E-REDES - Forging a more sustainable future by working with the energy of tomorrow, today

FORGING A MORE SUSTAINABLE FUTURE

BY WORKING WITH THE ENERGY OF TOMORROW, TODAY

P R O J E C T

PA R T N E R S

B U S I N E S S I N T E RV I E W

FORGING A MORE SUST FUTURE BY WORKING W THE ENERGY OF TOMOR TODAY Paulo Líbano Monteiro, Director of Innovation and Technology at E-REDES on enabling the energy transition while guaranteeing excellent and reliable energy distribution.

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TAINABLE WITH RROW,

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E-REDES - DISTRIBUIÇÃO DE ELETRICIDADE, S.A., PART OF THE ENERGIAS DE PORTUGAL GROUP (EDP GROUP), IS THE MAIN ELECTRICITY DISTRIBUTION SYSTEM OPERATOR (DSO) IN PORTUGAL.

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istributing 45TWh of energy to more than six million customers yearly via a 230,000km network (high, medium and low voltage), E-REDES is the sixth largest DSO in Europe.

The company is at the centre of the energy sector transformation striving for decarbonisation of the global economy while simultaneously maintaining a customer-centric approach characterised by brand trust, outstanding service and reliable distribution.

Here to tell us more about the company’s strategy for achieving a more sustainable future is Paulo Líbano Monteiro, Director of Innovation and Technology at E-REDES. Paulo begins by situating E-REDES within the context of the EDP Group, a global organisation operating in several areas of energy, with a core focus on renewables and grids.

“EDP is a global leading company in the energy sector, with a very strong focus on sustainability, ranking #1 among electrical companies in the Dow Jones Sustainability World index. As part of the EDP Group, E-REDES is very much committed to the energy transition and also the decarbonisation of the global economy,” says Paulo. “Today, we have around 13,000 employees

worldwide at EDP and more than three-quarters of our energy generation comes from renewable resources.

“We have ambitious goals and in terms of our main targets for the future, we intend to be coal-free by 2025. We want our energy to be totally green by 2030 and reach net zero by 2040.”

In his role at E-REDES, Paulo focuses on developing fresh solutions for the electricity grid by specifying, validating and qualifying new technology solutions at the company. A crucial priority for Paulo and his team is working towards the decarbonisation of the grid.

“Each year, E-REDES invests around €400m into our grid,” says Paulo. “A significant part of this investment is related to innovative solutions that will help us enable the energy transition.”

But in order to understand the efforts at E-REDES to enable the energy transition, Paulo first describes the balance needed between the production and consumption of energy.

“For context, DSOs like E-REDES play a fundamental role in the energy transition because these grids connect all the increasing energy resources that are feeding into it. This means all the generation 5

resources, mainly renewable at the distribution level, and all the sources of consumption that are connected to the grid. Therefore there must always be a balance between energy produced and energy consumed, and the grid must remain stable to strike this equilibrium to guarantee the security and quality of supply.

“There has been a change in the behaviour of power generation, which has become more and more intermittent based on the increasing prevalence of renewable sources and their nature – since they are less controllable than fossil fuels. Consequently, having a balance between production and consumption is more and more difficult to achieve. As it is harder to control the generation, we need to look at controlling the demand side 6

of the equation to secure balance in the electric system. The grid is the enabler by connecting all those resources.”

Paulo explains that finding a balance between supply and demand in the grid at E-REDES hinges on having a better real-time knowledge of the grid as a system in its entirety – including energy flows through older parts of the network, across low, medium and high voltage supplies. Beyond this sensing dynamic, the company’s associated priorities are having remote control of the grid and automating the processes that warrant it in order to improve efficiency.

According to Paulo, as sensing, remote control and automation become more prevalent for

E-REDES, data and flexibility also become increasingly fundamental for better management of the grid.

Once all these elements are aligned, the grid can begin to serve a purpose beyond the provision of energy and contribute to a better world, argues Paulo.

“AT E-REDES WE HAVE A LOT OF ADVANCED ANALYTICS ON TOP OF THE COLLECTED DATA FROM THE GRID”

“We need data and then of course we need to process that data,” explains Paulo. “At E-REDES we have a lot of advanced analytics on top of the collected data from the grid.

