Cities of the Future (Cemig)

Location: Sete Lagoas, Brazil

Partner Organization: DNV KEMA, Cemig, City of Sete Lagoas

cemig

What are Cities of the Future?
Companhia Energética de Minas Gerais (Cemig), one of the largest power generators and distributors in Brazil, has launched its Cities of the Future program in Sete Lagoas with the goal of improving services to the end-user and assessing the possibilities of Smart Grid implementation. Cemig understands the importance of Smart Grid and views it as a natural transition for utilities. A Smart Grid architecture would integrate its commercial and technical systems, enabling it to improve service quality, sustainability practices and relationships with stakeholders.

Technical overview
DNV KEMA was engaged to develop Cemig’s Automation Master Plan, a program for determining Smart Grid concepts for Cemig’s Cities of the Future pilot project. DNV KEMA first helped Cemig define its initial approach and overall Next, DNV KEMA and Cemig team developed a preliminary business plan based on local market conditions. Possible evaluation metrics were identified and a strategic analysis of partnership options and alignment with overall company strategy conducted. The result was a first approach to a custom designed technology, strategy and communication plan that fully aligns with the company’s vision.

City of the Future: Sete Lagoas
Because it met specific operational and logistical requirements, Cemig chose the City of Sete Lagoas, or the City of Seven Lakes, for project deployment. Sete Lagoas has a representatively diversified market with 100,000 residential, commercial and industrial customers distributed over urban and rural areas. With a population of over 200,000, it also has an electric system that is installed with high, medium, and low voltage. And since it is the location of Cemig’s Corporate University headquarters, a diverse set of tests could easily be conducted in different environments.

Automation, protection, and metering
Through the developed “Master Plan for Automation, Protection, and Metering of the Smart Grid,” Cemig seeks to establish a technical and financial foundation for Smart Grid implementation by identifying needs, functional requirements, technologies and implementation strategies. This would enable Cemig to improve distribution system reliability, reduce electrical losses, and optimize the use of equipment.

Power quality issues
Power quality issues and improving overall operational efficiency, service quality and customer satisfaction are other significant goals for Cemig. Investing in a 21st century power network to improve its services to end-users is a priority for Cemig as it plans to implement a Smart Grid.

Building a business case
As a first step, DNV KEMA began the process of building a business case for Smart Grid implementation by gathering information and conducting meetings with key individuals involved in the project to identify interfaces, impacts, and requirements for Smart Grid implementation. Next, the team conducted a regulatory analysis looking at the Brazilian regulatory framework and leveraging DNV KEMA's experience with international benchmarks and lessons learned worldwide. DNV KEMA also evaluated technology options for advanced metering infrastructure (AMI), distribution and substation automation, focusing on operational efficiency, quality of energy and investment optimization. The analysis of information technology and the existing telecommunication infrastructure was used to calculate the budget, including a high-level investment plan to be refined during the rollout phase.

Aligning with company strategy
In the final stage of the project, DNV KEMA identified evaluation metrics and conducted a strategic analysis by assessing partnership options and alignment with overall company strategy. The team also drafted a communication plan that addressed all involved stakeholders. In consideration of the incipient stage of several Smart Grid projects around the world and the trial nature of the Cities of the Future project, DNV KEMA advised Cemig to test the main recommended technologies and vendors. The companies worked together to divide Sete Lagoas into several zones with similar customer profiles to identify the best solutions.

Results
The Cities of the Future project represents a strategic step in entering a digital era and will provide a financial roadmap for a larger-scale implementation. A move to the Smart Grid will improve operational efficiency by providing access to more accurate information about power use and distribution. It will create options for the existing tariff structure, offering funding to the regulatory body, and it will provide greater interaction between the utility and its customers. Finally, the implementation of a Smart Grid would facilitate the integration of distributed generation, enabling the shift to a cleaner fuel supply portfolio.

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We knew that DNV KEMA's international expertise in Smart Grid and ability to look at different motivators around the world would provide a key contribution in building our business case.

Daniel Senna Guimarães

Project Manager, Cemig