國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
30
Section 2: Developed Countries Stakeholder Analysis
2-1. Government
United States of America
IBM has worked closely with the U.S Department of Energy and is the founding members of the Energy’s GridWise Alliance. The Alliance is much respected by the U.S government in providing practical energy solutions to the national energy plan. IBM has demonstrated its ability in the technology sector of computing and analytics. It has been involved in various historical big projects like manufacturing equipments used for the space mission to moon and submitted the contemporary icon of barcode which has changed how the world shops. All of the success that IBM has done over the 21st century has well prepared IBM to deal with more problematic issues that are threatening the life of mankind. IBM is ready to take their expertise to solve the more complex issues of energy which intertwined social, economic and environmental concerns. In the year of 2006, IBM and Northwest National Laboratory launched the pilot smart grid demonstration project. Research areas include the maintenance of peak load by regulating the temperatures of the home appliances. This has provided ground breaking news; the results proved that such practices could help to prevent grid overloads. Customers are able to see financial incentives from actions of energy reduction. This is very important for the development of the smart grid as now it is proven to be effective and can also create values for the consumers to mobilize them to the idea of smart grid.
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
31
Many modern public affair, economic and national defense systems are far too vulnerable to experience any sorts of power outage, the outcomes would be irreversible. By ensuring the stability of these systems through making an effort to present the power of big data analytics, the government would be able to make better decisions to conclude their own energy plan internally and to reach social harmony and national security as a whole. The very existence of IBM is to for government to transform their decision making process more on the decision-quality information rather than making political aspirations just to win the votes in the elections. Citizens do not need any more promises; they need government organizations to set good examples themselves and to indicate a clear path for them to follow for the future. U.S has grown too weak to experience another economic crisis and it is time for government organizations to embrace futuristic thinking if national sustainability is the case.
Global economic pressure, more demanding citizens, budget deficits and declining revenues have put government organizations in the position to rethink about how they can better generate values and have greater accountability. This has moved them to the attention to the use of big data analytics. Big data analytics would set the next page for the governments to be able to make quality decisions and to impose policies that would be able to drive the society and economy going forward. The key is how to gain access to information that can be use for decision making.
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
32
While U.S is still deeply disturbed by the economic crisis started at 2007.
IBM has already made its way to make the energy more efficient by assisting utilities and governmental organizations to reach their own energy goals throughout the world. Utility and government organizations worldwide are taking considerable measurements and actions to change its operations.
Increased governmental regulations have support the deployment of smart grid as power providers have the support of the government to roll out the AMI installations in many countries. Malta was the first country with the national smart grid and smart water system. In the year of 2009, IBM has helped the country of Malta, the smallest members in terms of the size of territory in European Union. It is a project that was out of necessity; Malta relies heavily on the imported natural resources to generate electricity. On the other hand, its own water system is powered by the electricity generated from the electric power plants. The problem is clear that these two systems are interconnected.
These have made the Malta government to integrate more renewable energy into the grid system. It is not an easy thing to do, but IBM does know how to solve the problem. IBM has finally waited the chance to demonstrate its ability on a national grid project. The Maltese project is going to be finish by the year of 2012 that is the first step for the realization of two way communications. The Maltese government would then be able to assess both commercial and technical energy losses. By enabling better insights into the usage pattern, demand management could take place to help to transform the nation to become more energy efficient. Information generated from the sensors and meters of the system would also be able to help the citizens to make smart energy decisions. The Maltese success has probably led the U.S government to start to value the true strength of smart grid and took the step to support the
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
33
smart grid development and deployment domestically. Most U.S smart grid projects are based on the collaborations from different stakeholders in the smart grid. In the low voltage grid, utility is responsible for the AMI installations;
solution provider like IBM provides the expertise in the integration of different kinds of system in smart grid.
Many U.S government organizations have struggled to find ways to make better plans for the citizens and IBM is the company which many government organizations turned to equip the policies with better understandings of how to improve the social, economic and environmental affairs. IBM has hosted conferences to show how they are working closely with the government organization to approach on the challenges they are facing. On date 9th of April 2013, IBM Government Analytics Forum was held in Washington DC, the event was hosted together with the Government Executive Media Group. It is important to know that in the U.S, the Government Executive Media Group plays an important role of providing trustful information for the senior decision makers in the U.S government to consider. Key topics discussed in the forum included smarter budgeting and finance, smarter program management and demystifying big data. This has shown that IBM is working closely with the government to assist the government organizations to be more efficient in their operations on all aspects of the public affairs. This could serve the purpose as it was said in the CSV approach, for any corporation that follows the approach must work closely with the government in order to come up with better regulations that are would further enhance the reputation of the technologies itself. This could also let government organizations to start to appreciate the true strength of IBM’s big data analytics and consider it as an important part of
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
34
the future of the nation.
