at European Technology Platform, 5 Oct 2011

1. Customer centricity - new choices with
ICT solutions for Smart Grid
• Smart Grid, lessons learnt
• what’s in it for a consumer
• where Nokia Siemens Networks fits
Dr. Artemy Voroshilov,
Head of Smart Grid sales, Europe
Nokia Siemens Networks
1 © Nokia Siemens Networks 2011

2. ‘SmartGrid’ disrupts utilities’ business models
Environmental Regulatory
Building & running centralized Getting the ‘rules right’ requires
generation, key to meeting new business models / ways to
supply, is increasingly difficult manage the customer experience
Renewable Energy Sources Meeting demand
Introduce new / unanticipated Requires new forms of customer
volatility into an industry proud load shaping, beyond DR, EE and
of its track record for reliability curtailment
Distribution Grid Set of new challenges
increasingly ‘omni-directional’, Security, customer privacy,
volatile power sources require integration of multiple disruptive
new control mechanisms technologies, aging workforce
2 © Nokia Siemens Networks 2011

3. Early trends in SG focus on technology
Without a customer value prop,
Smart Grid misses the point...
The ‘simple’ utility paradigm
…
Customers Generator
…. is transforming smartly
into the dynamic nexus of
supply and demand
3 © Nokia Siemens Networks 2011

4. Smart Grid is, first and foremost, about the customer
‘Simple’ AMI isn’t simple,
lots of global pushback
Focus here!
Reliability & real-time
communication need to
scale cost-effectively
Financial implications of Smart
Grid too broad to model
4 © Nokia Siemens Networks 2011

5. Smart Metering prevails in Europe
Regulatory framework
• EU’s 3x20 umbrella: 20% GHG reduction, 20% renewable energy, 20% energy efficiency for 2020
• 3rd Energy Package pushes for AMI (80% coverage subject to cost-benefits analysis, 2009/72EC, 73EC)
• focus on cost efficiency rather than investment in smarter systems / broader energy policy goals
Dynamic movers - clear path towards a full rollout of
smart metering (mandatory rollout or major pilot
projects on-going
Market drivers - no legal requirements for rollout, but
installation of meters on-going
Ambiguous movers - legal / regulatory framework
established to some extent , but due to lack of
clarity only small scale installations
Waverers - some interest from regulators / utilities, no
regulatory push towards smart metering
implementation.
Laggards - smart metering not yet an issue.
Source: European Smart Metering Landscape Report, 2011, www.smartregions.net
• Progress in implementation (# of pilots, meters & services in-field, realistic implementation roadmap for metering technologies)
5 © Nokia Siemens Networks 2011

6. Not a Market, yet first learnings and successes
Smart Grid in Europe*
• 219 smart grid projects, €5.5bn invested
(July 2011), most projects in E15 (E12
members lagging)
• Smart metering projects dominate (56% of
investment), demonstration rather than R&D /
PoC
• Distribution operators in the lead (27% of
projects, 67% of investment)
• Integration & scalability in focus (SI - largest
category, 34% of projects, 15% of investment)
• Multidisciplinary consortia & high
collaboration (operators, academia, research
centers, manufacturers, ICT vendors)
• Missing cost-benefit analysis, common
methodology required
• Success stories (EU15) - real-time info helps
save up to 10% of electricity consumption
Source: EC’s JRC, Smart Grid projects in Europe, 2011
6 © Nokia Siemens Networks 2011

7. Consumers require transparency of power consumption
It would decrease the amount of my 91%
electricity bill 88%
It would decrease my personal 69%
environmental impact 66%
It would better allow me to control 68%
the heating/cooling in my home 51%
It would decrease the time required 41%
to manage my electricity use 38%
Knowing that I am one of the 2011 2010
16%
highest electricity users in my peer
9%
group
Source: Accenture, 2011
7 © Nokia Siemens Networks 2011

8. Smart rating can build in the customer from the start
Easy top-up Online rating & Unified rating and tariffing
billing of electricity • Links smart meters directly to customer
accounts held on a prepaid energy server
• Real-time rating and tariffing
kWh
• Flexible pricing schemes from flat fees to
Balance dynamic tariffs and bonus programs
notifications
Customer Interaction & Experience Mgmt
Bonus … through various existing channels, e.g.:
programs Cost control • Web-portals
• Emails
• SMS’
• Social Networks / Chats / Blogs
8 © Nokia Siemens Networks 2011

9. Thanks for Energy Watch your consumption
saving. You earned - you are above the
100 points to your Average Threshold of
CO2 bonus account. last 3 months.
Weekend Promotion Happy Hour – 50%
– free charge of your price reduction for the
EV on Sunday night next 2 hours
starting 10pm – 3am.
Thanks for contributing to
our Green Energy target. Congratulations – you are the most
Your new Solar feed-in balanced Energy consumer in your
Tariff Increases by 5%. neighborhood. 5% Discount on your
actual monthly bill.
Congratulations! You are Save 2% Energy in peak
upgraded to a SILVER hours and you will receive
CUSTOMER. Enjoy the the same Energy free in
benefits! off-peak time.
9 © Nokia Siemens Networks 2011

