<BRIEF SUMMARY OF>Smart Grids Mini Hell’s Kitchen

Held at ETSI, 3rd March 2010

with Board #77

© ETSI 2010. All rights reserved

ETSI/B77(10)46

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Background Smart Grids flagged “strategic topic” at Board#75 (Nov 2009) The Board smart grids champions team

E. Darmois (lead), K. Dickerson , V. Dominguez, B. Dugerdil, S. Hicks, J. Koss, P. Lucas, J. Sundborg, D. Boswarthick (support)

Rationale New concept emerged in how electricity is managed. The power grid becomes

less of a one-way highway and more of an integrated, interactive network. This new grid gains “intelligence” and “two-way communications”.

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Issues for study include (strategic topic charter) What are the communication requirements for Smart grids entities? What are the communication requirements for entities in the Smart

Grid with devices in homes and businesses? What is the relationship with current proposals for Smart Metering? What can ETSI do to help with this?

Overall objective: Devise a strategy and a roadmap for Smart Grids standardization From a technology / architecture perspective – What? From an organizational perspective (ETSI works on some relevant

bricks, e.g. smart meters, M2M, PLC, etc) – How? From a partnership perspective - Who with?

Background

How does the Team work?

SG Champions Team works by conference calls and has a dedicated Smart Grid email list and shared FTP workspace

ETSI participates in the EU Smart Grids Task Force Task force and the three expert groups http://ec.europa.eu/energy/index_en.htm

Purpose of the mini Hell’s kitchen of 3rd March Get a bigger picture and feedback from the Board Gather elements to elaborate positioning/value proposition enable

the kick-off of standardization work Plan an open event in Q2 2010 (Smart Grid Workshop 14th June)

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Main issues for Hell’s kitchen 03/03/2010

What is a Smart Grid, how does it function? What are the principle drivers and challenges? Developments in the EU and beyond. Main blockers and barriers:

Costs Regulatory challenges Lack of Open Standards

”The Smart Grid needs consistent standards worldwide. Many of those standards are in development now in various places around the world. Completing them, stabilizing them and normalizing them planet-wide is a process that will take years of additional development, testing and negotiation".

Standardization landscape - where will ETSI add value?

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Agenda14:00 Introduction-objectives of the session Walter Weigel, Director General

14:10 Uncovering opportunities in the emerging smart grid

Chris Hartshorn, Research Director Lux Research Inc.

15:00 Smart Grids & Electricity Regulation  Roman Picard, Commission de Régulation de l'Energie (CRE, France)

15 :30 Policy perspectives towards the implementation of Smart Grids, the EU and US views

David Boswarthick, Secretariat support to Board team

16:00 ETSI assets to contribute to the smart grids standardization challenges

Emmanuel Darmois, ETSI Board

16:30 Discussion and conclusions/next steps All

17:00 Session closes

-- Lux and Client Confidential --

Uncovering opportunities in the emerging smart gridChris Hartshorn, Ph.D., Research Director Lux Research, Inc.

March 3, 2010

Doc: ETSI/B77(10)49Source: Chris Hartshorn, Lux ResearchAgenda item: 12.13Document for: DiscussionLate submission

8-- Lux and Client Confidential --

IT segment of the market will total ~$16 billion in 2015

Challenges in reliability, cost, energy efficiency, and environmentalism demand that intelligent communications systems augment the current grid

Global Smart-Grid Market, 2009 to 2015

9-- Lux and Client Confidential --

Companies must position to capitalize on three stages of smart grid

Near-term(1-3 years)

Mid-term(4-7 years)

Long-term(8-10+ years)

What is our vision?Grid stability and

operational efficiency

Renewables integration

Full SG system (including end

users)

What products will be critical?

• AMI/legacy integration

• Generation optimization and prediction

• T&D automation

• Distributed generation siting, modeling, integration, and optimization

• Emerging energy services

• Holistic E&E management solutions

• Residential demand response, TOU, HAN

Who are the key players?

