Working with the people and their territories, we continue to build stories of progress - Informe de Sostenibilidad
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02 Sustainable management • Innovation Management_______________________________ 6 Highly innovative company____________________________ 14 Distributed resources_________________________________ 18 Smart city services and sustainable mobility______________22 Business platforms and services of the future_____________26 Content
02 Sustainable management Innovation Management EPM continues to innovate and seek to be more efficient in its different processes to contribute to the harmony of life for a better world. This is how, starting from the corporate strategy, the business plan and strategic surveillance, it executes an innovation model that starts from sowing, undertaking, accelerating, growing and finally scaling options for new lines of business, new or improved products and transfer of technologies that allow business optimization. The Grupo EPM has matured in innovation management, incorporating the culture to innovate in its employees. It recognizes the importance of maintaining continuous learning and having a network of allies to make agreements or collaborative alliances, in an open innovation scheme that has allowed it, for example, to create the Center for Innovation, Entrepreneurship and Digital Transformation of Medellín- CIET, through an agreement between EPM and Ruta N for COP 12,000 million for the next three years. Likewise, it continues to promote entrepreneurship through the Capital Fund and the business accelerator by establishing a win-win relationship with 11 companies in which it has a stake, with whom it builds the required solutions with the quality and efficiency that the environment demands. 6 Additionally, with work on innovation it contributes to the following SDGs: 7 - Ensure access to affordable, reliable, sustainable and modern energy for all, 9 - Develop resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation and 11 - Make cities and human settlements inclusive, safe, resilient and sustainable. Back to content
02 Sustainable management Business Strategy Business growth PMO Innovation Development and Planning and development Internal Ecosystem Innóvate Grupo EPM New Capabilities Capital Seeds Corporative strategy 1 2 Digital Transformation Internal Capabilities 7 Business plans 3 4 Growth or profitability of today’s businesses 5 6 FCP Companies Strategic Surveillance Management Third of innovation projects FCP Business projects portfolio Subsudiaries Accelerator External Ecosystem 1. Mentoring Innovate + 2. Project coordination 3. Portfolio management New Divest 4. Resource coordination businesses 5. Ways of working 6. Direction M&A Back to content
02 Sustainable management Main achievements Program, project, Challenges Company Achievements in 2020 Compliance initiative or action Implement pilot project of power generation in Due to the health emergency due to COVID-19, EPM’s aqueduct network through technological this project was suspended in April 2020 with a Not Distributed resources developments (PAT systems - pumps such as scheduled restart in February 2021. For this reason, accomplished turbines). the connection to the network was not achieved. The business model to implement this service (supply Carry out studies to determine the viability of the of high VOLUMES of water to fill tank cars) was Distributed resources water sales business in service stations (supply of Total proposed and results were delivered to the Water high VOLUMES of water to fill tank cars). business. 8 The design stage was concluded, the budget was Initiate the remodeling of the industrial workshop EPM approved and the construction phase began, Technological and application of thermal barrier coatings preparing pre-contractual documents for civil works Total development for power generating equipment using locally and the procedures for obtaining the construction developed materials. license. The work will finish in 2022. The feasibility study was executed, whose deliverables were: benchmarking and market study; Carry out studies and a pilot to determine the regulation and macro environment; analysis of Distributed resources feasibility of offering comprehensive management attractiveness and competitiveness, and scenarios Total services for dielectric oils. and recommendations for business models. As a pilot for hypothesis testing, a commercial test was carried out with some potential clients. Back to content
