Seeing energy differently

Power and utilities: ready for a smart transformation?

Contents 1 2 4 What is smart? Seeing energy differently Power and utilities: a sector in transformation

10 Transformation lessons 13 Winning in smart 16 Ernst & Young in smart 17 Smart contacts

What is smart?
Smart: intelligent new technology, creating a more efficient energy system
Most current electricity grids were designed 40 to 50 years ago. Technology has moved on, and smart puts this new technology to work. Smart energy systems now in development around the world have three key components: the smart grid, the smart meter and smart appliances. By making better use of information and communications technology (ICT) and actively involving energy customers, the new smart systems will change the way we:

Produce energy: Smart grids can accommodate renewable energy (e.g., solar and wind)
and other decentralized energy sources (e.g., micro generation) more easily.

Deliver energy: Smart grids send energy and information two ways, giving utilities more
flexibility to manage supply and demand.

Use energy: Smart meters and appliances show consumers how much energy they
use so they can choose to use less, or to switch their consumption away from peak periods.

Smart
Generation Transmission and distribution Meter Supply and retail Customer

Smart grid

Smart meter

Smart appliances

For a comprehensive overview of what smart is, go to ey.com/smart

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Seeing energy differently

One of the greatest changes to affect power and utilities in over 100 years is the implementation of smart technologies.
Worldwide, power and utilities (P&U) companies are expected to invest over US$200 billion by 2015, upgrading metering and grid infrastructure to be smart. This will create a more technologically advanced, connected way of using energy that has the potential to create more secure, affordable and greener electricity. Across the globe, new energy schemes and technologies are emerging. They will lead us toward a smarter world and enable us to think differently about energy and how we use it. Many consider smart investment in P&U merely an infrastructure upgrade. We think this is too limiting, given the new technologys potential to transform P&Us business strategies and attract new players from other industries into the sector. Ernst & Young has many years of experience engaging with the challenges and changes that shape industries as they work through transformation. This paper combines that experience with our understanding of smarts impact on P&U, and its potential to start a revolution that will ultimately create new, converged markets. For those looking to navigate the opportunities of smart, we offer analysis and insight into the following questions:

How fast could smart transform the P&U sector? What new business opportunities might emerge from new converged markets? What lessons can P&U learn from other sectors transformation experiences? What does it take to be a winner in a future smarter world?

Seeing energy differently: www.ey.com/smart

www.ey.com/smart
Smart technologies are modernizing energy systems, bringing massive change for the industry, its consumers and for competition. How will utilities cope with the shake-up? And what must you do to get ahead and stay ahead? Visit our smart website at www.ey.com/smart for a wealth of information to support your smart journey:

Learn how smart technology is changing the P&U sector around the world Read about the new business opportunities of a changing market Discover what other industries learned from major change Find out if you have the seven characteristics of a smart winner Use our smart diagnostic to test your readiness to compete [available from 3 May 2010]

Please contact us if you need any help on your smart journey. Helmut Edelmann Global Power & Utilities Smart Program Manager Tel: +49 211 9352 11476 Email: helmut.edelmann@de.ey.com

Power and utilities: a sector in transformation

Urgent challenges are transforming the P&U sector:

How to make energy systems less carbon-intensive and less dependent on fossil fuels by integrating
decentralized and intermittent renewable energy into the electricity grid

How to increase energy efficiency to meet growing demand, given the increasing scarcity of energy resources How to increase access to energy, decrease the likelihood of blackouts, make energy more affordable or
keep up with demand for power in accordance with national agendas To address these challenges, new and more intelligent electricity systems are needed, including new communications structures, better utilization of IT and the active participation of consumers.

The solution? Smart grids.

Vision for the future

Smart is the enabler for more secure, affordable and green energy in the future. As Figure 1 shows, the new technology will have an impact on businesses across the value chain, from production to transmission to retail sales.

Seeing energy differently: www.ey.com/smart

Figure 1: Smart will affect every aspect of the value chain

Today
Production

Future

Key changes

Decentralized generation Intermittent capacity New sources of energy production, changes in generation mix Sustainable, secure sources of supply Increasing complexity and sophistication required Flexible and fluid infrastructure Two-way flow of energy and data Smart meters and grids enable flow of energy to and from customers Smart meters and grids offer new sources of revenue Customers generate their own energy Customers have more control its no longer just about price and reliability The volume and scope of customer data is significantly increased

Nuclear power station

Hydroelectric power

Coal/gas fired power station

Gas production

Onshore and offshore wind

CCS plant (coal/gas)

CO2 transport and storage

Solar

Trading Transmission

Business unit trading businesses local markets

Regional markets increasing centralization

Distribution Metering Retail

Energy flows to users Dumb meter

Micro wind

Smart metering

Micro CHP

Solar PV

Solar water heating

How fast could change happen?

