The Case for Innovative Change

During the first International Conference on the Integration of Renewable Energy Sources and Distributed Energy Resources held in December 2004, stakeholders and the research community suggested the creation of a Technology Platform for the Electricity Networks of the Future. The SmartGrids European Technology Platform for Electricity Networks of the Future 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. More importantly however, it is aimed at increasing the efficiency and security of the European electricity transmission and distribution system while removing obstacles to the large-scale deployment and effective integration of distributed and renewable energy sources. In April 2006 the Advisory Council of the Technology Platform of Future Electricity Networks presented their vision for SmartGrids. Following that publication the council published its Strategic Research Agenda (SRA) to be a resource for European and National programmes.

During 2005 and 2006, the EU funded the European Intelligent Metering project. The official title for the project was "Energy Savings from Intelligent Metering and Behavioural Change" and it involved partners from Austria, Denmark, Germany and the United Kingdom. The project was run from January 2005 to December 2006. The overall objective of the project was to maximize the energy savings available across Europe through the use of intelligent metering and behavioural changes of building occupants.

The European Smart Metering Alliance (ESMA) was established in 2007 and now has over 60 members from across all of Europe. The objective of ESMA is to maximise the energy efficiency benefits arising from the implementation of smart metering across Europe and to support the aims of Article 13 of the Energy Services Directive. Article 13 requires Governments to ensure that customers have meters that provide actual overall and time-of-use consumption levels. In November 2007, the Irish energy regulatory authority, the Commission for Energy Regulation (CER), published an "information paper" outlining the Irish government's plans for smart metering deployment. The paper specifically cites Article 13 of the Energy Services Directive as a factor leading the CER to plan for AMI technology deployment.

A 20th Century Grid
In spite of the innovative lead and the many initiatives been adopted by the European Commission one of the principal challenges facing energy companies across Europe is the age of the existing network. Most of the European grid was installed in the late 1950s of the last century. It was designed neither for trading purposes, for two-way traffic or for intense cross-border transports. It is well suited to manage Europe's electricity networks today, but the future will involve the connection of large and small centralised and dispersed power sources. As Europe struggles with a change that energy supply is no longer managed exclusively in a central way the aging grid is threatening to interfere with the transition to a sustainable solution. To succeed the smart grid platform will require supporting technologies and innovative solutions with smart meters and the ability to generate and export power locally an integral part of the efficiency and carbon footprint reduction vision.

The situation on the ground is somewhat different. While many European electricity companies debate the merits of smart metering and smart-grids, the reality is that Europe is still using an outdated electricity grid. Some commentators are of the opinion that Europe may already be behind on the technical innovations required and without the smart grids a transition from a centrally controlled energy supply to one that is more decentralised will not be possible. So while nearly every country in Europe is faced with a significant grid and smart meter renewable programme, there are some examples of companies implementing technology locally, but it is not happening on a large scale
The European smart meter market has developed relatively recently. It started in large part during 2001, when Italian utility ENEL announced the start of a large scale smart meter implementation. The Italian initiative has not been repeated to any great extent across Europe and it could well be argued that slower penetration in Europe is the result of concerns over the more competitive market effectively 'stranding' assets when customers want to switch provider—in turn making utilities less inclined to install them in the first place.

Italy and Sweden are leading the adoption of smart meters in Europe with full installation expected by 2009. The technology is also being introduced on a large scale in Denmark, Finland and Austria. New legislation is also expected to mandate smart metering in Ireland, the Netherlands and Norway by the next decade. The UK government is considering whether to introduce similar requirements, but is presently leaning towards a less sophisticated solution where consumers will only receive more information about their power consumption. In July 2007 a project to trial electronic smart meters in 15,000 homes across the UK was begun. Industry regulator Ofgem and four co-operating energy suppliers, EDF , E.ON UK , Scottish & Southern Energy and Scottish Power have invested in the initiative.

Developments in Denmark took off in 2004 with several ambitious projects being announced by the country's largest utilities. In July of this year the Danish utility SEAS-NVE awarded an advanced metering infrastructure project. Under the project, which is targeted to begin in the fourth quarter of this year and be complete by the end of 2011, SEAS-NVE will deploy advanced metering infrastructure to approximately 390,000 SEAS-NVE customers.

In July of this year a consortium that includes ERDF commenced one of the largest smart metering pilot installations in Europe. ERDF is a subsidiary of French utility EDF. The consortium, led by Atos Origin, the international information technology company, will conduct a pilot project encompassing 300,000 Power Line Communication (PLC) meters and 7,000 concentrators in France. The project roll-out is expected to start early in 2010.

Early in 2008 Stadtwerke Dusseldorf announced its intention to be the first utility in Germany to implement an Advanced Metering Management (AMM) system. It will do this in order to test the viability of enhanced smart metering systems among its 520,000 electricity customers in the Dusseldorf region. Other developments include the connection of the meter to other, multi-energy media such as gas and water, giving customers a further insight into their individual consumption patterns. Also in the first quarter of 2008 RWE launched first area-wide usage of smart meters in Germany. From the middle of this year, RWE will be equipping 100,000 households in Mülheim a.d. Ruhr with smart electricity meters.

Summary
The impact of a reduced smart grid and the slow adoption of technological and innovative advances can be clearly understood when one examines the core objectives set out in the Energy End-Use Efficiency and Energy Services directive (COM2006/32 EC) and the European members' ability to meet the targets. The directive contributes to security of energy supply, by managing overall demand. It encourages a move towards more energy efficient technologies and techniques by encouraging innovation and competitiveness, as underlined in the Lisbon strategy. By reducing greenhouse gases, the directive helps achieve the objective in the UN Framework Convention on Climate Change. Of particular interest are the national indicative energy savings targets of nine percent in nine years and the requirements on metering and billing.

It would appear that one of the principal reasons why the Network companies are showing so much lack of initiative is because of lack of competition. Without competition the impetus for innovation is missing. In fact market liberalisation provides some of the initiatives to ensure that changes and technological benefits for customers are implemented. But an impetus and a need to overcome the innovative inertia are necessary if Europe is to achieve its vision for the next generation smart grid. Without a smart grid, security of supply, reduced energy demands, reduced carbon footprints and an innovative collaboration of power sources will not be achieved. Energy reduction and innovative technology advances will only be possible when part of a major rethink on the architecture and operation of the European grid system.

While initiatives like the SmartGrids European Technology Platform, the European Smart Metering Alliance and the Energy End-Use Efficiency and Energy Services directive ought to be applauded, such initiatives in isolation may not be enough to ensure the stated objectives and outcomes are achieved. The smart ecosystem of the future will need to address issues of security, data management, customer demands and a policy strategy that somehow combines the benefits of market liberalisation and a focus on carbon reduction. It may be necessary for the political establishment to become involved and perhaps for the commission to consider establishing European regulations and a Europe wide transmission network. The vision for the SmartGrids of the future to connect large and small power sources and to coordinate generation options will only be possible when Europe overcomes the current dispersed innovative inertia.

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