02 Sustainable management Program, project, Challenges Company Achievements in 2020 Compliance initiative or action Smart city services Encourage the conversion of 3,500 vehicles to 2,537 conversions were carried out, for a total of and sustainable Partial Natural Gas Vehicles. 24,000 vehicles with installed and active NGV. mobility Manage the investments of the Private Capital Fund Highly innovative FCP II operations began in the second half. The 9 - FCP I and II (EPM Ventures Program) and work Total company monitoring of FCP I investments continued. jointly with the companies in which it has a stake. EPM It was not possible to carry out the Solar Circuit. A special training process of 52 hours of mentoring To develop and execute, in conjunction with the EPM and spaces for prototyping of Highly innovative Foundation, the “Technological Challenges” and business ideas with external people and Partial company “Innóvate EPM” programs to develop innovation intrapreneurs, until reaching the selection of the best capacities in new generations. six ventures that CONTINUE with a new phase of acceleration in 2021. Back to content
02 Sustainable management Challenges 2021 Scope and coverage Program, project, Year of Challenge Company Business Geography Management progress in 2020 initiative or compliance action Define the business model for Colombia – 2021 Water Its implementation has not started. smart aqueducts Antioquia This pilot began in October 2020, with the participation of ERCO and the Universidad Distributed Run community solar energy Escuela de Ingeniería de Antioquia and resources pilot, based on distributed energy Colombia – with the support of University College resources, smart metering 2021 Electric power Antioquia London. The first deliverable has already and digital platform for energy transactions been received and it is expected to advance during the year 2021 with the 10 other defined deliverables. EPM Qualitative research was carried out that allowed exploring the concept of smart cities in: citizens, authorities, EPM, and companies in Medellín and other Smart city Implement the provision of smart municipalities of the metropolitan area. services and city services as a strategic ally of Colombia – 2022 All businesses The contractual process was started for the sustainable Medellín and other territories in Antioquia consulting phase, the purpose of which mobility Colombia is to develop capacities in EPM, to be the strategic ally of the cities in the definition of the city strategy, design of Smart services and support in the implementation. Back to content
02 Sustainable management Scope and coverage Program, project, Year of Challenge Company Business Geography Management progress in 2020 initiative or compliance action Smart city Conversations were activated with some 11 services and Propose the EAS (energy as a Colombia – companies that offer electric buses to 2021 Electric power sustainable service) service in electric buses. Antioquia start with the signing of confidentiality mobility agreements. EPM The collaboration agreement and Start the execution of activities Highly contributions were signed with Ruta N, and projects at the Center for Colombia – innovative 2021 All businesses who will be EPM’s ally for the operation of Innovation, Entrepreneurship and Antioquia company the Center for Innovation, Entrepreneurship Digital Transformation and Digital Transformation. Back to content
02 Sustainable management Associated stakeholders • Clients and users • Community • Owner • State • EPM Group People • Suppliers and contractors • Partners • Investors 12 GRI standards Contents and own indicators EPM - 11 Innovation efficiencies EPM - 19 New lines of business in innovation Back to content
02 Sustainable management Scope and coverage Companies Geography Colombia – Antioquia Empresas Públicas de Medellín - EPM Colombia - Malambo, Atlántico Central Hidroeléctrica de Caldas - CHEC Colombia – Caldas Colombia – Quindío Empresa de Energía del Quindío - EDEQ Colombia – Santander Electrificadora de Santander - ESSA Colombia - Norte de Santander El Salvador Centrales Eléctricas del Norte de Santander - CENS Guatemala Aguas Regionales EPM Panamá Aguas de Malambo Business 13 Distribuidora de Electricidad del Sur - Delsur Water Sanitation Empresa Eléctrica de Guatemala - Eegsa Electric power Elektra Noreste - ENSA Gas Back to content
Highly innovative company Back to content
02 Sustainable management Highly innovative company In its day to day, the Organization seeks to foster the capacity for innovation in its employees and promote digital transformation in each of the companies, from the motivation, knowledge and creativity of the people, who are the ones who finally develop these new solutions that deliver value to stakeholders. Some mechanisms and actions to promote innovation, entrepreneurship and digital transformation are: • Management of the business accelerator and the Private Capital Innovation Fund. • Training events in innovation and agile methodologies. • Launch of challenges in the innovation ecosystem. • Seed and project management with application of agile methodologies and agile digital operating model (MOAD). Performance in 2020 15 The recognition of the EPM innovation