Nacho Arronte Arroyuelos EL DIRECTOR Pablo Simón / Endesa ...

Autorizada la entrega de la tesis de máster del alumno/a:

Nacho Arronte Arroyuelos

EL DIRECTOR

Pablo Simón / Endesa / [email protected]

Fdo.: Fecha:………/Julio/2010

EL TUTOR

Javier Reneses/ IIT / [email protected]

Rafael Cossent / IIT / [email protected]


Vº Bº del Coordinador de Tesis

Michel Rivier


mailto:[email protected]



UNIVERSIDAD PONTIFICIA COMILLAS

ESCUELA TÉCNICA SUPERIOR DE INGENIERÍA (ICAI)

MÁSTER OFICIAL EN EL SECTOR ELÉCTRICO

TESIS DE MÁSTER

SMART GRIDS BENCHMARKING

AUTOR: Nacho Arronte Arroyuelos

MADRID, Julio de 2010

Summary Smart Grids Benchmarking

July, 2010 i

SUMMARY

The massive electricity grid that utilities have developed to deliver power to

consumers during the past has been with us for over 100 years and during this period

has barely changed. The physical network has been deployed along all these years

with very few changes. The advances came basically through the transmission

network automation, where a relative small numbers of elements are monitored and

controlled, incorporating an important increase in reliability and providing the

security and quality of service of today‟s transmission networks. Additionally,

almost all generators where supervised and controlled through the companies control

centres. All this was possible thanks to a basic, but robust communication network.

These transmission advances came in the 70´s and 80´s, utilities expected a parallel

development for the distribution network in the following years, but unfortunately,

the difficulties associated to the huge number of elements, compared with the

transmission network, and the reduced return for the investment, resulted in a

reduced increase of distribution automation.

On the other hand, in the last years the suspicion of climate change being caused by

human effects, has not only been confirmed, but what is more the majority of the

worlds scientist are keen on acting immediately to change human behaviour radically

in order to reduce our impact on what would lead to the greatest changes in the

history of mankind on the Earth‟s biosphere during the next few centuries. To do so,

it is necessary to reduce carbon dioxide (CO2) emissions drastically. This implies

amongst other aspects the decrease of the use of hydrocarbon based fuels. Truly

committed, the European Union (EU) member states have compromised to the triple

20/20/20 objectives for the year 2020 which are a key issue in relation to electricity

generation, transport, distribution and use. The three objectives are to increase

renewable energy supply to 20% of total demand, reduce energy consumption by

20% with respect to 2020 forecasts and reduce Green House Gas (GHG) emissions

by 20% with respect to 1990 levels.


July, 2010 ii

In order to achieve these goals major changes must be made by all stakeholders. One

of the fundamental aspects that must change is the implementation of a new

electricity grid different from the one we have today, that has a number of constraints

that make it incompatible with the future needs.

The coming series of events countries will face regarding the energy sector in the

very near future demands the need to introduce new technologies in the grid. The

most used words throughout the sector are Smart Grid.

Taking into consideration the hypothesis that smart grids will be the future of the

electricity network in order to comply with the 20/20/20 requirements, this thesis

reviews these necessities, considering:

The opportunities and challenges faced by all stakeholders; taking into

account traditional generators, Transmission System Operators (TSO),

Distribution System Operators (DSO), retailers, consumers and authorities.

Also new stakeholders are considered: Research and Development (R&D)

institutions, Energy Service Companies (ESCo), equipment vendors,

prosumers (consumers that also produce), etc.

The Network Services expected to achieve the goals. And for these services,

the technological implementations and structural deployment associated.

Concepts and technologies like home automation, smart meters, distributed

and home generation, electric transportation and energy quality are explored.

The current state of the art has been analyzed by conducting a survey directed

to primary stakeholders throughout the world.

The key finding of this master thesis, are:

Histogram analysis reflects the survey has accomplished enough answers,

also obtaining answers from all key roles. Proving the versatility and

uncomplicated advantage of using survey analysis as a tool to gather

information.


July, 2010 iii

There is a general consent that smart metering devices will see deployment

within the next decade, as a first step towards a smart grid. This view is

shared by both direct survey responses as well as by European regulatory

bodies, such as Eurelectric, giving higher validity to our results.

Future benefits from the implementation of smarter networks are identified.

Demand side management ranks as being a very important benefit, ensuring

customers will play a vital role in the future energy model. Other benefits

such as the penetration of renewable sources of energy, higher efficiency,

integration of electric vehicles, advanced energy storage systems and the

issue of substitution of aging infrastructures, are all considered to be

important drivers towards automated networks, but not as much as DSM. On

the other hand, the least important driver identified is higher energy quality,

probably due to the already satisfactory levels achieved in most countries

participating in the survey.

In the same manner barriers to deployment have been found. The clearest one

for which a general agreement exists is the lack of standards, there is a too

high risk in deploying an investment of this character with no guarantee of

legitimacy. The problems concerning high investment decisions within a

context of uncertainty of future benefits are also important. Stakeholders also

consider as an important barrier the lack pilot projects being conducted,

necessary to perform detailed cost benefit analyses. The least relevant barrier

ranked in the survey is data confidentiality. However as already reflected

earlier, the lack of a clear regulation, understood and shared by all, is a

controversial issue. Not sharing a common view is a tremendous barrier.

The majority of volunteer agents surveyed the implementation of a smarter

grid is considered to be necessary to cope with global warming effects. Many

considering deployment more as a necessity than as an option.

Finally smart grids and metering may be a part of the solution to a sustainable energy

model, but looking into the future we must consider them as the corner stone for the

upcoming power system management, bringing new services that today we cannot

even imagine.

Resumen Smart Grids Benchmarking

July, 2010 iv

RESUMEN

Las redes eléctricas se han desarrollado en los últimos 100 años con el fin de

suministrar energía eléctrica a los consumidores, y en todo este tiempo la filosofía de

construcción no ha variado de forma sustancial. Los avances han venido

fundamentalmente por la automatización de la red de transporte, donde un número

relativamente pequeño de elementos se ha monitorizado y controlado, permitiendo

una importante mejora en la fiabilidad, al tiempo de suministrar la seguridad y

calidad de servicio con la que contamos hoy en día en las redes de transporte.

Adicionalmente, casi todos los generadores están supervisados y controlados desde

los centros de control de las compañías. Todo esto fue posible gracias a la ayuda de

una simple, pero robusta red de comunicaciones. Los avances en la red de transporte

vinieron en los años 70 y 80, y las compañías energéticas esperaban un desarrollo

paralelo de las redes de distribución en los años siguientes, pero desgraciadamente,

las dificultades asociadas al gran número de elementos, comparados con la red de

transporte, y el escaso retorno de las inversiones, resultó en un tímido incremento de

la automatización.

Por otro lado, la sospecha en los últimos años de que el cambio climático ha sido

causado por la acción del hombre, no sólo se ha confirmado, sino que la mayor parte

de los científicos a nivel mundial creen que es imprescindible cambiar de forma

inmediata y radical el comportamiento humano para reducir el impacto de nuestras

acciones sobre la tierra y evitar el mayor cambio de la biosfera que se puede producir

en los próximos siglos. Para ellos es necesario reducir las emisiones de dióxido de

carbono (CO2) de forma radical. Esto implica, entre otros aspectos, la disminución

del uso de combustibles fósiles. En ello se han comprometido los estados miembros

de la Unión Europea (EU) con un triple objetivo denominado 20/20/20 para el

próximo año 2020, donde la generación, transporte, distribución y uso de la energía

es un factor fundamental. Los tres objetivos son: Aumentar el suministro de energías

renovables hasta el 20% de la demanda total; reducir el consumo de energía en un


July, 2010 v

20% con respecto a las previsiones de 2020; y reducir las emisiones de gases con

efecto invernadero en un 20% en relación con los niveles de 1990.

Para alcanzar estas metas, deben contribuir de forma decidida todos los stakeholders.

Uno de los aspectos fundamentales que debe ser implantado es una nueva red

eléctrica, diferente a la actual, que tiene una serie de restricciones que la hacen

incompatible con las necesidades del futuro.

Con todo, cualquier previsión de desarrollo para el futuro del sector eléctrico, exige

introducir nuevas tecnologías en las redes eléctricas, con nuevos servicios no

requeridos hasta el momento. Para definir esta red del futuro, el término más

utilizado en el sector es el de Redes Inteligentes.

Teniendo en cuenta que las redes inteligentes serán imprescindibles para cumplir con

las exigencias asumidas en las metas 20/20/20, esta tesis revisa las nuevas

necesidades, considerando:

Las oportunidades y desafíos que tienen que ser afrontados por todos los

stakeholders; considerando las plantas generadoras tradicionales, el operador

de la red de transporte (TSO), los operadores de las redes de distribución

(DSO), comercializadores, consumidores y organismos regulatorios, así como

otros nuevos stakeholders en el sector, tales como organismos de I+D+i,

compañías de servicios energéticos, suministradores de equipos, prosumers

(consumidores que son también productores), etc.

Los nuevos Servicios de red esperados para conseguir los objetivos, así como

la implantación de nueva tecnología asociada a dichos servicios. Son

analizados conceptos y tecnologías como domótica, contadores inteligentes,

generación distribuida y calidad de servicio.

El estado del arte actual se ha analizado mediante una encuesta dirigida a los

principales stakeholders a nivel mundial.

Las principales conclusiones de esta tesis, son las siguientes:


July, 2010 vi

El análisis de histograma refleja que la encuesta ha logrado suficientes

contribuciones, así como la obtención de respuestas de todos los involucrados

en tareas clave. Demostrando la versatilidad y la ventaja de utilizar el análisis

de encuesta como una herramienta para recopilar información.

Existe un consenso general de que los contadores inteligentes se implantarán

en la próxima década, como un primer paso hacia una red inteligente. Esta

opinión es compartida por las respuestas directas a nuestra encuesta, así como

por los organismos reguladores europeos, como Eurelectric, dando una mayor

validez a nuestros resultados.

Se identifican los beneficios futuros de la aplicación de las redes inteligentes.

La gestión de la demanda se considera un beneficio muy importante,

garantizando que los usuarios jugarán un papel fundamental en el modelo

energético futuro. Otros beneficios, tales como la penetración de fuentes de

energía renovables, mayor eficiencia, la integración de los vehículos

eléctricos, los sistemas avanzados de almacenamiento de energía y la

sustitución de las infraestructuras anticuadas, son considerados factores

importantes de impulso hacia las redes automatizadas, pero no tanto como la

gestión de la demanda . Por otra parte, una mayor calidad de suministro se

considera como un aspecto menos importante, probablemente debido a los

niveles de satisfacción ya alcanzados en la mayoría de los países participantes

en la encuesta.

De la misma forma, se han encontrado algunos obstáculos al despliegue de las

redes inteligentes. El más claro, y para el que existe un acuerdo generalizado,

es la falta de estándares, ya que existe un riesgo muy alto en una implantación

masiva sin garantía de legitimidad. También se considera problemático tomar

la decisión de una inversión tan elevada, en un contexto de incertidumbre en

cuanto a los beneficios futuros. Los agentes consideran como una barrera la

falta de proyectos piloto, como elemento necesario para obtener un análisis

detallado de coste-beneficios. La barrera menos relevante considerada en la

encuesta es la confidencialidad de datos. Sin embargo como ya se ha

reflejado anteriormente, la falta de una regulación clara, comprendida y


July, 2010 vii

compartida por todos, es un tema controvertido. No compartir una visión

común es una enorme barrera.

La mayoría de los encuestados, la implantación de una red más inteligente se

consideren necesarias para hacer frente a los efectos del calentamiento global.

Muchos consideran la implantación más como una necesidad que como una

opción.

Por último, las redes y contadores inteligentes pueden ser parte de la solución para

obtener un modelo energético sostenible, pero mirando hacia el futuro debemos

considerarlas como la primera pieza para la futura gestión del sistema, con nuevos

servicios que hoy no podemos imaginar.

Table of Contents Smart Grids Benchmarking

July, 2010 viii

Table of Contents

SUMMARY .................................................................................................................. i RESUMEN ................................................................................................................. iv Table of Contents ...................................................................................................... viii List of Figures .............................................................................................................. x

1 INTRODUCTION ............................................................................................... 1 1.1 Motivation of the Thesis ............................................................................... 1

1.1.1 The 20/20/20 Objectives ........................................................................ 2 1.1.2 New Electricity Grids .......................................................................... 12

1.2 Smart Grid Definition ................................................................................. 14 1.3 Objectives .................................................................................................... 19

2 DRIVERS FOR SMART GRIDS ...................................................................... 22 2.1 Environment ................................................................................................ 23

2.2 Energy Independence .................................................................................. 24 2.3 Rising cost ................................................................................................... 26 2.4 Power Reliability ......................................................................................... 28

2.5 Green jobs ................................................................................................... 29 2.6 Modern Infrastructure ................................................................................. 29

3 STAKEHOLDERS ............................................................................................ 31

3.1 End Users .................................................................................................... 31 3.2 Generators ................................................................................................... 34

3.3 Energy Service Companies ......................................................................... 37

3.4 Transmission System Operators .................................................................. 38

3.5 Distribution System Operators .................................................................... 39 3.6 Standardization Institutions ......................................................................... 42

3.7 Regulators ................................................................................................... 43 3.8 Equipment Suppliers ................................................................................... 44

4 NETWORK SERVICES .................................................................................... 45 4.1 Smart Meter ................................................................................................. 45

4.2 Smart Home/Home Automation ................................................................. 49 4.3 Electric Transport ........................................................................................ 56 4.4 Energy Quality ............................................................................................ 64

5 WORLD DEVELOPMENT SURVEY ............................................................. 67 5.1 Methods ....................................................................................................... 68

5.1.1 Subjects ................................................................................................ 68

5.1.2 Data Acquired ...................................................................................... 69

5.1.3 Data Analysis ....................................................................................... 71 5.2 Results ......................................................................................................... 71

6 SMART GRIDS IN EUROPE ........................................................................... 84 6.1 SPAIN ......................................................................................................... 86

6.1.1 Economic and Energetic Situation ....................................................... 86

6.1.2 Smart Grids .......................................................................................... 89 6.2 AUSTRIA ................................................................................................. 100


July, 2010 ix

6.2.1 Economic and Energetic Situation ..................................................... 100

6.2.2 Smart Grids ........................................................................................ 101 6.3 FRANCE ................................................................................................... 102

6.3.1 Economic and Energetic Situation ..................................................... 102 6.3.2 Smart Grids ........................................................................................ 104

6.4 GERMANY............................................................................................... 105


6.5 GREECE ................................................................................................... 108 6.5.1 Economic and Energetic Situation ..................................................... 108

6.6 PORTUGAL ............................................................................................. 110


6.7 UNITED KINGDOM ................................................................................ 112


6.8 MALTA..................................................................................................... 116 6.8.1 Economic and Energetic Situation ..................................................... 116

6.8.2 Smart Grids ........................................................................................ 118 7 SMART GRIDS IN OTHER COUNTRIES .................................................... 120

7.1 UNITED STATES .................................................................................... 120 7.1.1 Economic and Energetic Situation ..................................................... 120 7.1.2 Smart Grids ........................................................................................ 121

7.2 AUSTRALIA ............................................................................................ 123 7.2.1 Economic and Energetic Situation ..................................................... 123

7.2.2 Smart Grids ........................................................................................ 124 7.3 BRAZIL .................................................................................................... 127

8 CONCLUSIONS ............................................................................................. 129 8.1 Discussion ................................................................................................. 129 8.2 Possible Future Progress ........................................................................... 132

REFERENCES ........................................................................................................ 143

TERM DEFINITIONS ............................................................................................ 147 Appendix A – Smart Grid Deployment Survey E-mails ......................................... 150 Appendix B – Eurelectric Smart Grids and Networks of the Future Results .......... 152


July, 2010 x

List of Figures

Figure 1 Estimated U.S. Energy Use in 2008. ............................................................. 4

Figure 2 Renewable energy, end of 2008 (GW). ......................................................... 5

Figure 3 Energy efficiency label. ................................................................................. 8

Figure 4 Reference Scenario. ..................................................................................... 10

Figure 5 World Greenhouse gas emissions by sectors. ............................................. 11

Figure 6 Smart grid electric elements. ....................................................................... 16

Figure 7 Carbon dioxyde vs. Global temperature graph. ........................................... 23

Figure 8 Natural gas throughout the world. ............................................................... 25

Figure 9 Demand Curve. ............................................................................................ 32

Figure 10 Quality Cost vs. Conformance. ................................................................. 34

Figure 11 Load Curve with EVs. ............................................................................... 35

Figure 12 Swift Quality Cost vs. Conformance. ........................................................ 41

Figure 13 Smart Metering Infrastructure levels. ........................................................ 46

Figure 14 HAN and WAN. ........................................................................................ 47

Figure 15 Final energy use U.S. 2008. ...................................................................... 56

Figure 16 Electric Vehicle. ........................................................................................ 59

Figure 17 Plug-in Hybrid Vehicle. ............................................................................ 59

Figure 18 Fuel Cell Powered Vehicle. ....................................................................... 61

Figure 19 Bio-Fuel Powered Vehicle. ....................................................................... 61

Figure 20 EV Load Curve. ......................................................................................... 64

Figure 21 Origin of survey answers ........................................................................... 72

Figure 22 Spanish Gross Electricity Generation (2009). ........................................... 88

Figure 23 Spanish historical Generation. ................................................................... 89

Figure 24 Spanish Special Regime Installed Capacity. ............................................. 89

Figure 25 Spanish Smart Meter Roll Out Timeline. .................................................. 90

Figure 26 Project Denise Clusters. ............................................................................ 94

Figure 27 Smart City Malaga Technology and Innovation. ...................................... 96

Figure 28 GAD Technologies. ................................................................................... 97

Figure 29 STAR project communications scheme. ................................................... 99

Figure 30 E-Energy projects .................................................................................... 108

Figure 31 United Kingdom Gross Electricity Generation. 2020 forecast. ............... 113

Figure 32 United States Gross Electricity Generation (2009). ................................ 120

Figure 33 Energy policy diagram. ........................................................................... 133

Figure 34 Smart Meters and Smart Boxes ............................................................... 138

Figure 35 Traditional Scheme. ................................................................................. 139

Figure 36 Current Scheme ....................................................................................... 140

Figure 37 Future Scheme ......................................................................................... 141

Figure 38 Smart Grid Deployment Timeline ........................................................... 142

INTRODUCTION Smart Grids Benchmarking

July, 2010 1

1 INTRODUCTION

1.1 Motivation of the Thesis

Electricity is a crucial factor for the development of society. All parts involved, are

influenced positively or negatively by the way electricity is produced, transported

and used. These three stages determine price, quality and other more difficult to

quantify externalities, such as effects on the environment, which differentiate electric

power systems around the world.

For any nation it is strategically important to have a reliable and secure power

generation, transmission and use. For instance, the industries of a nation that sustain

its economy, by providing job and salaries to its workers, are sustainable only if they

create value. In very basic terms the benefits must be greater than the costs. If

electricity costs are high, the benefit will be lower, leaving little margin to industry

growth. Likewise social progresses, to overcome poverty and improve healthcare

would not be possible. Today‟s safe and economic electricity allows us to access a

higher quality of life. The use of heating to keep our homes warm during the winter

period, refrigerators to conserve food, or access to more information through

television, the internet and radio are all good example of how electricity has changed

our world. Other important benefits are the possibility to work during the night, as

well as the constant technological development. For all these reasons electricity is a

safety and physiological need and therefore is considered as a basic right and not as a

service.

Global changes have taken place in the power sector in the last decades. In the past,

the traditional scheme of electricity supply consisted in vertically integrated utilities.

Companies were responsible for all parts of the energy supply chain, providing

consumers with their demand. Today, the majority of developed countries have

liberalized their power sector through a process known as deregulation. The key

steps of this process have been:


July, 2010 2

The unbundling of the activities. Separation of competitive activities,

generation and retailing, from regulated activities, transmission and

distribution.

Open entry to the wholesale markets.