It was said that U.S government has already viewed big data technology as an important source of natural resource. This could be interpreted that big data analytics would contribute its part to help the nation to become more competitive in the way to once again providing high standards of services and addresses more appropriate and relevant measures when it comes to decision making on the national level. From the energy point view, government organizations also account for a fraction of the total energy consumption. If more electricity could be saved by the government, then the government could be in the righteous position to advocate the importance of reducing energy consumption, because it has already set itself as an example for the general public to follow. This would also help to reach the secured power supply for the nation. In fact if the grid could be 5% more efficient in the U.S it would be equivalent to the reduction of carbon emission equivalent to 53 million cars.
But we must not forget that most of our automobiles are also using crude oil as the power sources.
Though, U.S was the first nation that has started with the nationwide smart grid deployment but the decentralized market and decision making due to the nature of the political structure has made it difficult for the large scale commercial deployment. McKinsey believes that U.S will remain as the biggest market in terms of smart grid market development. This could be attributed with the low interest rate posed put forward by the government up to year 2012 to encourage investors to invest in the smart grid markets. This could endanger the market in the long term as the P/E ratio has already reached the
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
35
number of 20 evaluated in early May 2013. Investors are rushing to get yields from the utilities and once the interest rate goes higher, utilities might be undervalued as the result of the interest rate change. The lesson taught by the Enron case further shows that if the utility is having too much power on influencing the market the results might be that the investor would be the victim in terms of unreal stock price and the actual performance of smart grid. One must be prepare for the consequences similar to the Enron case where the stock price was based on unreal numbers in the financial reports, all being to optimistic about where the future was going and forgot about the danger of having a P/E ratio that was never before in history. The government must consider whether the smart meter roll out would really benefit the economy as a whole from the perspective of the industries as well as the energy consumers.
U.S government might be right about the fact that U.S needs a cleaner and more efficient system to transmission and distribute the electric power. But it must also understand the fact that there are technological difficulties’ and negative effects that still remain as concerns of many such as the privacy issues and the investment in the utilities is getting out of hand due to the smart grid rush.
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
36
European Union
Great Britain
27In Europe, Great Britain was required by the E.U regulation to have replaced every existing electrical meter with the Smart meter. This is to make smart Grid possible in Great Britain. Knowing the path that Britain is about to endure, the question how to roll out the smart Grid. This would be to change the way how energy is generated, distributed and consumed. IBM took the opportunity to assist SmartGridGB to support its aims by bringing smart grid infrastructure that would create environmental and economic benefits for the people of Great Britain. The establishment of SmartGrid GB gathered together the intellects in the fields relevant to smart grid, the trade associations of U.K’
technology sector and key stakeholders that are in U.K’s utility industry.
28The estimation of money saved by smart grid when upgrading the grid infrastructure in U.K is somewhere around £19 billion. This was calculated on the difference between upgrading the grid infrastructure by using conventional technologies and using smart grid technologies. Despite the fact that develop and deploy smart grid technologies would cost Great Britain a total investment of £27billion between the year of 2012 and year 2050. Upgrading the grid infrastructure would still be nearly half the price when using smart grid technologies reported by Ernst & Young. Apart from the money saved, Great Britain could also expect economic growth and carbon reduction. Great Britain is facing foreign competition on the development of smart grid technologies as
27 IBM News Room
28 Greenwise staff, Green wise.
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
37
other key economies from the APAC are also rushing onto the smart grid market. It also worry that if the smart grid is not developed fast enough, then it might misses the carbon reduction targets set for the years ahead. It was estimated that smart grid could provide 10,000 job positions for Great Britain.
The U.K economy could also expect an increase of £13 billion gross value added. This would also go for the exports that there is going to be £5 billion excess. As much as 57% of the economic value would be coming from the manufacturing sector of smart grid supply chain and also the electric vehicle sector. As we know that Great Britain has strict regulations on the use of automobiles. Car sharing policy is a common practice in many mega cities of U.K to reduce the carbon emission. Electric vehicles would give Britain a better solution to reach its carbon reduction targets driven by the smart grid itself.
