共享價值與智慧電網之關係研究-以IBM公司個案探討 - 政大學術集成

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(1)國立政治大學企業管理學系碩士論文. 共享價值與智慧電網之關係研究治. 政. 大. -以立IBM 公司個案探討. ‧. ‧ 國. 學. Nat. io. sit. y. A study of relations between. n. al. er. Creating Shared Value and Smart Grid. Ch. i Un. v. -case ofeIBM hi n g cCompany. 指導教授: 黃秉德博士研究生: 童邦晏撰. 中華民國一○二年七月.

(2) Acknowledgments I would like to express my highest gratitude and appreciation to my committee chair and supervisor, Professor Ping-Der Huang for his genius in the field of social welfares and business management as well as always giving us the time and space to develop our ideas. He continues to show strong support towards supervision and conveys a spirit of adventure in regard of academic research and industrial practices and passion of teaching. This dissertation would not have been possible without his guidance and assistance.. 立. 政治大. ‧ 國. 學. I would like to thank my committee members, Professor Chester S. Ho and Professor Man-Jung Chan for providing more concepts and thoughts. ‧. which I was not able to capture on my own without their expertise. Thank you. n. al. er. io. sit. y. Nat. for showing interest in my work and given precious feedbacks.. i Un. v. In addition, I would also like to thank Professor Jonathan T. Scott of. Ch. engchi. Kozminski University, who has demonstrated his strong industry driven knowledge on sustainability and energy savings. Much credit goes to National Cheng-Chi University for the continued effort on organizing lectures and seminars that include professional academic researches and practical business cases from overseas and domestic.. i.

(3) Many thanks to my friends, Lewis Kuo, Bruce Chao, Peng-Peng, Arthur Liu, Vincent Wang, Larry Zheng, Kevin Wang, Heng-shuo Xu, Timon Yeh, Chun-Yu Chu, Chen-Chun Lai, Tony Chen, Bill Shu, Siao Bai, Baby Sheep, Chih-Yin Tung, Siao Sha, Mia Chen, Ya-Ching Zhang, Sharon Liu, Yi-Shan Liang for all of the support you have given me and there are many more that I would also like to thank to but forgive me for not able to cover all of the names. Last but not least I would also like to thank my family for everything you have given me.. Written Respectfully by TUNG PANG-YEH in Muzha. 學. National Cheng-Chi University, Department of Business Administration. ‧. ‧ 國. 立. 政治大. 2013 July 27th. n. er. io. sit. y. Nat. al. Ch. engchi. ii. i Un. v.

(4) Abstract Due to the rise of environmental awareness and the worsening situations between the business community and society, corporations are trying to find a way to reinvent capitalism. Michael E. Porter advocates that Creating Shared Value might be the answer for how business will able to reinvent capitalism and unleash the next wave of business and innovation. More and more corporations have jumped on the CSV bandwagon to create wealth for both the business and the society. Case analysis and secondary data analysis techniques are employed in this paper as the research method, through analyzing the stakeholders that are in the smart grid landscape. Academic. 政治大. literature, research papers, publications and information from relevant websites. 立. are used to support the analysis. The purpose is to find out whether IBM. ‧ 國. 學. Company’s business model is in accordance with the shared value model by analyzing the opinions of stakeholders of smart grid and the proposes values of. ‧. IBM’s smart grid solutions.. y. Nat. sit. The results are that most of the solutions that IBM has for smart grid are. n. al. er. io. somehow relevant to the concept of CSV. However, most of the values proposed are rather indirect. i Un. v. as they are often created through collaborating. Ch. engchi. with other players in the value chain. IBM alone would not be able to create a shared value model of its own. Therefore, suggestion has been made to emphasize on the importance of clearly identifying who has the biggest influence among stakeholders. Through chain effect between the stakeholders to enhance Smart Grid to become a more distinct shared value model.. Also, due to the complexity of technologies involved in smart grid, the research has many limitations.. Keywords: Creating Shared Value, Demand Management, Shard Value Model, Smart Energy, Smart Grid, Stakeholders Approach iii.

(5) Table of Content Acknowledgments ............................................................................................. i Abstract............................................................................................................iii Table of Content .............................................................................................. iv List of Figures .................................................................................................. v List of Tables ................................................................................................... vi Glossary..........................................................................................................vii Abbreviations .................................................................................................. xi Chapter One: Research Background Section 1: Research Background ............................................................. 1 Section 2: Research Motivation ................................................................ 3 Section 3: Research Purpose ................................................................. 4 Section 4: Research Design ..................................................................... 5 Chapter Two: Literature Review Section 1: Grid Industry .......................................................................... 6 Section 2: Creating Shared Value ........................................................... 16 Chapter Three: Research Methods Section 1: Research Structure ................................................................ 20 Section 2: Research Targets and Data Collection ................................... 21 Section 3: Data Analysis Methods .......................................................... 22. 立. 政治大. ‧. ‧ 國. 學. y. Nat. sit. n. al. er. io. Chapter Four: Research Findings Section 1: Emergence of CSV Business and Smart Grid in Developed Countries ................................................................................................ 23 Section 2: Developed Countries Stakeholder Analysis ......................... 30 Section 3: IBM Shared Value Model and Smart Grid in Developed Countries ................................................................................................ 94 Section 4: Emergence of Taiwan Smart Grid ........................................ 106 Section 5: Taiwan Smart Grid Stakeholder Analysis ............................. 108 Section 6: IBM Shared Value Model in Taiwan ..................................... 118. Ch. engchi. i Un. v. Section 7: Chapter Summary ................................................................ 125 Chapter Five: Conclusions and Suggestions Section 1: Conclusions ......................................................................... 130 Section 2: Suggestions ......................................................................... 132 Chapter Six: Limitations and Further Research Suggestions Section 1: Limitations ............................................................................ 139 Section 2: Further Research Suggestions ............................................ 140 Reference .................................................................................................... 142 iv.

(6) List of Figures Figure 2-1. Smart Grid Industry Value Chain ................................................... 9 Figure 3-1. Research Structure ...................................................................... 20 Figure 4-1. Demand and Supply of Electric Power ........................................ 28 Figure 4-2. Sources of Influence Changing Energy Consumption Patterns ... 87 Figure 4-3. Information Sources about Energy Cost, Environmental Impact, Alternative Suppliers, New Programs and Services ................................ 90 Figure 4-4. Percent of Respondents Believe Smart Grid and Smart Meter Deployment will have Specific Benefits ........................................................ 91 Figure 4-5. Percent of Respondents Expressing Their Likelihood of Taking on Specific Behaviors or Behavioral Changes .................................................... 92 Figure 5-1. Structure of Smart Grid Promotion Team ................................... 109 Figure 5-2. Roadmap of TaiPower’s Vision on Smart Grid ........................... 112. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. v. i Un. v.

