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Smart Grid Deployment Framework in the EU Smart Grid Deployment Framework in the EU ––
How ICT Vendors Can Benefit from Regulatory ChangesHow ICT Vendors Can Benefit from Regulatory Changes
Ewa Tajer, Research Analyst
ICT
27th November 201227th November 2012
© 2012 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of
Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
Today’s Presenter
Ewa Tajer, Research Analyst
Frost & Sullivan
2
• 5 years experience in Energy and Environment with special focus on
• Smart grid and smart metering
• Renewable energy
• Energy efficiency
• 4 years primary and secondary research expertise gained in both public
and private sector, particularly in:
• Existing policy and legal framework analyses
• Competitive environment monitoring and analyses
Focus Points
1. EU Energy Policy:
• Authorities’ Perspective
• Regulatory Framework for Smart Grid
• Energy Companies’ Perspectives
• Energy Companies’ Investment Needs
2. Main Regulatory Challenges
3
2. Main Regulatory Challenges
3. Country Overview
4. Conclusions
• Summary of Regulatory Challenges
• Energy System Transformation: Key Take-Aways
EU Energy Policy: Authorities’ Perspective
Renewable Energy Sources (RES)
Development
Energy Efficiency Improvement
Addressing the Growing Energy DemandReduction of Greenhouse Gas (GHG)
Emissions
Reduction Of Dependency On Imports
Security Of Supply Increase
The Current Energy Policy
of the EU(2020 targets)
49845-63
Source: European Commission ,Frost & Sullivan analysis.
Smart grid implementation will
result in global emissions
decreases of 15%
Smart grid implementation will be
followed by primary energy
consumption reduction in the EU
by 9%.
Possible output fluctuations have
to be balanced through advanced
low-voltage automatic.
* Compared to 1990 levels
20% Reduction in GHG
Emissions*
20% Reduction in Primary Energy
Use20%Share of RES
Smart grids have been recognised as a solution facilitating 20-20-20 goal achievement.
(Smart Grid—An upgraded energy network to which two-way digital communication between the supplier andconsumer, smart metering and monitoring, and control systems have been added.)
Poll Question
Which smart grid technology has enjoyed so far the greatest interest of EU regulators?
1. E-vehicles
2. Smart metering
3. Customer billing
5
4. Load fluctuation balancing
5. Smart homes
Regulatory Framework for Smart Grid
Directive 2006/32/EC
• Metering reflecting actual energy consumption and time of use (if it is technically
possible and economically justified)
• Energy bills based on actual energy consumption
• Electricity smart meter rollout cost and benefits analysis by 3 September 2012
• Timetable for smart meter implementation
• Obligatory rollout of electricity smart meters by 2020
Directive 2009/73/EC
• Obligatory assessment of gas smart meter rollout cost and benefits by 3
September 2012
Directive 2009/72/EC
Smart metering
69845-63
Explicit obligation – Obligatory rollout of electricity smart meters
Source: Directive 2006/32/EC; Frost & Sullivan analysis.
Directive 2009/73/EC September 2012
• Timetable for implementation (no obligatory timeframe given)
Grid automation/ E-vehicles
No explicit obligationGrid automation development driven by the changing energy landscape
(implicit obligation resulting from the directives 2009/28/WE and the Energy Efficiency Directive)
EU Energy Policy: Energy Companies’ Perspectives
Problems To Be Addressed Possible Solutions
Geographic expansion of the grid
Grid optimisation
More controlMore
visibility
More
accurate
metering
Integration of new energy sources and distributed
generation
Obsolete infrastructure and management systems
Trade and energy losses
79845-63
Qualitative Energy System Transformation
Two-way communication
Two-way energy flow
Source: Frost & Sullivan analysis.
Distributed generation
Rising energy demand
Changing customer needs
Losses reduction
EU Energy Policy: Energy Companies’ Investment Needs
Integration of renewable and decentralized
generation
More reliable energy
supplies
More operational efficiency
• Grid monitoring and control systems
(especially in the distribution layer)
• Automatic grid management (Self-
adapting grid)
• Virtual Power Plants
• Outage management
• Work force management
• Fault prevention and Predictive grid
maintenance
• Fault location and automatic feeder
switching
• Power quality monitoring
89845-63
generation
Demand management• Asset management for grid
components
• Data analytics for more efficient
asset maintenance and investment
planning
• Smart grid cyber security
• Energy theft prevention
• In-home smart metering systems
• Billing systems for dynamic tariffs
• Metering data management
• Big data transmission and storage
• Proactive load forecasting
• E-vehicle communication system
• In-home power consumption
management systems
Interconnection and communication between grid elements as basic precondition for grid transformation
Operation technologies and ICT synergy as the base of the future business model
Poll Question
What is the main regulatory obstacle to developing smart grid?
