The role of Smart Grids in future power

systems- EURELECTRIC Views

Dr. Mihai PAUN

Power Networks and R&D
EURELECTRIC

EPSU Meeting on Supergrid – Smart Grids

EURELECTRIC
11 March 2010, Brussels
 Content
1. EURELECTRIC & Distribution Networks activities
- WG Smart Grid/Network of the Future
2. The EC Task Force Smart Grids
3. DSOs in the Internal Electricity Market
4. Generic Model for Smart Grids
5. Smart Grids – EURELECTRIC Views
6. Networks Investments
7. Future Challenges for Distribution Systems and
Business
EURELECTRIC
 The Union of the Electricity Industry -
EURELECTRIC
Professional association representing the common interests of the
Electricity Industry at pan-European level, plus its affiliates and
associates on several other continents
Represents:

33 members

3200 large customers

275 Mio. stomers

800 GW

Contribute to development & competitiveness

Representing common interests of the
electricity industry at pan-European level

Promote the role of electricity

Formulates opinions, policy positions and

Publish documents on high-quality input reports in Working Groups, composed
of experts from the electricity industry

www.eurelectric.org
EURELECTRIC
 BOARD
OF
DIRECTORS

COORDINATION BUDGET
COMMITTEE COMMITTEE

ENVIRONMENT
ENERGY POLICY
MARKETS NETWORKS & SUSTAINABLE MANAGEMENT
& GENERATION
COMMITTEE COMMITTEE DEVELOPMENT POLICY COMMITTEE
COMMITTEE
COMMITTEE

WG Energy Policy WG SYSTINT WG Env. Protection WG Legal Affairs

WG Wholesale Markets
WG Prospective WG Distribution/ WG Waste & Residues WG Social Aff & HR
& Trading
WG Renewables & DG Regulation & Policy WG Env. Management NE Fiscal
WG Retail Markets
WG Nuclear WG Distribution/ & Economics FG Finance &
WG Regional Implement.
WG Thermal Customers & Operation WG Climate Change Economics
WG Gas*
WG Hydro WG Smart Grid/ WG Energy Efficiency FG Enterprise Risk
WG External Trade
WG R&D Network of the Future WG Env. & Society Management
(incl. South East Europe,
TF CCS Mediterranean and NE Transmission
NE Statistics & Russia sub groups) NE Standardisation
Prospects
NE Small Islands

Group Managed by the Secretariat:

•NE Communication Managers

EURELECTRIC

* Joint WG with Energy Policy & Generation Committee WG: Working Group TF: Task Force NE: Network of Experts FG: Focus Group
 The new Networks Committee structure focus on
Distribution Issues

Before New
WG Distribution Regulation & Policy

WG Distribution Customers & Operation

WG Distribution extend
WG Smart Grid/ Network of the Future

WG SYSTINT
keep WG SYSTINT
WG Systmed merge

create NE Transmission

EURELECTRIC
transfer NE Standardisation
 Strategic Distribution Activities

WG Smart Grid/Network of the Future: New technologies have the
potential to change the face of the networks industry. Networks will be
able to play a bigger role in achieving environmental goals but new
technologies might also alter the business model of the industry,
changing sources of income and creating new markets.

Future Technology of the business

WG Distribution/Regulation & Policy: Regulated DSOs must be able to

create value when it comes to their ability to invest in the necessary
assets to address the rising challenges.

Function of the business

WG Distribution/Customers & Operation: DSOs are facilitators of a

European retail market.

Operation of the business

EURELECTRIC
 It is necessary to define a Business
Model and the future Role of the DSO
Active Filter Smart Home

Smart Meter

Inhouse
technology
Smart Grid
Data
(flexibility)
management

System
Electric
control
Vehicle ~
Dispersed Market
Generation Platform
EURELECTRIC
The European Commission - DG TREN
Task Force Smart Grids

EURELECTRIC
 CONTENT

Mission

Expected Outcome

Participants

Deliverables

Time Scale

EURELECTRIC
 Mission

Advise the Commission on policy and

regulatory directions at European level and

To coordinate the first steps towards the
implementation of Smart Grids under the
provision of the Third Energy Package.

EURELECTRIC
 Expected Outcome

Common Vision in conjunction with

institutional actors and key stakeholders
for the implementation of Smart Grids

Strategic decisions and regulatory
recommendations for the EU-wide
implementation of Smart Grids

Strategic roadmap for the implementation
of Smart Grids and Smart Meters into the
European internal market
EURELECTRIC
 Participants

Governments, regulators and other
competent authorities including national
data protection supervisory authorities,
consumers, suppliers, traders, power
exchanges, transmission companies,
distribution companies, power equipment
manufactures and ICT providers.

EURELECTRIC
 Deliverables 1

Define policy and produce recommendations for a
new regulatory scenario with almost real time
prices signals and incentives which allow
consumers to active participate in the retail market
(Dynamic pricing scenario)

Produce a set of minimum functionalities for Smart
Meters that enables and assists consumers in
managing their energy consumption/production
(Consumer participating in generation scenario) as
well as ensures consistency with the provisions of
the Third Energy Package.
EURELECTRIC
 Deliverables 2

Identify the appropriate regulatory scenario and
recommendations for data handling, safety and
consumer protection.

Recommend the roles and responsibilities of all
actors involved in the implementation of Smart
Grids, such as regulators, DSOs, distributed
generation suppliers, equipment suppliers,
household appliances suppliers, consumers etc.