Open access to the transmission network.

Organization of wholesale markets, where generators compete.

Open access to retail market, where consumers can freely choose retailers.

The idea is simple; a competitive market will lead to higher efficiency, which will in

turn lead to lower prices, and in this way since electricity is a basic need, gains in

society as a whole. [1]

However the regulated activities are also crucial for the wellbeing of the system, and

must also develop accordingly to its needs. Now the world faces new challenges in

this front as the complexity of the sector increases.

The massive electricity grid that utilities have developed to deliver power to

consumers during the past has been with us for over 100 years, and during this period

has barely changed. The advances came basically through the transmission network

automation, where a relatively small numbers of elements began to be monitored and

controlled, incorporating an important increase in reliability and providing the

security and quality of service of today‟s transmission networks. Additionally,

almost all generators where supervised and controlled through the companies control

centres. All this was possible thanks to a basic, but robust communication network.

These transmission advances came in the 70´s and 80´s, utilities expected a parallel

development for the distribution network in the following years, but unfortunately,

the difficulties associated to the huge number of elements, compared with the

transmission network, and the reduced return for the investment, resulted in an

insignificant increase of distribution automation.

1.1.1 The 20/20/20 Objectives


July, 2010 3

On the other hand, in the last years the suspicion of climate change being caused by

human effects, has not only been confirmed, but what is more, the majority of the

worlds scientist are keen on acting immediately to change human behaviour radically.

The goal is to reduce our impact on what would lead, during the next few centuries,

to the greatest changes on the Earth‟s biosphere in the history of mankind. To do so,

it is necessary to reduce carbon dioxide (CO2) emissions drastically. This implies,

amongst other aspects, the decrease of the use of hydrocarbon based fuels. Truly

conscious, the European Union (EU) member states have committed to the triple

20/20/20 objectives for the year 2020 which are a key issue in relation to electricity

generation, transmission, distribution and use. [2] The three objectives are:

1. Increase renewable energy supply to 20% of total demand of primary energy

consumption

2. Reduce energy consumption by 20% with respect to 2020 forecasts

3. Reduce Green House Gas (GHG) emissions by 20% with respect to 1990

levels.

The 20/20/20 objectives, do not imply a predefined scheme to reach them, leaving

countries with the freedom of having a number of ways to reach the goals.

1.1.1.1 Increase Renewable Energy Supply to 20%

The first objective, to increase renewable energy supply to 20% of the total primary

energy demand, implies a huge economic effort. Total Energy can be divided into a

series of different processes: residential, commercial, industrial and transportation

use (see figure 1).


July, 2010 4

Figure 1 Estimated U.S. Energy Use in 2008.

Source: Lawrence Livermore National Laboratory.

Renewable electricity production is particularly economically demanding, due to two

reasons: Firstly because, the high investment cost of these power generators is much

higher than the needed for traditional generators that result in a cheaper price per

MW installed. Secondly, the quantity of capacity that must be installed in order to

reach a level of supplying of 20% of total final demand, means the real quantity of

installed capacity must be much higher, around 40%, because other energy uses such

as traditional energy transportation will not use renewable energy sources and also

because of the low flexibility nature of the technology that have a low capacity factor

(see equation 1).

Capacity factor =power fullat operated hadit ifoutput

timeof period aover output actual (1)

In most countries these type of generation must be subsidised. The market structure

does not consider the cost on the environment, and therefore it is the responsibility of

government to find a way to internalize green cost through different schemes, such as

carbon taxes, or subsidies. In 2008, the worldwide capacity of installed renewable


July, 2010 5

sources was lagging the expectations to comply with a sustainable energy model (see

figure 2).

Figure 2 Renewable energy, end of 2008 (GW).

Source: Renewable Energy Policy Network for the 21st Century.

Depending on a number of factors one nation may have higher renewable energy

resources of one kind or another. The most commonly used resources are listed

below, with a short explanation:

Hydroelectric generation is the most widely used renewable generation. It

allows for important energy production, as well as energy storage capability,

and high flexibility. Another advantage is the existence of pumping units that

pump water from a lower basin at valley hours, when the electricity is cheap,

and help the system in slightly mitigating the large variation of the demand

curve, something extremely important to simplify system operation, and

themselves by selling he pumped energy at a higher price in peak hours. The

problem is that most of the possible high power hydro sites are already


July, 2010 6

exploited, and new plants are environmentally unviable. Small hydro is also

used and is currently being further developed through new technologies.

Wind generation is facing a high deployment in many countries, it is very

possibly the cheapest and therefore most viable renewable throughout the

world. Wind farms are located at sites where the source is available, therefore

many times this generation plants are directly connected to distribution

networks, changing the traditional power flow patterns. This will at some

point constrain the network and a more developed grid will be necessary.

What is more, high intermittency and unpredictability requires a high reserve

capacity consistent of peaking units. Mainly gas powered, are necessary to

back up the system in case of wind fault, and indeed other renewable of

similar characteristics like solar generation. Ideally in a large enough system

with wind generation in many areas, wind would always produce and back up

its self. This would demand huge investments in interconnection

infrastructures, and new joint market structures. [3]

Solar generation. The energy emitted by the sun may also be taken

advantage of through different processes:

Solar photovoltaic cells generate electricity through a process where

the photons colliding with cells create a voltage difference. They have

the advantage of being usable in isolated location and the drawbacks

that the production of photovoltaic cells is expensive and heavy

metals are produced during manufacturing.

Solar thermal plants are another alternative not yet so mature.

Basically, these plants collect the heat from the sun to heat a fluid and

generate electricity. This generation involves an important number of

technologies that allow a variety of uses. From Low-thermal solar

heat collectors for domestic use to produce hot water, for example for

sanitary hot water, to large thermal generation plants to produce

electricity that could also use gas as an alternative fuel in the case the

sun is not shining, this would allow more flexibility, but gas storage

would be a new dilemma. Once more considering the ideal approach


July, 2010 7

diversification in renewable could very well be another part of the

solution, since many times when it is not windy it is sunny and one

source could backup the other.

Biomass consists of using biological materials as fuel for thermal generation,

especially interesting in the case of residues that are a problem that can

become a solution. The transport sector can also reduce emissions thanks to

switching from conventional petrol or diesel powered engines to biofuels that

are derived from biomass.

Tidal and wave generation are forms of hydro-generation applied at the sea.

The economic effort they demand is high, yet they are more predictable than

wind and solar. The drawbacks are mainly the investment costs in

infrastructures and networks.

Geothermal generation of electricity takes advantage of the heat stored in

the earth, only possible in very specific regions. But has the important

advantage of not having to rely on variable sources of energy such as wind or

solar, with low power but high capacity factor meaning that even though it

may produce not large amounts, it can produce it constantly, which is good

for system security as a renewable base unit.

Combined heat and power (CHP) is many times remunerated as a

renewable generator, because it leads to lower primary energy consumption

and emissions. It consists of gaining efficiency by adding the useful heat of

an industrial process with electricity generation, independently of which

process came first (heat electricity or electricity heat), the simultaneous

use allows for energy recycling.

In this way we can see that the generation technology is available to comply with the

20% renewable compromise, but it must be noted that it is equally important to have

a secure enough grid to operate with the new power flows, hence a smarter grid with

higher monitorization of information and superior flexibility.


July, 2010 8

1.1.1.2 Reduce Energy Consumption by 20%

The second objective, to reduce energy consumption by 20% with respect to 2020

forecasts may also be confronted in different approaches that vary considerably in

complexity and costs. Electricity consumption can potentially contribute to attaining

this goal. The means to achieve it could come in a number of ways:

Many countries are taking measures by giving incentives to use more efficient

equipment. A very clear example of these are the switching programs for EU

member states from incandescent light bulbs, that will soon disappear from

the market, to Compact Fluorescent Lights (CFL) and Light Emitting Diode

(LED) which have longer lifetimes and higher efficiency. Another initiative

many countries are adopting is to grant subsidies to those who buy high

efficiency appliances. More efficient white goods such as: refrigerator,

washing machines, dishwashers, or air conditioners would save energy and

more importantly, money directly to clients. Consumer awareness is crucial

to obtain optimal results. Therefore appliances must be sold with standard

energy labels (see figure 3) that clearly inform of the energy efficiency of the

apparatus. Rated from A to G, A being the most efficient.

Figure 3 Energy efficiency label.

Source: www.fareham.gov.uk/council/departments/housing


July, 2010 9

Many countries have already started installing or are starting the deployment

of smart meters. This subject is dealt with in more detail in Chapter 4:

Network Services. As a brief introduction to smart meters, it is important to

know that they are meters that still do not have specific standard, but should

ideally include new features such as real time consumption information in

detail and establishes two-way communication with utilities. This new

technology may very well revolutionize the way we use electricity today.

Initial pilot projects estimate 10% saving in energy costs. Basically the new

meter has the important advantage of informing consumers of energy cost.

The idea is that by giving energy prices, consumers have incentives to modify

inefficient consumption patterns. The efficient consumer will cut costs in

peak periods by shifting some of their power needs to valley hours. This idea

is subject of debate by many sceptics that find it hard to believe that ordinary

customers will change their habits.

A future step will be home automation; this consists of a set of domestic

appliances that will gain intelligence through automatic energy management.

In other words, the apparatus will automatically be able to determine the

optimal moment to turn on and operate as efficiently as possible. For instance

a refrigerator that cools down at maximum power during valley hours, and

then work at lower load during the peak.

The transportation sector is another of the major parts involved in the carbon

emission debate. A very promising future is expected from electric

transportation. Electric engines have a much higher efficiency ratio with

respect to the traditional combustion ones; furthermore it is not only a matter

of efficiency, but also of the primary energy source. In conventional thermal

engines, the primary source derives from fossil fuels. However, the primary

source that activates Electric Vehicles (EVs) depends on the electricity

generation mix, which may comprise a significant share of RES. Therefore

the net energy use will be lower, reducing energy consumption in the near

future. What is more, the electric vehicle could be used as an energy storage

system and balance the demand curve by charging during the valley, and


July, 2010 10

serving as a security service in case of outage. In Chapter 4: Network

Services a more thorough discussion on the topic is approached.

Finally, reducing energy consumption will have economic benefits. The allocation of

the costs and benefits must be shared in a fair way. It is crucial to consider that

prevailing over the economic interest, the security of the system is the most

important priority, and that international interconnections, together with smart grids

will allow the optimal flow of power generation in the most efficient way.

1.1.1.3 Reduce GHG emissions by 20%

Ultimately, to reduce GHG emissions by 20% with respect to 1990 levels is the last

compromise for EU states regarding energy policy. The effects of global warming

are caused by GHG emissions, and to decrease its effects gas emissions must be

reduced (see figure 4). The power sector is an important origin of GHG (see figure 5).

This objective will be reached through the adaptation of the previous two targets

together with adapting new technologies to make traditional generation cleaner, as

desulphurization plants, cleaner combustion boilers, etc.

Figure 4 Reference Scenario.

According to the international energy agency it is necessary to achieve the long-term stabilization of

the concentration of greenhouse gases in the atmosphere at 450 parts per million of Co2 equivalents –

our 450 Scenario - Energy efficiency and renewable energy will contribute to reduce global emissions

by 59% and 18%, respectively.

Source: www.iea.org


July, 2010 11

Figure 5 World Greenhouse gas emissions by sectors.

Source: World Resource Institute, Climate Analysis Indicator Tool (CAIT)

The 20/20/20 compromise is of crucial relevance, to minimize the effects of global

warming, but other reasons exist:

The current energy model based on finite fossil resources and high energy

dependency on imports, implies a high risk of supply disruptions, and

millions of Euros spent on foreign imports, point towards an unsustainable

model.

What is more, around 2000 million people lack access to advanced energy

services worldwide and there are not enough fossil fuels to provide with

advanced energy services to all its inhabitants using the current energy model.


July, 2010 12

The efficiency objectives together with new market designs and especially new

secure networks, with smart grids and international interconnections, will lead to a

competitive and sustainable new energy model, which will allow doing more with

less.

The current electricity grids of the world could be much more productive and

efficient, but the cost in the infrastructures when they were built did not justify the

investments, however with a rapidly changing production scheme, and new

environmental externalities that must be considered, a smarter grid could be the

solution.

1.1.2 New Electricity Grids

In order to achieve these goals, major changes must be made by all stakeholders. One

of the fundamental aspects that must change is the implementation of a new

electricity grid different from the one we have today, that has a number of constraints

that make it incompatible with the future needs.

The current grid is designed for large controllable generators, connected to a High

Voltage (HV) transmission network, supplying energy to an inelastic demand

connected to a Low Voltage (LV) distribution system. However, due to the necessity

to fight climate change, some states are already experiencing the penetration of

renewable energy sources, some of which deliver smaller amounts of power, are less

predictable and may be connected to lower voltage levels, since they are also

constrained to generate in the locations where the renewable source is available.

Additionally, the predictions of demand awareness will make demand elasticity more

variable. Therefore distributed generation and demand side response are two key

trends that are growing steadily and without a doubt will cause the complexity of

power flows to increase. This leads to a new challenge in the way to plan, design and

operate electricity networks.


July, 2010 13

The necessities of this new network must consider the opportunities and challenges

faced by all stakeholders. The introduction of two way communication, higher

efficiency, new generation technologies as well as energy storage systems are some

of the predictable necessities and benefits coming. In this way, in addition to

traditional generators, Transmission System Operators (TSO), Distribution System

Operators (DSO), retailers, consumers and authorities; new stakeholders are entering

the sector. These comprise Research and Development (R&D) institutions, Energy

Service Companies (ESCo), equipment vendors, prosumers (consumers that also

produce)… as well as traditional members are modifying their stake to adapt to the

future characteristics that the network will presumably settle in.

However, the difficulty to reach this ideal situation has a number of problems that are

lagging or avoiding the deployment of new grids. These must be solved as soon as

possible. One of the problems is the lack of a developed technology, partially due to

not having consolidated standards. Another problem is related to not adopting a

common scheme: different approaches taken by different countries. The result is the

lack of new services that would be responsible for the economic justification of new

investments.

The problem must be considered from an economic perspective. If the total cost

necessary to implement the new grid is smaller than the future benefits, then the

existence of a competitive market should lead to the deployment (see equation 2).

Total Costs < Future Benefits Competitive Market (2)

Yet even if the total cost is higher than the future benefits but the benefits are still

considered necessary to fulfil the international compromise, then the executive

should implement incentives to reach the objectives (see Equation 3).

Total Costs > Future Benefits (NECESSARY) Incentives (3)

Identifying which equation to follow is crucial, but in order to choose, regulators

must have a clear idea of the costs and benefits. Therefore all stakeholders must work


July, 2010 14

together in order to catalyse the deployment. The role of regulators is essential to

finally reach the future benefits the new grid will bring. Understanding all

stakeholders points of view, identifying and removing possible barriers and finding a

good and fair solution will lead to effective regulation.

1.2 Smart Grid Definition

Although discussion on the topic is vast, there are not yet clear definitions of what a

smart grid should feature. Reading through many different articles on the subject,

one quickly notices, it can mean different things to different people, often leading

discussions to confusion [9]. Some countries consider the deployment of smart

meters is enough, whilst others even consider incorporating the use of

superconductive transmission lines for fewer power losses [10].

Carnegie Mellon University recently published an article that describes the idea that

a smart grid is neither a clearly defined single concept nor a single technology.

Rather it is like a basket containing various combinations of balls. The context and

the interpretation depend upon the user. The article describes all of the various balls

typically found in this metaphorical basket. Some of them represent innovations that

are still in the development phase, while others stand for technologies which have

already been applied for years [74].

However a number of major smart grid platforms have given long, specific and sort

of official definitions. Following are the two most relevant ones:

A) European view

The European Technology Platform Smart Grids [11] defines smart grids as

“electricity networks 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 deliver sustainable, economic and secure electricity supplies”.


July, 2010 15

A smart grid employs innovative products and services together with intelligent

monitoring, control, communication, and self-healing technologies in order to:

Better facilitate the connection and operation of generators of all sizes and

technologies;

Allow consumers to play a part in optimising the operation of the system;

Provide consumers with greater information and options for choice of supply;

Significantly reduce the environmental impact of the whole electricity supply

system;

Maintain or even improve the existing high levels of system reliability,

quality and security of supply;

Maintain and improve the existing services efficiently;

Foster market integration towards European integrated market.

The “smartness” implies that Smart Grids do not only supply power but also

information and intelligence. The “smartness” is manifested in making better use of

technologies and solutions to better plan and run existing electricity grids, to

intelligently control generation and to enable new energy services and energy

efficiency improvements.

The Smart Grid Platform of the EU is also clear on what it does NOT mean.

The smart grid relates to the electricity network only (not gas) – it concerns

both distribution and transmission levels.

Smart grids are not new “super grids”. They will not look significantly

different to today‟s “conventional” electricity grids transporting and

distributing power over “copper and iron”. However, smart grids will lead to

improved cost-efficiency and effectiveness.

The smart grid is no revolution but rather an evolution or a process within

which electricity grids are being continuously improved to meet the needs of

current and future customers.

There will not (and cannot) be any “roll-out” of smart grids, since such a

“roll-out” is continuously occurring.


July, 2010 16

Although the concepts are sometimes confused, the smart grid is not smart

metering – the smart grid is a much broader set of technologies and solutions

(see figure 6).

Figure 6 Smart grid electric elements.

Source: European Technology Platform Smart Grids

While many utilities have put their focus on smart metering, smart metering does not

provide a smart grid. Indeed, it is possible to have smarter electricity grids (i.e.

distribution and transmission networks) without smart metering. But, there are

several benefits to smart metering which can reinforce other policy actions on

climate change. For example, when used with other parameters (such as differential

tariffs and information) smart meters can encourage consumers to reduce their

demand (load) when prices are high or when system reliability or power quality is at

risk.”

B) United States view

The U.S. Department of Energy's (DOE) Modern Grid Team has detailed seven key

characteristics of the Smart Grid. [12]

These include:


July, 2010 17

Enabling active participation by consumers

Accommodating all generation and storage options

Enabling new products, services, and markets

Optimizing assets and operating efficiently

Anticipating and responding to system disturbances in a self-healing manner

Operating resiliently against physical and cyber attacks and natural disasters

Providing the power quality for the range of needs in a digital economy.

The DOE has explicitly called out superconductors as one of the fundamental

technologies needed for the Smart Grid. Superconductor cables can significantly

enhance the flow of power on the transmission system, relieving grid congestion and

increasing efficiency. Applied under our city streets, they can enable, for instance,

widespread adoption of plug-in hybrid electric vehicles. These same cables also can

automatically suppress power surges and enable resilient power grids that can

survive attacks and disasters

In the US Energy Independence and Security Act of 2007 in its section 1301 [13]

states: “It is the policy of the United States to support the modernization of the

Nation's electricity transmission and distribution system to maintain a reliable and

secure electricity infrastructure that can meet future demand growth and to achieve

each of the following, which together characterize a smart grid:

Increased use of digital information and control technology to improve

reliability, security, and efficiency of the electric grid.

Dynamic optimization of grid operations and resources, with full cyber

security.

Deployment and integration of distributed resources and generation,

including renewable resources.

Development and incorporation of demand response, demand-side resources,

and energy-efficiency resources.

Deployment of `smart' technologies (real-time, automated, interactive

technologies that optimize the physical operation of appliances and consumer

devices) for metering, communications concerning grid operations and status,

and distribution automation.


July, 2010 18

Integration of `smart' appliances and consumer devices.

Deployment and integration of advanced electricity storage and peak shaving

technologies, including plug-in electric and hybrid electric vehicles, and

thermal-storage air conditioning.

Provision to consumers of timely information and control options.

Development of standards for communication and interoperability of

appliances and equipment connected to the electric grid, including the

infrastructure serving the grid.

Identification and lowering of unreasonable or unnecessary barriers to

adoption of smart grid technologies, practices, and services.”

After considering these detailed definitions. In a very simplified manner a smart grid

should include smart network devices and smart meters (recall figure 6).

