Plants that highly leverage digital applications across the utility production value chain
Underlying Technologies
Business Impact
What are digital utility plants?
IoT, Big Data and AI
Productivity, Reliability, Cost Ef�ciency
Example Digital Application
Predictive and preventive maintenance
Digital utility plants impact all crucial areas of utility production
Digital plants will enable drastic improvement of crucial KPIs in next5 years which are expected to surpass the improvements since 1990
OperationalImpact
27% 27% 26% 25% 25%22%
OEE* Productivity SG&A** Material,Logistics &
TransportationCost
Material,Logistics &
TransportationCost
Direct LaborCost
Direct LaborCost
CAPEX***,Inventory &
Cash
CAPEX***,Inventory &
Cash
Target Improvement in Next Five Years
21%
14%10% 10% 10% 10%
Productivity OEE* SG&A**
Improvements Since 1990
0.4%
0.5%
0.4%
0.4%
0.4%
0.8%
4.0%
4.5%
4.6%
4.7%
4.9%
5.0%
CAPEX***, Inventory & Cash
Direct Labor Cost
Material, Logistics &Transportation Cost
SG&A**
OEE*
Productivity
Comparison of Annual Improvement– Next Five Years Vs. Since 1990
Next 5 years Since 1990
*Overall equipment effectiveness; **Sales, general and administrative expenses; ***Capital expenditure
Source: Capgemini Digital Transformation Institute, digital utilities survey, February-March 2017; percentages indicate expected improvements in each category
Digital power plants can cut down 625 million metric ton CO2 emission annually by 2025
Environmental Impact
Source: Energy Information and Administration (EIA) Database, accessed in June 2017; Capgemini Digital Transformation Institute, digital utilities survey, February-March 2017; Capgemini Digital Transformation Institute analysis
*1 mature tree consumes, on average, 48 pounds or 21.78 kilograms of CO2 per year; **1 passenger vehicle emits, on average, 4.7 metric ton CO2 in a year: source United States Environmental Protection Agency Website, accessed June 2017.
Note:To understand the impact of digital plants on global CO2 emissions related to power generation, we have applied our insights from survey data on the following data set provided by the US Energy Information and Administration (EIA).
1. The predicted share of electricity to be produced worldwide by fossil fuel
2. Average heat rate for each type of fuel (measurement of fuel that needs to be burnt to produce a unit of energy): natural gas— 7.9 million BTU/MWh; coal—10.5 million BTU/MWh; petroleum—10.7 million BTU/MWh.
3. Emission rate for each type of fossil fuel: natural gas—53.05 kg/million BTU (0.42 metric tons/MWh); coal— 95.35 kg/million BTU (1.00 metric ton/MWh); petroleum—73.16 kg/million BTU ( 0.78 metric tons/MWh
Equivalent of having28.6 billion* more trees
on earth
Equivalent of eliminating CO2emissions from 133 million**
passenger vehicles
++
625 million metric tons CO2 emissions, 4.7% of global emission from power generation, can be saved annually by digital plants
4982 trillion BTU coal saved by digital plants
475 million metric ton (76%) CO2 emissions saved from coal-fired plants
124 million metric ton (20%)CO2 emissions saved fromgas-fired plants
26 million metric ton CO2 (4%) emissions saved from oil fired plants
352 trillion BTU oil saved bydigital plants
2333 trillion BTU gas saved by digital plants
CO2CO2CO2
Or
Across the world, digital plants have generated a lot of enthusiasm among utility players
However, utility companies’ lack of digital maturity in operation hinders the success of digital plant initiatives
How can utility companies increase their digital maturity to realize full potential of digital plants?
Digital Masters, utilities with higher digital maturity, will see much better improvements in crucial cost itemsBut, only 8% utility companies are Digital Masters in operations while 73% are Beginners at the moment
Adoption: Europe and US are the early adopters while India and China plan to catch up
Source: Capgemini Digital Transformation Institute, digital utilities survey, February-March 2017; percentages indicate the share of organizations in each category
US
China
France GermanyUK
Italy
50%
21%
68% 50%33%
56%
39%
22%
32%
India
10%76%79%
33%30%
Sweden
25%50%
We have an ongoing ( operational ) digital plant initiative
We have a digital plant initiative being formulated or work in progressBelow 25% 25 - 35% 35 - 45% 45 - 55% Above 55%
Below 25% 25 - 35% 35 - 45% 45 - 55% Above 55%
Beginners
Use business case analysis to see and prioritize digital plant initiatives, taking organizations strategic goals into account
Perform proof-of-concepts to identify most appropriate technologies and applications
Set up an effective governance process to track the bene�ts
Conservatives
Go for a holistic transformation rather than point technology solutions
Chalk out a strategic investment plan to scale up the digital plant initiatives
Fashionistas
Synchronize the digital efforts by engaging the leadership to drive the initiative from the top
Develop and nurture skills among employees to make the most out of digital plants
30%
25%
20% 19%15%
19%16% 16%
Capex SG&ADirect
labor Cost
Digital Masters Beginners
Raw MaterialLogistics &
Tranportation
Such superior cost item
performance can lead Digital
Masters to 33% higher
savings
Realized Cost Savings by Digital Plant Initiatives
Source: Capgemini Digital Transformation Institute, digital utilities survey, February-Marczh 2017;Capgemini Digital Transformation Institute analysis
Source: Capgemini Digital Transformation Institute analysis
Investment : Digital plant initiatives have been seeing aggressive investments over last five years
Source: Capgemini Digital Transformation Institute, digital utilities survey, February-March 2017
China
France
Germany
India
Italy
Sweden
United Kingdom
USA
Global Average
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%
Percentage of 2015's revenue invested over the last five years
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Know more here:https://www.capgemini.com/resources/the-digital-utility-plant-unlocking-value-from-the-digitization-of-production/
Contact us:[email protected]
The information contained in this document is proprietary. © 2017 Capgemini. All rights reserved.
The Digital Utility Plant Unlocking value from the digitization of
utility production
In a US based combined-cycle digital power plants, production cost can go down by 27% in next 5 years
FinancialImpact
Source: US Energy Information Administration (EIA) Database, accessed in June 2017; Capgemini Digital Transformation Institute analysis.
Note: The production cost of thermal or nuclear power plants can be segregated into three major categories: fuel cost, operational cost, and maintenance cost. This chart explains the current composition of these cost categories to produce one mega-watt of power in a power plant in the US as well as the improved cost composition of digital utility plants.
$33.42
$2.81
$2.25 (improved by 20%)
$2.56
$2.06 (improved by 19.5%)
Current Production Cost Improved Production Cost in 5 years
Fuel Cost Maintenance Cost Operational Cost
$24.06 (improved by 28%)
Improvement of $10.5per megawatt-hour
(27%)
Total cost =$38.79 per
megawatt-hour
Total cost= $28.37 per
megawatt-hour
