asset lifecycle optimization based on operations, risk and economic impact.”

Through better information technologies, electric utilities will be better positioned to:

  • Understand what assets pose the most risk to the utility and security of electricity supply
  • Decide where the utility should focus its efforts and resources for optimal return
  • Strategically evaluate assets by analyzing the health, criticality, and risk to the asset portfolio
  • Implement a consistent set of criteria for evaluating asset conditions that drives proactive, rather than reactive, maintenance
  • Establish a common and consistent end-to-end methodology for asset investment planning

“More concretely, the visualization and analytics platform created and used by SpaceTime and SMUD would allow distribution companies to have a data-based visualization of the distribution assets in Japan, many of which are aging… The creation of indexes and visualization methods would allow utility companies to know exactly which assets need to be replaced, and when,” echoed Kunio Katsura and Anh Tran, from NEC’s Smart Energy Division.

NEC believes that this type of collaboration will increase going forward and hopes that this collaboration will be a leading example for the future.

By Pamela Dahlia Lian, ITU News

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