(7) List of Tables Table 2-1. Smart Grid Market Segments and Most Active Segments............. 11 Table 2-2. Top 10 Networked Grid Vendors ................................................... 12 Table 2-3. Global Market Potential for Three Major Smart Grid Submarkets 14 Table 2-4. Estimated Regional Market Potential of Smart Grid ...................... 15 Table 2-5. Levels of Shared Value in Both Business and Social Results ....... 19 Table 4-1. List of GIUNC Meetings ............................................................... 60 Table 4-2. Global Utility Consumer Survey Distribution of Samples ............... 84 Table 4-3. Decision Making Elements of the Pattern for Energy Consumption ....................................................................................................................... 85 Table 4-4. GIUNC Smart Grid Analytics and Value Creation Workshop Results ....................................................................................................................... 94 Table 4-5. GIUNC Analytics and Value Creation in Comparison with Creating Shared Value ................................................................................................. 96 Table 4-6. IBM’s Smart Grid Solutions and Creating Shared Value ............. 100 Table 5-1. Smart Grid Promotion Team’s Division of Work ......................... 108. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. vi. i Un. v.

(8) Glossary Smart Grid 1. Smart grid generally refers to modernized grid with the ability to use. information and communications technology to gather and act on information. Information like behavior is gathered from bother energy supplier and consumers through automation processes. Aim to improve the efficiency, reliability, economics and sustainability of both the production and distribution of electricity.. 政治大 Advanced metering infrastructure (AMI) generally refers to as the smart 立. Advanced Metering Infrastructure 2. ‧ 國. 學. meter, the base for two-way communication between consumer and utility. Advanced metering infrastructure (AMI) is generally used to monitoring and. ‧. billing purposes. It is different than the traditional automatic meter reading. y. sit er. al. n. 3. io. Grid Networking. Nat. (AMR).. i Un. v. Grid Network generally refers to the kind of computer network. Grid. Ch. engchi. Network consist a number of systems connected in a grid. Power System Automation (Transmission and Distribution Automation) 4. Transmission and distribution automation generally refers to the. complete automation of all controllable equipment and functions in the transmission and distribution of electricity in power system.. 1 2 3 4. Wikipedia, http://en.wikipedia.org/wiki/Smart_grid Wikipedia, http://en.wikipedia.org/wiki/Smart_meter Wikipedia, http://en.wikipedia.org/wiki/Grid_network Wikipedia, http://en.wikipedia.org/wiki/Power_system_automation vii.

(9) Soft Grid Soft Grid is believe the second wave of smart grid, generally refers to software used to support and enable many smart grid submarkets. Consumer Engagement 5. Consumer engagement in smart grid generally refers to identifying,. messaging, programs and incentives to get consumer engaged in energy savings and submarkets of smart grid. Building Automation 6. Building automation generally refers to the advanced functionality. 治政 provided by building automation system (BAS), a 大 distributed control system, of 立 a building. ‧ 國. 學. Smart Enterprise. Smart enterprise or smart enterprise suites (SES) generally refers to. ‧. 7. y. sit. io. 8. al. er. DG Integration. Nat. vendors of portal products, content and document management.. Distributed generation integration (DG integration) generally refers to the. n. iv n C integration of the structure of electricity and the arrangements for h e n g csystems hi U operating distribution systems. Energy Storage 9. Energy Storage as storage systems generally refers to devices,. equipments used to store energy to perform useful operation for the designated time in the future. 5. Smart Grid News, http://www.smartgridnews.com/artman/publish/Business_Consumer_Engagement/ 6 Wikipedia, http://en.wikipedia.org/wiki/Building_automation 7 th Hayward, Simon.(2003, March 6 ), Smart Enterprise Suites: Coming to an Enterprise Near You, Gartner Research. Id: AV-19-4654. http://www.gartner.com/id=387875 8 Jimenez-Estevez, Guillermo, A., et el. (2007, November). A competitive Market Integration Model for Distributed Generation, IEEE Transactions of Power Systems, vol 22. No.4, p.1 9 Wikipedia, http://en.wikipedia.org/wiki/Energy_storage viii.

(10) Renewable Integration 10. Renewable integration generally refers to the deployment of and. operations of enough flexible, controllable resources of renewable power generation to support grid reliability, and manage the variability and uncertainty of intermittent renewable power generation. Smart Grid Information Security 11. Smart grid information security (SGIS) generally refers to“[…] technical. and organizational needs for sustainable “state of the art” Smart Grid Information Security (SGIS), Data protection and privacy (DPP), enabling the. 治政 collection, utilization, processing, storage, transmission 大 and erasure of all 立 information to be protected for all participating actors.”, quoted from M/490 ‧ 國. 學. mandate.. 12. ‧. Demand response. y. Nat. Federal Energy Regulatory Commission defined demand response as. al. er. io. sit. “Changes in electric usage by end-use customers from their normal consumption patterns in response to changes in the price of electricity over. n. iv n C time, or to incentive payments designed lower electricity use at times h e n gtocinduce hi U of high wholesale market prices or when system reliability is jeopardized.” PHEV smart charging 13. Plug-in hybrid/elective vehicles smart charging refers to the charging. and potentially discharging of electric vehicles connected to distribution grid with renewable energy. 10. California Public Utilities Commission, http://www.cpuc.ca.gov/PUC/energy/Renewables/hot/Renewable+Integration.htm 11 nd European Commission (2011, March 2 ) Smart Grid Mandate, M/490, p.2 12 Balijepalli, Murthy., Pradhan, Khaparde (2011) “Review of Demand Response under Smart Grid Paradigm”. IEEE PES Innovation Smart Grid Technologies. 13 Trilliant. Smart Charging of Electric Vehicles. http://www.trilliantinc.com/solutions/consumer/phev-smart-charging ix.

(11) Creating Shared Value 14. Creating shared values was advocated by Michael E. Porter and defined. as the redefinition of relationship between corporations and society with (1) redefining products and markets (2) redefining productivity in the value chain (3) enabling local cluster development.. Big Data 15. Big data refers to the collection of data sets at vast amount with. characteristics of volume, velocity and variety.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. 14. Ch. engchi. i Un. v. Porter, Michael E., and Kramer, Mark R. (2011). "Creating Shared Value". Harvard Business Review; Jan/Feb2011, Vol. 89 Issue 1/2 15 Wikipedia, http://en.wikipedia.org/wiki/Big_data x.

