Vienna: Larger customer management as an element of an energy saving policy

Abstract:

Vienna’s industrial sector is regarded as a priority target group for rational energy use. Therefore, the Vienna municipal utilities have established a special large customer management programme which is aiming to guarantee a customer oriented distribution of energy services as well as the implementation of environmentally compatible solutions. ”Larger customer management” can be regarded as a remarkable example of good practice for the following reasons:

• the utilities offer diversified services for energy saving,
• the energy saving issues are integrated into energy supply planning;
• the infrastructure is oriented to the customers’ needs in order to optimise the environmental gains from different energy sources;
• the consultancy of environmentally compatible supply systems is individually adjusted;
• the customer is insured against possible set-back in the new supply systems.

Concept and aims

For several years the Vienna municipal utilities have been pursuing a course towards becoming an energy service company (an overview of the city’s three energy companies is given below in the actors and structures section). Between 1980 and 1990 CO₂ emissions in Vienna were reduced by 16% and since then the level of absolute CO₂ emission has remained stable. The trend towards ecologically-oriented energy services and target group oriented energy management is becoming an increasingly viable option for public energy supply companies. The Vienna municipal utilities also switched to a new policy of selling ecologically-oriented solutions to its customers. With the involvement of external consultants, the public utilities conceived a strategic management concept for CO₂ reduction measures. Consideration was given to the increasing importance of ecological criteria, the increasingly specific nature of customer wishes, and the foreseeable increase in competition. Therefore, a municipal energy utility must adopt an offensive strategy to become a consistent energy supply company.

To attain these goals, the energy concept of the city of Vienna has developed a strategic marketing concept which includes the following programme elements:

• Promoting a change of awareness with regard to improving the quality of the environment;
• Developing environmentally compatible products;
• Increasing the market share of environmentally friendly services;
• Promoting customer-oriented thinking;
• Developing innovative services;
• Rendering services in an efficient manner;
• Guaranteeing adequate supply.

Against the backdrop of these targets, areas were defined and measures formulated to attain the newly defined company aims. Absolute priority was given to the further development of large customer services and the promotion of rational energy use in industry. The analysis of savings potential amongst large customers of the Vienna municipal utilities led to the conclusion that the replacement potential of fossil fuels by grid-based energy sources amounted to some 40%. However, such replacement can only be implemented with simultaneous energy savings, since grid-based energy sources normally have comparatively higher specific costs.

A basic principle in developing new energy services is the adoption of an industrial management approach which serves both the appropriate economic customer benefit and the economic benefit of the service supply company. Energy services refine energy sources into services just as the provided energy services save work for the customer, which currently he does himself or pays third parties to do. On this background, the Vienna municipal utilities have been developing an energy service package for large customers which range from construction offers, systems operation and maintenance, all the way up to funding. Other elements of the energy service include the marketing mix, namely product/service, distribution and price policies, etc. This guarantees the use of energy saving potential without having to wait for the introduction of new legislative provisions. If such an energy service is to be successful some basic requirements have to be taken into account:

• The development of energy services must depend on the customers’ needs. This applies particularly to the product, service, price and distribution areas.
• Customers do not ask for energy sources but for services of a certain quality at an acceptable price. The municipal utility has the task of providing the best environmentally friendly energy offer. This especially applies to network solutions.
• As network energy sources usually have a higher specific cost than solid or liquid fuels, use of network energy sources must lead to lower energy consumption in order to be able to offer the desired service at the same price. It is the energy service’s task to offer energy source solutions that fulfil this cost argument.

An example of such a service package is the load management offer. Previously, it was the case that company initiatives to reduce energy consumption frequently failed in view of the high cost of load management equipment. For this reason, the municipal utilities are offering the following service package:

• Analysis of company load development and survey of the technically and economically feasible savings potential in terms of electrical output;
• Elaboration of a load management plan;
• Installation and leasing of load management equipment, including servicing;
• Customer insurance against economic risks pursuant to the failure of the load management system.