10. Energy Solution Architecture complements CIS and MDMS
Deviations, impact to
ERP Layer CIS Customer Care ERP Business Intelligence P&L, impact of offers
(CRM) system
Customer Self Care Invoicing Reports
Customer Experience
Management
Rating & Tariffing Tariff Management Basic energy rates Time of Use rates Dynamic rates
Product information
Bonus programs Notifications Prepaid Energy Top up
Customer information
Command brokering (disconnect/reconnect) Versioned data storage Application Enablement Long-term usage data
Meter Data
Management
Validation, Estimation, Editing Meter data integration Automated meter provisioning etc
Data Collection MDCS 1 MDCS 2 MDCS 3
Connection layer Home Area Network Last Mile Wide Area Network
Meters
10 © Nokia Siemens Networks 2011

11. EV charging / eMobility – additional revenue with same asset
Electric Vehicle Charging Solution (ECS)
Smart energy Charge vehicles
delivery anywhere, enabled • Online rating and dynamic tariffs
by roaming support • Customer identity and data management
• Secure identification and roaming enabled
by eMobility control
• Reduced risk and initial investments enabled
by Software-as-a-Service (SaaS) delivery
Secure
identification of
users and
vehicles
Convenient Billing Field-proven
and Dynamic Tariffs
11 © Nokia Siemens Networks 2011

12. Where Nokia Siemens Networks fits – Today & Tomorrow
Smart Rating Access Transport E-mobility Network
kWh networks connectivity management
Real-time monitoring Cost-efficient Provide reliable, Provision of charging Management of the
and billing to enable communication cost-efficient and points & management dynamic Smart Grid
dynamic tariffs and solutions for AMI + secure backhaul of the related billing infrastructure, new
prepaid energy grid automation communication infrastructure assets and OPEX
Software – to shape customer behaviors, enable value-add services and process high volumes of Smart Grid data
traffic in near real-time
Connectivity – to provide an evolutionary blueprint that optimizes the overall 2-way communications infrastructure in
lock step with the evolution of your smart grid strategy
Services – expertise and support to design, build, run or outsource Smart Grid communications networks, as needed
12 © Nokia Siemens Networks 2011

13. Summary
• Smart Grid transformational to Utility business
• no evolution but revolution
• disruption best understood from customer perspective
• Customer centricity
• start with customer value prop, design backwards
• electricity price – elastic, people respond to dynamic tariffs
• there are simple / expandable ways to focus on customer messaging
• For a vendor
• no simple technology sale
• embed a wider vision of customer into everything we do
• insights from our experiences in other industries matter to our customers and partners!
13 © Nokia Siemens Networks 2011

14. Thank you
artemy.voroshilov@nsn.com
14 © Nokia Siemens Networks 2011

15. Backup
15 © Nokia Siemens Networks 2011

16. What Customer Experience Management is all about?
Experience is everywhere.
Customer is unique and
must be faced as so, not
silo by silo
Experience is individual. Experience must be shared.
Customer must feel that It’s unthinkable to have
you think about him and dedicated people for
not that you shoot at individual analysis. So, self-
will. learning is key.
Experience has timing. Experience reaches you.
Actions have a specific You can’t wait to the
moment to happen and customer to contact you. He
lose most of the effect if will only do so when
the window is lost. something is wrong.
16 © Nokia Siemens Networks 2011

17. NSN strengths in telecom - for power utilities
Systems integration Consulting
500+ projects and 100 170+ engagements
security contracts for over 70
globally customers globally
Managed services Participating in national and
310+ contracts serving international Smart Grid
over 570 million standardization activities
subscribers globally 750,000+
Nodes installed and in
550,000,000+ 45,000+ service with over 140
utilities in more then
Subscribers served by our Services professionals
100 countries
rating and billing solution operating in 150 countries
18 © Nokia Siemens Networks 2011

18. Nokia Siemens Networks – who are we?
• Joint venture of Nokia (FI), Siemens (GER), recently
acquired Motorola’s wireless networks infrastructure business
• Started operations April 1, 2007
• 72,000 employees in 150 countries
A world leading supplier for the Telco industry
• 3 billion mobile subscribers
• 75 of top 100 Telco operators
• €12.7 bn net sales in 2010
• network systems, business solutions,
global services
A strong partner for the energy industry
• Full grid connectivity
• Smart dynamic rating and smart billing
• Renewable energy management
• E-mobility
• Active demand response
19 © Nokia Siemens Networks 2011