(12) Abbreviations CIO - chief information officer CSV-Creating Shared Value CTO- chief technology officer DMS- Data management system EBIDTA- Earnings before Interests, Taxes, Depreciation and Amortization E.U- European Union EV- Electric vehicle. 政治大 ICT- Information Communication Technology 立 IBM- International Business Machines. ‧ 國. 學. GB- Great Britain. GIUNC- Global Intelligent Utility Network Coalition. ‧. GTM- Green Tech Media. n. al. MDMS- meter data management system. Ch. engchi. MoSG-McKinsey of Smart Grid. er. io. IBM GUCS- IBM Global Utility Consumer Survey. i Un. PV- Photovoltaic R&D- Research & Development SCADA- Supervisory control and data acquisition SERI- Smart Energy Research Institute SVM- Shared Value Model TOU- Time of use pricing U.K- United Kingdom U.S- United States xi. sit. y. Nat. HR-Human resources. v.

(13) Chapter One: Research Background. Section 1: Research Background The world has become one global village in the sense that we are highly dependent on each others. As the boundaries have diminished, world-scale problems have become the concerns of the entire global community. It is apparent that the future cannot be separated with the present. Industrialization has helped many nations to experience economic prosperity and allowing the. 政治大. citizens of these nations to enjoy all the advantages of modern economy. That. 立. has been the case for the developed countries and many developing countries. ‧ 國. 學. are following the paths to modernize their own economy. Business community. ‧. is the basis to drive the economy forward as it creates products and services to the society. On the other hand, the society has prospered because the. y. Nat. er. io. sit. business community is providing them with products and services that meet the needs of the consumers. Environmental concerns like climate change and. n. al. Ch. i Un. v. energy crisis has bitter the relation between the business community and the. engchi. society. All of a sudden, the business community is blamed for not giving enough care to sustain the balance between takes and gives. The emergence of CSR is not a coincidence. It reflects on worsening relation between the business community and the society with government organizations and NGOs asserting pressure on requesting corporations to be more responsible towards the environment and the society. Apparently, this has halted the development of the economy as corporations are constantly meeting requirements that irrelevant to the core of their business. This has created even more tension between the already deteriorating relations between the 1.

(14) business community and the society. Every move of the corporations is magnified and rigorously examined by the society the government and NGOs. Governmental policies have made firms turning their face away from the societal and environmental issues. Externalities are created while firms are providing products and services which they usually don’t take responsibility of dealing.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 2. i Un. v.

(15) Section 2: Research Motivation The way society approach the problem is to force firms to internalize these externalities by imposing taxes, regulations and fines onto the business community (Porter 2011). After reviewing much academic research, literature and business publications, firms have tried to ease the tension by contributing efforts to the well being of society and environment. Without a doubt, environment provides the resources needed for the economy. It is in that nature, sustainability has become a broad concern. Despite all the critics about. 政治大. capitalism, we must admit that capitalism has become the cornerstone of the. 立. modern economy. I do agree that a visionary leader does need to think of its. ‧ 國. 學. business in a broader context to include the needs of all the stakeholders that are within the firm’s reach. Leaders have the power to change the world; they. ‧. have the ability to show where it is best to go. I do believe that IBM is a. y. Nat. io. sit. company that will be able to show us the way how to actualize shared value.. n. al. er. IBM has always been there in various historical events there were seemed. Ch. i Un. v. uncertain but proved to be the milestone of humanity. According to Mr. Porter,. engchi. the next wave of business is going to be those companies that are able to make comprehension of the true strength lay within CSV. Some of the companies have already followed the suit of SVM “Intel and IBM are both devising ways to help utilities harness digital intelligence in order to economize on power usage”. (Porter, 2011) The analysis of this paper is based on IBM’s approach towards CSV and the study of smart grid. To bridge the connection between them to evaluate whether IBM has a shared value model in place and the gaps that still remain.. 3.

(16) Section 3: Research Purpose Essentially, the goal of this paper was to come up with a reasonable business plan to help to expand the IBM’s smart energy solutions to Taiwan. However, due to the fact that IBM has already become part of the smart grid sector in Taiwan. The goal of this paper has changed to evaluate IBM’s CSV approach of business in Taiwan and to establish a practical CSV framework for business to consider when making their own CSV approach business in developing countries. This paper will explain the concept of Creating Shared. 政治大. Value (CSV). Also to show that how by focusing providing values to the society. 立. could generate business values simultaneously. The intersection between. ‧ 國. 學. IBM’s approach to corporate responsibility and the definitions of Creating Shared Value could be seen as they way how shared value could be reach by. ‧. including the societal and environmental concerns into corporate strategy. To. y. Nat. n. al. er. io. for the firm.. sit. deliver values through the core competencies by create competitive advantage. Ch. engchi. 4. i Un. v.

(17) Section 4: Research Design In this case study, IBM’s shared value approach will be used. IBM, “A century of leadership-Since its founding in 1911, IBM has strived to do more than simply giving back to society. To us, corporate responsibility has always meant expanding the expectations of what companies can and should do for society. Michael E. Porter’s definition of Creating Shared Value approach will also be used: “There are three ways companies can create shared value opportunities: by reconceiving products and markets; by redefining productivity. 政治大. in the value chain; by enabling local cluster development”.. 立. In terms of smart grid, IBM’s definition of smart grid will be used: “A Smart. ‧ 國. 學. Grid is transparent, accessible, resilient. And optimized from the user on up.16”. ‧. In addition to that U.S Department of Energy’s definition of smart grid will also. sit. y. Nat. be used: “Smart grid” generally refers to a class of technology people are using. io. er. to bring utility electricity delivery systems into the 21st century, using. al. computer-based remote control and automation. These systems are made. n. iv n C possible by two-way communication and computer processing that h e ntechnology gchi U has been used for decades in other industries.”. The sources of data are mainly secondary information of literature, publications and trustful documentations from the government and the industry. Data are then comparing with the principles of Shared Value to find how relevant is IBM’s CSV approach to that of Michael E. Porter’s CSV in the smart grid landscape.. 16. IBM Smart Energy Program 5.

(18) Chapter Two: Literature Review Sections 1: Grid Industry 1-1.Traditional Electrical Grid Electrical grids are used for the transmission and distributions of electrical power generated from the power plants, and are mostly constructed during the early to mid 20th century in most developed countries like United States of America and countries that experienced early industrialization.. 立. 政治大. New terms emerged as the national boundaries no longer exist when it. ‧ 國. 學. comes to transmitting electricity. National grid is an anachronism term in most countries as grid often goes beyond borders. The preferred terms for grid. ‧. today are the transmission grid and the distribution grid. Transmission grid. y. Nat. io. sit. refers to the long-distance transmission of electricity while distribution grid is. n. al. er. for local connections. Power is generated at the power plants in all forms. Ch. i Un. v. ranging from hydro to nuclear. As they move down the stream, higher voltage. engchi. electricity passed onto power substation through transmission grid. Different kind of adjustment of voltage is taking place at the substation. High and medium voltages are supplied to factories for industrial purposes and commercial buildings for business to function. It continues to move down the line and eventually reduced to low voltage and to be distributed through distribution grid like transformers to households to support electrical functionality at home.. 6.