A smart grid should include two basic features:

1. Automated metering infrastructure: metering must allow two-way

communication between the customer and utilities.

2. Automated devices in transmission and distribution: devices must allow

higher power flow information recollection and higher operational

flexibility.

3. Smart safe, efficient and sustainable grid reaction to users and

generation actions (1) and network constraints (2).

The definitions stated above describe the meaning and functions that a smart grid

must achieve. But do not explain in detail, neither the way nor the moment of how

this should be done. In other words the goals are given but the strategy is not. As an

analogous descriptive example consider the process of building a bridge. A bridge is

a structure built to span a physical obstacle, for the purpose of providing passage

over the obstacle. Known the definition there are a number of ways to obtain the

same goal, the designs of bridges vary depending on the function of the bridge and

the nature of the terrain where the bridge is constructed. In the same way a smart grid

will vary depending on the specific needs of each network. Temporal phases and

steps are just as important as the actual definition.

http://en.wikipedia.org/wiki/Span_(architecture)


July, 2010 19

1.3 Objectives

Taking into consideration the new challenges of the energy sector, and the need to

give a sustainable solution, the smart grids represent a part of the future, and it will

be configured as the backbone for next changes in the power system.

With this premise, the objective of this thesis is to analyze the current situation and

the elements around, and internal, to the smart grids, trying to identify the needs of

the system and the future the smart grids have to consider. Also, it will analyze the

actions performed or scheduled, so that a state of the art can be presented. Finally, a

look to the future will be foreseen.

The development of this thesis covers the following main objectives:

1. DRIVERS: First of all, the drivers of the system, as the facts to steer to a

complex solution as smart grids, will be reviewed. There are a great number

of challenges for the electrical networks that the world has to face in the near

future. All of them must be confronted by players involved, but they can be

summarize in the following, that will be analyzed in detail:

a. Environment

b. Energy Independence

c. Rising cost

d. Power Reliability

e. Green jobs

f. Modern Infrastructure

2. STAKEHOLDERS: Once reviewed the drivers the smart grids have to face. It

is needed to analyze the agents involved in the solution. For smart grids, the

stakeholders are not only the transmission or distribution system operators,

but all players that directly or indirectly are involved with the electric system.


July, 2010 20

In this chapter, the problems and expectations of each of the stakeholders will

be analyzed. Every stakeholder must cover their expectations and must

engage dialogue with the rest, sending and receiving the correct information,

to assist regulators in understanding how smart grids can benefit all network

users. The roles, responsibilities and rights of relevant stakeholders and

authorities must be clearly defined and adopted suitably.

The stakeholders analyzed are:

a. End Users

b. Generators & Distributed Generators

c. Energy Service Companies

d. TSO

e. DSO

f. Standardization Institutions

g. Regulators

h. Equipment Suppliers

3. SERVICES: Analysis of the network services expected to achieve the goals.

And for these services, the technological implementations and structural

deployment associated. Concepts and technologies like home automation,

smart meters, distributed and home generation, electric transportation and

energy quality will be explored.

4. DEVELOPMENTS IN EUROPE: Study the current state of the art situation,

the implementations executed or under way, as well as the government and

regulator point of view in a number of states of Europe and other areas, and

obtain expectations from different stakeholders. Identify the different impacts

the implementation that these grids will have on the different stakeholders

throughout Europe and other areas in order to help regulators and utilities

understand different views, as well as recognize possible inconvenience and

barriers for their necessary deployment.

5. THE WAY TO GO: Finally, we believe that a specific time line with clear

objectives is fundamental for the deployment of the new technology.


July, 2010 21

Alternative solutions and possible guidelines will be advised to reach a fair

and sustainable compromise.

6. FURTHER DEVELOPMENT: Further works will be needed in order to

reach international solutions to the clear, transparent and fair deployment of

smart grids. This paper aims to help this deployment and serve as a reference

to future works.

DRIVERS FOR SMART GRIDS Smart Grids Benchmarking

July, 2010 22

2 DRIVERS FOR SMART GRIDS

The power sector, as already described in the introduction, involves a number of

different activities such as generation, transmission, distribution and retailing, as well

as other more indirect activities like regulation, market operation, demand response,

equipment industry and so on.

The near future challenges for the networks around the world, must be confronted by

all players involved, and not only by the regulated activities, like transmission and

distribution. Among these challenges, we find some so important as: (i) forecasted

increase in energy demand, (ii) escalating political believe in competition through

market liberalization, (iii) environmental directives, as the 20/20/20 EU objectives,

(iv) low emissions generation trend, (v) penetration of distributed generation, (vi)

promotion of new high efficiency technologies, (vii) demand side management, (viii)

incursion of the electric vehicle, (ix) energy storage systems and customer active

participation in markets, (x) new investments to guarantee higher system security to

replace aging infrastructures, (xi) stimulating intelligent consumption and (xii)

creation of new services. All these are just some of the probable tests the power

sector stakeholders will confront. [14]

As mentioned above, all stakeholders are involved and have to provide answers to

these challenges, but the electrical grid has a special role. It has to be ready, not only

to support all the changes without representing a limitation to new implementations,

but also to promote the new services and developments requested by all network

users.

Analysing in detail the indicated challenges, and noting the high correlation between

many of them. It is possible to summarize all of them in six key factors, as main

drivers to the smart grid, destined to be part of a possible solution. These six key

factors are following: [15]

1. Environment

2. Energy Independence


July, 2010 23

3. Rising cost

4. Power Reliability

5. Green jobs

6. Modern Infrastructure

2.1 Environment

Global warming has alarmed society about the hazards the planet is exposed to by

pollution, and primarily about the increase of hydrocarbon gases resulting from

human activity as the main source to blame for the greenhouse effect. The high

correlation between carbon dioxide and global temperature illustrates the necessity to

reduce carbon emissions (see figure 7). Since the use of fossil fuels accounts for 40%

of these greenhouse gases, [16] and they are still the most widely used source of

energy, at around 70% of the net generation today. [17] There is a common

conformity on the need to reduce these emissions.

Figure 7 Carbon dioxyde vs. Global temperature graph.

Source: http://zfacts.com/p/226.html


July, 2010 24

The integration of renewable sources, as clean energy, is undoubtedly very important.

Even though we could invest in renewable generation, today‟s electrical

infrastructure cannot maximize the benefits of these clean sources, because of their

location, and variability. The location is a handicap because the introduction of high

quantities of distributed generation may cause power flow problems, since the grid

was designed to work in a decreasing voltage level structure with unidirectional

power flows. The variability may cause system operation technical hitches because

the system is not automated enough, which means a lack of operational flexibility.

But the change of energy generation sources is not the only action that can be taken

to ease the environment. The energy efficiency is another parameter important to rely

on. Here the goal is to use less energy without losing quality of live. And this means

taking actions as for instance replacing all lightning technology, with 80% savings,

changing all inefficient equipments for new “Class A” ones, and so on.

Electric vehicles for public transportation can also help change the use of fuel for

electricity, which could be generated by cleaner sources, as explain above. In this

case, the advantages are not only the change of the power source, but also the benefit

brought by the better efficiency of electric engines. In Chapter 4 a more detailed

discussion on electric transport is provided.

But all these actions are impossible to implement without an electrical network able

to support them. So, as new requests as renewable portfolio standards are adopted by

an increasing number of countries, the networks must be adapted to fully incorporate

the benefits brought. The same will occur with the massive incorporation of new

electric vehicles. New standards have to be defined and new elements have to be

incorporated in the future Smart Grid. In summary, a smart grid would improve

energy efficiency and facilitate the penetration of new services in an efficient and

reliable way, contributing to the overall system needs, reducing investment in

traditional generation.

2.2 Energy Independence


July, 2010 25

Today fossil fuels are essential for the development and wellbeing of our society.

Energy resources vary from one country to another. The majority of traditional

generation fuels: petroleum, natural gas and coal, are concentrated in just a few

producing countries, making the rest energetically dependent. This strategic

constraint is a major threat for many nations, as witnessed by eastern European

countries during the last winter periods, when Russian gas suffered a lack of supply.

Note that the vast majority of gas is produced by Russia and the Middle East

countries (see figure 8). Generally, governments have confronted the problem

throughout diversification in different energy sources, technologies and importing

partnerships. However, the figures spent on imports are astonishing. For instance, the

United States of America spends more than $200,000 per minute on foreign oil [18].

Figure 8 Natural gas throughout the world.

Natural gas resources located throughout the world in billion cubic meters.

Source: Cedigaz 2009.

This situation will get worse and worse in the future, as the current non renewable

sources diminish. The goal is to replace these sources by others owned by the

country, or that could be acquired by an important number of other countries at a

reasonable price. But obviously, the best and most reasonable approach is to have a

diversify energy matrix, based on clean energy, renewable ones and, in the last case,

not dependent of a few countries.


July, 2010 26

As indicated in the previous driver, the change of the primary energy sources has to

be reinforced by an increase in the energy efficiency, smart demand and penetration

of electric vehicles.

The possibility to do more with less is one of the advantages of a smarter grid,

reducing the energy generation needs, for a given demand. High efficient grids, and

the penetration of clean sustainable fuels, will reduce foreign fuel dependency and

increase efficiency. Add this to the rest of efficiency actions, thanks to further

features of smart grids will bring even better results for all, both economical and

environmentally.

2.3 Rising cost

One of the characteristics of the electricity chain process is that energy cannot be

stored in significant amounts. This means, there must always be a permanent balance

between the power generated and the power consumed. The use of electricity varies

throughout the day, and therefore the generation must also adapt to demand changes.

Therefore it is necessary to have plants that may only be used for short periods of

time, making them more expensive in order to recover their fixed cost, i.e.

investment. In this way a growing demand means growing costs.

Customers are not aware that the generation price of energy is different in peak than

in valley hours, and of the constant generation management to satisfy demand, that

comes at different prices depending on the overall consumption. The number of

variables related to the final price is huge, and very complex to reflect. Amongst

other factors that define final price we find: the energetic matrix, primary sources

market price - this is the value of the already mentioned fuels with very high

volatilities, power plants availability costs, ancillary services, and of course the

demand. But finally, all this means that the end consumer will unavoidably also have

an increase in its electricity bill, as more electricity is required.


July, 2010 27

On the other hand, historically the demand has been considered inelastic. This means

that demand is considered fixed and therefore cannot be modified. But as the price of

electricity started increasing and discriminated from peak demand to valley demand,

the big consumers began to change their consumption profile, changing the energy

use time periods and reducing the demand by increases in efficiency. Additionally,

small consumers also move a small part of their consumption profile from peak to

valley, mainly in the heating equipments, moving the connexion time from day to

night. Price signals may bring elasticity to demands side response.

In this environment, there are two ways to reduce the bill.

One is to reduce the electricity cost by using cheaper electricity. And that

could be done by changing the energetic matrix to a more efficient one. In the

long-run renewable sources could bring costs down.

The other possibility is to use energy more efficiently, through the

management of demand. There is a huge margin for demand rationalization.

It is not logical to have a single price structure if electricity prices change

with time and space of use. The solution would consist of variable energy

prices for any time of the day since prices must reflect the real cost.

In fact, for households, an important part of the consumption could be

scheduled in normal conditions at any time of the day. For example, not just

the above indicated heating equipment, but also programmable washing

machines, dishwashers, refrigerators and heating that could work more

efficiently if they work during the valley and stopped or work at low power

during the peak. Other needs such as lighting, computer and television use

could achieve higher efficiency through the use of household energy storage

systems such as the lithium batteries we use in laptops, which could be

charged during the cheapest periods of the day. Obviously, in order to make it

possible in a rational way, it is necessary to have real time information for the

energy condition – peak or valley – and have smart appliances.


July, 2010 28

In both situations it is essential to have a smart grid to support these features. The

problem once more is the economic effort needed at first to introduce a smart grid,

given the uncertainty of not knowing if in the long term benefits will surpass costs.

2.4 Power Reliability

The reliability indices of most developed countries are relatively high compared to

the cost of upgrading the grid, still a cost/benefit analysis must be rerun periodically

as new technology cost go down. On the other hand, analyzing the power

disturbances as a whole, they still cause major economic loses. In the United States

more than $150 billion dollars are wasted every year due to power outages, about

$500 per citizen. [19].

With the increase of electrification, both in quantity and quality – mainly associated

to computerized equipment – the sensitivity of users for power reliability is changing.

Today the loss of energy supply even for a short period of time is detected by the

users through more sensitive equipments, such as electric clocks, computers, and so

on, even though the new ones are typically more protected. This results in a higher

demand for reliability. In summary, an important increase in reliability, would allow

saving money offering a better service, yet the problem today is to justify the

investments through the cost/benefit analysis.

Smart grids would in a natural way increase security and reliability of supply. The

communication infrastructure associated to smart grids will solve the cost/benefit

analysis, and allow higher network automation. Currently the lack of automation

means utilities in many cases do not know there is an outage until a customer calls in

to report it, and the operational flexibility is very limited. The risk of cascading

failure increases the greater the interruption time is, thus increasing the probability of

a massive blackout [20]. The higher automation of smart grids implies higher

knowledge of power flows and therefore higher flexibility in operation. Reaction to

potential problems will take place before customers may even be affected, or much

faster and safer, and in this way the impact will be minimized.


July, 2010 29

2.5 Green jobs

The world economic crisis has shot unemployment rates upwards throughout the

world, a need to find stimulus to reactivate struggling economies is a crucial problem.

A common mistake made by many of the executive administrations is to rush into

unproven projects that generate unnecessary jobs that solve one problem today to

have two problems tomorrow. The key to success is therefore not to oblige to waste

money but to spend money on its equivalent benefit. New jobs can arise from

promoting and allowing consumers to take advantage of new opportunities that have

proven a cost/benefit relationship analysis, understanding by benefit both economical

and social gains.

As explained earlier, the power sector will require necessary research and

development and the related jobs in the transformation of the energy sector in the

future society. Renewable generation, efficiency increasing, public electric

transportation, and the network developments have to be prepared.

Many people believe that the smart grid is an opportunity to create hundreds of

thousands new jobs. But before spending millions of dollars, government funding

must promote pilot projects to assess the cost/benefit relation. This will be the first

step to assess the potential of the economic benefits of all changes that can be done.

Such risky investment on new technologies will not be made by only a player, such

as distribution companies alone for smart grids, unless a fair return is settled.

Regulation plays the key role in deploying a promising job sprout. Green jobs will

provide products and services that use renewable energy resources, reduce pollution,

and conserve energy and natural resources.

2.6 Modern Infrastructure

In many cases, the infrastructure we use today in the energy sector has

technologically barely changed from the one used 100 years ago. From the power

plants, to transmission, distribution and the equipment use by the final users, the

changes have been very small. We can just think of the incandescent light bulb as an


July, 2010 30

example of a contemporary way to emit light inefficiently. We have been using this

technology since Thomas Edison invented it in 1878. Only now, obliged by the

increase of electricity prices and the need for higher efficiency are new technologies

beginning to emerge.

Now, all the factors are together pointing at a new target. First of all, we have higher

energy needs, but also need the technology to be more efficient, the technology to

have new clean and renewable energy sources, the technology to adapt the network

to the user‟s needs.

All the advances together, will give us the opportunity, and the urge, to revolutionize

the sector, bringing an efficient and sustainable use of energy.

Specifically, for smart grids, as costs of communication technologies go down and

the technology available for switching and sensors become smarter, the time seems

right for the next step towards new developments. But we must wait until pilot

projects prove a cost/benefit analysis, ensuring sustainability.

STAKEHOLDERS Smart Grids Benchmarking

July, 2010 31

3 STAKEHOLDERS

To perform changes of this magnitude it is basic to take into account the needs and

expectations of all players involved, ensuring non discrimination and fair allocation

of resources. Every stakeholder must cover their expectations and must engage

dialogue with the rest, sending and receiving the correct information, to assist

regulators in understanding how smart grids can benefit all network users.

The roles, responsibilities and rights of relevant stakeholders and authorities must be

clearly defined and adopted suitably. The most important stakeholders are listed

below and commented in detail in the following pages:

1. End Users

2. Generators & Distributed Generators

3. Energy Service Companies

4. TSO

5. DSO

6. Standardization Institutions

7. Regulators

8. Equipment Suppliers

3.1 End Users

The power market, as in fact any economic market, is governed by supply and

demand. Demand side is represented by Customers. Traditional electricity markets

have been characterized by an extremely inelastic demand (see figure 9). What this

means is independently of the price of the market, the demand remains constant.

There are various reasons for this, but primarily since electricity is a basic need,

consumers have become dependent on it. As a simple example, consider that if

electricity prices rise the consumers will logically still keep their refrigerators

plugged in, maintaining demand. Make no mistake. People do and are very worried

about the price they pay for electricity, but the truth today is that they do not have a

choice, and indeed this usually becomes a political problem. The inexistence of


July, 2010 32

efficient price signals for consumers leads to a lack of transparency. This can lead to

market power abuse. Customers have the right to be protected from market power. It

is the responsibility of the administrative authorities to regulate the market in order to

protect consumers from being abused. The inexistence of efficient price signals for

consumers and market power abuse are two different topics but more transparent

price signals would also bring barriers to market abuse. [21]

Figure 9 Demand Curve.

Example of the inelastic demand curve and the escalating power generation bids of the Spanish

electrical system.

Source: www.omel.es

With the new energetic scheme, we cannot talk any more of consumers, as passive

agents connected to the network to use energy. New technologies allow today anyone

to have an active role as end users of the network, not only as consumers but also as

producers, and indirectly, taking part of the network management. The new

renewable energies make it possible for end users to have small generators at home.

The energy produced, depending of the country‟s regulation, can be used to reduce

their consumption or even to inject it into the network.

Another possibility that will arise in the near future with the development of new

batteries is the capability of household energy storage. This could be done with high

capacity batteries for general use, or even taking advantage of the specific batteries,


July, 2010 33

like the electric vehicle ones. Again the advantage is that in some specific cases at

peak times, the client could revert – sell – the stored energy to the network.

But finally, end users will take actions moved basically by: desire for the best prices,

higher quality of service and new added value services:

Lower Prices - Fundamentally what customers expect and want are the best

power prices. The smart grid should give end users the opportunity to obtain

the highest prices as small producers, and in the same way, get the lowest

prices as consumers.

The liberalization of energy markets ideally allows consumers to adapt

consumption pattern to a lower energy price. Catalyze demand side

management of electricity, thanks to two way communication between

customer and utilities, given an effective price signal. What this means is that

a consumer will be able to observe real time prices, or at least the peak and

valley periods, and react in an intelligent way, displacing consumption from

expensive peak hours to cheaper valley hours, which would mean important

economic benefits to users. Currently a wide range of the consumption could

be moved to valley hours with absolutely no problem as already explained in

Chapter 2.3 in the section devoted to rising cost, with the examples provided.

Higher Quality of Service - Today quality of service is well regulated and in

most developed countries considered highly satisfactory, since a compromise

has been achieved between costs and quality levels. What is more, in many

countries DSOs have incentives to increase quality of service levels (see

figure 10).

With the deployment of smart devices in the network and two-way

communication meters, the distribution companies will find it cheaper to

further improve quality of service. Perceptibly the smart grid would bring

even better levels that would again benefit all users. [22]


July, 2010 34

Figure 10 Quality Cost vs. Conformance.

Quality costs for consumer and utility are aggregated to obtain total quality cost.

Source: www.emeraldinsight.com

New Added Value Services - As for new services and technology, consumers

are currently unaware of their benefits and therefore not interested, which in

market terms means no demand, action or contribution. Certainly, once the

deployment of smart grid occurs, the new services which will be studied in

depth in the following chapter will accelerate their deployment.

3.2 Generators

The more efficient network use will modify the electricity generation balance curve,

forcing the generators to operate in new ways. Generator operation will suffer: fewer

stops, fewer ramps, etc. It is important to note that while traditional generation may

worry that smart grids, through their higher efficiency may reduce energy prices for

consumers, this does not necessarily mean losses for electricity production.

Generators receive an economic benefit proportional to the market price times the

quantity of power sold minus their production costs, as explained below (see

equation 4).