Eventually, we will incorporate data from outside the grid for instance regarding weather conditions and predictions related to consumption or generation. All this data must then be analysed deeply for us to be able to manage the grid more efficiently.

cope with this increase in uncertainty regarding mainly the production of energy by renewable sources, but also in consumption to an extent.

At E-REDES we are tackling this by having a more configurable network and by taking a more active role on the consumption side of this balance.

“We also need improved flexibility in the world’s electric system to

“Beyond this, the goal at E-REDES is for the grid to also contribute to 7

a better environment. This involves having more remote operations that do not require trips to the sites, changing our fleet to an electric vehicle fleet, using much less polluting drones instead of helicopters for grid inspection, generating green electricity for self-consumption and deploying more environmentally friendly solutions regarding the components or solutions that we use in the grid.”

Within the broader effort to promote the development of the grid at E-REDES, Paulo elaborates on the Four Innovation Dimensions at the company enabling their endeavours.

THE FOUR INNOVATION DIMENSIONS AT E-REDES 1. Enabling Technologies 2. Grid Solutions 3. System Operation 4. New Business Models “The first of the Four Innovation Dimensions at E-REDES is Enabling Technologies,” explains Paulo.

“These technologies help us produce more environment-friendly solutions. This includes the use of drones, robots or satellite imagery to monitor the grid network. We also deploy advanced analytics, artificial intelligence and, more recently, generative AI. Lastly, we are working 8

with technologies to seek evermore sustainable materials in our solutions.

“The second dimension is Grid Solutions. These are the equipment or devices that are installed in the physical grid. Here, we are increasingly using sensing devices for grid monitoring, remote control technology, automation, voltage regulation, smart metering, safety solutions and edge computing where we decentralise processing power. We need to know, more and more in real time, what is happening in the grid. We also need to be able to remotely act in the grid, to automate operational decisions as much as possible and to collect all the relevant data to feed our analytics capabilities.

“The third Innovation Dimension at E-REDES is System Operation, where we focus on the applications we build to operate and manage the grid itself, for instance by building a new Advanced Distribution Management System (ADMS).

“We are also using advanced analytics and AI to better understand the condition of our assets such as transformers, cables, switches and all those electric devices we are using in the grid. This allows us to gauge the probability of failure and health index of our assets by analysing their previous usage, location, power levels and other crucial data. With these insights on

hand, we are exploring probabilistic planning, rather than a deterministic approach, to determine how we should invest in the grid and what are the main investment priorities.

“Vegetation management is also very important for us since we have a lot of overhead lines in Portugal – they constitute 80% of our grid.

We are using advanced analytics, drones and satellite imagery to understand the situation and identify problems with the line or where we need to control growth.

“For our customers, we are increasingly using and expanding digital channels to encourage seamless online interactions. We are also improving the level of information and level of service provided to our customers, which

are becoming active players in the whole electric systems, either as consumers, producers or flexibility providers.

“DSOs are becoming the largest users of communication points.

In our case, by the end of 2024 we’ll have 6.4 million customers with smart meters working as communication devices, which is somehow comparable in size to a telecommunications operator.

We’ve established as a private virtual network operator, having our own SIM cards for cellular communications and using the physical infrastructure of the telecommunication providers, with whom we have commercial agreements.

“The final Innovation Dimension 9

is New Business Models. Even though E-REDES operates in a highly regulated sector, so our avenues for growth or expansion are limited, there is still the need to look for different approaches to the business.

One area where we’ve been very active is in providing new, valuable data to society, the open data concept. We are making available, free of charge and in line with GDPR, huge amounts of data regarding the electric grid, useful for actors in the electric system, academia, research institutes, municipalities, media and society in general. We are also piloting new market and non-market-based solutions for flexibility services provided by the users of the grid. Flexibility services, which basically consist of increasing/ decreasing consumption or generation as requested for specific time periods and grid locations, will play an essential role in the future as an efficient tool to keep the grid and electric system balanced in a much more volatile context of distributed mobile consumption and intermittent generation.”