(19) The conventional electrical grid is hard to monitor flow of electricity. Electricity can only be tracked in the first ten percent of both the transmission and distribution grid. Imagine that you pour water down the drain; you will only be able to see where the water runs close to the very top of the pipe, everything beyond that became the blind spots. From the point of efficient use of energy, this could not be allowed and definitely needs a fix to increase the transparency of the flow of electrical power.. Restoration of Electricity. 立. 政治大. When outage takes place, consumers would have to contact their utility to. ‧ 國. 學. complaint about the power outage. There are no clear signs of the location of the outage due to low visibility of the operations. Current status, age and. ‧. condition are hard to be determined; more effort would be required for the. y. Nat. io. sit. repair crew to identify the sources of outage. This would result in an increase. n. al. er. in operational cost as repair crew cannot prioritize the work order as it often. Ch. i Un. v. involves the replacement of deteriorated assets. Asset management becomes. engchi. a hard thing to do as there is no clear information on the asset owned by the power providers in accordance to the condition and performance of assets. Moreover, procurement is based on inaccurate inventory and asset data and monetary capital are lost respectively.. 7.

(20) 1-2.Smart Grid. The deployment of smart grid collaborative is still at its infancy. The rate of deployment depends on the participation of the stakeholders. Problems with the local government’s legislation and regulation as well as the demand response of the consumers together with the attitude of the power companies would determine the effectiveness of the project. Let us first understand the basics of smart grid. Hopefully, it will help to create a clear sense why smart Grid has became the prominent solution for electrical power company to step. 政治大. up to the issue of sustainability. And possibly takes themselves to the place of. 立. Creating Shared Values through the deployment of Smart Grid.. ‧ 國. 學. Technology advancements and IBM’s ability of system integration have. ‧. made it feasible for one to talk about making smart grid digitally intelligent.. y. Nat. io. sit. Sensors, meters, automated tools for analyzing and controlling, monitoring. n. al. er. two-way flow of energy between separate entities and control. IBM is about to. Ch. i Un. v. integrate all the above to create a transparent route of energy and information. engchi. flow right from the power plant to plugs. It would be able to reduce the risk of having electricity outage, even if outage does take place, the recovery period is expected to be shorter. It will benefit the power companies to optimize the grid performance at the same time to empower individuals to manage energy usage with the appliances in hand.. To expand it further, solar and wind energy can be add onto the smart grid to increase the power supply from renewable energies. Power sources like commercial battery for power storage and electrical vehicles are also 8.

(21) connected to the smart Grid to further diversify the network to include items depend heavily on electrical power. U.S Department of Energy (DOE) describes the importance of smart Grid as “computerizing” the electric grid, in the notion of giving an electronic nervous system to the electric grid.. 1-3.Smart Grid Industry Value Chain. 立. 政治大. ‧. ‧ 國. 學. Nat. Source: This Research Summarized. n. al. Ch. engchi. er. io. sit. y. Figure 2-1. Smart Grid Industry Value Chain. i Un. v. The smart grid industry value chain is generally categorized as shown in figure 2-1. To the most left of the value chain would be the utilities as they are directly responsible for the production, transmission, distribution of the electric power. Then comes the AMI that are considered to be the physical infrastructure parts of the grid for connectivity of the grid. There are also the applications and software sector of the smart grid provide intelligence to the grid. Smart meters refer to those the new generation of electric meters vital to allow utility to establish end-point control and gaining consumer insights on behavior patterns and implementing demand management. Smart home that 9.

(22) hosts the smart meters and smart home appliances could participate in the energy reduction program to make energy more efficient on the household level. All the values generated through the smart grid could be deliver to the end user by providing them with more customized electricity rates and securing the supply of energy as well as preventing outages from happening in advance.. IBM ‘s Position in Value Chain. 政治大 efficiently," said Guido Bartels, 立 General Manager of IBM's Global Energy &. “We're in a position to help our utility clients transform their networks more. ‧ 國. 學. Utilities industry. "The SAFE framework provides visibility, control and automation across the utility infrastructure as well as IT assets to help provide and. business. agility. as. part. of. an. intelligent. network. sit. y. Nat. transformation." 17. ‧. security. n. al. er. io. IBM’s is in the application and software part of the smart Grid industry. i Un. v. value chain. With the global market potential of application and software. Ch. engchi. related to smart grid is estimated at the value of between $5-8 billion by the year of 2014; as it is within the area of grid applications. But IBM may also share the market value of customer application, as they are either directly or indirectly involved in this area as well, and the value of that is $3-10 billion by the year of 2014. The revenue of the smart grid managed service is estimated at the number of $4.3 billion by the year of 2015.. 17. IBM News Room, http://www-03.ibm.com/press/us/en/pressrelease/28412.wss 10.

(23) 1-4.Smart Grid Market Segmentation. Currently, there are 155 named and known companies that are in the smart grid business according to the GTM Research. It was also suggested that within the Networked 150, 60% of these businesses are private while the other 40% are public. 74% of the operations are based in the U.S while other 26% are international operations.. 18. Table 2-1. Smart Grid Market Segments and Most Active Segments. 政治 Most 大Active Segments. Smart Grid Market Segments. Grid Networking. T&D Automation. 13%. Transmission and Distribution Automation. Communications. 13%. Soft Grid. Grid Support. 10%. Demand Response. AMI Infrastructure. 8%. Consumer Engagement. Home Area Networks. y. 8%. Building Automation. Integration& Consulting. 8%. io. n. er. Nat. al. sit. ‧ 國. 19%. 學. Soft Grid. ‧. 立. AMI infrastructure. Ch. Smart Enterprise DG Integration. iv Security n U. e n g c h iDemand response. 6% 5%. Storage. Building Area Networks. 4%. Renewable Integration. MDM. 4%. Security. Storage. 3%. Source: GTM Research (2013). “Top Networked Grid 150: The End-to-End Smart Grid Vendor Ecosystem Report and Rankings". 18. GTM Research, Top Networked Grid 150: The End-to-End Smart Grid Vendor Ecosystem Report and Rankings 11.