B = P · Q – C (4)


July, 2010 35

Where P is the market price, Q is the quantity of power soled and C is the cost for the

company to produce Q. Generator obtaining an economic benefit equal to B. [21]

As a consequence even if prices fall, the benefits of generation could increase due to

higher production. The lower prices and new services can also bring rebound effects

increasing demand. An example could be the use of electric vehicles that would burst

demand during valley hours (see figure 11). In the following figure an increase of the

demand during the off peak hours due to the expected high penetration of electric

vehicles in the Spanish system, implies higher quantities of electricity sold by

generators.

Figure 11 Load Curve with EVs.

Forecasted load curve for the Spanish system for a penetration of one million electric vehicles in

2014. With 8 hours off-peak recharge.

Source: Proyecto Piloto de MOVilidad ELEctrica: MOVELE [23]

The bottom line is that maybe consumers will not consume less, but actually more,

yet surely in a more efficient way. Especially important is once again to consider the

problem, not for network and generation separately, but as a single complex process,

because of the correlation each one causes on the other. What this means is that

generators must forecast the future network in their investments to adapt to future

system needs and avoid investing in obsolete technology.


July, 2010 36

The expected high beneficiaries of a more flexible network are distributed generation

plants. Currently the access and connection points for these generators are complex

and hence expensive. In many cases these costs must be covered by the generator

itself, increasing fixed cost. Other possibility not explored yet could be the

cooperating generation. Today, for example in Spain, each generator has its

exclusive connection point, but talking about renewable generation, the same point

could be shared in a cooperative way, for example for solar and wind generation, so

that during sunny days the generation could come from the solar farm and at night

and cloudy days, the wind plant, if possible, could generate. At conflict times, clear

rules should be established to assure the maximum capacity generation with the

agreed priority. In this way, the network investments could be optimized.

With Smart Grids this scenarios could be considered, taking the grid the

responsibility to manage the agreements in an effective way. So, cost would surely

decrease, meaning lower investment cost and higher security of supply.

As mentioned above, another form of generation that will increase in the near future

and have to be supported by the upcoming new services will be those customers that

also produce their own energy, sometimes known as prosumers. New

microgeneration technologies and energy storage systems make them viable for

domestic use. This new form of extreme distributed generation in high amounts is

unviable without an important upgrade in the current grid.

Additionally, with the increasing penetration of renewable generation, new problems

arise for the generator community as a whole. Historically, the generation park was

able to manage the demand in an economic way. As new technology entered the

sector, old plants where replaced by new ones in a more economic way. Today, the

renewable generation is coming to the market helped by government incentives and

displacing other plants, creating a distortion to the market. But it is the first effect to

a coming alarming situation. With the increase of renewable plants, an excess of

energy in the market will be produced at certain periods of time – mainly at valley

hours – this will bring conflict between generators in the market. In this case, the


July, 2010 37

business plans calculated only with the incentives, but considering full production,

will not comply with reality. Many plants will operate far less hours than planned

and therefore obtain worse economic results than expected.

Other effect associated with the increasing participation of renewable generation, is

the fact that at certain point, every kW of renewable energy will need to be backed

up for almost the same quantity in kW of traditional generation. This means an

increase of traditional generation deployed as back up, but with an expectation of

minimum participation in the market, which implies higher price back up units.

These two last cases would be particularly important in markets not very well

interconnected, as Spain. It could be minimized by more capacity to absorb the

exceeding energy, which can come through increase the interconnection capacity,

increase the storage capability with new pump reservoirs, or moving the demand

through demand side management.

Anyway, smart grids have to support all the expected functions, and the regulator has

to solve the economic distortions of the market through adequate remuneration

and/or services.

3.3 Energy Service Companies

Energy Service Companies (ESCo) are businesses that use their knowledge of energy

usage, to come up with a broad range of comprehensive energy solution products for

consumers. An example of ESCo service could be the design and implementation of

energy saving projects. ESCo perform an in-depth analysis of the property, designs

an energy efficient solution, and then recommend a package of improvements to be

paid for through savings. Once contracted, ESCo may install the required elements

and maintain the system to ensure energy savings during the payback period. In this

case, ESCo will guarantee that savings meet or exceed annual payments to cover all

project costs, usually over a contract term of seven to 10 years. If savings don't

materialize, the ESCo pays the difference, not the consumer.

http://en.wikipedia.org/wiki/Payback_period

http://en.wikipedia.org/wiki/Payback_period


July, 2010 38

Many types of building improvements can be funded through their existing budgets:

new lighting technologies, boilers and chillers, energy management controls and

swimming pool cover, to name a few.

The above mentioned cases are a small part of the activities that the ESCo could

implement. With the unbundling of the energy process and the increase in flexibility,

a wider range of products for ESCo will appear. Also customers more aware of

environmental problems, energy markets and system operation, through a direct

economic signal, imply higher interest in energy efficiency products. A promising

future awaits the companies that find efficient ways to find win-win situations

together with customers.

Obviously, the more flexibility will imply more services, and overall, the network to

support it, which means, smart grids.

3.4 Transmission System Operators

Even though the transmission system is already highly automated, it will be also

responsible to support the new services of the whole system. At the end, the

responsibility of the stability of the entire system is in the hands of the transmission

system operator.

The TSO has to have the tools to observe the entire system, which include all the

interconnections with the distribution companies and other networks, and also the

real time generation of the system. Until now it was easy, since only big plants were

in the system, and typically connected to the transmission network. But in the

coming years, the number of sources will become huge, and will be connected to any

point in the network. The question now, is how much real time information has to be

integrated into the TSO computer systems to obtain the highest efficiency in the

electrical system.


July, 2010 39

These questions have to have an answer translated in new services and have to be

supported by the transmission network to help accomplish a higher flexibility in

operation that will help the stability and security of the system.

Additionally, due to the uncertainty of the renewable power plants production, it is

necessary to count with reserve backup generation in the own network, or optionally,

share common reserves with neighboring countries through interconnections. The

EU has plans to implement a supergrid that would interconnect the transmission

systems from the northern countries to the north of Africa. The available power

should be at least the 10% of the maximum consumption.

3.5 Distribution System Operators

Distribution system operators will play a key role for the viability of smart grids that

are basically set on distribution networks. The general deployment of communication

systems and automation equipment until the user end point as part of the smart grid,

will mean an important effort has to be made by distribution companies, since it is in

their networks where the major impact must occur.

The current network is dimensioned for the peak load period, with little automation

in high voltage, very little in medium voltage and none in low voltage networks. This

means an almost null operational flexibility in the whole distribution system and

hence a traditional and inefficient management scheme. The increase in operation

possibilities and the demand side management shift to cheaper prices, means the

energy consumption could be more efficiently distributed. In this way, investment in

new assets that would be necessary with demand growth in a traditional scheme,

need not be made if the efficiency increases. Costs for consumers would be lower in

terms of energy generation, and the bottom line is that a higher, but much more

rational use of the network can be achieved.

The smart grid is fundamentally based on different devices that are in constant

communication between network users. This increase in information allows a higher

gain in efficiency in the distribution area.


July, 2010 40

A common mistake is to think that due to the huge number of clients, the technology

needed for this high integration of communications is unavailable. However, there

are no technical problems for the implementation, but actually the barriers are purely

economic ones. The communication between the central dispatch and the

substation – or the transformer center of medium to low voltage – can typically be

done easily through the public network, and from there to the user house. It is

possible to communicate through power line carrier over the own electric lines.

Directly proportional to the vast number of clients are the needs in equipment

necessary to achieve correct communication. Given current regulatory incentives,

quality of service may justify a very small number of automation made on the

distribution network, about 5% of the elements depending on the network design.

But still far from the requirements, an efficient grid would need to have to comply

with all the coming challenges. The devices needed are today too expensive to justify

a reasonable return. [42]

With a scheme, where the clients would be responsible for the costs, directly or

indirectly, of the two-way communication meters, a very important part of the

needed communications would be solved, and the DSO could reach much higher

levels of automation. This would bring a wide range of advantages for the

distribution company.

Firstly, the quality of service would rise exponentially. Although already considered

satisfactory in many countries, a better quality of service means higher revenues for

distribution that work under incentive scheme regulation, and very high economic

savings for the aggregated customers, meaning gains in society as a whole. Recall

figure 10, if the cost of distribution falls the graph would swift to a balancing point

with higher quality (see figure 12). The demand quality cost and utility quality cost

functions change with time due to changes in related costs.


July, 2010 41

Figure 12 Swift Quality Cost vs. Conformance.

Shift from high cost for the distribution company to obtain higher quality of service to lower cost

under hypothesis of automation being waged by clients.

Source: inspired by www.emeraldinsight.com

Operating a poorly automated system means that in case of fault, the DSO will not be

aware of the error until the client communicates it. The problem reaches individual

client level. What is more, locating the fault in the actual network must be done

physically through maintenance crews that must examine the lines and devices, in the

actual scenario. All this process is time demanding and expensive. Under automated

operation the process of restoration of supply could be done in much shorter time,

since the smart devices working together, would inform of the specific location

where the fault is located. Once more, the important number of faults that are due to

avoidable causes could be foreseen by the operator and dodged altogether, signifying

savings in maintenance and increasing the life span of assets.

Another way in which the maintenance and assets would be exploited more

efficiently is in the equipment substitution criteria. If the load balance of a line or

transformer is unknown its operating life is estimated. This means that sometimes,

assets are replaced prior to their optimal amortization, and other times break because

of aging, causing a problem to the system. The first case is economically inefficient,

and the second is even worse since it compromises system security. It would be

much more efficient to optimize the substitution of the assets. In a highly

communicated system power flow information can be taken, and the use of assets

can be recorded in detail. Useful life of assets is a very important optimization to

take into account, due to their extremely high costs.


July, 2010 42

Further reward for distribution companies, is that losses will also reduce, both

technical and non-technical.

Technical losses are due to the physical effects of load flows in power lines,

being the most important the Joule effect that is caused by electron kinetic

energy transforming into heat. These losses will be smaller because of the

new ways the system will operate.

Non-technical loses are due to theft by means of illegal connections or

mistaken invoices to clients. The DSO will have the possibility to find the

hitch and solving it by disconnecting illegal connection. The problems with

clients that do not pay will easily be solved by remote disconnection, and

connection.

In this way the distribution company may well be the major risk taker and

responsible for the deployment of the smart grid, but the benefits will also be

substantial. The remuneration of the DSO must be reasonable considering the major

benefits it will bring to all stakeholders.

3.6 Standardization Institutions

The standardization institutions will face problems that up to date have never been

posed. Included in the standardization institutions must be all the users involved in

the new elements. So, technical representatives of generator, transmission and

distribution companies, equipment suppliers and other experts have to be involved in

the discussions to obtain the standards that comply with the users‟ expectations.

As utilities implement Automated Metering Infrastructure (AMI) and seek to extend

the Smart Grid beyond the meter into the home and other devices, the diverse

number of communication protocols creates serious compatibility problems for

utilities, suppliers and consumers alike.


July, 2010 43

Communications protocols must be defined. If each supplier has a unique protocol, a

market of winners and losers may outcome. More sensible would be an approach

where open and public protocols were defined.

So, it is very important to end up having open standards that can be shared with

everybody, as a form of promoting development without restriction for the different

suppliers, to reinforce efficiency.

3.7 Regulators

The regulatory authorities are responsible for the well being of the entire power

system, not only in the short term but also in the long term. They must do so by

taking the appropriate actions in the long, medium and short term, to help all

stakeholders achieve the maximum net social benefit.

The role of the regulators has been vital in the liberalization of the power sector.

Currently, the systems have successful operating markets, however new services and

activities demand new regulation. It is crucial to not forget that in a sector where all

parts are interconnected; an unfair allocation of charges may bring direct

consequences on the rest. In this way it is important to have clear rules before

implementation of new activities.

From the regulatory perspective, the imminent social compromises imply actions be

taken in at least the following three fundamental aspects:

1. The environmental challenges many countries have agreed to work on.

Diminishing the effects of climate change, through reducing carbon

emissions, promoting energy efficiency and encouraging a high penetration

of renewable sources of energy production.

2. The interest to keep on promoting higher quality of service.

3. The sustainability of the system always considering the new challenges that

without a doubt will continue emerging.


July, 2010 44

The employment of smart grids is considered to be crucial to deal with all these

problems. However the regulatory authorities must be clear and define: roles,

responsibilities and rights.

The economic validation of important investments must be taken assuring the rate of

return is proportional to the risks involved. The regulator must find a way to share

the costs amongst stakeholders to assure deployment occurs. The learning curve of

new technologies and services must be managed so that cost efficiency is reached.

An erroneous regulation that does not remove barriers, or that brings excessive

restrictions, may make a fair rate of return over investment impossible.

3.8 Equipment Suppliers

Suppliers of smart equipment must work hand in hand with standardization

institutions. Together, along with the other stakeholders included in the Standard

Organizations have to specify the standards needed be fitted into the new devices.

And finally, the equipment suppliers have the challenge to make them as sustainable

and cheap as possible, assuring correct operation.

NETWORK SERVICES Smart Grids Benchmarking

July, 2010 45

4 NETWORK SERVICES

The drivers to smart grids, already discussed in chapter 2, all share three common

social compromises that as a result ensure the sustainability of the power system. The

system must be:

Environmentally responsible

Economy efficient

Reliable enough to ensure an adequate security of supply

The answer to the question of if the costs needed to achieve these objectives are

lower than the cost incurred in building such a network, is unknown because it is

difficult to determine just how much investment is necessary and how much benefit

will outcome. It is necessary to distinguish where a surplus of investment is made

and where it lacks. Determining the perfect investment is impossible due to the

abundant number of unknowns. Estimations of optimal investment may and should

be calculated under a number of different schemes taking into account the future

forecasts and uncertainty factors. Once more it is important to consider that with the

new network, new products and services will emerge modifying expectations.

The present chapter will be devoted to an examination of the most important new

products and services that a smart grid will predictably introduce. Although precise

information about these products is not yet known, a promising future is expected.

In the following years, deployment of the following products and services is

expected:

a. Smart meters

b. Home automation

c. Electric transportation

d. Energy quality

4.1 Smart Meter


July, 2010 46

The vast majority of stakeholders agree that in the coming decade, smart meters will

become a common feature in consumer connection points. Customers will need these

devices to adapt to future network needs, and to take advantages of the benefits.

The term smart meter, similarly to what occurs with the description of smart grid, is

not very precisely defined. This is because no specific standards have been agreed

upon; leaving a range of different possibilities open to choice, from relatively simple

meters to extremely advanced ones.

A smart meter is a device that records the energy consumed and quantity of power by

the customer, i.e. the meter, and has the ability to communicate information to the

outside world, transforming the traditional passive meter into an active smart meter.

Therefore, any meter that can communicate is a smart meter.

The communication can be one-way or two-way. The level of smartness depends on

the exact capabilities of the meter. One-way communication is the simplest way of

smart meter and facilitates Automated Meter Reading (AMR). As device complexity

increases, two-way communication and advanced services are introduced. The meter

begins to be a part of the intelligent grid. The term then commonly used to refer to

this kind of meter is Advanced Metering Infrastructure (AMI) (see figure 13).

Figure 13 Smart Metering Infrastructure levels.

Market definition and expectation of different types of metering infrastructures.

Source: http://www.ti.com/corp/docs/landing/smartmetering/


July, 2010 47

Communication in a smart meter can be wired or wireless. A common wired scheme

is via the power line. This is commonly known as Power Line Communication (PLC).

PLC uses the existing infrastructure to modulate information on the main signal.

Whereas wireless communication uses Radio Frequency (RF) to communicate using

wireless transceivers, a device that has both a transmitter and a receiver sharing

common circuitry. A variety of wireless standards such as Zigbee, 802.15.4,

Bluetooth, etc… dominate the metering industry today.

The meter is especially important because it is the channel of communication

between the personal network inside the home and the external distribution and

transmission networks. In a residence, the network formed inside a home is called a

Home Area Network or HAN. In a similar way, the external network is known as a

Wide Area Network or WAN. The smart meter just outside the home forms both a

HAN and WAN (see figure 14). The HAN communicates with appliances inside a

home to monitor and control energy consumption. The WAN allows the meter to

communicate with other external sources, like the smart grid.

Figure 14 HAN and WAN.

Source: http://www.ti.com/corp/docs/landing/smartmetering/

Smart meters are a breakthrough to the metering industry bringing a number of

advantages to the consumer and utility companies.

Some of the advantages for the customer include:

Demand information on consumption via sub-metering in a home.


July, 2010 48

Clear and accurate invoicing based on actual consumption.

Automated failure information and handling.

Capability for selling energy back to the supplier which will facilitate

microgeneration technology (e.g. solar panels or wind turbines).

Flexible tariffs that measure consumption over set time periods.

Additionally, some of the advantages for the utility companies are:

Network optimization.

Automated metering and invoice processes.

Remote disconnect of power to delinquent players.

Real time monitoring of meter tampering.

Suppliers will be able to differentiate their tariffs and services through

offering alternative means of displaying energy consumption – i.e. through

mobiles, the internet or via digital TV.

Improved accuracy of forecasting energy demand at different times of the day.

For the previous reasons, it is now commonly recognized that smart electronic meters

deployment will be the first key step to smart grid success. The new feature will

enable energy efficiency gains and therefore reduce carbon emissions.

The smart electrical meters need to face new tests such as tariff flow profile

management or over the air upgrade. This implies that the application must have well

designed processors that must support large quantities of data. These data must be

banked in the device‟s memory, be securely encrypted, for security reasons and

processed with enough connectivity, to interface with the smart grid functions.

These modern architectures will be installed in the field for the next decades. And

will have to be built reliable and at the right cost, to enable mass deployment. The

definition of standards must be approached to find the right sort of solutions.

In summary, smart meters will empower customers to make choices on how and how

much energy they use. Suppliers will install two-way communication systems that


July, 2010 49

display accurate real-time information on energy use for consumer and feedback

energy information to supplier.

4.2 Smart Home/Home Automation

Till this point, this thesis has focussed on the drivers towards a smart grid at regional

system level. However since an important part of the system is composed of small

clients it is interesting to analyse how the future grids will change electricity use at a

domestic level.

The term smart home is used to describe a home that has been automated to obtain

system and personal efficiency by driving energy costs down.

Today home automation, or domotics, basically consists of state of the art

technologies applied for domestic services. Another definition widely used is the

integration of technologies in the intelligent design of a social space. Examples of

these automations are: (i) home entertainment systems, (ii) house plant watering, (iii)

pet feeding, (iv) domestic robots, (v) automatic shades, etc. These products are

expensive and consumers are not aware of their direct and indirect benefits, for this

reason demand is low and therefore only a small market exists. An important

consequence of the imminent introduction of smart meters into consumers‟ homes is

the arrival of new power products and services. As clients become aware of cost,

through an efficient electricity price signal, an incentive towards energy efficiency

and new commodities will drive consumers to look for new products. The industry

will start a new market for these goods, whose primary expectations bode well for a

promising future.

Recall that primarily what users are interested in is in obtaining a lower electricity

bill. The nature of the market means there are basically two ways of achieving these:

(i) either there are cheaper offers, this means the generation and distribution is made

more efficient, or (ii) there is a reduction of demand, this implies reducing the energy

consumption.


July, 2010 50

Consumption can be reduced overall with less use or with the use of new

technologies. Reducing domestic energy consumption can be accomplished in many

ways. Good insulation, double-paned glass, weather-stripping and similar efforts can

improve your home's ability to retain the desired temperature. Some homeowners

take a further step and choose to install solar panels or to simply reduce their energy

use, for example by turning off standby modes or computers when they're not needed.

But as part of managing your energy use, it's important to know how much electricity

you're actually using, even though your monthly electric bill may not include all the

relevant information. [24] This is why the smart meter is a key element for

improving efficiency, by providing a competent price signal. When the user is able to

react by reducing or moving its power needs during excessively expensive periods,

this action is known as Demand Side Management (DSM).

