The Capgemini Smart Meter Valuation Model

| Point of View

How to measure the value of implementing smart meters for Distributed Network Operators

This business case represents more than just a financial justification; it is
an essential negotiation, decision-making and communication tool which will increase
and enable strategic understanding of a smart meter investment.

There is an increasing pressure on the Energy & Utility sector throughout
Europe in regards to embracing, contributing towards and meeting political goals
and visions, such as the 3x20% objectives by 2020 (reduce energy consumption and
Greenhouse Gas (GHG) emissions, and increase use of renewable energy sources).

Smart meters have the potential to contribute towards these political goals: they provide new opportunities which will improve the way electricity is distributed
and consumed.

When governments realize that these types of investments are elementary for meeting
political objectives and for the functioning and security of the future energy
infrastructure, critical decisions are sometimes made on a legislative level which
result in massive impact on key stakeholders.

The question of who should pay for smart meter investments is a central theme
in the debates between governmental bodies, market players, energy associations
and media. When there are disputes regarding the distribution of costs and benefits
and who should pay, consensus-driven development of a detailed business case becomes
an essential tool for clarification, negotiation and decision-making.

Capgemini’s smart meter business case approach

To match the challenges DNOs are facing today, Capgemini has devised a unique smart meter business case approach that covers:

  • Understanding of vision and strategic context
  • Understanding of technical smart meter setup
  • Business case setup
  • Quantification of costs and benefits
  • Business case calculation
  • Presentation to the decision makers

This approach is built on the Capgemini business case framework, the Smart Meter
Valuation Model
, as well as Capgemini’s benchmark catalog base that consists of experience gathered
from more than 30 international utilities running smart meter installations.