What will the industry look like in, say, 10 years time? It will depend on the speed of change and where you are in the world. We see three essential scenarios for change: infrastructure upgrade, evolution and revolution.

Infrastructure upgrade
P&Us invest in new smart technologies to meet increasing energy demand, alleviate environmental pressure or replace out-of-date infrastructure. They use smart technology to detect and react to shifts in loads or network failures, improving network effectiveness. Emerging markets such as India or China will probably follow this path, as will some European markets.

How to be smart
If smart is treated as an infrastructure upgrade only, and business as usual continues, the full advantages of the new technologies cannot be realized. The major challenge for P&U companies is to get their upgrade investments right, so that they can respond quickly and cost-effectively to a market exhibiting evolutionary or revolutionary developments.

Evolution
Business strategy transforms slowly until a tipping point is reached, due to a technological breakthrough or customer acceptance. At that point, competition quickly shifts into an advanced stage. Parts of the US have already begun this shift and will potentially move toward revolution much earlier than other countries. Australia and some European markets will probably follow this evolutionary path.

How to be smart
Transformations in business strategy can be slow to take hold. P&U companies need to be alert to signs of change and agile enough to seize new opportunities. For example, smart technology will create a two-way flow of energy and information between consumers and utilities, exchanging usage and price information. The simple business of energy supply could evolve into a new, sophisticated form of energy service, in which utilities help consumers to manage their energy use and react to prices to find the best deals.

Revolution
Significant upgrades to physical infrastructure combine with a new interactive customer relationship and new competitive models that allow third parties to enter the market. This creates a revolution. Market rationalities and business strategies change completely.

How to be smart
P&U companies could face strong competition from new entrants in every part of the value chain. As the market evolves, so will the skills required to compete effectively. The greatest challenge will be deciding where to position your business in the new market. P&U companies will also have to build new partnerships to meet the changing demands of the smart consumer.

Seeing energy differently: www.ey.com/smart

New business models for a smart market

Todays business strategies are based on a one-directional flow of energy from centralized generation to the consumer. Smart will change this to a two-way flow of energy and information across all parts of the value chain. How can P&U companies respond to this transformation and achieve market leadership? We see a number of potential routes including: Focus on renewables and decentralized energy Smart grids will be more efficient than current systems and better at incorporating renewable and decentralized energy. As their costs decrease and taxes are levied on carbon emissions, P&U companies need to ask themselves: are we investing in the right technologies and the right geographies given our smart capabilities? Does our renewables generation capacity constitute a separate business that requires different competencies than the rest of the company? Focus on trading Smart will provide much more detailed information about a utilitys generation assets in relation to its customer base and consumption. This could enable better matching of supply and demand if the required IT, data management and risk management capabilities are in place. In competitive markets, such as Europe, the importance of trading will significantly increase with the move toward smart, offering new revenue opportunities such as trading products around electricity storage. Focus on customers Customers wont care about smart until you make it relevant to them. The biggest challenge for utilities will be overcoming customer inertia. Unless they see significant benefits from switching suppliers or managing their own energy usage, change will not happen. Utilities that understand this will make customer education and communication a priority. Focus on being a leader in smart technologies Companies with strong skills in this area will focus on improving smart technologies, pushing them forward and promoting standardization so the industry can benefit from economies of scale. One note of caution: as the telecommunications sector learned with 3G, a promising technology is not a guarantee of business success. You must also define a convincing customer proposition. Focus on the entire smart value chain Leading-edge intelligent utilities will connect renewable energy and the smart network to the smart home, through the smart meter in much the same way that telecommunications companies now provide a mobile platform that offers consumers voice, media, entertainment and internet applications. Utilities adopting this business strategy will need to combine traditional capabilities (e.g., asset base, regulatory management, engineering capabilities) with the requirements of new smart technologies (customer-centric, ability to partner, high agility).

