The document discusses challenges facing grid operators like Alliander as the energy industry transitions to more renewable and distributed sources. It outlines issues like accommodating electric vehicles, two-way energy flows, smart metering and home automation, and smart cities and grids. It then proposes several innovation strategies and implementation approaches for grid operators to address these challenges, including business model innovation, lean startup methods, DevOps, separate systems by type, and allowing for proactive business scenarios. Governance is also discussed, including extending existing frameworks and optimizing the IT portfolio.

1. Exploring the upside of risk optimize the IT portfolio
“Opportunities multiply as they are seized.” Sun Tzu
Alliander IT CIO Office
Michel de Goede

2. 1. Introduction of Alliander

3. 2. The EU (1/3)
Low prices for all, better quality, more choice Innovation Better competitors in global markets

4. 2. The EU (2/3)
Sustainable, secure and affordable energy for Europeans

5. 2. The EU (3/3)
2020 Goals:
•20% reduction of greenhouse gas emission
•20% share for renewable energy sources
•20% saving in energy consumption
Measures:
•Step up energy performance
•Improve energy transformation
•Financing
•Change behaviour

6. 3. Issues of a grid operator: Electric vehicles (1/5)
•Roll out of thousands of electric vehicle charging stations
•Grid Capacity is insufficient
•What if we use cars as backup energy storage?

7. 3. Issues of a grid operator: Two way traffic (2/5)
Monetary flow
Information flow
Transmission
Trade/PRP/ Shipper
Distribution
Supply
Metering
Production
Physical flow
© Jeroen Scheer, Alliander, 2011
•Flows change
•Capacity increase

8. 3. Issues of a grid operator: Smart metering and home automation (3/5)
•Roll out of 5 Million Smart Meters (Gas + Electricity)
•Inform customer regarding energy consumption and create awareness
•Respect privacy concerns
•Manage the potential data ocean

9. 3. Issues of a grid operator: Smart city initiatives (4/5)
•Combination of various techniques (Amsterdam)
•Self healing and self regulating micro grid (Bronsbergen)

10. 3. Issues of a grid operator: Smart grid (5/5)
•Accommodate higher peaks and two-way traffic through intelligence
•Accomodate energy transition scenario’s through intelligence
•Provide the necessary information to all parties involved

11. 4. Innovation: sixth Schumpeter / Kondratiev wave of innovation (1/5)

12. 4. Innovation: The semantic wave (2/5)

13. 4. Innovation: And then there is also..... (3/5)
Source: Sogeti VINT

14. 4. Innovation: And then there is also..... (4/5)
Sources: Wired, PSFK, Google, Motorola, Artefact Group, Glow Caps

15. Business Processes
4. Innovation: into the virtual world (5/5)
Virtual World
Personal Devices
Home Automation
Operational Technology
IT Connected
Organizations
Crime

16. 5. Business Model Innovation: Steering on output (1/5)

17. 5. Business Model Innovaton: create composite services (2/5)

18. 5. Business Model Innovation: choose your battles well (3/5)
There typically are 6 potential treatments for both the up and downside of risk:
•Ignore, the ostrich ‘see-no-evil-hear-no-evil’ tactic;
•Accept, the potential impact of some risks may be deemed acceptable to your organization;
•Reduce, e.g. the potential impact or probability of occurrence of a risk, like the banking app;
•Transfer, use insurance or subcontracting to transfer potential consequences of risk;
•Avoid , not entering the type of business that may incur potential risk impact deemed too high;
•Exploit, risk is also an opportunity and high risk investments may yield high returns.

19. 5. Business Model Innovation: Real option planning (4/5)
Source: Ronald Poppe, Reader Financial Engineering, Rotterdam School of Management / Erasmus University
Bankers understand steady cash-flows
Insurance companies understand risk
1.Calculate future cash-flows
2.Calculate volatility
3.Calculate option value

20. 5. Business Model Innovation: Lean startup methods (5/5)
Source: Alexander Cowan, Steve Blank
Agile

21. 6. Implementation: Learn from the past (1/6)
0% 20% 40% 60% 80% 100%
Traditional
Ad-Hoc
Lean
Agile
Iterative
Successful Challenged Failed
Copyright: Scott W. Ambler (see www.ambysoft.com/surveys/)

22. 6. Implementation: use the different speeds in your landscape (2/6)
Source: ING

23. 6. Implementation: separate your systems by type (3/6)
Source: Forrester

24. Cross functional teams
•Product driven
•No projects
•No ITIL
Self Service
•Automated Testing
•Automated Configuration
Streamlined Operating Procedures
•Continuous Integration
•Collaborative Development
•Continuous Monitoring & Feedback
DevOps properties1
Preconditions DevOps
Impact our time1
Lead to business outcomes1
Agility
Resiliency
1 See also:: http://www.pwc.com/us/en/technology-forecast/2013/issue2/features/cios-agility-stability-paradox.jhtml
6. Implementation: Use DevOps if possible, PMO if necessary (4/6)

25. 6. Implementation: 1 size fits all architecture pattern (5/6)
Internet (open)
Access Management (access layer)
Representation
(presentation layer)
Authorization Management
(application layer)
Application
1
Application n
May I enter the house?
What goods and services
am I allowed to
use in these rooms?
Any device
Offices (closed)
For which rooms do you
give me the key(s)?
What goods and services
am I allowed to
use in these rooms?
Protocol and data- format decoupling such as: Citrix,
HTML 5, JSON, XML, Sybase SUP and so on
Application 2
Application 3

26. 6. Implementation: Allow for pro-active business scenario’s (6/6)
© Wim Bouman, Alliander IT
Needs semantics

27. 7. Governance: Extend GRC structure
GRC
controls testing
Operations
Yearly audits
& escalations

28. 7. Governance: Allow for quality driven IT using ISO and OCEG
Source: OCEG

29. 7. Governance: The optimized portfolio
Source: http://toolsformoney.com/portfolio_optimization.htm/
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30. Questions?
Alliander IT CIO Office
Michel de Goede
Thank you!