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
38
Germany
Germany is the biggest nation in the European Union in terms of population as well as the energy consumption. Germany heavily rely on the import of coal for the power generation and heating and cooling. Follow by the 1986 Chernobyl nuclear disaster, the German publics grow strongly against nuclear power, another energy resources that Germany has long been depended on. The German government wanted to abandon the use of nuclear power by the year of 2025. It was probably due to all of the complexity of the energy issues of the pass and to plan for a more secure future that the demand for renewable energy raised to the surface.
Due to rapid development of renewable energy, Germany was able to provide renewable energy options that are cost-effective and was creating considerable amount of jobs in Germany. The Germany government is the first nation that shows strong dedication to the development of renewable energy options. The result pretty much surprised everyone in Germany. The policy turned out to be very successful. It all starts with the Climate Change Policy, then the Feed-in-tariff came into make to bring financial incentives in place to support the transition from using energy produced conventionally and that is often done through centralized production to distributed energy sources of renewable energies. All parties in the Germany are committed to the preservation of the environment and fighting against climate change. By joining the environmental, economic and energy policy, Germany has developed a clear pathway for the country to become more energy efficient at the same time delivering economic value and to reduce externalities to the
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
39
environment as a whole. The Germany government was not afraid to show the world what their political aspiration was and was very clear and determined to define its success through its various forms of effort to make the country not only a better place for living but to take make it as the first nation that bets its future by adapting to the renewable energies. As the founding member of European Union, Germany continues to show strong involvement in the policy making as well as complying with every political targets set forward by the European Union. In March 2007, the European Union has collectively agreed to reduce the carbon emission by 20% by the year of 2020 in comparison with the 1990 level. E.U is not stepping down on its firm attitude towards the severe climate change issue. Many discussions have been happening within the union as to how to best solve the climate change issue. It then emphasized on increasing energy efficiency by 20% and to include 20% of renewable energy into the electric grid as sub-targets. As a union, all of the members have agreed upon the Burden Sharing Agreement. In this agreement, Germany is legally obliged to cover 18% of its energy consumption from renewable energy sources. Statistics shows that, despite the fact that Germany was not superior in terms of both conventional natural resources and natural energy resources in comparison with any other members of the E.U, it still strikes to reach the environmental goals of E.U at its best. After the Copenhagen Agreement, new target for carbon emission reduction was escalated to 30% from E.U alone.
That was under the condition if the global community has agreed to work together to deal with climate change. However, without the Copenhagen Agreement, members of E.U have already agreed upon the previous target of 20% reduction by the year of 2020. During the Meseberg 2007 meeting, Germany has further proposed more ambitious environmental goals to not only
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
40
show its commitment to the climate change issue but also to encourage other industrialized countries to show their part of involvements. The results out of this meeting include the followings: Emissions Trading and Clean Development Mechanism support for climate-friendly energy production of renewable and combined heating and power, energy efficiency measures for residential households. Much of the work was scheduled to be done between the year of 2008 and 2009. Clearly, the time is ticking and the world cannot be waited for any longer for ongoing discussions about climate change. Germany has set a clear time frame about exactly what has to be done and continue to work step by step to realize targets that have been agreed upon. There are also 29 measures to assess the carbon emission level that came out of the Meseberg 2007 meeting. Each single one of them will provide Germany as to how to best monitor and evaluate its progress towards the even larger goal of reducing the carbon emission up to 30% by the year of 2020. Germany is ready to do more than the general target of 20% started by challenging its own capability.
Germany is one of the first countries to have carried out a full-scale implementation of smart grid. Germany has always been a competitive country by trying to shape its economy is a self-sufficient manner. It constantly tries to think of way to improve its economy as well as contributing its part to the environmental and social related issues. In fact, Germany is one of the most successful countries when it comes to universalize the renewable energies.
Germany was very clear about its own energy plan. Hard as it might seem but Germany has made significant improvements over the last 10 years. What are the driven forces that have made Germany becoming the energy role model? A
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
41
lot has to do with the strong dedication of the German government. The supply of energy to customers still continues to be a major topic for the German government as one of its political agenda.
German Renewable Energy Act serves to encourage cost reductions by
German Renewable Energy Act serves to encourage cost reductions by