(24) IBM is involved in two submarkets of Smart Grid, integration and consulting and softgid. Companies like CSC, WIPRO, SAIC, Accenture, IBM, BRIDGE are in the integration and consulting submarket Companies like Rockspace, SAS, Oracle, EcoFactor, CISCO, IBM, TEARDATA, VmWare, EMC, Spacetime are either competing or collaborating with each in the area of softgrid. Softgrid refers to the data storage and analytics and is vital to the creation of platform and analytics.. Top 10 Networked Grid Vendors. 立. 政治大. Smart Grid is a complex structural system; therefore no single company is. ‧ 國. 學. able to solve the puzzle. However, GTM Research has ranked 10 outstanding companies that are in this market, as shown in table 2-2. ‧. Table 2-2. Top 10 Networked Grid Vendors. y. Nat. ABB. Transmission and Distribution automation. CISCO. Schneider Electric. er. al. n. S&C. sit. Submarket. io. Company. Distribution Automation/Grid Support. Ch. i Un. v. Communications. e n gDistribution c h i Automation. IBM. Integration and Consulting. OPOWER. Soft Grid. Itron. AMI Infrastructure. SILVERSPRING. Communications. SIEMENS. Transmission and Distribution Automation. TENDRIL. Home Energy Management. Source: GTM Research (2013). “Top Networked Grid 150: The End-to-End Smart Grid Vendor Ecosystem Report and Rankings". 12.

(25) 1-5.Value Estimation of Smart Grid. There certainly have been a lot of talks about the promising future of the smart grid deployment as U.S government has issued funds to support the national scale of deployment of smart grid. President Obama has issued the direct investment of $4.519 billion for Smart Grid roll out. In Europe, country like U.K is also pursuing the replacement of electrical meter to smart meter also on the national level. In order to make continent Europe more energy efficient and sustainable, E.U regulation stated more than 80% of the. 政治大. consumers will have to have smart meter installed by the year of 2020. The. 立. cost for completing the replacement of meters is estimated around £11 billion.. ‧ 國. 學. The number of smart meters for installation in both U.S and U.K is respectively 40 million and 50 million sets20.. ‧ y. Nat. 21. io. sit. McKinsey further specifies the more distinctive business areas of Smart. n. al. er. Grid and has calculated its global market potential. McKinsey has estimated. Ch. i Un. v. three smart grid submarkets which they consider the values are more apparent. engchi. and identifiable. These submarkets include the Customer Applications, AMI/Smart Meters, and Grid Applications. McKinsey did not include Plug-in electric vehicle, enable of renewable generation, and storage in their analysis as defined solutions for these areas are still missing. The manufacturers of smart grid equipments definitely can expect a shoot in their financial performance. However, for the Smart Grid solution providers, the estimation of real market value of Smart Grid still remained unclear. This is the reason why 19. U.S Department of Energy(2009) rd Tweed, Katherine (2012, January 3 ), “100 Million Meters Coming to Europe by 2016”, Greentech Media 21 McKinsey, MoSG_Solution Providers (2010) 13 20.

(26) McKinsey sums the estimated global market potential value for both the equipments and solutions together. Table 2-3. Global Market Potential for Three Major Smart Grid Submarkets Estimated Market Value (Global). Estimated cost. Factors accounted. Customer Applications. $3-10 billion. $120-$340 (per residential customer). Hardware, communication network systems, installation, customer education program. AMI/Smart meter. $7-13 billion. (per end point). remote disconnect & reconnect capability. io. y. diagnostics, Fault detection/isolation/restoration , wide area measurement. er. per customer). sit. $160-$300 (for utility to invest. Volt-VAR optimization, Conservation voltage reduction, monitoring and. ‧. $5-8billion. Nat. Applications. 政治大Communication technology, $200-$400 gas and electric meter ratio,. 學. Grid. 立. ‧ 國. Categories. al. n. iv n C Source: McKinsey MoSG Solution Provider U Grid Opportunity for Solutions h e n(2010).“The i Smart h c g providers”,Pg. 45-52. 14.

(27) Table 2-4. Estimated Regional Market Potential of Smart Grid. Country. Estimated Market Value (2007). Estimated Market Value (2014). Growth Rate (2007-2014, p.a.). North America. $1.2 billion. $6-16 billion. 30-55%. Europe. $1.5 billion. $5-13 billion. 20-40%. China. $0.2 billion. $2-5 billion. 50-70%. Source: McKinsey MoSG Solution Provider (2010).“The Smart Grid Opportunity for Solutions providers”,Pg. 45-52. McKinsey has. 治政 also made market value大 estimation 立. for three key. economies of North America, Europe and China. McKinsey commented that. ‧ 國. 學. China will be able to experience strong growth between the year of 2007 and. ‧. 2014. The Chinese government is aiming to upgrade the grid infrastructure. In. sit. y. Nat. China, the grid is managed by State Grid Corporation. State Grid Corporation. io. al. er. is going to invest a $45 billion USD for smart grid development in China22. The North American market will continue to remain as the biggest market and. n. iv n C Europe could expect a relative strong due to the strong E.U regulation h e ngrowth gchi U on the carbon emission.. 22. Frost & Sullivan, Mega Trend 2020 Global Smart Grids, slide number 13. 15.

(28) Section 2: Creating Shared Value CSV was advocated by Michael E. Porter and the concept firstly appeared in Porter’s 2006 Harvard Business Review article entitled “Strategy & Society: The Link between Competitive Advantage and Corporate Social Responsibility. The concept was further expanded in another Porter’s Harvard Business Review article entitled “Creating Shared Value: How to reinvent capitalismand unleash a wave of innovation and growth”. It is time for everyone to sit down and think rationally that is business the only entity to be blamed for the. 政治大. problems or are we all responsible for the severe situations that have bothered. 立. us and made us confuse about where to go in the future.. ‧ 國. 學. Creating shared value seems to be promising framework for corporations. ‧. and governments to work together to create business that would both benefit. y. Nat. io. sit. the society and the economy. Strategy leading authority, Michael E. Porter, has. n. al. er. always been on a lookout for business new frontiers. Porter advocates SVM is. Ch. i Un. v. able to create a link between business strategies and corporate social. engchi. responsibility (CSR), if one can build a social value proposition into corporate strategy. However, SVM recognized the mutual dependence of the competitiveness of a company and the health of the communities surrounding it. On the other hand, social responsibility should always be considered on all levels of planning as well as in the implementation stage and in the operations. CSR is a post World War II phenomena and it was not until the 1960s that businesses have start to recognize its importance23. The nature of CSR as the 23. Archie B. Carrol &Kareem M. Shabana. (2010) The Business Case for Corporate Social Responsibility: A Review of Concepts, Research and Practice. International Journal of Management Reviews, 12(1), 1. 16.