team as an R + D + I Unit was once again obtained by the Ministry of Science, in Colombia, According To the Policy of Actors of the National System of Science, Technology and Innovation. In addition, the Innóvate EPM 2020 program was implemented, aimed at external entrepreneurs (university students). In this version, which had the participation of EPM officials, the training, prioritization and selection phases of the six best projects were developed, which will be part of a later phase for acceleration. The Grupo EPM promotes an open and collaborative innovation strategy that allows its companies to develop alliances with technological parks, centers and universities, in addition to carrying out R & D & I projects that seek profitability and the development of new business alternatives. Through Ventures EPM, a program that materializes investment in ventures, the business accelerator and Private Equity Funds, strategic and financial support is provided to companies related to EPM’s sectors of interest for the development of new products or necessary services. in the group. Capital Fund I continued with the portfolio management and the constitution of Capital Fund II was managed, as well as its approval before the Financial Superintendence and the beginning of its operations. Back to content
02 Sustainable management The digital transformation in EPM continues to grow with more seeds (teams focused on solving business challenges), which have generated minimum viable products (MPV) and transversal digital components. An agile and digital operating model (MOAD) was implemented, which includes teams called Virtual Centers of Excellence, who will mark the evolutionary path of different disciplines for the future: intelligent process automation, agile and innovation practices, customer experience and data science. The CHEC subsidiary consolidated its innovation management system and executed the CHEC 3D strategy, by identifying core capabilities, training in design thinking, scrum master and the creation of the innovation committee and studies associated with this culture. Innóvate CHEC was expanded and the program was extended to the department of Risaralda. Several designs and some prototypes were developed: a web application to manage payments for consumption made in the electric stations and the application of nanotechnology principles for the decomposition of organic pollutants in CHEC’s water bodies. In addition, with the event called “The great CHEC challenge”, prioritized initiatives were started until four challenges were presented in the summons. A preliminary mapping of possible partners for a solution was also carried out and the communication strategy and launch of the program were defined in March 2021. CHEC and ESSA obtained the approval by Minciencias of several projects presented in the 16 summons for tax benefits. CENS worked on the development of organizational capacities with innovation as a means to implement and advance new solutions. Investments and expenses - Highly Innovative Company Action (million COP) Concept / Indicator 2018 2019 2020 EPM Headquarters 15,416 7,259 19,220 Subsidiaries Grupo EPM 3,677 255 2,563 Total investments 19,093 7,514 21,783 Source: New Business, Innovation and Technology Vice Presidency / Development and Innovation Management The values include the investments and expenses of EPM and its subsidiaries executed in previous years, which had been considered in the actions previously called “Transformational Innovation” and “Entrepreneurship”, since many of these pilots and projects have to do with the new action. detailed here, the most significant items correspond to investments made in the Private Equity Fund for Entrepreneurship. Back to content
02 Sustainable management GRI standards Contents and own indicators EPM - 11 Innovation efficiencies EPM - 19 New lines of business in innovation Scope and coverage Companies Businesses Empresas Públicas de Medellín - EPM Water Central Hidroeléctrica de Caldas - CHEC Sanitation 17 Electrificadora de Santander - ESSA Electric power Centrales Eléctricas del Norte de Santander - CENS Gas Geography Colombia – Antioquia Colombia – Caldas Colombia – Santander Colombia – Norte de Santander Back to content
Distributed resources Back to content