Potential for strong competition from new entrants

Smart will increase competition in P&U by creating opportunities to sell new services to customers. New entrants will use their traditional strengths to enter the market by partnering with utilities or going it alone, in areas such as:

Bundling new value-added services Billing and customer care Metering, communication, IT and data management Providing energy to customers Generation
Smart could blur the lines between the P&U, automotive, technology and telecommunications sectors. Those companies that can act as integrators bundling services, data and technologies will drive this process of convergence. For example, telecommunications companies could sell services directly to the end consumer as well as operate the required communications structure of a smart grid.

Figure 2: Where will new entrants seek to compete with P&U?

Power and utilities uniqueness
Home services

Extent of business opportunities for new entrants

Automotive, real estate, consumer product, media, entertainment companies: home automation, electric vehicles, energy management

New entrants from other industries

Power and utilities companies

Billing and customer care

Telecommunication, technology, retail companies: monthly billing, energy consumption information Metering companies, service providers: meter installation, remote metering Telecommunication, technology, retail companies: local area networks (LANs), load management, data mining Industrial products, service providers: micro grids, network optimization Cleantech, automotive, retail companies: decentralized and/or renewable generation

Metering

Communication, IT and data management

Delivering electricity to the customer

Electricity generation

P&Us need to develop stronger customer focus

It is not yet clear how engaged consumers will become in managing their energy consumption. But what we do know is that people care about home comfort and convenience, and they care about prices. Decreasing energy costs without reducing security and convenience is always going to be a convincing proposition. In time, the developing technology will make a wide range of potential value-added smart services possible. To realize the full benefits, P&U companies will have to develop excellent levels of customer focus and customer relationship management. They will need to take the time to educate customers in ways that are relevant to them for example:

Companies that offer the right combination of services at the right price will win.

Introducing new rates to encourage energy conservation Helping customers remote-manage new smart home appliances Producing energy and selling it back to the grid
Companies that offer the right combination of services at the right price will win.

Transformation lessons
How have other industries coped with transformation and what can we learn? Our analysis of major change in the automotive, technology, telecommunications and retail sectors has identified 10 essential lessons and 10 fascinating case studies that could help P&U companies find the right direction toward a smart world.

1
Develop more symbiotic relationships, or you wont be able to deliver a seamless experience for the consumer.
Automotive

2
Remember cash flow is your lifeblood.

3
Find out what your customer values and use your brand to seize market opportunities.
Technology

4
Look for new partnerships to identify and fully capitalize on market opportunities.
Technology

5
Stay attuned to change and anticipate tipping points, or you will miss the market.
Technology

From fossil fuels to electrification

Major vehicle manufacturers and new entrants are joining forces to bring electric vehicles (EVs) to market. Because electronic components make up a large percentage of a cars value, electrification is attracting many new suppliers. Traditional manufacturers need to develop closer relationships with their suppliers, new market entrants, dealers and a host of other stakeholders to deliver vehicles without compromises to customers.

Technology

Managing cash flow

The arrival of the internet and dot-com era generated extraordinary eagerness to participate. A handful of leading companies, including Amazon, eBay and Google, had carefully constructed business plans that delivered real consumer benefits. But many more investors overlooked traditional financial metrics and paid a high price when the companies they invested in ran out of money. No business is given an open check book forever at some point the investment stops and you have to earn a profit.

Building brand loyalty

The proliferation of technology options in recent years has inundated consumers with choice. Among the companies to develop strong brand loyalty in this environment are Google and Apple. Google unseated previous internet search engine champions through a combination of: innovation, expanded service offerings, performance and reputation. Apple secured its position by demonstrating significant apparent value to music audiences and capturing their imagination with superb design.

Partnering for success

Cloud computing proposes that computing itself can be delivered as a web-based service that accesses huge data centers. But few, if any, single vendors can offer the entire package of services required by corporate IT buyers. In late 2009 a partnership among Cisco, EMC and VMware established the Virtual Computing Environment Coalition to accelerate the use of data center virtualization and private cloud infrastructures. The global competition and disruptive innovation afforded by restructured networks will create market opportunities for incumbents and new entrants.

Anticipating tipping points

Successful technology companies are adept at tracking technology advances, legislative developments, consumer demand patterns and competitive activities and, more importantly, anticipating revolutionary change. This is a vital survival skill given the ever-increasing amount of available market data.

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Seeing energy differently: www.ey.com/smart

Smart technology has the potential to unleash immense change on the P&U sector. Where can it look for guidance?