Home automation has four key drivers, which will substantially increase as the smart

grid deploys: [25]

1. Convenience

2. Security

3. Savings

4. Environment

Convenience – The increase in personal comfort is a natural driver in any

market. If the benefit the product returns is higher than the cost, customers

will buy the product. The benefits are subjective, but as price decreases the

quantity sold will increase. An automated home increases comfort by saving

time and effort. Routine occupations such as: watering your plants, turning

off all lights, setting the thermostat to economy mode and arming the security

system can all be automated. Moreover, automation has an important market

in the entertainment sector. As an example, take for instance the case of how

traditional television sets have changed over the last decade to home theatres.

The experience of having the lights dim, curtains close, the movie to start and

the phone to mute all with the touch of a button is another market front for


July, 2010 51

this technology that can incorporate further benefits thanks to the future

electricity model.

Security – More important than convenience may be the higher security an

automated home may provide. Simple fire detectors, gas shut down devices

and ventilation systems, lighting escape paths, security cameras and

automatic dialling to emergency services are all important devices that can be

intelligently synchronized into one‟s home to increase security levels.

Savings – The economic savings are the benefit that traditionally drives

consumers to a product. As energy costs increase with society having higher

power needs, the importance at an individual level of saving electricity

increases. With a smart grid implemented at regional level and AMI in each

home, the operation of lights, water heater, heating and air conditioning

systems, entertainment components, appliances and irrigation systems may be

used in a highly efficient way.

Environment – As a direct consequence of being more efficient the automated

home become eco-friendly. This may have intangible social benefits given

that nowadays not being ecologically aware is frowned upon by society.

The smart grid will allow future development by coordinating the interactions

between the WAN, the smart meter and the HAN. Both utilities and home owners

will work together to reach a win-win solution. The new products are being designed

to bring smarter solutions that take advantage of the new energy model. Some of the

products expected to have a high demand are for instance the development of

microgeneration, which is defined as the on-site generation of zero or low carbon

emission, heat and power by small consumers to reduce external power needs,

examples are: (i) photovoltaic panels, (ii) small wind turbines, (iii) combined heat

and power, (iv) solar water heating… [26] Also energy storage systems bring

convenience and security in the way of more reliable energy, and savings and

efficiency by charging during valley hours and reducing overall system consumption

in the peak.

Consumption pattern, quantity and type, may vary strongly depending on factors

such as location, power price and life style. However in the vast majority of countries,


July, 2010 52

domestic clients are unaware of the price they pay for energy consumed - €/MWh,

and energy prices do not distinguish between different time periods. Furthermore

smart appliances are not used. The promising possibilities of home automation can

be explained through the very simplified model designed to show the hypothetical

electricity use of a small dwelling. Let us consider the following four possibilities:

Traditional Scheme – Considering a single tariff or flat rate of 0,12 €/kWh,

with no off-peak discrimination and no smart appliances (see table 1).

Table 1

Power [W] use [h]

Energy

[kWh]

Cost

[€]

Standby – Entertainm. 10 24 7,2 - 0,864

Standby - Phone, Rout. 75 24 54 - 6,48

TV 120 3 10,8 - 1,296

Music 40 2 2,4 - 0,288

Laptop 1 50 6 9 - 1,08

Laptop 2 50 6 9 - 1,08

Washer 500 0,3 4,5 - 0,54

Dryer 5400 0,3 48,6 - 5,832

Dishwasher 1500 0,5 22,5 - 2,7

Cooking 1000 1 30 - 3,6

Security light 26 12 9,36 - 1,123

Lighting 300 6 54 - 6,48

Refrigerator 500 9 135 - 16,2

Heat pump 1500 4 180 - 21,6

576,36 Cost: 69,16

Under this hypothesis the client will consume a quantity of energy, in the

example 576,36 kWh in a month and be invoiced for a total cost of total

energy times the flat rate (0,12 €/kWh) giving a total cost of 69,16 €. In this

scheme clients are unaware of electricity cost, and will not have an incentive

to reduce cost and energy use.

Hourly discrimination – Peak prices of 0,14 €/kWh and an off-peak of 0,06

€/kWh from 10 pm to 12 am. This mean that during the off-peak the energy

saving are around 50% with respect to the regular tariff. Therefore during the


July, 2010 53

14 hours of cheaper electricity it is ideal to turn high consumption appliances

on. With no smart appliances and an unaware customer (see table 2).

Table 2

Power

[W]

use

[h]

Off-peak

[h]

Peak

[h]

Energy O-

p [kWh]

Energy P

[kWh]

O-p

Cost [€]

P Cost

[€]

Standby - Entert 10 24 14 10 4,2 3 0,252 0,420

Standby - Others 75 24 14 10 31,5 22,5 1,89 3,150

TV 120 3 0 3 0 10,8 0 1,512

Music 40 2 0 2 0 2,4 0 0,336

Laptop 1 50 6 0 6 0 9 0 1,260

Laptop 2 50 6 0 6 0 9 0 1,260

Washer 500 0,3 0 0,3 0 4,5 0 0,630

Dryer 5400 0,3 0 0,3 0 48,6 0 6,804

Dishwasher 1500 0,5 0 0,5 0 22,5 0 3,150

Cooking 1000 1 0 1 0 30 0 4,200

Security light 26 12 11 1 8,58 0,78 0,515 0,109

Lighting 300 6 3 3 27 27 1,62 3,780

Refrigerator 500 9 4,5 4,5 67,5 67,5 4,05 9,450

Heat pump 1500 4 0 4 0 180 0 25,200

138,78 437,58 8,327 61,261

Energy: 576,36 Cost: 69,59

The idea behind discrimination periods is that the consumer will have

incentives to shift consumption to cheaper periods. However as is described

in the numerical example if the consumer is unaware of this and there is not a

channel of communication, the customer will not change its energy use habits

and there is a risk of achieving worse results. The discrimination price will

bring a net negative benefit since the punishment of consuming in peak

period at a higher price (0,14 €/kWh) will weigh more than the benefit of

consuming during off-peak periods at (0,06 €/kWh). The total cost will be

0,43 € more expensive using the same quantity of energy in the same way that

under a flat rate scheme.

Hourly discrimination – Peak prices of 0,14 €/kWh and off-peak of 0,06

€/kWh. With no smart appliances but with an aware customer thanks to a

smart meter with two-way communication (see table 3).


July, 2010 54

Table 3

Power

[W]

use

[h]

Off-

peak [h]

Peak

[h]

Energy O-p

[kWh]

Energy P

[kWh]

O-p

Cost [€]

P Cost

[€]

Standby - Entert 10 0 0 0 0 0 0 0

Standby - Others 75 24 14 10 31,5 22,5 1,89 3,15

TV 120 3 0 3 0 10,8 0 1,512

Music 40 2 0 2 0 2,4 0 0,336

Laptop 1 50 6 6 0 9 0 0,54 0

Laptop 2 50 6 6 0 9 0 0,54 0

Washer 500 0,3 0,3 0 4,5 0 0,27 0

Dryer 5400 0,3 0,3 0 48,6 0 2,916 0

Dishwasher 1500 0,5 0,5 0 22,5 0 1,35 0

Cooking 1000 1 0 1 0 30 0 4,2

Security light 26 12 11 1 8,58 0,78 0,5148 0,11

Lighting 300 6 3 3 27 27 1,62 3,78

Refrigerator 500 9 4,5 4,5 67,5 67,5 4,05 9,45

Heat pump 1500 4 0 4 0 180 0 25,2

228,18 340,98 13,69 47,74

Energy: 569,16 Cost: 61,43

The installation of two-way communication meters with an efficient price

signal and after educating customers in energy appliance consumption will

bring the correct incentive to consumers to change traditional energy habits.

In the example consumers switch completely off entertainment systems, such

as television sets or video players, by disconnecting the systems from the

actual appliance not just leaving the system on standby with the remote

control. Another change may come through shifting appliances that can be

used during off-peak periods with no major problem. Laptops can be charged

during the night, the washer, dryer and dishwasher may turn on during the

cheap 14 hours. Just with these few modifications energy is saved and used

more efficiently. The benefits in economic terms are noticeable in the

example over 7 € are saved, this is around 11% of the hypothetical monthly

bill. However the drawback is that consumers will lose personal quality of life

having to worry about when to turn on and off appliances.


July, 2010 55

New energy model hypothesis – Price discrimination and smart appliances

that disconnect appliances instead of standby and have better efficiency rates,

and smart metering infrastructure, that provide competent price signals (see

table 4).

Table 4

Power

[W]

use

[h]

Off-peak

[h]

Peak

[h]

Energy

O-p

[kWh]

Energy P

[kWh]

O-p Cost

[€]

P Cost

[€]

Standby – Entert. 10 24 0 0 0 0 0 0

Standby – Others 75 24 14 16 31,5 36 1,89 5,04

TV 120 3 0 3 0 10,8 0 1,512

Music 40 2 0 2 0 2,4 0 0,336

Laptop 1 50 6 6 0 9 0 0,54 0

Laptop 2 50 6 6 0 9 0 0,54 0

Washer -10% 450 0,3 0,3 0 4,05 0 0,243 0

Dryer -10% 4860 0,3 0,3 0 43,74 0 2,6244 0

Dishwasher -10% 1350 0,5 0,5 0 20,25 0 1,215 0

Cooking 1000 1 0 1 0 30 0 4,2

Sec. Light -10% 23,4 12 11 1 7,722 0,702 0,463 0,098

Lighting -10% 270 6 3 3 24,3 24,3 1,458 3,402

Refrigerator smart 500 9 6 3 90 45 5,4 6,3

Heat pump 1500 4 1 3 45 135 2,7 18,9

284,562 284,202 17,074 39,788

Energy: 568,764 Cost: 56,862

The use of home automation combined with an efficient price signal means the

consumer will not need to have to deal with the uncomfortable part of the

problem of worrying about turning off or shifting use to less wasteful periods.

The automation in smart appliances may provide this service directly for them.

In addition, these appliances are more efficient and automatically compute

complex algorithms to optimise when to turn on depending on the price given

by the smart meter and other consumer personalized variables. In the example

more than 12 € per month are saved compared to the traditional monthly bill.

The other advantage is that the overall power system is more efficient, meaning less

hazardous for the environment. The smart grid can allow further development of new


July, 2010 56

products that would bring more benefits in the form of commodity and savings.

Other products not mentioned in the example, but that augurs an important

deployment, are the introduction of: micro-generation, as previously mentioned in

this chapter; and the electric vehicle, to which the next section of this chapter is

devoted, since it will play very relevant roles in this context.

Finally it is important to mention that since the deployment of smart grids is so

important for environmental reasons, but difficult to justify economically; it is of

great importance to seize all the possible benefits related. Therefore it is important to

have a clear understanding about these in order to introduce smart grids, smart meter

and appliances that have standards prepared to achieve this. Introducing smart meters

that have an hourly discrimination prices but do not efficiently interact with the

consumer through an easy to read screen or that do not communicate through a HAN

with the automated appliances will not allow capturing many of the benefits needed

to justify the investment.

4.3 Electric Transport

The alarming situation of energy supply and use is unsustainable - economically,

environmentally, and socially. The transport sector is responsible for the highest final

end use of electricity throughout the majority of developed countries. (See figure 15).

39%

33%

12%

16%

Final energy use U.S. 2008

Transportation

Industrial

Comercial

Residential

Figure 15 Final energy use U.S. 2008.

Source: Lawrence Livermore National Laboratory.


July, 2010 57

Besides being responsible for the highest final energy use, the transport sector is also

one of the less efficient ones. Taking the train or bus is cheaper and more efficient

than using a family wagon, yet today, a dynamic way of life requires a comfortable

and quick mode of transportation, in this way the car is the mode of transportation of

most citizens. On the other hand, the desire to cut down greenhouse gas emissions

and reduce our dependence on foreign oil, means electric drive is a solution that

shows potential [28]. However, adapting the world for electric vehicles will not

happen overnight. It will require substantial investments in technology,

manufacturing, modernizing infrastructure and market development. The power

utilities and the car industry, two sectors that have traditionally been independent

must work together to achieve deployment. The car industry must develop new cars,

with all the technologies that this demands, that are able to comply with the low

emission standards, while bringing competitive comfort and drive experience

compared to traditional ones. On the other hand, the infrastructure required to power

these vehicles are networks that can cope with the new needs. The power sector shall

be responsible to foresee the more complex power flows at distribution level and

adapt the network; as a result a smart grid is needed to get on the right road, right

away.

International organizations are aware of the needs. The International Energy Agency

(IEA) published in December 2009, a detail paper on “Global Gaps in clean energy

research development and demonstration” [27]. In this report the agency expresses

the future economic needs in RD&D of different energy related technologies. As

well as research needed in topics such as: energy efficiency, carbon capture storage

(CCS) systems, smart grids and other renewable sources, the report calls out the

importance of the deployment of advanced vehicles as the primary needs for funds in

RD&D during the coming years (see table 5). To achieve the blue map 2050 goal

almost half of total fund for RD&D for the sector should be devoted to advanced

vehicles.


July, 2010 58

Table 5 RD&D Gap Analysis Overview. Source: IEA [27]

Before going into RD&D priorities, a very basic conceptual background of the

different types of electric vehicles is given for a better understanding.

An electric vehicle is one, in which the torque supplied to the wheels comes from an

electric motor, much more efficient than a traditional combustion engine. This

electric motor may be powered by different sources of energy:

Either exclusively by rechargeable batteries, usually made of lead acid or the

more modern and efficient Lithium-ion. All Battery electric vehicles (EVs)

are charged through the network and through advance development will be

able to sell back energy to the grid. At the present time battery vehicles have


July, 2010 59

the advantage of being very cheap to run, due to the low electricity price and

use of very efficient engines that do not emit pollutants. However the main

drawback is that the technology is immature and very expensive, batteries

have low energy storage to mass ratio, and this means these vehicles are very

heavy, making mileage low. An additional disadvantage is that recharging

takes very long using traditional low voltage sockets. For these reasons the

infrastructure necessary is crucial.

Figure 16 Electric Vehicle.

Source: inspired by CEESA PROJECT. WP.3. FUTURE ELECTRIC POWER SYSTEMS [29]

When the vehicle is powered by a combination of batteries working together

with an internal combustion engine (ICE) using petrol or diesel, these are the

so called hybrids (HEVs), when these are able to recharge the batteries form

the network or sell it back they are known as plug-in hybrid electric vehicles

(PHEVs). These cars seem to be a positive compromise for a transition to

pure EVs, reducing the drawbacks yet still achieving important benefits.

Figure 17 Plug-in Hybrid Vehicle.


Another promising possibility is the use of hydrogen as a source of energy for

fuel cells. These fuel cell vehicles (FCVs) are powered with hydrogen (H2)

produced from an electrolysis process. A process that uses an electric current


July, 2010 60

to produce H2 in other word producing car fuel with electricity. The basic idea

behind a hydrogen fuel cell is to use as its fuel and oxygen, usually from air,

as its oxidant [30]. Fuel cells generate electricity from a simple

electrochemical reaction in which an oxidizer in the anode, O2 from air, and a

fuel, H2, in the cathode of the fuel cell combine to form a product, water H2O.

Therefore the advantage of using H2 as a fuel is that the only residue is water.

In addition, the fuel cell itself has no moving parts, making it a quiet and

reliable source of power. The electrolyte that separates the anode and cathode

is an ion-conducting material. At the anode, hydrogen and its electrons are

separated so that the hydrogen ions (protons) pass through the electrolyte

while the electrons pass through an external electrical circuit as a Direct

Current (DC) that can power useful devices. The hydrogen ions combine with

the oxygen at the cathode and are recombined with the electrons to form

water. The reactions equations are shown below (see equation 5).

Anode Reaction: 2H2 => 4H+ + 4e- (5)

Cathode Reaction: O2 + 4H+ + 4e- => 2H2O

Overall Cell Reaction: 2H2 + O2 => 2H2O

Fuel cell cars don‟t have the drawbacks of long recharging and are almost

identical to traditional ones, however the electrolysis process needed to

produce hydrogen is very expensive due to the high energy demanded,

furthermore the technology is still immature and problems exist related to

hydrogen storage in compact and secure ways. It would be needed to develop

a brand new infrastructure to produce, transport and store hydrogen. This last

activity is particularly risky. Under this scheme the paradigm would change,

besides having a vehicle, the client would have an energy storage system,

being able to sell power back to the grid.


July, 2010 61

Figure 18 Fuel Cell Powered Vehicle.


Finally, it is important to consider that electric vehicles may be part of the

solution but that they are not necessarily the only solution. There are a

number of alternatives that achieve the same final objectives, but using

traditional combustion engines. Bio-fuels have almost zero emission and

there is no need for these to be imported. Switching to Bio-fuel means no

major changes are needed in the electricity grid for transport purposes.

However this also means less added value services for consumer such as

energy storage.

Figure 19 Bio-Fuel Powered Vehicle.


Clearly economic incentives are needed to deploy ways to achieve the efficient

vehicle technologies that are capable of seizing all the benefits and, just as

importantly, recover the costs. Therefore in this early stage, RD&D is necessary for

this purpose. According to the IEA decarbonisation of the transport sector will

require a significant move towards more efficient vehicles, advanced propulsion

systems, improved vehicle energy storage, and low-carbon alternative fuel

production and compatibility with vehicles. The highest priority advanced vehicle

RD&D investments should include:


July, 2010 62

Energy storage: For electricity and hydrogen to realise their full potential as

transportation fuels, improved on-board storage devices will be needed, with

energy densities two to three times those for current best performance levels.

Target systems include PHEVs in the short term, followed by EVs in the

medium term, and FCVs in the long term. These vehicles will be more

expensive than conventional vehicles; minimising any cost increase via

reduced battery and other energy storage costs will be critical to their success.

Lightweight materials: Significantly lighter vehicles are needed to increase

vehicle efficiency, such as very high strength steel, aluminium, and

composite materials.

Fuel efficient technologies: Options include advanced internal combustion

engine based power trains capable of recovering some of the energy lost as

heat. HEVs represent a suite of technologies that continue to be improved and

optimised. More efficient power trains are accompanied by energy efficiency

improvements addressing all vehicle components, like low rolling resistance

tires and more efficient on-board electric and electronic devices.

Breakthroughs in thermoelectric materials for waste heat recuperation are

also possible, both in bulk materials and those associated with

nanotechnology.

Low-carbon fuels and fuel delivery infrastructure: Advances in

production of low-CO2 hydrogen and pathways towards an affordable

hydrogen distribution infrastructure are needed if fuel cell vehicles are to

become a commercial reality. Similarly, recharging infrastructure for EVs

will be required to scale up vehicle electrification, beginning in targeted cities

and regions.

Fuel cell propulsion systems: Continuous improvements in fuel cell systems

are needed, including improved durability and performance under real-world

conditions as well as system cost reduction. Much progress has been made in

recent years but it must continue in order for fuel cell vehicles to become

competitive with ICE vehicles.


July, 2010 63

As pilot project proof positive cost benefit analysis, the electric transport sector will

see its market rise. One possible outcome is a mix of traditional, bio-fuelled powered,

EVs and FCVs. The advantages of EVs are already very clear, the vehicle allows for

lower hazardous emissions mainly due to three reasons: firstly, since the electric

engine is more efficient, less overall energy is needed to cover the equivalent

mileage; secondly, since this energy comes from an energy mix of different energy

sources like: solar, wind, hydro, nuclear and fossil, the proportion of fossil fuels is

lower (recall figure 1), and finally the vehicle‟s batteries can be used as energy

storage system that will allow to flatten the load curve allowing a more efficient use

of the grid. Apart from the environmental aspects, the economic aspect is positive in

the way that electric transportation is cheaper due to the lower cost of electricity

compared with gasoline, considering approximate values of electric, hybrid and

internal combustion engines (see table 6).

Table 6 Estimated Current Cost to Run Different Vehicles

Assumptions €/100km gCO2/km

electric motor 0,15 kWh/km · 0,12 €/kWh 1,80 88*

Hybrid 4,6 l/km · 1,30 €/l 5,98 109

ICE 6,0 l/km · 1,30 €/l 7,80 135

* considering the 2007 Spanish energy mix

The whole system will benefit from the overall increase in efficiency. But to deploy

all these systems a grid able to cope with more complex energy flows is necessary.