(29) term suggested is to take responsibility, whereas CSV is about creating value in both business and economic terms. Some claimed that CSV is the extension of CSR, while others believe it is about creating value. Though both talks about “doing well by doing good”, but CSV is fundamentally different than past activities of CSR. In some cases, social care programs are set-off to provide resolutions for certain social issues. Moreover, considerable amount of effort has been given to improve the living conditions of “the bottom of the pyramids”. Many studies have shown the used-to-be CSR approach has evolved and is considered as to set the course for corporations to build a positive relation with. 治政 governments and non-government organizations大 (NGOs). However, CSV is 立 completely different to that of CSR. CSV is to emphasized on creating values ‧ 國. 學. while CSR focuses on taking responsibility.. ‧. The definitions of shared values24 according to Michael E. Porter are as the. al. n. 1. By reconceiving products and markets 2.. er. io. sit. y. Nat. followings:. i n By redefining productivity C in the value chain U hengchi. v. 3. By enabling local cluster development. 24. Porter, Michael E., and Kramer, Mark R. (2011). "Creating Shared Value". Harvard Business Review. P. 5 17.

(30) 25. CSV and CSR both talk about the value but have different meanings, in. the CSR value meant doing good for the society and in CSV it is about creating value of both economic and societal benefits while using cost-effective analysis. CSR is usually done through corporate philanthropy, talks about been a responsible citizen and focus on the sustainable development of mankind and the earth. CSV on the contrast is about combining companies and the community to achieve value creation. In many circumstances of the past, we can see that CSR often is created to respond to the external pressure but CSV is about integrating effort to create competitive advantage. As for the. 治政 shareholder, CSR is often seen as a drawback 大 for profit maximization while 立 CSV could be more preferred option of integrate the resources, effort, skills, ‧ 國. 學. knowledge and technologies to maximize profit. When it comes to the project. ‧. agenda, CSR often revolves around personal preferences of the agenda. sit. y. Nat. together with the reporting mechanism from the outside to drive the project.. io. al. er. Whereas in the CSV, the agenda is more company specific and generated internally. The source of investment often comes from the CSR budget for. n. iv n C CSR project, but CSV wages the budget to create a business h entire e n gcompany chi U model that would deliver both economic and societal values.. 25. Porter, Michael E., and Kramer, Mark R. (2011). "Creating Shared Value". Harvard Business Review. P. 16 18.

(31) Creating Shared Value employs the shared value model and measure from FSG to serve as the value creation framework to create values for both the business and the society. Thus, it is important to know how the results of shared value can be measured.. Table 2-5. Levels of Shared Value in Both Business and Social Results Levels of Shared Value. Business Results. Social Results. Reconceiving product and markets. Increased revenue Increased market share Increased market growth Increased profitability. Improved patient care Reduced carbon footprint Improved nutrition Improved education. Improved productivity Reduced logistical and operating costs Secured supply Improved quality. Reduced energy use Reduced water use Reduced raw materials Improved job skills Improved employee. y. n. Reduced costs Secured supply Improved distribution infrastructure Improved workforce access Improved profitability. sit. io. al. Improved Profitability. Ch. engchi. i Un. v. Source: FSG(2012), Measuring Shared Value. 19. incomes. Improved education Increased job creation Improved health Improved incomes. er. Nat Enabling cluster development. ‧. Redefining productivity in the value chain. 學. ‧ 國. 立. 政治大.

(32) Chapter Three: Research Methods Section 1: Research Structure IBM’s Shared Value Model Stakeholder analysis of developed countries  Initiatives  Performances  Attitude. Evaluate CSV Business Plan of IBM Benchmarking IBM. Redefining productivity in the value chain Business Results: Improved productivity Reduced logistical and operating costs Secured supply Improved quality Improved Profitability. Reconceiving products and markets Business Results: Increased revenue Increased market share Increased market growth Increased profitability. 立. n. al. y. sit. er. io. Social Results: Reduced energy use Reduced water use Reduced raw materials Improved job skills Improved employee incomes Improved nutrition Improved education. ‧. ‧ 國. 學. Nat. Social Results: Improved patient care Reduced carbon footprint Improved nutrition Improved education. 政治大. Ch. engchi. i Un. Enabling cluster development Business Results: Reduced costs Secured supply Improved distribution infrastructure Improved workforce access. v. Improved profitability Social Results: Improved education Increased job creation Improved health Improved incomes. CSV Model of smart grid in developed countries IBM strategy Taiwan smart grid Taiwan smart grid Stakeholders Analysis Figure 3-1. Research Structure 20. Proposed Taiwan CSV Model of smart grid.

(33) Sections 2: Research Targets and Data Collection. 2-1.Research Targets:. This research focuses on smart grid stakeholders of the developed countries, mainly United States of America, together with the smart grid stakeholders of Taiwan. The research employs the case study technique from qualitative research.. 2-2.Data Collection:. 立. 政治大. ‧ 國. 學. Data collection was done mainly through the secondary resources. The sources of data include governmental official reports of United States of. ‧. America, governmental official reports of Taiwan, websites related to smart grid. sit. y. Nat. sector like Greentechmedia, official documentations of utilities adopted smart. n. al. er. io. grid, official documentations of IBM Company, official documentations of. i Un. v. Taiwan Power Company, McKinsey & Company, GTM Research. A valuable. Ch. engchi. insights of consumer’s attitude towards energy saving was gained from IBM Company’s Global Utility Consumer Survey. Secondary data helped to learn about the relations between the attitudes of different stakeholders towards the concept of smart grid and its relation with energy saving. All sources have helped to identify the relevance of IBM’s smart grid solutions with CSV. The reason for choosing these domains as sources of information is to ensure data reliability is reached to validate the research.. 21.

(34) Section 3: Data Analysis Methods In this case study, IBM’s shared value approach will be used. IBM, “A century of leadership-Since its founding in 1911, IBM has strived to do more than simply giving back to society. To us, corporate responsibility has always meant expanding the expectations of what companies can and should do for society. Michael E. Porter’s definition of Creating Shared Value approach will also be used: “There are three ways companies can create shared value opportunities: by reconceiving products and markets; by redefining productivity. 政治大. in the value chain; by enabling local cluster development”.. 立. In terms of smart grid, IBM’s definition of smart grid will be used: “A Smart. ‧ 國. 學. Grid is transparent, accessible, resilient. And optimized from the user on up.26”. ‧. In addition to that U.S Department of Energy’s definition of smart grid will also. sit. y. Nat. be used: “Smart grid” generally refers to a class of technology people are using. io. al. er. to bring utility electricity delivery systems into the 21st century, using computer-based remote control and automation. These systems are made. n. iv n C possible by two-way communication and computer processing that h e ntechnology gchi U has been used for decades in other industries.”. The sources of data are mainly secondary information of literature, publications and trustful documentations from the government and the industry. Data are then comparing with the principles of Shared Value to find how relevant is IBM’s CSV approach to that of Michael E. Porter’s CSV in the smart grid landscape.. 26. IBM Company, IBM Smart Energy Program, http://www.ibm.com/smarterplanet/us/en/smart_grid/ideas/ 22.

