Siemens Energy has a portfolio of modernization and upgrade solutions that utilities can purchase in order to increase the competitiveness of their components such as their gas turbines. Utility companies – which represent Siemens Energy’s typical customers – are always looking for solutions to increase productivity and transparency of their electricity generation process. In addition, power generation is particularly sensitive to equipment cost due to the volatility of electricity prices and fuel costs.
Siemens Energy’s goal is to continuously enhance value of the services offered to their customers, as Siemens Energy is also looking into ways to increase customer engagement and maintain an even closer relationship with their customers, since power plants’ life cycle can be up to several decades.
The goal of this project was to design and launch a Minimum Viable Product (MVP) for an alternative financing business model together with an efficient monitoring application for the technical solutions for power plant enhancements.
The Minimum Viable Product selected by Siemens Energy for is called “Turn Up”. The Turn Up upgrade is part of the Siemens Energy strategy to maintain competitiveness of a certain gas turbine type which has been in operation for more than 15 years. Turn Up provides significant performance advantages and offers attractive financial payback options to utility companies.
Solution: ZkSystems Billing
Instead of buying the Turn Up upgrade upfront the customer pays only for its usage. This means that at the end of each month the customer receives an invoice from Siemens Energy with their precise usage of the Turn Up and corresponding usage costs. With this, the customer has the flexibility to pay for the Turn Up service only when it is actually being used, provided revenue is being generated. With this automated Pay-per-Use approach, the customer carries their costs from capital expenditures (CapEx) to operational expenditures (OpEx). Transmission of relevant data such as machine sensor data payment details are agreed upon between the customer and Siemens Energy in advance.
A monitoring dashboard is included in the service scope and was provided by ZkSystems, so that the user of the machine can track their usage and related cost in a transparent manner.
Benefits for Siemens Energy and Their Customers
- Higher automation: This application enables an automated way to execute pay-per-use compared to a manual way of calculating the usage cost.
- Higher customer retention: With the new business model, Siemens Energy shows flexibility to their customers in volatile markets. Siemens Energy and the customers do share the investment risk.
- Better sales process: The new business model will result in additional revenue growth.
- Increased transparency: The customer can now track usage, efficiency and cost data as well as have a direct comparison to the electricity prices from the stock market.
- Flexibility: Customers have the opportunity to pay just for the service they have used. This enables them higher flexibility during the planning and purchasing process. The initial investment happens in a form of operational expenditures (OpEx), thus reducing investment risk.
- Higher automation: Similar to Siemens Energy, their customers can achieve higher automation by using an automated pay-per-use application rather than the manual accounting.