02 Sustainable management Distributed resources EPM seeks to offer solutions for places and territories difficult to reach with large centralized systems designed for cities. This focus requires the integration of technology and business models in small-scale solutions that allow cost efficiency in the provision of PUBLIC drinking water, sanitation, energy and solid waste management services. For the Water and Sanitation business, they are solutions for the provision of drinking water and sanitation in a sustainable, clean and adaptable way to populations, sectors or communities that are not connected in any way with the main networks. For the Energy business, they are small and modular energy generation and storage technologies that provide electrical capacity, energy and flexibility when needed. For the Solid Waste Management business, they are solutions that involve the construction, operation and maintenance of systems that respond to the needs of small populations. Performance in 2020 19 With the pilot carried out in the rural area of the municipality of Olaya, EPM advanced in the knowledge about the installation of efficient aqueduct solutions in areas of difficult access for new users, using remote measurement technologies for remote management of these systems. This pilot could be replicated in many regions where Grupo EPM has a presence. The Energy business, for its part, strengthened its foray into solar self-generation, in which it invested COP 2,068 million in four solar systems for large clients, with a total installed capacity of 859 kWp and carried out the operation and maintenance of two solar systems. An ultrafiltration plant was installed to integrate it into the telemetry and remote-control network that is part of the smart aqueduct project in the town of Sucre, municipality of Olaya- Antioquia. The scope and design of a pilot plan for the initiative to flatten the demand curve for drinking water was advanced. The best technology was identified and components were developed to transmit the information to an analytics center for processing and control. Back to content
02 Sustainable management A market investigation was carried out with the company Ernst & Young, as an input for the structuring of the business model for the sale of water in service stations. The floating solar panel project in the Guatapé reservoir was completed and the photovoltaic solar system was delivered to the operating areas of the Guatapé plant. On the subject of transactive energy, in an agreement with the Universidad Escuela de Ingeniería de Antioquia and the ERCO company, progress was made in the execution of two pilots: one with the community of Comuna 13 of Medellín in order to analyze the transactional characteristics of this population segment, and another in which the data of the energy transactions of 14 participating users were collected. A proposal was delivered for the structuring of the dielectric oil renewal business -RAD-, to offer renewed oil and services associated with the management and treatment of these oils to third parties. Aguas Regionales installed two hypochlorite generation systems on site, one in the municipality of Apartadó and the other in Chigorodó. CHEC designed the technology evaluation prototype for swimming pool water heating. 20 ESSA completed the third year of monitoring the performance of the El Parnaso solar self- generation system, and recorded a generation of 145 kWh-day. CENS structured the energy efficiency proposal to start in 2021. ENSA installed a recycled water reserve tank in the Cerro Viento offices, which can wash 25 to 30 vehicles, representing a saving of 500 liters of drinking water. Investment and expenses in distributed resources (million COP) Concept / Indicator 2018 2019 2020 EPM Headquarters 7,091 3,611 3,631 Subsidiaries Grupo EPM 11,527 73 2,340 Total investments 18,618 3,684 5,971 Source: New Business, Innovation and Technology Vice Presidency / Development and Innovation Management The values include the investments and expenses of EPM and the subsidiaries, executed in previous years, which had been considered in the action previously called “Technological developments”, since many of these pilots and projects have to do with the new action detailed here. Back to content
02 Sustainable management GRI standards Contents and own indicators EPM - 11 Innovation efficiencies EPM - 19 New lines of business in innovation Scope and coverage Companies Geography Empresas Públicas de Medellín - EPM Colombia – Antioquia 21 Colombia – Caldas Aguas Regionales EPM Colombia - Norte de Santander Colombia – Santander Centrales Eléctricas del Norte de Santander - CENS Panamá Central Hidroeléctrica de Caldas - CHEC Electrificadora de Santander - ESSA Businesses Water Elektra Noreste - ENSA Electric power Back to content
Smart city services and sustainable mobility Back to content