(35) Chapter Four: Research Findings. Section 1: Emergence of CSV Business and Smart Grid in Developed Countries For over a century of time, IBM has always put itself on the business frontier and continues to lead to create solutions that ultimately became either a common tool or practice of its time. The hereditary motto of THINK still strikes IBM’s best effort to combat the problems that our humanity faces.. 治政 United Nations’ publication of WORLD POPULATION 大 TO 2300 indicated the 立 world population is projected to peak at the level of 9.22 billion by the year of ‧ 國. 學. 2075. This number has gone beyond the projected level of 8.92 billion for year. ‧. 2050 in another United Nations’ publication of 2002 Revision. Whether the city. sit. y. Nat. would be able to maintain sustainable growth depends on how we manage our. io. er. own energy system.. al. n. iv n C The world is seemingly carrying weight of longevity of human race, h e nthe gchi U which directly contributes to the ever growing population. IBM is well aware of the issues revolving around the center attention of sustainability. By the year of 2050, estimation of over 70% of the world’s population will live in cities. Utility of power is increasing exponentially. Concerns about the stability and security of the environment surfaced. Global population is expanding at the expense of the environment and whittles down the natural resources we need to support human activities. The modern economy heavily relies on the process of transformation of resources. Society feeds on the outputs of the products and services generated by corporations. Corporations have become the major 23.

(36) source for consumption of natural resources. The transformation processes could be explained by the value chain of Michael Porter. Value chain of a company is composed of two types of activities, primary and support. A company’s competitive advantage comes from the distinctive combination of its value units in the value chain to meet the demand of the consumers by providing unique values. Quite often this would only create economic values and leaving the societal needs and environmental protections untouched. It goes without saying that earth is the home to humanity. There is only one earth for us to live on and the essence to all things. Having understood that, IBM. 治政 began the program of smart planet. IBM has spend 大 tremendous amount of 立 effort investing on new technologies and taking actions that would provide not ‧ 國. 學. only economic value but also creating values for the society to reach a even. Nat. sit. y. ‧. bigger goal of sustaining the environment.. io. er. A corporation is only responsible for the creation of profit for the. al. shareholders and to create jobs for the society (Friedman 1970). That is a. n. iv n C classic example of traditional capitalistic of business. We must come h e n gapproach chi U into the realization that without the society, business would not be able to make progression. Everything that business world is taking are coming from the society. SVM is there to indicate business to find the point where the business values intersect with the social values and to provide those values from your best practices related to the core of the business. It is nothing like the corporate philanthropy or CSR or sustainability, it is mostly about value creations (Porter 2006). It should be clear that sustainability is the basis of all, for the business community, the economy, the society to prosper sustainably. Without them it would be like building castles in the sky when talking about 24.

(37) sustainability. We must consider the fact that to be environmentally aware is one thing but to be able to turn that awareness into practices is another thing. As we can see countries that are more environmentally aware are mostly coming from the developed world. To reach that stage, many have to be done. The thing is that most of the so called environmentally aware corporations must have gone through the time when the operations are seen as harmful.. We must know that we are all too easy to live in the comfort zone, and that is partly the human nature. In the business world, we often talk about the downsides of staying in. 立. 治政 the comfort zone,大it. would wear off the. competitiveness of the organization along with many other organizational. ‧ 國. 學. problems that businesses might not be able to fully utilize its assets and the. ‧. resources possessed. There would not be any innovation formed if we stay. sit. y. Nat. satisfy the achievements of the past and grab hard onto and would not let them. io. er. go. You might not like to think it as a direct execution to an organization but in. al. fact it is like a tumor that is slowly eating away the energy of any organization.. n. iv n C That also applies for the society, to stay with the things we have h ewenchoose gchi U and refuse to go the extra mile to start doing things that are beyond out ability in order to break through the bottlenecks. Grid system is a good example as it was builds on the technology that has existed since the early 20th century but hardly modified ever since. Government is responsible for providing the public infrastructure as the citizens of any nation have the right to be treated fairly in terms of access to the commodities that would support their lives. The economic reason why the grid system has not been upgraded to my best guesses probably are it would be too expensive doing so. U.S government has estimated that it would take as tens of billions U.S dollar to reform the entire 25.

(38) system.. At time when the only concern for any industrialized countries was to create as many products possible to boost the GDP level. I would hardly imagine anyone would have think that the grid system that once helped the nation to achieve those remarkable GDP would come back firing at them one day. The discussions about how to greatly sustain the world did not come into people’s attention until the first U.N conference about climate change took place in June 1992. With so many parties’ interest to consider, it takes a long. 治政 time for people to finally see the clear reduction大 of greenhouse gasses. We 立 must know that everything we do in the business world has its own limitations, ‧ 國. 學. but the traditional capitalistic approach has a fatal flaw of overrating the values. ‧. in monetary term.. sit. y. Nat. io. er. From many of the business cases from the U.S, many corporations were. al. asked by the governments and the NGOs to act more responsibly when deliver. n. iv n C the values and to reform the value No business is able to do everything h echain. ngchi U. by itself; outsourcing has become the way for companies to save the capital. So now it has become the responsibilities of the entire value chain and the supply chain to act in order to the governmental regulations to prove it as both environmentally and socially responsible. It seemed to be a complicated thing to do as now corporations also have to make sure that every single entity in the supply chain and the value chain has to also act responsibly. Clearly, it has become the competition between different sets of supply chains and how the value chain is comprised in the most socially and environmentally accepted manner. I do not see how this could be reached by corporate philanthropy, so it 26.

(39) is out of the discussion. As for CSR, many programs have focused too much attention on creating values that cost too much capital investments for the corporations.. The economic progress simply feeds on electric power, mostly from coal and oil combustion in the world today. Though most power providers claimed most electricity supporting the average demand of the consumers are produced as cleanly as it could be. Inevitably, fossil fuels and natural gas still remained the essential resources for producing electric power and are emitting. 治政 considerably huge amount of green gasses to the大 environment. In the case of 立 more environmentally aware utilities, they have started to prioritize ways of ‧ 國. 學. electricity generation according to the level of externalities created. However,. ‧. when the peak demand occurs, for instance, everyone turns on the air. sit. y. Nat. conditioning system in a hot summer day, more electricity is required. To. io. er. respond to that, standby coal and crude oil power generators are activated to. al. produce more electricity to keep up with the peak demand. As the result, more. n. iv n C gasseshare emitted into e n g c h i U the air. carbon and hazardous. and resources are. wasted to meet that temporary high demand year after year.. 27.