A service package also exists for the installation and operation of combined heat and power power (CHP) stations which covers almost all the relevant working steps from demand analysis to planning, operation and maintenance of the CHP all the way to complete financing. Further sector-specific energy supply services are in preparation. These include, for example, software-assisted regular measurement of company energy flows, which is transmitted via the existing network to a central control point at the public utilities. There the data is evaluated and, in consequence, aggregated in order to identify basic inefficiencies.

A relatively new field of activities is corporate energy analysis, which was set up in 1995. Energy flows in companies are usually very complex and mostly unknown to the companies themselves. Energy flow determination by company staff is usually insufficient and results in high staff costs. Prepayment for consulting is often unacceptable to companies as success is usually not foreseeable. However, if the municipal utility as a trustworthy partner can offer to combine its know-how with an individual concept based on the company’s requirements, the large customer gets an advantage without a great risk. At the same time the plant operator will get the opportunity to reduce energy costs, to save energy and to allocate energy costs, which are otherwise included in total costs, with acceptable precision to a number of budgetary items.

Implementation

As load management, cogeneration, and corporate energy analysis turn out to be the most common energy service, it seems appropriate to focus on some projects from these areas in order to demonstrate the benefits of large customer management.

1. Load management

Load management aims to avoid output peaks and helps the customer to reduce electricity costs where the flat rate is calculated on the basis of the output measured. The electricity supply company no longer needs to supply the avoided peak output and, in the medium term, is in a better position to make better use of its production and distribution capacities. In developing load management special attention is given to medium-size companies. As the energy expertise in this type of company is often insufficient, Wienstrom (Vienna power) offers a complete service package ranging from load analysis to system financing. Another reason for the concentration on mid-sized companies is that at these companies the process-generated company operations are still visible and easier to understand. Nevertheless, load management service had to stand the test of time which included the following stages:

• The load development of the commercial customer group was analysed.
• The load development of various sectors of the commercial customer group was analysed and opportunities for possible load savings were ascertained.
• In selected sectors with a high load savings potential, process-generated company operations were examined.
• As there was no load management system on the market which satisfied the economic requirements of medium-size firms, a new, cost-effective load management system was jointly developed with the AEG company.
• The practical suitability of the new load management system was tested in pilot projects.
• Parallel to this, a software package for load analysis was developed with the Landis & Gyr company to ascertain load reallocation potential and to demonstrate to the customer the cost advantages.
• A marketing concept was developed for the new service.

After the test phase the following service could be included in a typical load management service:

• Wienstrom analyses the load development in companies and establishes the technically and economically feasible savings potential in terms of electricity consumption. This analysis comprises registering electricity needs in a quarter-hourly rhythm over several weeks.
• Wienstrom develops a load management plan which determines which equipment can be temporarily switched off without hindering operations.
• Wienstrom provides the customer with a load management plan on a rental basis. The customer thus avoids high investment. A profitability calculation is made.
• Wienstrom carries out all adjustments and the optimisation of operations.
• Wienstrom assumes the co-ordination between the customer and the contracted electrical company.
• Any load peaks arising pursuant to a failure of the load management system are not invoiced to the customer.

2. Cogeneration

Cogeneration has been a field of activity for Wienstrom for more than 20 years and it forms the backbone of electricity and district heating production in the capital. In developing from an energy supplier to an energy service company, Wienstrom decided to offer its customers the cogeneration service in addition to developing and introducing other services. The cogeneration service provided by Wienstrom consists of several segments:

• Demand analysis: Prior to the planning of a small-scale combined heat and power (CHP) station the possibilities and measures which allow reduction of energy use in industrial plants are determined. External consulting firms are involved in this work, if required.
• Sizing: The remaining energy demand is partly covered by the grid and partly by the small-scale CHP station. The sizing of the small-scale CHP station is matched to the heat demand of the customer. The heat base-load demand is covered by optimum utilisation of the small-scale CHP system. This results in lower emissions and allows it to operate very efficiently. Reserves to meet heating needs and to cover peak load are provided by gas boilers. The residual electrical supply and electrical energy reserves are provided by the Wienstrom grid.
• Finance: The plant is fully financed by Wienstrom, and is the property of Wienstrom. Usage and operation agreements are signed with the owner of the industrial plant. Servicing and maintenance agreements are concluded with Wienstrom. To ensure transparency, all financial analysis up to profitability calculations is carried out jointly with the customer.