02 Sustainable management Smart city services and sustainable mobility Smart city is a concept and a way of organizing a territory making use of technology and other elements, to satisfy the needs and offer relevant services to citizens, businesses and visitors, which facilitates governance, increases transparency, strengthens democracy and citizen participation and builds a more equitable, inclusive and competitive city. In this sense, the Grupo EPM has projects to improve the intelligence of the services it provides, in smart electrical grids, in analytics to detect losses and fraud in energy, gas and water, as well as in automation and remote management of PUBLIC LIGHTING. It also develops sustainable mobility initiatives that aim at the harmony of life for a better world, fitting in with the sustainable mobility strategy of providing energy “for transport” from clean or renewable sources and natural gas. Performance in 2020 In most of its energy subsidiaries in Colombia and abroad, the Grupo EPM has fostered the ecosystem of sustainable mobility in its territories with the acquisition 23 of electric vehicles and the installation of infrastructure consisting of PUBLIC and private electric chargers. Regarding smart city services, the subsidiary Eegsa made progress in the Red AMI project, in which it invested 10,333,881 quetzals equivalent to COP 4,551 million in its operation and maintenance. EPM carried out a market investigation to modernize PUBLIC lighting, which includes the change from sodium and conventional luminaires to more efficient LED luminaires and the foray into pilot projects for remote management systems for PUBLIC LIGHTING. These results will serve as input for a consulting phase in smart cities. In electric mobility, the offer to finance bicycles and electric scooters for Somos cardholders continued (EPM’s loyalty program aimed at customers and users). Conversations were started with foreign suppliers of electric buses to sign confidentiality agreements and explore alternatives for renting batteries or associated models to promote the use of these vehicles. Back to content
02 Sustainable management CHEC closed the year with the launch of the first electric charging eco-station, the installation of the second charging station and the presentation to the Manizales city hall of the proposal for a sustainable mobility public policy. EDEQ installed the first fast charging station in the department of Quindío and began steps to deploy the charging infrastructure for two wheels. Additionally, it continued to promote the purchase of motorcycles and electric bicycles through the Somos card. Eegsa made the purchase of an electric vehicle and continued with the initiatives of: automation of the electricity grid, installation of recharging points, Asociación de Movilidad Eléctrica de Guatemala -Amegua-, negotiation and pilot tests of LED luminaires and carried out the designs of the financing platform called “Consíguelo”. Delsur worked on the installation of thermal imaging cameras, battery bank monitors and isolating protectors in the network sections in the substations, in order to carry out monitoring, data analysis and reduction of faults. Also, in the implementation of the cable and phase identification system in distribution networks that provide more precise data in the geographic information system, reducing technical losses. 24 Investment and expenses in smart city services (million COP) Concept / Indicator 2018 2019 2020 EPM Headquarters 0 0 173 Subsidiaries Grupo EPM 8,774 33,120 5,745 Total investments 8,774 33,120 5,917 Source: New Business, Innovation and Technology Vice Presidency / Development and Innovation Management The values include the investments and expenses of EPM and the subsidiaries, executed in previous years, which had been considered in the action previously called “Technological developments”, since many of these pilots and projects have to do with the new action detailed here, the most significant items correspond to investments made by the subsidiary Eegsa on smart metering -AMI- and with the Integrated Computer System for User Service -SIIAU- Eegsa, Investments and expenses for sustainable mobility are detailed in the Mitigation of climate change action. Back to content
02 Sustainable management GRI standards Contents and own indicators EPM - 11 Innovation efficiencies EPM - 19 New lines of business in innovation Scope and coverage Companies Geography Empresas Públicas de Medellín - EPM Colombia – Antioquia Colombia – Caldas 25 Centrales Eléctricas del Norte de Santander - CENS Colombia - Norte de Santander Colombia – Quindío Central Hidroeléctrica de Caldas - CHEC El Salvador Empresa de Energía del Quindío - EDEQ Guatemala Empresa Eléctrica de Guatemala - Eegsa Businesses Distribuidora de Electricidad del Sur - Delsur Electric power Back to content
Business platforms and services of the future Back to content