The possibility to store electricity, means demand must have further tools to

effectively recharge vehicles during off-peak and reduce peak consumption. Correct

price signal will allow flattening the load curve. Even though the penetration of

electric vehicles will mean higher electrical energy use (see the additional green area

in the example in figure 20 or recall figure 11), this energy will substitute traditional

transport energy - petroleum; hence overall total energy use will be lower [31]. More

importantly, not only is more energy saved, but as green house gas emission are

avoided, because of the less pollutant energy mix, the net social benefit is higher (see

equations 6 and 7).


July, 2010 64

Avoided Use of Petroleum – Electricity Mix Use = Energy Savings (6)

Energy Savings + Avoided GHG >0 Higher Net Social Benefit (7)

Figure 20 EV Load Curve.

BLUE - example of daily load curve. GREEN - additional energy needed to recharge electric vehicles,

under the hypothesis of penetration of one million EVs in the Spanish system.

Source: inspired by Proyecto Piloto de MOVilidad ELEctrica: MOVELE [23]

Finally, others issues that need to be solved are external electricity infrastructures

that must be developed by stakeholders both from the power and car industries.

Examples of these important aspects are: types of charge (slow or fast), types of

connection point (domestic plugs or electro-stations), etc.

4.4 Energy Quality

Taking into consideration all the previous assumptions, it seems clear that the smart

grid together with all its possible directly linked products brings higher efficiency.

Because, the higher grid automation implies that system security will also be higher

and therefore energy quality will be more robust.


July, 2010 65

Once the communications have being deployed in order to get the SM information,

the next step is to acquire real time information from the MV network and

telecommand some neuralgic points.

This level of automation will allow DSOs to increase the quality of service through:

Supervision of MV and LV network

Real time fault detection

Real time automation and control of MV network

Alarm detection in CTs

Failure detection in MV and LV without test-error procedure

Unbalance/overload/deviation detection on voltage

Losses reduction

Assets load

Increase MV network configuration

To have profiles of load/voltages/current in the network

Grid automation is basically combining the power grid with Information and

Communication Technologies (ICT). Communications allow network providers to

obtain valuable information, and with this information, it is possible to better

understand problematic power flows. Furthermore, some devices can actually act on

the grid, combing the higher ICT with active devices; higher network flexibility is

achieved. Detecting real time problems and solving them before reaching emergency

situations, or in the worst case scenario allowing faster restoration.

When describing the most important parts of the power sectors, it is clear that they

are greatly related to the backbone of the system, this is the network. All the topics

listed below are directly related to energy quality:

Safety – line worker, public, equipment

Reliability – up time

Security – ability to meet demand

Robustness – environmental


July, 2010 66

Market – cost of congestions

WORLD DEVELOPMENT SURVEY Smart Grids Benchmarking

July, 2010 67

5 WORLD DEVELOPMENT SURVEY

The Previous chapters have been devoted to giving a detailed discussion on the great

necessity and future benefits that the deployment of a smart grid will bring. The

questions that arise are then: “What are we waiting for? Why doesn‟t any country in

the world has a smart grid?” The answers to these questions are open and depend on

who you ask because each nation is very different. Therefore one of the strong points

of this thesis is to achieve a greater understanding of how this problem is being faced

worldwide.

Therefore the objective is to study the current state of the art situation, the

implementations executed or under way, as well as the government and regulator

point of view in a number of states of Europe and other areas, and obtain

expectations from different stakeholders. Identify the different impacts the

implementation that these grids will have on the different stakeholders throughout

Europe and other areas in order to help regulators and utilities understand different

views, as well as recognize possible inconveniences and barriers to their necessary

deployment.

At this point of the discussion, it is very important to remind the reader that the

problem of deploying smart grids is merely economic. A network should be as smart

as the society that pays for it decides it should be. In this way a network in Japan,

where network charges are high, is already much more efficient than one in a less

developed country, as it is logical.

Another important fact to be kept in mind is that investment is the main economic

barrier, due to the high risk associated with sunk costs. The business cases do not yet

clearly prove that returns are higher than the costs. And above all these, a series of

risks related to this return exist.


July, 2010 68

5.1 Methods

To gather information to develop this study, two approaches have been used. Firstly,

information has been gathered from a series of different electricity platforms that are

working on the current development of smart grids. Secondly, an internationally

targeted survey was designed to recollect specific information and a series of similar

questions to validate results comparing them to the ones from established platforms.

5.1.1 Subjects

For preliminary examination, information on the different countries has been gathered

from an important number of references. However three papers: (i) “Smart Grid and

Networks of the Future” - Eurelectric Views, (ii) “Position Paper on Smart Grids” -

ERGEG and (iii) “EcoPinion: Separating Smart Grid from Smart Meters? Consumer

Perceptions and Expectations of Smart Grid” – EcoAlign, have been used to gather a

global view of the problem. These papers have been of vital importance for this thesis

since they have been used to acquire answers and compare results.

“Smart Grid and Networks of the Future” - Eurelectric Views: Provides data

from 30 DSOs from 16 European countries. Quantitative Histograms

answering 45 questions on nine different topics to understand the present

status and perspective of smart grid implementation until 2020 are attached

together with interesting discussions on the topic.

“Position Paper on Smart Grids” – ERGEG: aims to initiate a dialogue with

all stakeholders of the European electricity power systems and markets, in

order to assist regulators in understanding how smart grids can benefit

network users and, assuming that cost-effective benefits can be identified, to

explore ways in which the development of smart grids can be encouraged.

This paper explores the drivers and opportunities for „smarter‟ networks from

the users‟ perspective. Most importantly, it discusses the regulatory

challenges and priorities and proposes a number of questions and issues for

stakeholders to respond to. Answers to these questions are particularly

interesting and can be found in the ERGEG website.

“EcoPinion: Separating Smart Grid from Smart Meters? Consumer

Perceptions and Expectations of Smart Grid” – EcoAlign: conducted the


July, 2010 69

survey in conjunction with Clasma Events, in May 2010 to test United States

consumer perceptions and expectations in regard to smart grid.

Information has also been gathered directly from end-sources through the

development of a detailed survey prepared specifically for this thesis. A list of over

700 emails was established after performing intense research. The sample was

balanced to match the worldwide stakeholders by three categories:

1. Stakeholder function:

(i) Regulators

(ii) TSO

(iii) DSO

(iv) Utilities

(v) Independent

2. Organization

3. Country involved

The hypothesis was established that the expected reply would be in between a 5% to

10%. This low participation was hypothesised for the following reasons:

Lacks of interest to answer a student – many consultancies are already

conducting similar studies with more resources.

Lack of knowledge about the subject – although all emails belonged to

stakeholders involved in the matter. A portion is not aware of the regulation

on the subject.

Incorrect email – The initial source of where the emails where collected are

subject to error.

Delivery Failure

Out of the office / Vacation

5.1.2 Data Acquired

All subjects where sent the same email that consisted of a letter with the triple

objective of:


July, 2010 70

Informing of the study taking place and its importance.

Request for collaboration.

Explained complete confidentiality criteria

The first emails where sent during the month of April 2010, and as previously

planned a new set of emails were redirected in May 2010 to obtain additional results.

Both emails can be found in appendix A.

The actual survey was designed and developed using Google docs software [43].

This software brings advantages to both volunteer and survey developers. A link on

the email redirected volunteers to the Smart Grid Deployment Survey, a fast and easy

way to answer surveys is available, given respondent may answer directly on the

interface and send the answers at the click of a button. The answers are securely

encrypted and available in a self reloading excel spread sheet for developers.

One of the strengths of the survey is that both qualitative and quantitative questions

are presented, all aiming at identifying the current situation worldwide for Smart

Grid deployment. The topics considered are:

1. Origin and role of volunteer.

2. Regulation on Smart Grids in his country.

3. Regulation on Smart Meters in his country.

4. Timing for deployment.

5. Pilot projects.

6. Expected costs.

7. Drivers.

8. Barriers.

9. Additional questions the volunteer considers are important to take into

consideration.


July, 2010 71

5.1.3 Data Analysis

Primary analysis to the twelve questions included in the survey show the current

situation of the volunteers‟ countries. However, data must be analysed individually

and collectively to ensure results validity. To do so the information obtained is

researched to prove validity, this is simple because volunteers are asked to provide

references. Personal volunteer opinions are also analysed and considered.

Quantitative results are aggregated to compute histograms that can be objectively

compared to results from similar studies developed by established research groups.

Histograms represent a graphic display of the frequency of an answer [44]. In order

to assess whether histogram distributions are similar to the results obtained by others,

we compare both normalized histogram to set qualitative results and use statistical

analysis to test objective quantitative results.

5.2 Results

The results for the smart grid deployment survey are summarised in the following

section, identified by the number of the question.

1. Data origin

Volunteer demographics are shown in charts 1.a and 1.b.

A total of 35 survey answers from 12 different nationalities were obtained between

the months of April to June 2010. Responses are very disperse including answers

from seven European Union member states, four answers from non-EU but OECD

members and one response from a developing country, Brazil. (See figure Answers).


July, 2010 72

Figure 21 Origin of survey answers

Australia

Austria

Brazil

Canada

France

Germany

Greece

Portugal

Spain

Switzerland

UK

United States

1

1

1

1

1

1

2

1

10

1

1

14

1.a. From what country are you responding?

The United States call can be considered positive obtaining 14 responses. A total of

17 answers came from European member states, although 10 of these came from

Spain, from where this survey was lunched and it has been easier and more effective

to encourage response. Finally response from Brazil, Canada and Switzerland

complete survey replies.


July, 2010 73

14

12

4

23

1.b. What role do you play?

Survey results are shown to come from in a major part from independent sources and

suppliers. The reason could be because the answer could represent the personal

opinion of the responder and not the official position of their companies.

4. Smart Meter switching program

As a first step towards smart grid deployment, stakeholders were asked if switching

programs to smart meters where expected and when they are due. In Chart 4 answers

are reflected.

0 - 5 years 5 - 10 years Already implemented

N/A

7

12

9

7

4. If there is a switching program to Smart Meters when is it due?


July, 2010 74

Implementation of smart meters is certain in the next decade over the majority of

countries surveyed. Eurelectric DSO survey [40] reflected similar answers for EU

member states. (See Appendix Eurelectric views on smart grids and networks of the

future: chart 7.1. DSO installs Smart Metering devices to all residential customers.)

Eurelectric concludes that DSOs will install smart metering devices for all residential

customers. Responses to smart grid deployment survey indicate that 80% of total

answers have already implemented or will implement in the next decade smart meter

switching programs.

5. Smart Meter regulation

A vital question to be addressed is if an activity will be regulated or liberalized. This

was enquired for smart metering.

Regulated Unregulated N/A

18

7

10

5. Is the Power Sector Regulation addressing Smart Meter development, as a regulated or unregulated activity?

This result reflects how, even after ensuring smart meter deployment in most

countries, a great uncertainty exists on regulatory issues. This is an alarming figure

since almost 30% of volunteers could not give a firm answer.

8. Smart Grid projects

In question 8 stakeholders were asked to identify if smart grid pilot projects were

being conducted, specifying size and expected aggregated cost per consumer

considering. Answers can be found in charts 8.a. and 8.b.


July, 2010 75

> 100,000 50,000 -100,000

10,000 -50,000

0 - 10,000 None N/A

20

13

24

5

8.a. My country is approaching a SG project for xxx points

Pilot projects are being conducted and are of important scale. Utilities show

awareness that this kind of projects must be run at an important scale to accurately

reflect cost benefit analysis. A fundamental question is if the benefits of these

projects will be maintained after project ending, or if they will be dismantled.

< US$100

US$100 to

US$200

US$200 to

US$300

US$300 to

US$400

US$400 to

US$500

> US$500

N/A

5

12

4

1 12

10

8.b. If your country is developing a pilot Project, what is the aggregated cost per customer?

From these data we drive to two conclusions. Firstly that there is a general consent in

believing that the aggregated cost per customer will be above $100 an under $200.

The second conclusion, and maybe more important is that many fundamental

stakeholders are not aware of cost needed.


July, 2010 76

9. Smart Grid benefits

Question on key features the deployment of a smart grid would bring are given in the

following seven charts.

Very Important

Important Relevant Not Relevant

1312

10

0

9. Smart grid development increase renewable source production

Similar results as the ones published by Eurelectric show how the development of

smart grids is correlated to an increase in renewable generation. (See Appendix

Eurelectric views on smart grids and networks of the future: chart 2.2. Integration of

Distributed/Renewable Energy Sources, Plug in hybrid cars into the grid.) However

in Eurelectrics analysis of chart 2.2., the main conclusion considers that smart grids

are not a necessity for the integration of distributed generation. This is a

controversial response since clearly the majority of answers indicate the high

importance of smart grids to deploy renewable energies.


July, 2010 77

Very Important


11

18

5

1

9. Smart grid development increase high efficiency technologies

High efficiency technologies will be catalyzed by the development of smart grids

worldwide.

Very Important


16 16

3

0

9. Smart grid development increase demand side management

There is no doubt that smart grids will allow customers to actively participate in

decision making processes. Eurelectric responses show similar results, although

slightly considered more as important, than as very important. (See Appendix

Eurelectric views on smart grids and networks of the future: chart 2.3. Utilize

Demand Side Management (DSM) for improvement in overall system efficiency

(avoiding investments in peak generation) and customer tariff system with


July, 2010 78

incentives.) The main conclusion to acquire here is that DSM is surely a driver

towards smart grids.

Very Important


10

16

9

0

9. Smart grid development increase penetration of the electric vehicle

Electric vehicles will need of advanced communications systems to control power

flows increasing system operation complexity.

Very Important


7

17

10

1

9. Smart grid development increase energy storage systems

When asked about expectation with regards to energy storage systems, the majority

of stakeholders considered this as an important driver for the smart grid. Eurelectric

considers this question from the distribution system operation perspective. (See

Appendix Eurelectric views on smart grids and networks of the future: chart 4.8.

Advanced storage devices (batteries, compressed air systems, etc.) are used in DSO


July, 2010 79

operation). The DSO‟s answers to Eurelectric are very dispersed and the document

conclusions indicate that in network development no breakthrough of advanced

storage devices in DSO‟s operation are expected to constitute new network

developments.

Very Important


7

15

10

3

9. Smart grid development increase aging infrastructures

As the infrastructure in most countries is already very mature, the issue of obsolete

assets is considered to be an important driver for smart grids.

Very Important


8

10

15

2

9. Smart grid development increase higher quality of service

The smart grid development will bring a service of higher quality but this is not

considered as of fundamental importance by voluntary subjects surveyed.


July, 2010 80

Summarizing answers to question 9, future benefits of smart grids. Stakeholders

identify as a very important benefit, the advances that will come through demand

side management. They consider renewable penetration, energy efficiency, electric

vehicles, energy storage systems and an aging infrastructure as relevant and

important. Finally higher quality of service seems to be a relevant factor but in

between the other questions it has ranked as the least important, yet still relevant.

10. Smart Grid barriers

Question ten aims at addressing the current fundamental barriers to smart grid

deployment. Five issues are identified: lack of standards, few pilot projects, high cost

with unknown benefits, lack of regulation and data confidentiality.

Very Important


21

11

3

0

10. Lack of standards is a barrier for smart grid development

The lack of standards is a basic barrier for smart grid deployment.


July, 2010 81

Very Important


2

21

9

3

10. Few pilot projects is a barrier for smart grid development

Majority of stakeholders consider that the issue of there being few pilot projects can

be considered as important, but not as very important.

Very Important


14

12

9

0

10. High costs vs. unknown benefits is a barrier for smart grid development

The investment needed to develop a smart grid is compromised by the uncertainty of

future benefits.


July, 2010 82

Very Important


1112

6 6

10. Lack of regulation is a barrier for smart grid development

Once again the issue of regulation is a controversial one. Although the majority of

stakeholders considerate as an important barrier almost 20% of survey responses

consider that regulation is not a relevant barrier for smart grid deployment.

Very Important


5

11

16

3

10. Data Confidentiality is a barrier for smart grid development

As communication systems increase the data interchanges in-between the system

components. Stakeholders‟ answers reflect data confidentiality is a relevant, but not

all that important barrier to smart grid deployment.

Therefore, the clearest barrier to smart grid deployment is identified as the lack of

standards. While volunteers consider that having few pilot projects and the

uncertainty of future benefits from high investments are important barriers. There is


July, 2010 83

not a common view towards the issue of lack of regulation and finally data

confidentiality is not that much considered as important, but just as a relevant issue

that must be considered as a barrier.

11. Smart Grid necessary to minimize global warming effects

Finally, control volunteers were asked if they consider that the smart gird is

necessary to fulfill the decrease in global warming effects.

Yes No

25

9

11. Will the Smart Grid be necessary to fulfil the decrease of global warming effects?

More than 70% consider a smart grid is necessary to mitigate global warming. In this

way many consider the smart grid deployment is not an option, but more a necessity.

SMART GRIDS IN EUROPE Smart Grids Benchmarking

July, 2010 84

6 SMART GRIDS IN EUROPE

European smart grid stakeholders have been very active at all levels, from politicians

working on regulations and directives, to distribution companies deploying pilot

projects.

The supremacy of European law over member state law implies that member states

will eventually have to adapt to European Union policy.

EU law comes in two forms:

Regulations - Laws that directly come into force in all member states, without

requiring any implementing measures, and automatically override conflicting

domestic provisions.

Directives – Laws that require member states to achieve a certain result, but

allowing certain flexibility in the way to attain the desired result, typically

within a given timeframe, this process is known as transposition.

Therefore member states transpose EU directives, and state governments actively

participate with national regulators.

A number of EU legislations refer to smart grid showing the European compromise

to advances in the networks of the future.

Already in the Directive 2006/32/EC, on energy end-use efficiency and energy

services, concerns achieving an overall indicative energy savings target by each

Member State. Article 13 mentions the need to provide final consumers with

competitively priced individual utility meters that accurately reflect the final

customer's actual energy consumption and that provide information on actual time of

use.

Directive 2009/72/EC of the European parliament and of the council, of 13 July 2009,

concerning common rules for the internal market in electricity and repealing


July, 2010 85

Directive 2003/54/EC establishes in ANNEX I - Measures on consumer protection

section 2:

“Member States shall ensure the implementation of intelligent metering systems that

shall assist the active participation of consumers in the electricity supply market. The

implementation of those metering systems may be subject to an economic assessment

of all the long-term costs and benefits to the market and the individual consumer or

which form of intelligent metering is economically reasonable and cost-effective and

which timeframe is feasible for their distribution.

Such assessment shall take place by 3 September 2012.

Subject to that assessment, Member States or any competent authority they designate

shall prepare a timetable with a target of up to 10 years for the implementation of

intelligent metering systems. Where roll-out of smart meters is assessed positively, at

least 80 % of consumers shall be equipped with intelligent metering systems by 2020.

The Member States, or any competent authority they designate, shall ensure the

interoperability of those metering systems to be implemented within their territories

and shall have due regard to the use of appropriate standards and best practice and

the importance of the development of the internal market in electricity.”

Therefore by 2012, EU member states must make economic assessment of smart

metering devices. Where assessment reflects positive results, at least 80% of

consumers shall be equipped with a smart meter by 2020.

Furthermore, EU legislation identifies the importance of open and public standards.

That guarantees interoperability in distribution networks. Open standards also allow

equipment market competition, therefore reducing prices for consumers; and avoid

the creation of possible monopolies or technical barriers. A Spanish energy agency,

Energía y Sociedad, considers that without standards, future developments and

solutions will be compromised, putting investments at risk. [14]


July, 2010 86

The European Commission‟s M/441 EN standardisation mandate to European

standardisation institutions in the field of measuring instruments, namely CEN,

CENELEC and ETSI, to develop an open architecture for utility meters involving

communication protocols enabling interoperability.

