European smart grid roll-out on target
Currently across much of the European Union programs are being implemented to install smart meters in every home and business. This, combined with power and control networks, will provide the infrastructure upon which our widely anticipated smart grids can operate, enabling a much better control of the continent’s energy demand and supply.
|Energy Management System
In addition, since 2002 a further €3.15 billion has so far been spent on 459 smart grid R&D or demonstration and deployment projects, with several billion more expected to be spent by 2020. To provide a fully integrated European energy network, the European Commission estimates that altogether another €140 billion will need to be invested in the electricity grid itself by the decade’s end.
The sixteen countries going ahead with full implementation include the UK, France, Spain, Holland and Italy, but not Germany, which has opted for selective smart metering roll outs, along with Latvia and Slovakia. Among these nineteen countries, penetration could well exceed the EU’s Third Energy Package target of 80 percent by 2020. So far it has been Denmark that has spent the most per capita and per unit consumption on smart projects and meters.
Each country’s decision to go ahead with full roll out was based on a national cost benefit analyses, but in three EU countries these turned out to be negative, curtailing further development there for the time being at least, and holding back the penetration rate across Europe. According to the EDSO, at EU level the average cost of a meter, including installation, is €252, while immediate anticipated benefits average €309, along with average energy savings of 3 percent. Early results from 22 smart grid trials being undertaken in the UK suggest peak demand savings of 10 percent – representing more than 70 GW of capacity at EU level.
However, even within the sixteen nations going ahead will full roll-out, only eight are following the recommended functionality embodied in Distribution System Operators’ (DSO) guidelines, which experts warn could have implications for inter-operability of the smart grid at a supra-national level in the longer term.
There are also smart projects that focus on the consumer. These are concentrated in a few countries: Denmark, France, UK and the Netherlands, and enable large organisations to use power far more efficiently by linking sites and equipment in an internal network. Organizations involved include DSOs, universities and research centres.
A smart grid’s ability to efficiently and reliably balance power demand and supply produces many benefits. Among the most important, smart grids will be able to safely integrate more renewable and other distributed energy sources into the electricity network, while on the demand side, it should be possible to accommodate more major offtake points, including for electric vehicles. These are both key enablers in the expansion of renewable power, and so are critical in meeting the EU’s emissions reduction targets and tackling global warming.
Speaking at a conference in July, Per-Olof Granström, Secretary General of EDSO, said the development of smart grids would be: “critical if we are to reach the EU’s energy and climate objectives in a cost-efficient way.” In addition, grids will be made more reliable through the use of automatic grid reconfiguration, which is the smart way to prevent or restore outages.
Consumers of all sizes will be more empowered, with greater control over their electricity consumption, and much more scope to actively participate in the electricity market, both by selling power and deciding when to buy based on real-time price information. However, this is limited in several countries, where the type of smart meters being deployed will not provide consumers with the data needed for effective participation, according to EDSO. Once meters are installed for both electricity and gas, there is even potential for some customers to switch fuels as one becomes more expensive than the other.
In a study carried out by Accenture in the UK, utility executives said they believed smart grids would mean more competition for them in supply, and therefore a better deal for the customer. Eventually smart grids should tend to even out the daily swings in demand and price, smoothing demand more evenly across the day and reducing the country’s peak generating capacity needs.
Smart grids are also expected to deliver significant economic benefits. For example, recent UK analysis, commissioned by SmartGrid GB, suggested an estimated potential £13 billion boost to GDP, and £5 billion of potential exports by 2050, along with 9,000 jobs up to 2030.
By far the biggest obstacle to roll-out is not technical, but related to concerns over the use of data and consumer privacy, with a high degree of consumer resistance to participating in trials continuing to be recorded throughout the EU. The basis of concern over privacy is what could happen if data from individual smart meters gets into the wrong hands. For example, home owners who are on vacation may be concerned that an absence of consumption might indicate to potential burglars that their house is empty.
As a result of concerns of this sort, safeguards are being set up to reassure consumers that their data will not be available to third parties. At the same time, given the overwhelming case in favour on cost, energy saving and environmental grounds, the EU is recommending greater education as smart meters are installed, in order to make consumers aware of their positive impact.
EDSO has set up a website dedicated to raising awareness of the potential benefits among consumers, and major public funding is coming from organisations such as the UK’s Low Carbon Network Fund. For member states planning a full roll-out of smart metering, the involvement of all stakeholders – including consumers, governments, utilities, regulators and DSOs - is essential for success.
In the UK, Utility Networks (UN), a utility industry body that strongly supports the smart grid roll out, recently emphasised that “consumer buy-in was crucial”.The group hopes that with the help of supportive celebrities such as Bob Geldof, the message can be put across effectively. Gary Cottrell, Manager at UN said: “The availability of Smart Metering and billing information in the home will give the consumer knowledge and power; knowledge about their energy usage; and the power to save it. Evidence from the introduction of smart meters in the UK has shown changes in the way consumers use energy resulting in lower energy bills, a win- win situation.”
Regulation also presents some challenges across Europe. The range of legal and regulatory arrangements make it difficult to replicate projects with the same results in different locations, and also hinders the scalability of projects to larger regions. The various EU wholesale and retail market set-ups each have different influences on smart grid deployment opportunities, creating a variety of business opportunities and new business models.
The roll out of smart meters provides the basis for a continent-wide smart grid that will act as a kind of neural network for energy. As well as improving efficiency, reliability and cutting usage, it is changing the optimal generation model from a centralised system based around large power plants, to a distributed system based around renewable power provided by consumers, alongside more variable large scale renewables. This is an essential element in the evolution toward a sustainable low carbon future, and as such has to trump public opposition over privacy concerns. To avoid delays, privacy safeguards must be tight to ensure no scare stories arise, and the public needs to be educated about the benefits to society and the environment at large.