02 Sustainable management Business platforms and services of the future A business and services platform is a business model that creates value by facilitating exchanges between two or more interdependent groups, generally consumers and producers. For these exchanges to happen, platforms leverage and create large, scalable networks of users and resources that can be accessed. The Grupo EPM seeks to redesign business to commerce (B2C), business to business (B2B) and business to government (B2G) services, including point-to-point (P2P) services for regulated and unregulated markets, as well as to develop new service offers through virtual platforms, with an objective of growing through innovation. With this guideline, EPM has made progress in structuring possible new businesses or in optimizing current ones, achieving efficiencies that also translate into lower costs for the company and consequently in a more efficient and innovative company for its users. Performance in 2020 27 Both EPM and the subsidiaries CHEC, CENS, Delsur and Eegsa made significant progress implementing applications based on technologies such as IoT, Artificial Intelligence, Blockchain and Cloud and enabled new digital assistants that provide remote access to our clients, guaranteeing security, agility and improvement in the attention. Likewise, in EPM several platforms were implemented to support some regulations and for the management, use and exploitation of information. EPM reviewed and adjusted the business plan to offer B2C-B2B services, incorporating lessons learned from iterations carried out with clients. At the same time, CENS designed a similar service that is awaiting approval by the Board of Directors. EPM made progress in the Prosumidores platform, in the development of web applications that allow to unify the customer experience, in the platform for robotization of manual tasks of current processes, put into operation the first IPA solution (Robotic Process Automation + Artificial Intelligence) with the invoice quality process - histograms, the platform and data quality tools were enabled for monitoring, for the monitoring of IT applications and components (information technologies) and establishment of the Data Science Community. Back to content
02 Sustainable management The company implemented EMA chatbot for employees and clients in the process of integrating with WhatsApp. Likewise, the Delsur subsidiary advanced with a chatbot pilot that it hopes to massify during 2021. For its part, Eegsa implemented the bot called Sunny with artificial intelligence and machine learning that integrates with messaging channels and with other tools such as the CRM-EPESI system and Comegsa APP and with digital services to facilitate communication with customers, including the package of technical services called MantPlus offered by Comegsa. CHEC inaugurated the Vive CHEC experience center, a modern and innovative relationship point, where clients find commercial, experiential and co-creation spaces. A concept that combines digital and experiential moments in an experience that generates positive emotions, for remembrance and recommendation. It also made progress in optimizing the administration, operation and maintenance of electrical installations by implementing high- tech equipment that monitors different variables through energy management software. Delsur made progress in the VAcBI Plan (active sales with business intelligence) that promotes the acquisition of complementary services through the analysis of personalized information to generate tailored value offers, through contracts with staggered coverage and with payment flexibilities in the invoice (initially aimed at high demand customers). Eegsa for its part made progress with the C4C (Cloud for customer) platform that integrates 28 with Outlook and creates an automatic ticket for customer service; tools were implemented for the SIIAU system (Integrated User Service Computer System), progress was made in generating online electronic invoices, as well as payment and credit agreements. Investments in business platforms and services of the future (million COP) Concept / Indicator 2018 2019 2020 Investments and expenses made by EPM 0 0 5,416 Investments and expenses made by national 1,552 148 10,847 and international subsidiaries Total investments 1,552 148 16,263 Source: New Business, Innovation and Technology Vice Presidency / Development and Innovation Management The values in the table include the investments and expenses of the subsidiaries, executed in previous years, in the action called “Technological developments”, since many of these pilots and projects have to do with the new action detailed here. The significant increase in investments in 2020 in the subsidiaries corresponds mainly to the implementation of scada and materials management at Eegsa. Back to content
02 Sustainable management GRI standards Contents and own indicators EPM - 11 Innovation efficiencies EPM - 19 New lines of business in innovation Scope and coverage Companies Colombia – Caldas Colombia – Santander Empresas Públicas de Medellín - EPM Colombia - Norte de Santander 29 Central Hidroeléctrica de Caldas - CHEC El Salvador Electrificadora de Santander - ESSA Guatemala Centrales Eléctricas del Norte de Santander - CENS Distribuidora de Electricidad del Sur - Delsur Businesses Water Empresa Eléctrica de Guatemala - Eegsa Sanitation Geography Electric power Colombia – Antioquia Gas Back to content
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