1. Lack of minimum functional standards
2. Technological risk
3. Utilities’ business model
4. Lack of governmental smart grid strategies
9
Main regulatory challenges
• No binding standards
published yet
• M/490, M/441, M/468
mandates
• Smart meters:
Standards developed at
national level
• Grid automation
Technology Customer acceptance
• Lack of knowledge about smart metering benefits
• Financial Cost Of the Deployment
• Privacy concerns (behavior patterns)
• No separate legally binding document on metering data
Business model
• Income derived from
regulated tariffs
• Cost-benefit balance
• Poor state support
• No incentives for innovative
energy technologies
development
• Narrow view of cost-efficiency
109845-63
• Grid automation
Predominant standard for grid
automation used by energy
utilities (IEC 61850)
document on metering data protection issued thus far
• Poor knowledge about the composition of energy prices and tariffs
• Narrow view of cost-efficiency
(smart grid added value not
included)
• Tariff construction
Source: Frost & Sullivan analysis.
Important especially for smart metering and demand management• Switching from one energy provider to another• Answering to price signals
Crucial for all smart energy investment
Utilities’ Investment Scope: Country Overview
• Renewable goal (2020): 49%
• Energy demand increase: 14%
Smart grid focus
Smart metering
DSO grid automation
E-vehicles
Smart homes
Sweden
• Renewable goal (2020): 15%
• Energy demand increase: 7%
Smart grid focus
Smart metering*
DSO grid automation
E-vehicles
Smart homes
United Kingdom
119845-63
Smart homes
• Renewable goal (2020): 15%
• Energy demand increase: 12%
Smart grid focus
Smart metering
DSO grid automation
E-vehicles
Smart homes
Poland
Smart homes
• Renewable goal (2020): 18%
• Energy demand increase: (-10%)
Smart grid focus
Smart metering
DSO grid automation
E-vehicles
Smart homes
Germany
*Electricity and gas smart meters
Summary of Regulatory Challenges
The legal framework for smart grid and smart metering remains incomplete and does not ensure asmooth transition towards a smart energy infrastructure. The most important regulatory challenges areshown below.
Standards for smart
equipment (including
communication
protocol)
Dedicated data
privacy and data
protection
Cyber-security
Minimum
functionalities
for smart
equipment
Regulatory Changes Required for Smart Grid Deployment
129845-63
protocol)framework
Definition of
market
participants’
roles and
responsibilities
Fair cost-sharing
model and tariff
regulation
Inclusion of
energy
efficiency in
energy tariffs
Additional
incentives for
investors
Source: Frost & Sullivan analysis.
Energy system transformation: Key Take-Aways
3
4
Smart grid usually deployed according to either national (smart meters) or international standards (grid
automation)
Business model and uneven distribution of costs and benefits as the main restraint
2
1
Regulatory framework for smart grid deployment undefined
EU regulations as an important driver for smart grid, especially grid balancing and smart metering.
5 Governments do not provide strong support for innovative energy projects
13
Energy utilities need to closely collaborate with ICT suppliers
Energy System Operators ICT Companies
WHAT ARE THE GOALS? HOW CAN THE GOALS BE ACHIEVED?
Energy System Operators to define starting
point for the smart grid development process
ICT suppliers to provide dedicated solutions and
offer constant support
5 Governments do not provide strong support for innovative energy projects
4
Next Steps
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join our GIL Global Community
14
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For Additional Information
Joanna Lewandowska
Corporate Communications
ICT
+48 22 390 41 46
Ewa Tajer
Research Analyst
ICT
+48 22 481 62 72
17
Adrian Drozd
Research Director
ICT
+44 1865 398 699
Cyril Cromier
Vice President, Sales
ICT
+33 1 4281 2244