Customers: • Vertically integrated utilities, RTO/ISOs

Partners:• Utility provider incumbents, RTO/ISOs

Customers: • Disaggregated utilities, renewables developers, trading markets

Partners:• Renewables/energy storage developers

Customers: • Buildings, enterprises, consumers

Partners:• EPCs, consumer equipment suppliers, automotive partners

Smart Grids & Electricity Regulation Smart Grids & Electricity Regulation

ETSI BoardETSI Board

Sophia Antipolis, March 2010

Doc: ETSI/B77(10)41Source: Roman Picard, CREAgenda item: 12.13Document for: Discussion

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Summary

Electricity market and market players

Electricity regulation

Regulation impact on smart grids Example of smart metering systems

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Smart Grids & Electricity Regulation

I. – I. – Electricity market and market playersElectricity market and market players

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Electricity market players

Regulator(CRE)

EuropeanUnion

State

SystemOperators

Producers

ElectricitySuppliers

Industrials

LocalAuthorities

ElectricityStock exchange

Consumers

ServicesProviders

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Smart Grids & Electricity Regulation

II. – II. – Electricity regulationElectricity regulation

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Historic evolution of regulationHistoric evolution of regulation

Directive#96/92/EC

Directive#2003/54/EC

Directive#2009/72/EC

Law#2000-108

Law#2003-8

Law#2004-803

Law#2005-781

Law#2006-1537

1999

2000

2003

2004

2007

20 %

30 %

37 %

68 %

100 %

> 100GWh/y

> 16 GWh/y

> 7 GWh/y

Pro

Private

200 sites

1,400 sites

3,200 sites

4 M sites

35 M sites

Policy perspectives towards the implementation of Smart Grids,

EU and US views

Hell’s kitchen at ETSI, 3 March 2010

© ETSI 2010. All rights reserved

Doc: ETSI/B77(10)46Source: ETSI Director-GeneralAgenda item: 12.13Document for: DiscussionLate submission

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The American View

“The smart grid plan offers the hope that it “will save us money, protect our power sources from blackout or attack, and deliver clean, alternative forms of energy to every corner of our nation.”

“The growth of clean energy can lead to the growth of our economy”

- President Barack Obama

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US – Economic StimulusAmerican Recovery and Reinvestment Plan – 2009 $787 Billion stimulus

The bill provides $4.5 billion to modernize the nation's electricity grid with smart grid technology. The bill increases federal matching grants for the “Smart Grid” Investment Program from 20% to 50%. $10M for NIST to coordinate smart grid standards

Department of Energy (DOE) lead agency for U.S. Government - $3.4 billion of Stimulus-funded Smart Grid Investment Grants

The bill provides $2.5 billion for renewable energy and energy efficiency R&D, demonstration and deployment activities.

The bill provides a three-year extension of the Production Tax Credit (PTC) for electricity derived from wind facilities through December 31, 2012, as well as or geothermal, biomass, hydropower, landfill gas, waste-to-energy and marine facilities through December 31 2013.

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The European View

Recital 27Member States should encourage the modernisation of distribution networks, such as through the introduction of smart grids, which should be built in a way that encourages decentralised generation and energy efficiency.

Article 3, 11In order to promote energy efficiency, Member States, or where a Member State has so provided, the regulatory authority shall strongly recommend that electricity undertakings optimise the use of electricity, for example by providing energy management services, developing innovative pricing formulas or introducing intelligent metering systems or smart grids, where appropriate.

- Statements on Smart Grids Directive 2009/72/EC of 13 July 2009

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EU - Drivers and actions towards Smart Grids Present EU targets require changes to the grids. Smart Grids solutions embrace the

changing structure of generation, market and use of electricity.

This evolution is a complex subject and a true industrial take-up has not been happening to date. It requires a coordinated approach addressing various issues and all the actors.

Key challenges are of regulatory nature.

The Third Energy Package provides the appropriate environment for the implementation of Smart Grids across Europe and its obligations support it to a large extent by 2020.

A Task Force has been launched to set up the policy, further regulation recommendations and coordinate the first steps towards the implementation of Smart Grids.

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Conclusions and Recommendations US clearly lead EU on the issue of Smart Grids

Started earlier Inject more money Heavy push from Government

EU is clearly committed to Smart Grids Started slightly later Less money injected Less political push on the issue Can use lessons learned in US, and in EU on Smart Metering

Recommendations Rec01: ETSI participates pro-actively in the EC Smart Grid Steering Committee meetings Rec02: ETSI nominates participants for the three EC Task Force Expert Groups Rec03: ETSI cooperates with Cenelec on Standards roles and Strategy being developed Rec04: ETSI monitors to the technical work done in US (and other regions) on Smart Grids

(China, Japan, others…) Rec05: ETSI participates in the NIST SGIP meeting (open invite obtained)

World Class Standards

Smart GridsAn opportunity for ICT and ETSI

Champions Team© ETSI 2010. All rights reserved