For further analysis and detailed case studies, visit www.ey.com/smart

6
Establishing barriers around data limits new market opportunities.

9
Engage with the regulator, or you may not like the outcome.

10
Until you combine market information with data management capabilities, its just data.
Retail

Dont promise what you Collaborate with allies on cant deliver to customers, standardization to open or you will lose their new markets. enthusiasm for change.
Telecoms Telecoms

Technology

Accessing real-time data

In the early days of the IT industry, companies established multiple technology barriers to block competitors from penetrating their customer base. However, this limited market growth for all players. Today, most IT-related information is available in easily accessed, standard formats that are shared openly. As a result, the technology industry enjoys rapid growth and has shown extraordinary resilience through two recessions in the past 10 years.

Setting customer expectations

In the late 1990s, third generation (3G) technology promised a new world of mobile services, but consumer experience failed to live up to the hype and uptake was poor. It took years for operators to update their business model for 3G services and become more customer-oriented. In 2007, smartphones provided the breakthrough for mobile broadband and finally managed to attract customers in large numbers.

Standardizing technology
Early mobile phone companies recognized that market growth depended on developing a common set of standards for digital mobile technology. It took seven years of collaboration between the phone companies (and subsequently hardware vendors) to develop GSM, which became the first internationallyaccepted digital mobile telephony standard in 1989. It is now the dominant mobile technology.

Telecoms

Promoting competition
In the 1990s, European telecommunication regulators deemed switching costs (incurred when a consumer wanted to change mobile telephone providers) a barrier to competition. They intervened to introduce mobile number portability (MNP), to allow subscribers to retain their existing mobile number when switching from one mobile operator to another. This was intended to intensify competition in the mobile market, but success was mixed and the outcome was costly for mobile operators. Countries adopting a more comprehensive approach where the regulator and regulated companies actively co-operate have created more truly competitive markets for consumers and service providers.

Increasing customer loyalty with data warehousing

Retailers collect vast amounts of information on sales. They use data warehousing techniques to identify patterns in shopper behavior, which provides valuable information to plan promotions, pricing strategies and merchandising decisions.

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Top five transformation lessons that matter to P&U

Smart has the potential to fundamentally change the way in which the power and utilities sector (P&U) does business. So what are the key lessons P&U can learn from transformation in other sectors? 1. Find out what your customers value and use your brand to seize market opportunities. The fact that the technology can do something doesnt necessarily mean people will want it. For smart, its only when you marry legislated change (i.e., installation of smart meters) with customer needs (which will evolve over time) that you are able to successfully grow new markets. So what will be the smart killer app? What will consumers pay extra for? Where are you going to make money? And is your brand strong enough to be trusted to deliver smart? 2. Dont promise what you cant deliver to customers; you may lose their enthusiasm for change. Right now, even assessing what different companies mean by smart is difficult. For consumers, this presents an even greater danger they are at risk of being oversold a smart world before it has even been developed. Remember the rocky launch of internet services on mobile telephones? 3. Until you combine market information with data management capabilities, its just data. Smart meters will generate huge volumes of new real-time data, which is of minimal value until it has been analyzed properly. This is not an area of strength for utilities. IT strategies, systems, future investments and potential partnerships must be reassessed in order to gain the skills needed to turn this data into meaningful information. 4. Stay attuned to change and anticipate tipping points, or you may miss the market. What does smart mean for your business? What does succeeding in this market mean for you? Theres a lot of white noise about smart in the media. Utilities must distinguish between what is happening in their market versus what is possible, and remain alert to signals that consumer attitudes have reached a tipping point where change will happen very quickly. 5. Look for new partnerships to identify and fully capitalize on market opportunities. All of this will require utilities, used to going it alone, to take on new business partners. Whether its to analyze huge volumes of customer data, target new services at a particular segment of consumers or share risk, what new partnerships, joint ventures or product/ service collaborations will your business need?
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Seeing energy differently: www.ey.com/smart

Winning in smart
Smart is beginning to change the energy landscape and shake up the value chain. By altering how energy is generated, delivered and used, smart is making room for new competitors from sectors such as retail, media, telecommunications and technology, as well as from within the industry itself.

What do you want to achieve?

What does winning in smart mean for you? It depends on your companys starting point and ultimate objectives. For some, winning might mean maintaining existing revenue flows; for others, it might mean completely redefining their business to expand into new products, services or geographies. Defining what success means for you and deciding what to invest in will depend on: The speed of change in your market(s) do you see smart as an:

Infrastructure upgrade: Investment in upgrading infrastructure provides some opportunities for return
from effective spending and improved performance. However, companies need to be alert to tipping points that signal the market is moving into an evolutionary/revolutionary state.