Recommend criteria and recommendations for
funding Smart Grids deployment though grid
tariffs or other regulatory means.
EURELECTRIC
 Time Scale
No. TASK Timescale

TASK 1. Produce a common vision in conjunction by May 2010

with institutional actors and key
stakeholders for the implementation of
Smart Grids

TASK 2. Identify the strategic decisions and by January 2011

regulatory recommendations for the EU-
wide implementation of Smart Grids

TASK 3. Produce a strategic roadmap for the extension of

implementation of Smart Grids and Smart Task 2
Meters into the European internal market

EURELECTRIC
 EURELECTRIC Objectives on
Smart Grids

EURELECTRIC
 EURELECTRIC Objectives on
Smart Grids

Support/coordinate the Electricity Industry

towards the implementation of Smart Grids
under the provision of the Third Energy
Package and

Advice the Commission on policy and
regulatory directions at European level and

EURELECTRIC
 EURELECTRIC Objectives on
Smart Grids – How to achieve them?

R&D Distribution Platform to support

implementation/deployment of Smart Grids

Set appropriate R&D Priorities

Regulatory Framework/Directions

Introduction and rollout of Smart meters

Market Model – Smart Retail Market

EURELECTRIC
 Smart Grids – EURELECTRIC
Preliminary Views

Strategically Deploying Smart Grids

EURELECTRIC
 PRELIMINARY DEFINITION
A Smart Grid is an electricity network that
can intelligently integrate the behaviour and
actions of all users connected to it -
generators, consumers and those that do
both - in order to efficiently ensure
sustainable, economic and secure
electricity supply.

EURELECTRIC
 Key Messages

Smart Grids is the way to equip system operators with the
necessary tools to contribute to the 2020 objectives.

EURELECTRIC recognise the need for governments and
regulatory authorities to work together towards an optimised
business model for all parts in the value chain from
generators to consumers to minimise total costs.

Regulators need to take appropriate measures to support
the development of smart grids allowing a fair rate of return
when DSOs contribute to meet efficiency and Renewables
(RES) targets.

Need for a clear and predictable regulatory framework for
the European electricity market.
EURELECTRIC
 Purposes of the EURELECTRIC Survey

To improve understanding of the current operating
framework of electricity distribution networks

To describe the smart network characteristics in each
member country.

To provide information on the scope, characteristics
and present degree of innovation in the electricity
distribution networks and business.

To provide a high-level understanding of the outputs
which the implementation of the Smart Grids concept
and businesses are expected to deliver.

EURELECTRIC
 Type of responding DSOs
Type of DSO %
Large DSO (>100,000 customers) 90
Rural DSO 17
Urban DSO 30
Mixed urban-rural DSO 73
Voltage level: =<20 kV 80
Voltage level >20 kV 73

EURELECTRIC
 PARTICIPATION

Questionnaire with 46 statements
on key issues

Who are you?

Which are the Drivers for SG

New Services Expected from DSOs

Network Development

Active Grid management

Network investments

Smart metering

Regulation – key success factor

Answers from 30 DSOs

EURELECTRIC
in 16 countries
 Drivers for Smart Grids

Smart Grids improves customer service.

Smart Grids is a necessity for the integration of
RES and distributed generation.

Progress in technology - big driver

Increasing flexibility

Optimisation between economic and technical
aspects

DSM is a driver – active prosumers

Ageing assets is an opportunity for investments
EURELECTRIC
 Drivers for Smart Grids
16 Q2.5: Is the progress in technology a driver for Smart Grids?

14

12

10 5 - FULLY AGREE
Conclusion: PROGRES IN TECHNOLOGY 1 - FULLY
IS A BIG DRIVER/opportunity? DESAGREE
8
6 - BLANK
6

0
1 2 3 4 5 6

EURELECTRIC
 Network Development

Change in MV network architecture is not
expected by all DSOs, but...

Change in LV network architecture is more
prominent

Bidirectional flow at distribution level still an
exception

Future distribution network operation is still an
issue

EURELECTRIC
 Network Development
12

10

Q4.4: The expected installed capacity for DG will be a criterion in

8
network dimensioning?

4 Conclusion:
DG WILL INFLUENCE NETWORKS
2
INVESTMENTS

0
1 2 3 4 5 6

EURELECTRIC
 Active Management of the Grid

Active management of the grids is an alternative
to network reinforcement for most DSOs.

The actual degree of networks automation will
increase to ensure customers satisfaction.

The impact of Virtual Power Plants on the power
flow is not clear.

DSOs have a key role in system security and a
role in enabling DG to contribute to the system
security. How in practice?

EURELECTRIC
 Network Investment

The results of EURELECTRIC analysis show that
the present replacement rate of assets in DSOs is
maintained except smart metering.

There is no need for all DSOs to install higher
distribution capacity wires and cables for
renewables.

The main challenge remains to look into the future
of the electricity business.

Strategic R&D priorities for future networks.

Investments are needed.
EURELECTRIC
 Future Challenges for Distribution
Business

“SmartGrids” concept

What will the future Grids look like?

Regulatory challenges
for distribution
How to regulate distribution in the next 10 years?

EURELECTRIC
 Regulation – key success factor
12 Q9.2: The risk associated with new technology is covered by the
regulatory framework?
10

Conclusion:
6 WORK TO BE DONE TO COVER THE
TECHNOLOGICAL RISK - HOW?
4

0
1 2 3 4 5 6

Incentives given by Regulators to DSOs for their involvement in R&D

work and for the development and deployment of new technologies
EURELECTRIC supporting Smart Grids should be improved.
 EXPECTATIONS AND NEXT STEPS

Reference point in carrying out comparisons between
DSOs.

Beneficial in discussing with regulators

Aid the sharing of best practice and improving efficiency

Not a benchmarking study

It provide the context for understanding the similarities and
differences between companies and the level of
implementation of the Smart Grids concept in Europe.

Lead to further collaborative work to promote better
understanding.

EURELECTRIC

.
 Thank you for your
attention !
mpaun@eurelectric.org
http://www.eurelectric.org

EURELECTRIC