A recent report showed that global emissions reductions of 15% and EU annual primary energy consumption reductions of 9% could be achieved by Smart Grid technologies by 2020. With other studies also reflecting the potential benefit of these solutions, it’s no surprise that the EU have been advancing the Smart Grid agenda.
Understanding what Smart Grids are, and what benefits they can bring, is crucial, because beyond the EU vision of a revolution in electricity networks and their markets, Smart Grids has become a catch-all term for product or network development of any kind To ensure EU and Member State mechanisms supporting their Smart Grid vision deliver maximum value, they must incentivise the development of scalable and replicable solutions which deliver market and sector-wide change, not simply bolster one-off developments which would dilute available funding. There are positive signs, as vertically-integrated utilities, regulated monopolies, global manufacturers, and SMEs are already engaged in this challenge. Bringing together public sector support and private sector investments will help strike the balance between big ideas and big business.
The environment in which big ideas and big business come together already has a framework for evolution. The European Parliament have approved a third package of legislative proposals (Third Energy Package) for Europe’s electricity and gas markets, which include mechanisms to further align network regulation, development, and standardisation between Member States – key issues for Smart Grid development. Additionally, the Smart Grids Task Force advises the European Commission (EC) on related policy and regulation, and coordinates the first steps towards Smart Grid implementation.
Also key to this evolution is standardisation. The Smart Grid Standardization Mandate brings together support from the European Standardisation Organisations (ESOs) in developing standards for EU Member States. These standards make compatible a variety of digital and communication technologies, electrical architectures, and associated processes with the objective of achieving the interoperability and implementation of the different high level services and functionalities of a Smart Grid. They also fulfil the technical and organisational needs for sustainable Smart Grid Information Security (SGIS) and Data Protection & Privacy (DPP), as defined by the Smart Grids Task Force. These define the collection, utilisation, processing, storage, transmission, and erasure of all relevant data.
Central to the development of Europe’s agenda for Smart Grids are the European Technology Platform (ETP) for the Electricity Networks of the Future. The ETP was developed by the EC through Framework Programme research clusters and began its work in 2005. Its aim was to formulate and promote a vision for the development of European electricity networks looking towards 2020 and beyond. In April 2006, it presented a Vision document, which was driven by the combined effects of market liberalisation, the change in generation technologies to meet environmental targets, and the future uses of electricity. In 2007, it published its Strategic Research Agenda (SRA) describing the main technical and non-technical areas to be investigated in the short-medium term. These documents have since inspired several Research and Development programs within the EU and National institutions. In 2010, based on additional stakeholder contribution, the ETP’s Strategic Deployment Document was finalised. This described and gave timelines for the relevant deployment priorities and the benefits that would consequently be delivered. The Advisory Council, which oversaw this activity, has now been formally dismissed, and a new SmartGrids ETP Forum established to accompany the deployment stage. A Mirror Group represents the interests of a range of Member States, and Working Groups provide the necessary technical input. The ETP are currently redrafting the SRA, looking additionally at the period beyond 2020.
In the UK it is recognised that the benefit of a Smart Grid deployment does not necessarily flow to the investor (the distribution network operator, or DNO), but potentially instead to other sector stakeholders (such as the customer or generator). This has given rise to an evolution of regulatory schemes to incentivise the required investment. Under the latest scheme, UK DNOs contribute a share of net revenue to a central fund of £500M. They must then participate in a competition if they want to win back a portion of the fund for spend on innovative network development projects.
Preferred projects generate useful learning for all UK networks and involve a wide-range of other large organisations and, notably, SMEs. EU funding schemes also encourage SME participation. The seventh framework programme (FP7) for research, development, and demonstration projects encourages the participation of SMEs in the required collaboration. Other EU schemes are geared specifically and exclusively towards SMEs; in the case of UK arm of the EUROSTARS program, towards those with a research focus.
The tremendous benefit of Smart Grid technologies is encouraging action at EU and Member State level, such as with standardisation and implementation of funding schemes and other regulatory incentives for development projects. Key to maximising the benefit of such effort is in supporting projects that deliver scalable and replicable solutions reflecting the required paradigm shift in networks and markets. Achieving this requires a balance, between the momentum of sector giants, and the cutting-edge innovation of SMEs.
SEGEC is a public/private and ERDF funded organisation working with Scottish organisations to specifically overcome the various commercial, technological, and regulatory barriers to major infrastructure projects and promote this standardisation.
 GeSI Climate Group Smart 2020 http://www.gesi.org/LinkClick.aspx?fileticket=tbp5WRTHUoY%3D&tabid
 Third Energy Package http://ec.europa.eu/energy/strategies/2007/2007_09_package_electricity_gas_en.htm
 Smart Grid Standardisation Mandate http://ec.europa.eu/energy/gas_electricity/smartgrids/doc/2011_03_01_mandate_m490_en.pdf
 the European Committee for Standardisation (CEN), the European Committee for Electrotechnical Standardisation (CENELEC), and the European Telecommunications Standards Institute (ETSI)
 Smart Grid Vision http://ec.europa.eu/research/energy/pdf/smartgrids_en.pdf