Evolution: As customers become more receptive to change or where technology becomes suitably
advanced, the market accelerates into a more competitive state. Companies need to be ready with innovative products and services, as well as strong customer communication, to capitalize on opportunities.

Revolution: Once customers are engaged and smart infrastructure is in place, a complete shift in business
models is needed to compete along the value chain. To participate in this rapidly changing business landscape, utilities will need to build or acquire skills that strengthen their customer focus, enhance innovation, reinforce their brand and maintain their strategic flexibility. Your long-term strategy do you aim to become a market leader in smart grids, smart metering and/or smart homes? In which geographical markets do you intend to compete? Some companies will continue to operate within their home markets. For others, energy will become borderless and they will seize opportunities to roll out products and services in other geographies. Technology leadership will also differentiate which companies can seize a stake in smart.
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Winners wheel
Do you have the characteristics of a smart winner?

Based on our experience and knowledge of the P&U sector, as well as the lessons learned from other industries that have gone through similar fundamental transformations, we have identified the seven key characteristics needed to be a winner in smart:

1. Clear vision, strategic flexibility

Use our diagnostic to assess your readiness for smart

[available from 3 May 2010]

2. Effective partnerships 3. Innovative products and services 4. Technology excellence 5. Strong brand 6. Customer focus 7. Managerial and operational excellence

Does your organization have the characteristics needed to be a winner? And if not, where do you need to improve? Ernst & Young can help you assess how prepared your business is for smart. Our self-assessment tool is based on our experience and knowledge of the P&U sector, and the lessons we have learned from other industries that have gone through similar fundamental transformation. Visit our website, www.ey.com/smart, to use the diagnostic and continue planning your smart journey.

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Seeing energy differently: www.ey.com/smart

Figure 3: Key characteristics of a winner in the new smart market

Managerial and operational excellence
The smart transformation requires a change to business as usual. A critical skill will be the ability to execute new strategies in the face of evolving markets, new opportunities and threats. There will be unprecedented pressure to adapt utility organizations, systems, processes and people capabilities. How will these skills be created and nurtured within the management team?

Clear vision, strategic flexibility

The starting point of any smart strategy is a rigorous, well-documented and comprehensive understanding of the opportunities that smart brings to the P&U value chain. From there, a company can articulate the position it wants to achieve in the chain.

Managerial and operational excellence

Clear vision, strategic flexibility

Customer focus
Smart meters, grids and homes could fundamentally change the relationship between customer and energy provider. Energy and information will flow two ways, giving customers more control over their energy as well as the option to produce and sell energy. Truly customer focused companies will interact effectively with the customer across the entire smart value chain.

Customer focus

Winner in smart

Effective partnerships

Effective partnerships
The ability to partner effectively is critical for success. Partnering with new entrants to the sector is a fast-track method for utilities to gain the new competencies they will need skills such as managing huge amounts of real-time data, creating a truly customer-centric experience or integrating the new technologies in smart homes.

Strong brand Technology excellence

Innovative products and services

Strong brand
Will your brand make the leap into smart services and products? To date, it has been useful for utilities to be seen as relatively conservative market-followers. Now, some will need to become agents of change to succeed, and some will need to form new partnerships to build and deliver a convincing smart brand.

Innovative products and services

Companies able to develop and deploy a smart killer application will be the winners in P&U. The Wii and the iPhone are examples of how other sectors have developed applications that have gone on to open new markets and attract new customers.

Technology excellence
Smart will radically challenge the IT and data management capabilities of utility companies. Smart meters will relay a stream of real-time data, which will require real-time analysis and timely response. New IT competencies, such as data mining and data warehousing, will be vital to release the potential value of this new data.

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Ernst & Young in smart

Smart services
We have the capabilities and the people to help clients see projects through successfully. We can work on any or all of the life cycle stages of P&Us transition to smart:

Ernst & Young is helping companies across the P&U sector to assess opportunities and revise strategies in light of the potential transformation that smart brings.

Figure 4: The smart life cycle Program management Program Management Office (PMO), Program review
Identify and diagnose
Smart readiness diagnostic Smart strategy review Market review Market research Business modeling Valuation Setting up a road map for smart

Design and planning

M&A Due diligence Financial services Project finance Customer management Value proposition setup Product life cycle management IT advisory IT security advisory

Solution development
Customer management Supply chain management Vendor selection IT advisory IT security advisory Transaction support Tax advisory

Implementation
Supply chain management Customer management Financial services Project finance IT advisory IT security advisory

Operate and stabilize

Performance improvement Cost reduction Liquidity management Working capital Market reassessment

Change management human capital Monitor and control reporting, FIDS

We also provide support for the overarching activities, such as program management, change management, and monitoring and control, that help to create and maintain a successful project.