Within the broader sweep of the Four Innovation Dimensions at E-REDES, Paulo highlights several key projects he and his team have been involved with, helping the company transform its operations – benefitting customers and the environment simultaneously.

The E-REDES Smart Metering Program captures more than 500m 10

data records every day, including detailed consumption data, network and meter events, electrical measurements and equipment status.

“We are rolling out smart meters to our 6.4 million low voltage customers, having already deployed them with our medium and high voltage customers,” says Paulo. “Our objective is to finish the low voltage smart meter rollout by the end of 2024. Currently, we have 5.6 million customers with smart meters. The large majority of those are already integrated into our Intelligent Grid, meaning that we are already remotely controlling and collecting the information from those meters, as well as providing all the required services to clients and retailers.

“The main technology we deploy for communicating with the smart meters is power line communications (PLC), in our case PLC Prime. PLC is used by most of the DSOs in southern Europe because it’s a very cost-effective solution, it suits the smart metering requirements well and there is abundant knowledge and experience related to this technology.

“Our smart meter program lets our customers better understand their consumption, with information registered at 15-minute intervals, offering incredibly detailed insights and highlighting ways for those who are willing to become more efficient

with their energy behaviours.

“We benefit from the smart meter insights because we can detect network events like instances of overvoltage or undervoltage, cases of fraud or neutral cable breaks and interruptions in the grid.”

Beyond the Smart Metering Program, Paulo elaborates on the importance of AI and digitalisation within the Four Innovation Dimensions at E-REDES. He describes how the broader goal here is for E-REDES to become a fully digitalised and AI-enabled business.

“Before explaining the importance of AI, the main concern before this is the full digitalisation of the business,” says Paulo. “This means that we need to have the physical grid digitalised, which involves being able to communicate with all the relevant devices in the grid – hence why the Smart Metering Program is so important, for instance. Full digitalisation allows us to know what's happening at every relevant point in the grid but also supports our internal processes by bolstering our analytics. We have made tremendous progress towards full digitalisation of the business in recent years, so now we can turn our attention to deploying AI effectively.

“With our progress towards becoming a fully digitalised business, we needed all the relevant

tools to work with the increasing volumes of data generated by that transition which entailed developing our advanced analytics capabilities and therefore artificial intelligence.

“The EDP Group is investing significantly in AI and the importance of this technology for the Group but also E-REDES as a company will only continue to increase. First and foremost, AI

“OUR OBJECTIVE IS TO FINISH THE LOW VOLTAGE SMART METER ROLLOUT BY THE END OF 2024” will help us better understand the data from the grid. We are also working on a pilot project to better understand how generative AI might help the business, for instance in customer service support.”

The last key project Paulo highlights within the Four Innovation Dimensions at E-REDES is the company’s use of the latest drone technologies to inspect its assets and the grid more broadly.

“We use drones in two main ways,” explains Paulo. “The first is for planned overhead lines inspections, a service provided to us by third 11

parties since it is more efficient in terms of risk and cost than helicopters, the solution of days gone by. We have a lot of overhead lines, more than 100,000 km, that we need to inspect regularly.

Traditionally, we used helicopters equipped with cameras, thermal imaging and LIDAR technology for measuring distances to perform that task.

“Helicopters still work as a solution, but we realised that the same task could be performed by drones with significant safety, environmental and cost benefits. So we worked with some partner companies to adapt drones with those types of cameras that we need to

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inspect the lines and then also to fine-tune the process for efficient flights addressing the inspection requirements while respecting security and licencing conditions.

Nowadays, we are conducting more or less half of our yearly inspections by using drones. This will most probably increase in the future.

“The second way we use drones is as a tool to increase our capacity for occasional inspections in the field, as an extension of our eyes. When we have a failure in our overhead lines, we need to go to the field and look at assets like insulation devices or connections. Field operatives would often need binoculars or stairway access to assess the

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“WE HAVE BEEN WORKING WITH SEVERAL COMPANIES TO HELP US INSTALL AND DEVELOP THE RELEVANT SOLUTIONS” situation, but now with drones that is a much simpler, safer and more efficient operation.”