Additionally, in the communication COM (2009) 111 final, Brussels, 12.3.2009, the

European parliament encourages a minimum level of functionality for smart

metering so that the same minimum options can be offered to all consumers,

irrespective of where they live and who provides the service.

In this direction, a series of European R&D projects are being conducted. In the

following pages we briefly describe some of the most important projects up to date.

PRIME – Power-Related Intelligent Metering Evolution

OPEN METER – Open and Public Extended Network metering infrastructure

FENIX – Flexible Electricity Networks to Integrate the eXpected „energy

evolution‟

ADDRESS – Active Distribution Network with full integration of Demand

and distributed energy RESourceS

6.1 SPAIN

6.1.1 Economic and Energetic Situation

Spain is the twelfth largest economy in the world by GDP, with a per capita income

in the average of the European Union. GDP is the market value of all final goods and

services made within the borders of a country in a year.

Currently Spain‟s financial situation is somewhat compromised. After almost 15

years of economic growth, Spain entered into a recession period in the second

quarter of 2008. Spain's unemployment rate has risen since 2007, from 8% to more

than 19% in December 2009, and continues to rise. What is more, the countries fiscal

deficit doubles the Economic and Monetary Union of the European Union (EMU)

limit. Government stimulus to improve unemployment levels and boost economic


July, 2010 87

growth has been unsuccessful, to an important extent due to an excess of

construction sector workers in a country where over construction has occurred during

the last years. Spain's private banking sector is another story, relatively insulated

from the global financial crisis; Spanish leading banks have not required government

intervention as has taken place in other countries. The economy is projected to

resume modest growth sometime in 2010, making Spain the last major economy to

emerge from the global recession.

The energy sector in Spain is approximately five percent of the country's gross

domestic product; its importance goes beyond its share in total output, constituting a

strategic sector needed by all branches of economic activity. Spain is considered as

an electrical island since the interconnections with France are very weak.

Additionally, even though Spain has some natural resources (see table 8), it is largely

dependent on foreign fuel imports, in almost 82% [47].

The energy demand in Spain has grown at around 3.5% annually since 2002, with a

sudden halt in the last two years due to the economic crisis. The Spanish annual

energy peninsular consumption for the year 2009 reached 251 TWh, 4.6% less than

the previous year. During the last decade important investments in generation plants

have been necessary to cope with demand growth. Spain is a leading producer of

solar and wind power (see figure 22). However, the existence of a liberalized

competitive market and the regulated special regime generation, i.e. renewable

generation, has brought an overinvestment in the competitive market of peaking

combined cycle units.

According to a report by Ernst & Young in October 2008, Spain is the fifth most

attractive country in the world to invest in renewable energy after the United States

Germany, India and China.


July, 2010 88

Figure 22 Spanish Gross Electricity Generation (2009).

R.E. stands for special regime production.

Source: www.ree.es

Table 7 Electricity Generation

Electricity Production Consumption Exports Imports Losses **

(TWh)

300.5 276.1 16.92 5.88 13.36

Country

comparison to

the world

13 14

*2007 est. or 2008 est. or 2009est.

**The discrepancy between the amount of electricity generated and/or imported and the amount

consumed and/or exported is accounted for as loss in transmission and distribution.

Table 8 Resources

Production Consumption Exports Imports Proved

Reserve

Oil**(bbl/day)

28,130 1.562 million 226,900 1.813

million

150

million

bbl

Natural Gas

(cu m) 17 million 38.18 billion 0

38.59

billion

38.59

billion

*2007 est. or 2008 est. or 2009est.

**This entry is the total oil produced in barrels per day (bbl/day). The discrepancy between the

amount of oil produced and/or imported and the amount consumed and/or exported is due to the

omission of stock changes, refinery gains, and other complicating factors.

During the last decade Spain has seen the incursion of combined cycle and

renewable, reducing thermal coal generation (see figure 23) [57]. Wind production

has grown from 11 897 MW in 2006 to 18365 MW in 2009, while solar PV has

increased from 146 MW in 2006 to 3708 in the first quarter of 2010 (see figure 24)

[58]. The new Spanish energy mix requires better grid operation tools, to maintain

system security. This denotes that a smarter grid could be a necessity.

https://www.cia.gov/library/publications/the-world-factbook/docs/notesanddefs.html?countryName=Malta&countryCode=mt&regionCode=eu#2038









July, 2010 89

0

50.000

100.000

150.000

200.000

250.000

300.000

350.000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

(TW

h)

Spanish Historical Generation

Other Renewables (SR)

Hidraulic (SR)

Thermal (SR)

Combine Cicle

Thermal Fuel-Gas

Thermal Coal

Nuclear

Hidraulic

Figure 23 Spanish historical Generation.

Source: inspired by CNE tables

0

5.000

10.000

15.000

20.000

25.000

30.000

35.000

2006 2007 2008 2009 2010

MW

Spanish Special Regime Installed Capacity

SOLAR

EÓLICA

TRAT.RESIDUOS

RESIDUOS

BIOMASA

HIDRÁULICA

COGENERACIÓN

Figure 24 Spanish Special Regime Installed Capacity.

Source: inspired by CNE tables

6.1.2 Smart Grids

In Spain there are a set of rulings to regulate: network efficiency, renewable energies,

smart meters and smart grids, but the economic sources to finance the developments

are still not clearly define.

The 28th

of December ITC/3860/2007 Order [59], in the First Additional Disposition

indicates the obligation for the distribution utilities to deploy the new meters before

the 31st of December 2018 for all Spanish users. Specifically, it states:


July, 2010 90

Plan de sustitución de equipos de medida. 1. Todos los contadores de medida en suministros de energía eléctrica con una

potencia contratada de hasta 15 kW deberán ser sustituidos por nuevos equipos

que permitan la discriminación horaria y la telegestión antes del 31 de

diciembre de 2018. Este cambio se realizara de acuerdo al plan de sustitución

que se establece en la presente disposición.

2. El número de equipos que deberán ser sustituidos por cada una de las

compañías distribuidoras se establece como un porcentaje del total del parque

de contadores de medida de cada una de dichas empresas para este tipo de

suministros y deberá ajustarse a los valores que se señalan a continuación para

cada intervalo de tiempo:

a. Entre el 1 de enero de 2008 y el 31 de diciembre de 2010 deberá sustituirse

un 30 por ciento del total del parque de contadores de hasta 15 kW de

potencia contratada de cada empresa distribuidora.

b. Entre el 1 de enero de 2011 y el 31 de diciembre de 2012 deberá sustituirse



c. Entre el 1 de enero de 2013 y el 31 de diciembre de 2015 deberá sustituirse



d. Entre el 1 de enero de 2016 y el 31 de diciembre de 2018 deberá sustituirse



Figure 25 Spanish Smart Meter Roll Out Timeline.

Source: Energia y Sociedad Smart Grids

In addition, it indicates the need for remote management systems to deal with the

new meters, but it does not define the technical requirements.

In Spain this implies changing 28 million meters in 10 years time [66]. This is a huge

effort, both in work and economic terms, and not only for the DSOs in charge of the

deployment, but also for the users that, in many cases, have to prepare their sites.

Considering a cost of 200 €/unit, the total cost for Spain would be 5.600 Million €.

Currently, the deployment is behind schedule, basically due to:


July, 2010 91

1. At the time when the regulation was passed, no standards or technical

specifications were defined. It was not until May 2009 that the standards of

communication, meter management and associated equipment were defined.

2. As a result, no equipment was available in the market;

3. The companies had the concern, that if they deployed equipment with no

defined standards, they risked to later face new legal requirements that could

not be complied with.

4. The associated remuneration costs were not indicated.

In addition, the Government also wanted to speed up the process of Smart Meter

deployment, in the way that individual consumers could ask at any time for their

meter substitution in order to have access to hourly discriminated tariffs, but the

Spanish regulator, CNE discouraged it [63].

On the other hand the order ITC/3022/2007, anticipating the EU directive, that

defines the following specifications in electric meters [64], and the RD 1110/2007,

defines the unified regulation for the measure point in the Spanish electric system

[65]:

Measure:

Active (P) and Reactive (Q) energy

Maximum power demand (every 15‟)

Period discrimination data storage capacity for 3 months

Management capabilities for 6 tariff periods storage of information for 3

invoices

Register:

Quality parameters (more than 3 min interruptions and voltage limits)

Events (alarms, changes in invoice, fraud )

Display information for user.

Power control

Power limiter


July, 2010 92

Switch integrated in the meter

Manual reconnection

Remote management

Measures of energy and power for invoice closure

Remote reading of quality parameters

Parameter modifications – tariffs, power contracts, type of contract, etc.

Remote synchronisation

Software update

Remote metering of events

Remote connection and disconnection

Capacity to manage loads

Capacity to send messages to consumer

The Electric Sector Law, in the Article 46 [61], defines the possibility to develop

DMS projects, which could be financed by the electric tariff. It specifically states:

Artículo 46. Programas de gestión de la demanda. 1. Las empresas distribuidoras, comercializadoras y el operador del sistema en

coordinación con los diversos agentes que actúan sobre la demanda, podrán

desarrollar programas de actuación que, mediante una adecuada gestión de la

demanda eléctrica, mejoren el servicio prestado a los usuarios y la eficiencia y

ahorro energéticos.

El cumplimiento de los objetivos previstos en dichos programas podrá dar lugar

al reconocimiento de los costes en que se incurra para su puesta en práctica

conforme a lo dispuesto en el Título III. A los efectos de dicho reconocimiento

los programas deberán ser aprobados por el Ministerio de Industria y Energía,

previo informe de las Comunidades Autónomas en su ámbito territorial.

2. Sin perjuicio de lo anterior, la Administración podrá adoptar medidas que

incentiven la mejora del servicio a los usuarios y la eficiencia y el ahorro

energéticos, directamente o a través de agentes económicos cuyo objeto sea el

ahorro y la introducción de la mayor eficiencia en el uso final de la electricidad.

The Royal Decree 222/2008 [60] established a new remuneration scheme for DSOs,

based on incentives for distributors to reduce costs, which also included some

efficiency criteria. But currently there is no specific regulation addressing Smart

Grids.


July, 2010 93

And recently, the Sustainable Economy Law [62], in the Article 83, paragraph 2,

makes explicit reference to incentivize the smart grids as a mean to increase the

efficiency of the whole system. Specifically, it states:

2. El Gobierno aprobará programas y tomará las medidas necesarias para

favorecer el desarrollo de redes inteligentes y microrredes integradas que

mejoren y faciliten la gestión del sistema, acerquen los puntos de generación de

energía eléctrica a los puntos de consumo, incorporando, preferentemente,

energía de origen renovable o de sistemas de cogeneración de alta eficiencia.

Todo ello con el objetivo de disminuir las pérdidas en transporte y distribución

eléctrica, mejorar la garantía, estabilidad y rendimiento del sistema eléctrico e

incrementar la aportación térmica de origen renovable.

On the other hand, a significant barrier for new development in the Spanish market is

the important deficit in the regulated tariff. From several years ago, even though the

regulated costs and the incentives to renewable production have been recognized to

the DSOs, they have not been brought to the tariffs, creating a deficit that has to be

neutralized in the next years. Besides the dysfunction in the financial account of the

companies, the most important effect is the fact that tariffs do not represent the real

cost of the energy chain. For the implementation of smart grids, it is very important

that stakeholders can show the new offered services reduce costs for final consumer,

and for this reason tariffs must reflect realistic cost of the energy chain.

In Spain there are very interesting projects in development, either alone or in

partnership with different stakeholders. The most important are:

1. DENISE- Intelligent, Secure and Efficient Energy Distribution

2. SMART CITY- Plugging Smart to the Grid

3. GAD – Gestión Activa de la Demanda

4. STAR – Sistema Telegestión y Automatización Red

6.1.2.1 DENISE Project

Objective

The objective of this project is to do research on smart grids, focused on the new

services and demand side management, as well as network reliability [67] [68]. The

project is divided in the following clusters:


July, 2010 94

Cluster 1. Common areas

Cluster 2. Network logic intelligence

Cluster 3. Physical network intelligence

Cluster 4. Energy efficiency

Cluster 5. Energy reliability

Figure 26 Project Denise Clusters.

Source: www.cenit-denise.org [67]

Partnerships

The DENISE Project is led by ENDESA. In addition, 12 companies and 7 research

institutions participate in this project: Hidrocantábrico Energía, Capgemini, Cetecom

(AT4Wireless), DMR Consulting (Everis), DS2, Eliop, Home Systems, Inelcom,

Isotrol, Sadiel, Taim-TFG, Telvent, Greenpower, AICIA, CIRCE, CITCEA, IIT-

Comillas, Universidad de Málaga (grupos ISIS e IC), Universidad Politécnica de

Madrid (CeDInt) y las Fundaciones CITIC y Creafutur.

Budget and Time for Fulfilment

The Project budget is 30 million € and the scheduled time is four years.

Expected results

Functional integration of the electric and communication networks,

throughout new technologies. In this way project expect to: (i) improve

quality of service; (ii) integrate real time information in order to achieve the


July, 2010 95

optimal service and demand side management and network reliability; and (iii)

implement a new generation of energy services and communications

Definition of new scenarios to evaluate the future network generation in the

following areas: (i) standards and regulation developments; (ii) development

and deployment costs in the current networks; and (iii) benefits for society

and the economy of the country

Development of a new control architecture and devices able to be integrated

in the current networks

6.1.2.2 SMART CITY Project

Objective

Smart City Malaga objective is the implementation of a new energetic management

model, in the Spanish city of Malaga [69] [70]. The implementation will save 20% of

energy consumption, which represents 6.000 tons of carbon dioxide save per year.

It will involve the implementation of:

5 MV (20 kV) feeders, for 38 km

59 MV/LV transformers

300 Industrial consumers, 900 Commercial consumers and 11.000 domestic

consumers

63 MW of contracted power

70 GWh/year of consumption, which means 28.000 Tons CO2 annual

emissions


July, 2010 96

Figure 27 Smart City Malaga Technology and Innovation.

Source: portalsmartcity.sadiel.es [70]

Partnerships

The Smart City Project is led by ENDESA and counts with the participation of the

following 11 companies: Enel, Acciona, IBM, Sadiel, Ormazábal, Neo Metrics,

Isotrol, Telvent, Ingeteam y Greenpower, along with several universities and

research institutions.

Budget and Time for complexion

The Project budget is 31 million € and the scheduled time is four years.

Expected results

The project will demonstrate the following basic concepts of Smart Energy needed to

contribute to comply with the 20/20/20 objectives:

Smart Energy Management. 8 - 15% emission reductions

Smart Buildings. 30 – 50% emission reductions

Smart Energy Generation

Smart and Informed Customer. 5 - 15% emission reductions

Smart Energy storage

Smart Mobility


July, 2010 97

6.1.2.3 GAD Project

Objective

The project is aimed to research on mechanisms to implant active demand side

management in Spain [71] [72]. These mechanisms include regulatory and economic

aspects as well as technology needed to implement an effective active demand side

management at domestic level.

The project is divided in the following work packages:

WP1. Analysis of scenarios

WP2. Pricing / Legislation

WP3. Algorithms for Demand Side Management

WP4. Measurement and Management of Loads

WP5. Communications

WP6. Experimental Test Setting

WP7. Analysis of Results

Figure 28 GAD Technologies.

Source: www.proyectogad.com

Partnerships

GAD project, funded by CDTI (Technological Development Centre of the Ministry

of Science and Innovation) in the INGENIO 2010 program, pursues research and

development of solutions for the optimization of electrical consumption at a domestic


July, 2010 98

level. The National Strategical Consortium of the Electrical Active Demand

Management is led by Iberdrola Distribución Eléctrica, S.A.. Other partners are: Red

Eléctrica de España, Unión Fenosa Distribución, Unión Fenosa Metra, Iberdrola,

Orbis Tecnología Eléctrica, ZIV Medida, DIMAT, Siemens, Fagor

Electrodomésticos, BSH Electrodomésticos España, Ericsson España, GTD Sistemas

de Información, Foresis y Corporación Altra. On top of this, fourteen Spanish

research organizations are collaborating.


The project has a duration of four years (2007-2010) and it has a budget of 23‟3 M€

Expected results

The project expects to bring the following benefits:

For consumers. The household consumption optimizations will reduce the

electric bill as result of avoiding the peak load prices. This is possible by

programming the household equipment to start in valley hours;

For DSOs. Because it will be able to optimize the network, today designed for

peak load use. Since the load will be uniformly distributed in the 24 hours,

network investments could be adjust;

GAD project will allow the electric consumption of green energy. Allowing a

higher penetration of renewable energies;

Consequently, GAD will have an impact in the climate change mitigation

6.1.2.4 STAR Project

Objective

The STAR project will be a large implementation of smart grid technologies in the

Spanish city of Castellón [66]. The project will involve:

583 MV/LV transformation locations (CTs). 384 CTs in remote supervision

and 66 CTs in remote supervision and control

100.973 domestic meters, involving 175.000 consumers

Several different typological installations


July, 2010 99

The most innovative aspects that will be incorporated during the project are:

Advance meters, provided by different suppliers, working together

Active demand side management. Continuation of GAD project

Electric vehicle charging points

Figure 29 STAR project communications scheme.

Source: Energia y Sociedad Smart Grids

Partnerships

The Star project is exclusively conducted by Iberdrola.


The Project budget is 22 million € and the scheduled time is one year.

Expected results

The project expects to bring the following results:

In Operation:

Supervision of MV and LV network

Fault detection

Real time automation and control of MV network

Alarm detection in CTs

Failure detection in MV and LV without test-error procedure

Increase quality of service

In Network Planning:


July, 2010 100

Unbalance/overload/deviation detection on voltage

Losses reduction

Assets load

Increase MV network configuration

To have profiles of load/voltages/current in the network

Evaluation of electric vehicle impact

6.2 AUSTRIA


Located in central Europe, two thirds of Austria is in the great mountain range

system of the Alps. The eastern valley regions are the most populated, the most

important of which is the Danube basin. With a well developed market economy and

high standard of living, Austria is the tenth richest country ranked by per capita GDP.

Its economy features a large service sector, a sound industrial sector, and a small, but

highly developed agricultural sector.

Austria‟s energy generation is primarily based on hydropower, responsible for almost

60% of generation considering hydro and pumped storage. Other renewable sources

such as wind, solar and biomass power plants are today a minor part of the energy

mix. The rest of production comes from gas and oil. Austria has fossil fuel reserves

but requires additional imports to cover the demand (see table 10). Austria has no

nuclear power generation. The countries energy policy changed in the 70‟s after a

referendum voted approximately 50.5% against nuclear power, and parliament

subsequently unanimously passed a law forbidding the use of nuclear power to

generate electricity. [52]



(TWh)

66.78 68.37 14.93 19.8 3.28






July, 2010 101

Country comparison

to the world 40 38

*2007 est. or 2008 est. or 2009est.



Table 10 Resources


Reserve

Oil**(bbl/day)

19,360 244,900 50,160 263,200 96 mill.

bbl

Natural Gas (cu m) 1.532 bill. 8.39 bill. 2.788 bill. 9.78 bill. 27.9 bill.

*2007 est. or 2008 est. or 2009est.




6.2.2 Smart Grids

The Austrian power sector regulation is not yet addressing the Smart Grid

development. However the Federal, Ministry for Transport, Innovation and

Technology (BMVIT) and based on the results of the research programmes of

BMVIT, an intensive discussion process on the topic of Smart Grids has started some

years ago in Austria. This early positioning and the high commitment of scientists

and researchers, grid operators and industry, as well as the already existing specific

know-how in Austria have contributed to the development of trend-setting research

projects. First pioneer regions are already engaged in the questions of the

implementation of these new system solutions. [36]

Recently the Federal Minister for Transport, Innovation and Technology, Doris

Bures declared:

“The development of smart grids is an essential basic prerequisite for intelligent

future energy systems. It represents one of the most difficult economic challenges

worldwide. We do realize that this is an important technology field in the

international context. Here Austria can play an important role within the peer group

of “innovative leaders”.