3. Corporate energy analysis

In contrast to cogeneration, corporate energy analysis is a new area of activity. Therefore, Wienstrom has tested the transmission of meter readings via the existing grid in co-operation with the Landis & Gyr company for over two years. The advantage of the technology selected is that only the readings measured in the company are collected whereas data transfer takes place through the existing electrical installations in each company. This guarantees developing a cost effective and fully automated system for collecting data on company energy flows.

In collaboration with the Economic University and the Technical University of Vienna the Vienna utilities have analysed four industrial plants from different sectors where the technology developed by Landis & Gyr is being used. The aim had been to develop a software package for carrying out the following tasks:

• Beforehand analysis of the inefficiencies in the company’s energy use;
• Identifying the energy flows which are significant in quantity;
• Detection of major energy flow losses;
• Computer-based processing on the basis of the established company energy data (index figures, constituent figures, relational figures);
• Demonstrating the overall balance of energy flow in a company;
• Estimation of redevelopment potentials;
• Searching for energy source substitution;
• Setting priorities for redevelopment measures;
• Submitting a detailed corporate energy concept;
• Calculating energy cost classification on the basis of individual cost items.

On such a basis the larger customers can get a new system of corporate energy analysis. This service includes the following steps:

• Drawing up the methods of measurement;
• Defining the dimensions of measurement;
• Carrying out the energy measurements;
• Installing the energy flow analysis system which is operated on rent;
• Elaborating the company’s energy flow;
• Evaluating the results from the measurements by diagram analysis;
• Formulating, if necessary, alternatives for redevelopment;
• Searching for alternative substitution potentials;
• Calculating energy costs and profitability;
• Supporting corporate action with finance.

Actors and Structures

In December 1998 the Vienna municipal utilities were divided off from the city administration and transformed into a corporation. Ever since, the WIENER STADTWERKE Holding AG has been run as a corporation encompassing three energy companies: Wienstrom (electricity branch), Wiengas (gas branch) and Fernwärme Wien (district heating branch).

Since large customers want a reliable energy service regardless of the energy source, larger customer management has to meet certain minimum requirements:

• It has to offer a single extensive contact unit for large customers.
• It has to take into account the varying criteria of large customers.
• It has to provide sophisticated documentation tools for those dealing with large customers, particularly presentation brochures and computer software.
• It has to conduct a result-oriented management system for customer service.

Source of Information

InnoTec Systemanalyse GmbH, (ed.) 1994: Seven City Workshop - Overcoming the Barriers to Implementing Energy Saving Measures at a Municipal Level. By Order of the European Commission Directorate-General for Energy (DG XVII), Berlin

OECD, (ed.) 1995: Urban Energy Handbook. Good Local Practice, Paris

Pink, Friedrich 1996: Large customer management at the Wiener Stadtwerke, in: EA.UE, (ed.), Facing the Challenge. Successful Climate Policies in European Cities, Berlin, pp. 100-108

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Vienna :

The City of Vienna has a population of 1,600,000 and the conurbation has a population of approximately 2,500,000. The city covers an area of 415 square kilometers and provides approximately 790,000 workplaces. Vienna is a primary location for OPEC and major financial institutions. Main industries include engineering, electrical and chemical branches, as well as textiles and food-processing activities.

Population:

Project was added at 27.06.1996
Project was changed at 24.08.2001

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