Wrapping up our conversation, Paulo describes how partnerships and collaboration are imperative to the innovation efforts at E-REDES. In particular, Paulo highlights the installation of sensing devices at E-REDES’s secondary substations.

“The secondary substations constitute the point of the grid where medium voltage is transformed to low voltage and is then distributed from there to our low voltage customers,”

explains Paulo. “We have around 70,000 secondary substations in our grid. We have been exploring how to improve our monitoring capability in the feeders, which are the lines going out to the secondary substations. For that, we are using sensing solutions and devices to measure the electrical characteristics of every lowvoltage feeder that goes out to our customers. To accomplish this task, we have been working with several companies to help us install and develop the relevant solutions.

“Through these partnerships, we have been able to develop solutions 15

with multiple business use cases to better manage the grid, measure the energy quality, detect failures or losses of power in the grid and better identify the grid topology regarding all the smart meters in our network. We intend to expand these solutions in the future to thousands of our secondary substations.

“Another collaborative project I’d like to highlight in terms of the importance of partnerships is our drive to use more environmentally friendly materials and components in our operations. For instance with our cables, we have been working closely with one large supplier to pilot a new medium voltage cable using insulation materials made from vegetable-based materials 16

using reused domestic vegetable oils, instead of carbon-based materials. This project contributes to promoting a circular economy and helping us become a more environmentally friendly company, thus we look for this type of partnership with a lot of interest.

The use of more environmentally friendly materials and products, as well as the search for circular economy solutions constitute a very important general trend in the business, highly promoted by our own green goals but also by European regulations.”

For further information about E-REDES, visit e-redes.pt.

Turn over for 'ADDED VALUE' with Paulo.

OUR COMMITMENT TO A LOW-CARBON FUTURE I N N O VAT I O N

C L I M AT E C H A N G E A M B I T I O N

Prysmian Group confirms its ambition to be one of the main technological players in the transition towards the use of renewable energy sources and a carbon-free economy.

Climate strategy aligned with the Paris Agreement climate objectives

Net-Zero _ by 2035, to fully decarbonize our internal activities (Scope 1 &2) _ by 2050 for our supply chain (Scope 3) emissions

D E S I G N F O R S U S TA I N A B I L I T Y One of our main areas of activity is the development of new, more sustainable products:

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Reduced impact on CO2 emissions in its manufacture

-24%

Use of recycled raw materials and BIO materials

2022

-7,5%

Improving product recyclability rates

Sc op e

-46%

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EMISSION REDUCTION SINCE 2019

1 pe Sco

Elimination of hazardous substances in their composition

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Improved transmission efficiency Phasing out plastic in packaging

-31,5%

-28%

0 2019

2022

2030

2035

2050

SOCIAL AMBITION T H E C A B L E I N D U S T RY ’ S FIRST GREEN L ABEL

Diversity, Equality and Inclusion Programmes

Women's Leadership Development Programme in STEM (science, technology, engineering and mathematics) To have a positive impact on the communities in which we operate Health and safety as a top priority

THE FIRST

100% RECYCLABLE

CABLE TECNOLOGY

2022

15,7%

EXECUTIVE WOMEN

44,9%

WOMEN WITH OPEN-ENDED CONTRACTS

BECAUSE MORE TH AN WOR DS, WE LIKE FAC TS.

pt.prysmiangroup.com/sustentabilidade

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Connect with Paulo

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RECOMMENDED VIEWING “The fascinating, never outdated, TED talk ‘What makes a good life? Lessons from the longest study on happiness’ addresses a fundamental aspect of our lives, which is always worth remembering,” says Paulo.

RECOMMENDED READING “The Culture Map: Decoding How People Think, Lead, and Get Things Done Across Cultures by Erin Meyer is a very interesting and pedagogical book about the differences across several cultures regarding the way people interact, lead and take decisions,” says Paulo.

LOOKING AHEAD Paulo embraces the opportunity to network at conferences and expos and finds the following events particularly interesting and valuable: • Enlit Europe

Connect with E-REDES

• CIRED

• CIGRE

Connect with EDP GROUP

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www.e-redes.pt

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