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Seeing energy differently: www.ey.com/smart

Why choose Ernst & Young?

We have the right smart people.
Our P&U smart professionals have deep experience of managing complex transformations. Our global smart network has the knowledge and experience to help companies through the entire smart journey.

Visit our smart website at www.ey.com/smart for a wealth of information to support your smart journey:
Learn how smart technology is changing the P&U sector around the world Read about the new business opportunities of a changing market Discover what other industries learned from major change Find out if you have the seven characteristics of a smart winner Use our smart diagnostic to test your readiness to compete

Our multidisciplinary know-how creates value for clients.

We offer knowledge and experience of IT risk and assurance, financial account advisory services, risk and tax, coupled with an extensive track record in managing finance and human resources integration. We bring insights gained from innovation, new clean technologies and a culture of encouraging entrepreneurs.

Smart contacts
Country/region Africa Australia Canada China France Germany India Italy Korea Middle East Nordics Poland Spain United Kingdom United States Contact name Jonathan Blackmore Brett Croft Steve Power Raymond Ng Pascal Antonini Oliver Becker Arun Srivastava Andrea Paliani In Sang Yoo Jalal Bibi Lars Ansteensen Piotr Piela Phone +27 11 772 3023 +61 3 8650 7623 +1 416 943 3367 +86 10 58153332 +33 1 46 93 70 34 +91 011 4363 3119 +39 0280 669761 +82 2 3787 6533 +97 1241 74502 +47 24 00 27 80 +48 225577580 +31 88 40 78810 +44 20 7951 4345 +1 704 331 1900 Email jonathan.blackmore@za.ey.com brett.croft@au.ey.com stephen.R.Power@ca.ey.com raymond.ng@cn.ey.com pascal.antonini@fr.ey.com arun.srivastava@in.ey.com andrea.paliani@it.ey.com in-sang.yoo@kr.ey.com jalal.bibi@ae.ey.com lars.ansteensen@no.ey.com piotr.piela@pl.ey.com manuel.giraltherrero@es.ey.com peter.spaans@nl.ey.com rpostance@uk.ey.com john.chevrette@ey.com

We have the necessary industry knowledge.

Ernst & Youngs Global Sector Centers are committed to delivering helpful insight. Our Global P&U Center serves as a hub for sharing industry-focused knowledge that helps clients to succeed in a changing world.

+49 211 9352 18655 oliver.becker@de.ey.com

We are truly independent.

We have no interest or conflict, financial or otherwise, in any of the smart metering or grid products or services for sale. Our role is simply to help you make the best decision by providing sound, independent and unbiased advice.

Manuel Giralt Herrero +34 915727479 Richard Postance John Chevrette

The Netherlands Peter Spaans

Ernst & Young Assurance | Tax | Transactions | Advisory

About Ernst & Young Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide,our 144,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential. Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit www.ey.com About Ernst & Youngs Global Power & Utilities Center In a world of uncertainty, changing regulatory frameworks and environmental challenges, utility companies need to maintain a secure and reliable supply, while anticipating change and reacting to it quickly. Ernst & Youngs Global Power & Utilities Center brings together a worldwide team of professionals to help you achieve your potential a team with deep technical experience in providing assurance, tax, transaction and advisory services. The Center works to anticipate market trends, identify the implications and develop points of view on relevant industry issues. Ultimately it enables us to help you meet your goals and compete more effectively. Its how Ernst & Young makes a difference. 2010 EYGM Limited. All Rights Reserved. EYG no. DX0078
In line with Ernst & Youngs commitment to reduce its impact on the environment, this document has been printed using recycled paper and vegetable-based ink. This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither EYGM Limited nor any other member of the global Ernst & Young organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor.

Global contacts
Ben van Gils Global Power & Utilities Leader +49 211 9352 21557 ben.van.gils@nl.ey.com Bob Ford Americas Power & Utilities Leader +1 215 4485438 robert.ford@ey.com Helmut Edelmann Global Power & Utilities Smart Program Manager +49 211 9352 11476 helmut.edelmann@de.ey.com

Seeing energy differently: www.ey.com/smart