(40) Figure 4-1. Demand and Supply of Electric Power Source: This Research Summarized. 政治大 The fundamental idea of electric power generation and the consumption of 立. electricity are based on keeping the equilibrium point in real-time. Unlike, any. ‧ 國. 學. other commodities, electricity is hard to be stored at large amount without. ‧. additional equipments such as batteries of all sizes to store that power. In. sit. y. Nat. order to avoid power shortage from happening, the electricity supply has to be. io. er. higher than the demand from the demand side. If the supply of electricity is. al. iv n C power outage does not happen. h The e n difference g c h i Ubetween the supply and the n. higher than the demand, excessive supply could be reserved to ensure that. demand would be the margin of electricity. Electricity supply also has to follow the pattern of the demand in order to reach security, flexibility of both are equally important, shown in figure 4-1.. When the peak demand occurs, normally it would mean the supply also has to increase to cover peak demand. This is why demand management is so important. Demand management means that rather than increasing the supply throughout the day, it would be better to maintain or in best wishes to decrease 28.

(41) the demand for electricity occur at the peak time. This would mean that supply does not have to increase drastically at the peak time.. Reducing the electricity is more accessible than increasing the supply. It’s faster and it’s less expensive. To reduce the demand of electricity it requires energy saving by the consumer through the realization of demand response. Utilities need to engage the consumers to participate in energy reducing programs; the demand sides have the responsibility to take actions more than the supply side. This is the demand response, which means that the demand. 治政 sides have take actions to the request of the demand 大 management. To put it in 立 short, once the energy efficiency is improved, less money would spend on the ‧ 國. 學. construction of new power plants to meet the increasing high demand. Utilities. ‧. can also design cost effective tariffs for the customers. Smart grid promises a. sit. y. Nat. win-win situation for all stakeholders in the broader picture. Thus, it is in the. io. er. mission of utilities to take active role in the establishment of smart grid. If the demand and supply could be predicted by, for instance through the use of “Dig. al. n. iv n C consecutive actions demand response h e n like gchi U. Data” analytics,. can support to. ease that peak demand. Old fashion ways for producing electricity like oil and coal combustions have extreme high level of externalities to not only the environment but also to the society and economy. List of “Oil Crisis” from the 1970s have verified oil combustion an uneconomic resource for electric power generation.. 29.

(42) 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. 政治大 projects like manufacturing equipments used for the space mission to moon 立. of computing and analytics. It has been involved in various historical big. ‧ 國. 學. and submitted the contemporary icon of barcode which has changed how the world shops. All of the success that IBM has done over the 21 st century has. ‧. well prepared IBM to deal with more problematic issues that are threatening. n. al. sit. intertwined. social, economic and. er. energy which. io. complex issues of. y. Nat. the life of mankind. IBM is ready to take their expertise to solve the more. i Un. v. environmental concerns. In the year of 2006, IBM and Northwest National. Ch. engchi. 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.. 30.

(43) 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. 治政 promises; they need government organizations 大 to set good examples 立 themselves and to indicate a clear path for them to follow for the future. U.S ‧ 國. 學. has grown too weak to experience another economic crisis and it is time for organizations. to. embrace. futuristic. if. national. er. io. sit. y. Nat. sustainability is the case.. thinking. ‧. government. al. n. Global economic pressure, more demanding citizens, budget deficits and declining revenues have. iv n C put government h e n g c horganizations i U. 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.. 31.

(44) 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. 治政 country of Malta, the smallest members in terms 大of the size of territory in 立 European Union. It is a project that was out of necessity; Malta relies heavily ‧ 國. 學. 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. sit. y. Nat. power plants. The problem is clear that these two systems are interconnected.. io. er. These have made the Malta government to integrate more renewable energy. al. into the grid system. It is not an easy thing to do, but IBM does know how to. n. iv n C solve the problem. IBM has finally the chance to demonstrate its ability h ewaited ngchi U 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 32.

(45) 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. 治政 improve the social, economic and environmental 大 affairs. IBM has hosted 立 conferences to show how they are working closely with the government ‧ 國. 學. organization to approach on the challenges they are facing. On date 9 th of April. ‧. 2013, IBM Government Analytics Forum was held in Washington DC, the. sit. y. Nat. event was hosted together with the Government Executive Media Group. It is. io. er. important to know that in the U.S, the Government Executive Media Group. al. plays an important role of providing trustful information for the senior decision. n. iv n C makers in the U.S government h to consider. Key U e n g c h i 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 33.

(46) 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. 治政 more electricity could be saved by the government, 大then the government could 立 be in the righteous position to advocate the importance of reducing energy ‧ 國. 學. 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. sit. y. Nat. nation. In fact if the grid could be 5% more efficient in the U.S it would be. io. al. er. equivalent to the reduction of carbon emission equivalent to 53 million cars.. n. But we must not forget that most of our automobiles are also using crude oil as the power sources.. Ch. engchi. i Un. v. 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 34.

(47) 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. 治政 having a P/E ratio that was never before in history. 大 The government must 立 consider whether the smart meter roll out would really benefit the economy as ‧ 國. 學. 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. y. Nat. more efficient system to transmission and distribute the electric power. But it. er. io. sit. must also understand the fact that there are technological difficulties’ and. al. negative effects that still remain as concerns of many such as the privacy. n. iv n C issues and the investment in thehutilities is gettingUout of hand due to the smart engchi grid rush.. 35.

(48) European Union Great Britain 27. In 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. 政治大. infrastructure that would create environmental and economic benefits for the. 立. people of Great Britain. The establishment of SmartGrid GB gathered together. ‧ 國. 學. 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.. ‧ y. Nat. 28. io. sit. The estimation of money saved by smart grid when upgrading the grid. n. al. er. infrastructure in U.K is somewhere around £19 billion. This was calculated on. Ch. i Un. v. the difference between upgrading the grid infrastructure by using conventional. engchi. 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 28. IBM News Room Greenwise staff, Green wise. 36.

(49) 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. 治政 automobiles. Car sharing policy is a common practice 大 in many mega cities of 立 U.K to reduce the carbon emission. Electric vehicles would give Britain a better ‧ 國. 學. solution to reach its carbon reduction targets driven by the smart grid itself.. ‧. n. er. io. sit. y. Nat. al. Ch. engchi. 37. i Un. v.

(50) 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. 政治大. energy issues of the pass and to plan for a more secure future that the demand. 立. for renewable energy raised to the surface.. ‧ 國. 學. Due to rapid development of renewable energy, Germany was able to. ‧. provide renewable energy options that are cost-effective and was creating. y. Nat. io. sit. considerable amount of jobs in Germany. The Germany government is the first. n. al. er. nation that shows strong dedication to the development of renewable energy. Ch. i Un. v. options. The result pretty much surprised everyone in Germany. The policy. engchi. 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 38.