July, 2010 102

It is the task of modern and rational energy and technology research policy to

develop strategies for a safe, environmentally friendly and economic energy supply

system.

It is our joint goal to develop future oriented concepts and solutions in the field of

smart grids and to initiate their implementation.”

Up to date only smart meter pilots are running, some DSOs are starting to roll-out

smart meters in certain regions, but covering all costs by themselves. This is the case

of ENERGIE AG, which is since autumn 2008 in a trial run of 10,000 units in the

ENERGIE AG supply region.

The Austrian power system may for a number of reasons not require a smart grid.

Since due to its location Austria is well interconnected with the European power

system, there is very little distributed generation and neither peak demand nor overall

consumption are very high.

On the other hand, the power supply system is the key to effectively linking relevant

social topics such as climate protection, energy efficiency and decentralized energy

production. Issus that the EU energy directives make binding for all member states.

Austria sees this challenge as an opportunity to acquire a strong position in a

promising new industry. This year, the first Smart Grid model region in Austria will

officially start with funding from the climate and energy funds.

6.3 FRANCE


France‟s modern economy is changing, from the traditional French economic system

strongly characterized by extensive government ownership and intervention, to one

that relies more on market mechanisms. In recent years the government has partially

or fully privatized many large companies, banks, and insurers, and has conceded

stakes in such leading firms as Air France, France Telecom, Renault, and Thales.


July, 2010 103

However government still maintains a strong presence in some strategic sectors, such

as power, public transport, and defence industries.

Global economic crisis effects have not affected severely the France, which have

gone through the crisis better than most other big EU economies because of more

resilient consumer and government spending, and lower exposure to the downturn in

global demand.

The French energy sector is characterized by a moderate dependency of oil and gas,

very little of which is used for electricity generation. France produces more

electricity than it consumes, thanks to 59 nuclear power plants responsible for

supplying almost 80% of demand. As for renewable sources, their share in electricity

production is around 13%, largely hydropower. France is the smallest emitter of

carbon dioxide among the seven most industrialized countries in the world, due to its

heavy investment in nuclear power. In this context renewable technologies seam

unnecessary, therefore these technologies are having difficulties taking off the

ground.



(TWh)

535.7 447.2 58.69 10.68 40.49

Country

comparison to

the world

9 9

*2007 est. or 2008 est. or 2009est.



Table 12 Resources


Reserve

Oil**(bbl/day)

70,800 1.986 million 554,100 2.346

million 103.3

million

Natural Gas

(cu m) 17 million 17 million 0

38.59

billion

2.548

billion










July, 2010 104

*2007 est. or 2008 est. or 2009est.




6.3.2 Smart Grids

While the smart grid topic is somewhat diffuse, French regulation is already working

on a program to install 34 million new smart meters, called Linky, are due in less

than five years. The metering standardization follows the European mandate (M441).

The CEN, the European Committee for Standardization, CENELEC, the European

Committee for Electrotechnical Standardization, and ETSI, the European

Telecommunications Standards Institute have agreed to combine their strategic

approach to standards work in the area of smart meters.

In order to address these EU energy directives, the European Commission and EFTA

addressed Mandate M/441 to CEN, CENELEC and ETSI. A Smart Meters

Coordination Group (SM-CG) was set up to answer this request. This group will

provide a focal point concerning smart meter standardization issues in respect to

Mandate M/441. The group will give an update on the European context and ongoing

and/or future standardization activities in coordination with ISO and IEC in the field

of eco-design (new regulation), electric vehicles, smart meters and smart grids.

In this way functional specification for smart meters are not yet decided. But France

has already a time incentive program with low tariffs. On the other hand technical

specifications have been decided by ERDF, the French DSO, which has defined PLC

Power Line Communication for outdoor communication. Indoor communications are

still at a study level.

In France, EDF works on smart grid demonstration project: PREMIO to demonstrate

an innovative, open, and repeatable architecture to optimize the integration of

distributed generation, storage, renewable energy resources, demand response and

energy efficiency measures in order to provide load relief, local network support and

reduce CO2 emissions in the PACA region, in south east France, a area subject to


July, 2010 105

congestion during peak hours, where it is difficult to guarantee the demand supply

balance.

6.4 GERMANY


The German economy is the fifth largest economy in the world in terms of

Purchasing Power Parity (PPP) and Europe's largest. Germanys industry is based on

machinery, vehicles, chemicals, and domestic equipment. One of Germany‟s main

problems is its aging population. Low fertility rates and declining net immigration

are increasing pressure on the country's social welfare system that necessitates

structural reforms. Germany exited recession in the second and third quarters of

2009, thanks largely to rebounding manufacturing orders, exports outside the Euro

Zone and a relatively steady consumer demand. The German economy expects to

recover to about 1.5% growth for the year 2010. However, experts call for caution,

since the relatively strong euro, tighter credit markets, and an anticipated bump in

unemployment could mitigate medium-term recovery prediction.

Germany is the world's fifth largest consumer of total energy; considering electricity

generation, residential use, commercial, industry, and transport; requiring large

imports of oil and natural gas (see table 14). In terms of electricity consumption

Germany is Europe's largest consumer. German power industry is characterized by

vertically integrated utilities, which are amongst the world leaders. The country is

known for its environmental consciousness and green policy. As an example the state

is committed to several treaties promoting biodiversity, low emission standards,

recycling, and the use of renewable energy, and supports sustainable development at

a global level.

Nevertheless Germany's carbon dioxide emissions per capita are among the highest

in the EU, although they are significantly lower than those of Australia, Canada,

Saudi Arabia and the United States. This is due to the fact that coal generation is the

fundamental technology employed to produce electricity. Even though the largest


July, 2010 106

wind farm and solar power capacity in the world is installed in Germany. Currently

nuclear energy produces an important portion of the German base load, but is

planned to be phased out by 2021.



(TWh)

593.4 547.3 61.7 41.67 26.07

Country

comparison to

the world

8 7

*2007 est. or 2008 est. or 2009est.



Table 14 Resources


Reserve

Oil**(bbl/day)

150,800 2.569 million 582,900 2.777

million 276

million

Natural Gas

(cu m) 16.36 billion 95.79 billion

12.68

billion

91.99

billion

175.6

billion

*2007 est. or 2008 est. or 2009est.




6.4.2 Smart Grids

The German energy model will face many difficulties in the coming years primarily

because even though the system is well interconnected, the Feed-in tariffs design to

comply with EU compromises to achieve a high penetration of renewable has lead to

a fast expansion of these energies and the countries policy to phase out nuclear

production implies a volatile production, that will require to change the energy

management system.

These are the primary reasons of why Germany demands the implementation of a

smart grid that could help achieve future goals. Such as:










July, 2010 107

Security of supply, efficiency and climate protection with digital networking

of the power providing system

Optimization of the energy supply system using modern information and

communication technologies (ICT)

New interdisciplinary jobs in the fields of renewables and communication

New markets for high-tech solutions

Progress in liberalization and decentralization of the energy market

The German government is working in supporting many R&D activities, e-energy

projects and support of electric vehicle projects. Current regulation already ensures

that all new meters installed from January 1st this year must be smart.

E-energy is a four year term initiative by the German Federal Ministry of Economics

and the German Ministry of Environment. The budget of the project is approximately

€140 million. The project consists of developing six information and communication

technologies for energy system and in parallel the development of seven projects for

intelligent integration of electric vehicles (E-Mobility) through ICT into Smart grids

(see figure 30).

As Chancellor Angela Merkel put it at IT summit in Darmstadt, November 2008:

“E-Energy shall bring intelligent IT support to energy production and consumption –

from the generator in the power station way down to the customer.”

The standardization roadmap for German Smart Grid is responsibility of the DKE

German Commission for Electrical, Electronic & Information Technologies of DIN

and VDE.


July, 2010 108

Figure 30 E-Energy projects

6 E-Energy projects & 7 integrated ICT for Electric Mobility projects.

Source: E-Energy German Smart Grid Project [53]

6.5 GREECE


Greece has a capitalist economy in which the public sector accounting for about 40%

of GDP. Important income comes from tourism, which provides 15% of GDP. EU

aid has helped Greece arrive to this situation. The Greek economy grew by nearly

4.0% per year between 2003 and 2007; investment was catalyzed by the 2004 Athens

Olympic Games, and in part to an increased availability of credit, which has

sustained record levels of consumer spending. But the economy went into recession

in 2009 and Greece violated the EU's Growth and Stability Pact budget deficit

criterion of no more than 3% of GDP, with the deficit reaching 10.7% of GDP.

Under intense pressure by the EU and international market participants, the

government has adopted a medium-term austerity program that includes cutting

government spending, reducing the size of the public sector, decreasing tax evasion,

reforming the health care and pension systems, and improving competitiveness

through structural reforms to the labor and product markets. The government faces

long-term challenges to push through unpopular reforms. In April 2010 a leading

credit agency assigned Greek debt its lowest possible credit rating; in response, the


July, 2010 109

International Monetary Fund and Eurozone governments pledged more than $160

billion in support of Greece over the next three years.

Greece's is composed in a major part by thousands of small islands. This geography

has led to the development of a fragmented electricity system, with little of the

country's power plants connected to the mainland grid. The energy balance of Greece

is strongly dependent on imported oil. Electricity is generated mainly from lignite,

leading thus to high CO2 intensity values. Greece is second only to Germany in the

EU for lignite coal. The majority of power plants are in the north where the lignite

fields are located, while the bulk of demand is in and around the region of Attica in

the south, where 40 percent of the population and most of the country‟s industry

reside. Interconnection between the country's numerous islands remains low, albeit

increasing. Domestic lignite remains the most important fuel for electricity

generation, although the use of natural gas is growing rapidly and renewable energy

use is also expected to expand. Already Greece has a significant amount of installed

wind capacity and other renewables including geothermal, solar, wood and waste

electric power units exist. The total system consists of some 12,800 megawatts (MW)

of installed capacity with a further 850 MW of interconnectors for imports. Greece

will benefit from greater electricity connections with its neighbor. Although Greece

has liberalized its electricity sector, former state monopoly Public Power Corporation

(PPC) continues to hold a dominant position.



(TWh)

58.79 58.28 1.962 7.575 6.123

Country

comparison to

the world

43 42

*2007 est. or 2008 est. or 2009est.



Table 16 Resources


Reserve










July, 2010 110

Oil**(bbl/day)

4,891 434,000 bbl 151,300 553,000 10

million

Natural Gas

(cu m) 14 million 4.206 billion 0

4.205

billion

1.982

billion

*2007 est. or 2008 est. or 2009est.




Regulation on smart grids is lacking in Greece. Up to date we have only identified

the Public Power Corporation (PPC), Greece‟s incumbent power utility working on

the SmartHouse/SmartGrid Project Consortium, where they are responsible for

researching islanding operation with renewable and diesel island power grid.

6.6 PORTUGAL


Portugal has become a strong economy since it joined the European Union in 1986,

then the European Community. Like many other member states, successive

governments have privatized many state controlled firms and liberalized key areas of

the economy, including the financial and telecommunications sectors. Economic

growth had been above the EU average for much of the 1990s, but shrank 2.8% in

2009. GDP per capita stands below EU-27 average, at about two thirds. Portugal's

financial sector has been relatively insulated from the global financial crisis and the

government has not spent much on shoring up banks. Nonetheless, the public deficit

is above EU limits and is an important issue that needs to be solved.

Portugal is highly underprovided in terms of energy, currently importing all the fossil

fuels it consumes. Furthermore, given Portugal‟s geographic position it is only

interconnected to Spain, which is very poorly interconnected to the European

network.

Traditionally Portugal has needed electricity imports to fulfill demand requirements.

However during the current year, for the first time in its history, Portugal has a trade


July, 2010 111

balance of positive power, exporting more energy than it imported. This is largely

thanks to the investment in renewable generation and the hydrological year that has

brought abundant water. The investment in renewable energy in Portugal could total

€12 billion by 2012 and €120 billion by 2020, primarily in wind, solar and hydro

generation.



(TWh)

44.47 48.78 1.313 10.74 5.117

Country

comparison to

the world

53 47

*2007 est. or 2008 est. or 2009est.



Table 18 Resources


Reserve

Oil**(bbl/day)

7,861 291,700 53,260 351,100 0

Natural Gas

(cu m) 0 4.754 billion 0

4.763

billion 0

*2007 est. or 2008 est. or 2009est.




6.6.2 Smart Grids

At this moment Portuguese government directives to develop the Smart Grid concept

exist, but there is no regulatory support for them. Research and industrial projects are

encouraged through national funds. The best example of this is a large national

project: InovGrid, that is being conducted by EDP, INESC Porto, EFACEC,

LOGICA, CONTAR to create smart meters and to develop a pilot with 50.000

consumers dimension. [41] [42]. This is presently already running in the city of

Evora and involves an investment of €12 million. At present different PLC










July, 2010 112

communication standard type protocols are being tested, but other solutions are also

being considered.

The inescporto has conducted important research projects concerning distributed

generation and microgeneration that proof the how energy losses diminish with the

penetration of distributed generation in all distribution areas, from urban to rural.

These studies proof that large technical, economic and environmental benefits can be

achieved by using microgeneration thanks to:

Considerable amounts of loss network reduction

Better voltage profiles

Reliability improvements

Increase economic performance of the distribution activity

Investment deferral network reinforcement cost

Avoided costs in network losses

Avoided co2 emissions

And identify the importance that specific and fair new remuneration schemes

must be identified to benefit all stakeholders.

6.7 UNITED KINGDOM


The UK is one of the quintets of trillion dollar economies of Western Europe,

together with German, France, Spain and Italy. Over the past two decades, the

strategy followed by government has been to reduce public ownership. Privet

ownership has brought competition and efficiency to the economic system. Services,

particularly banking, insurance, and business services, account by far for the largest

proportion of GDP while industry continues to decline in importance. In 2008,

however, the global financial crisis hit the economy particularly hard, due to the

importance of its financial sector. The Bank of England periodically coordinates

interest rate moves with the European Central Bank, but Britain remains outside the

European Economic and Monetary Union (EMU).

The UK‟s electricity production is primarily based on coal and gas (see figure 31),

since it has large coal, natural gas, and oil resources, but its oil and natural gas


July, 2010 113

reserves are declining and the UK became a net importer of energy in 2005 (see table

20). To comply with EU directives, investments in green technologies, such as

carbon capture storage (CCS) and renewables are necessary in the coming years.

Another particularity is that the UK energy regulator (OFGEM) predicts serious

security of supply issues by the year 2015, therefore new regulatory schemes are

being designed to ensure system security. [54]

Figure 31 United Kingdom Gross Electricity Generation. 2020 forecast.

Source: one third of UK power renewable by 2020



(TWh)

368.6 345.8 1.272 12.29 33.818

Country

comparison to

the world

12 12

*2007 est. or 2008 est. or 2009est.



Table 20 Resources


Reserve

Oil**(bbl/day)

1.584

million 1.71 million

1.602

million 1.651

million

3.41

billion

bbl










July, 2010 114

Natural Gas

(cu m) 69.9 billion 95.94 billion 10.5 billion

36.54

billion

342.9

billion

*2007 est. or 2008 est. or 2009est.




6.7.2 Smart Grids

The UK government is committed to seeking measures to achieve carbon savings,

however smart grids are still in a pilot phase, what the government has already

started deploying are better metering and billing systems. It considers that one way

this can be achieved is if all new and replaced meters are smart. In October 2008 the

Government announced its intention to mandate a roll out of electricity and gas smart

meters to all homes in Great Britain with the aim of completing the roll out by the

end 2020. [55]

Regulation for smart metering is described in the Department of Energy and Climate

Change paper: TOWARDS A SMARTER FUTURE: GOVERNMENT RESPONSE

TO THE CONSULTATION ON ELECTRICITY AND GAS SMART METERING.

That states that Regulation will follow the Central Communications Model, under

which energy suppliers will be responsible for purchasing and installing meters, and

communications are coordinated centrally offering the best model for Britain‟s smart

meter roll out. This scheme combines strong incentives for energy suppliers to

deliver a high quality service to their customers, with wide scope to simplify and

improve industry processes, making it easier to switch between suppliers. This model

is expected to minimise the time and risk involved in preparing for roll out, in

particular since it avoids changing the disposition of responsibility for metering

services.

The Government believes that the development of smart grids can be fostered

effectively under this approach, in particular by ensuring the requirements of

network business are reflected appropriately in the minimum meter specification and

the communications solution. The Government believes that this approach is also

likely to result in a smart metering roll out which is more responsive to customers


July, 2010 115

overall, in particular because the provision of smart meters and related services will

be an important part of the supply companies‟ relationship with their customers.

The Government also believes that strong positive engagement among local

communities will be particularly powerful in generating the necessary awareness,

enthusiasm and take up. This underlines the value of managing the roll out, so that as

many people as possible in local communities receive their new meters at the same

time. The Government therefore intends to develop measures to promote

coordination of deployment at local level. As part of the Implementation Programme

we will therefore assess the optimal approach to an area by area deployment further.

An important aspect of this work will be to consider linkages to the development of a

smarter grid and measures to tackle fuel poverty. The full range of stakeholders will

need to be involved in this work as it is taken forward, including consumer groups,

Local Authorities, the Energy Savings Trust, suppliers and network companies.

Proposals for the Domestic Sector - Functionality

The Government confirms the proposals it set out in the Consultation Document on

high-level smart meter functionality requirements, with the exception of functionality

to remotely enable/disable gas supply. The Government considers that further work

is needed to assess some of the issues raised before a final decision is taken on this

element of the gas smart metering system.

The Government considers the detailed proposals made by some respondents on

smart grid functionality to be a subset of the requirements it set out in the

Consultation and therefore has not made any additions to its original proposals for

the electricity smart metering system in response to these.

The Government notes the comments received relating to the security and safety of

the smart metering system as well as the need for appropriate consumer protections

particularly relating to switching between credit and pre-pay and the possibility of

remote disablement of energy supply. Ensuring security of the smart metering system,


July, 2010 116

safety and protection of consumers will be at the heart of the Implementation

Programme and also in particular, the work on functionality.

The Smart Metering Implementation Programme will develop the agreed list of high

level requirements into more detailed functional requirements. This work will

examine the more detailed functionality issues raised in Consultation Responses and

smart grid functionality in particular. It will also take into account the independent

analysis on the gas valve once that is complete. There will also be close links with

the work on communications infrastructure requirements. Cost-benefit considerations

will be an important part of this work.

Specific grid automation is being promoted by pilot projects from the Institute of

Energy Technology, Research Councils and the regulator's innovation fund.

6.8 MALTA


Malta is expected to become the world‟s first Smart Grid Island by 2012. The

Maltese Smart Grid not only includes the energy sector, but works together with the

water sector in a synergy that is of crucial importance for this country. Due to its

geographic location, Malta has limited fresh water supplies, and has few domestic

energy sources. In Malta, water and electricity are inextricably clear. Roughly one-

third of Malta‟s water comes from three aging plants that squeeze the salt out of

seawater through reverse osmosis (RO). Another third is pumped out of Malta‟s

shrinking aquifers by approximately 8600 private borehole owners who extract water

free of charge. About a quarter is pumped out of Water Services‟ own boreholes. The

rest comes either from small RO plants run by a few large hotels or from private

cisterns that store the scant 550 millimetres of annual rainfall. Therefore electricity

accounts for 75% of the cost of the water produced. So when electricity rates go up

for large commercial customers by 60 percent, it effectively bumped up domestic and

commercial rates for water, too, by as much as 25%.[48]. Malta's financial services

industry has grown in recent years and in 2008-09 it escaped significant damage

from the international financial crisis, largely because the sector is centred on the


July, 2010 117

indigenous real estate market and is not highly leveraged. The global economic

downturn and high electricity and water prices have hurt Malta's real economy,

which is dependent on foreign trade. The need for more efficient energy and water

supplies are key drivers to the smart grid [47]. Changes in distribution and metering

will be needed to build a smarter energy and water system. These brave decisions

taken by the Maltese National Electricity and Water Utilities: Enemalta and Water

Services Corporation (WSC) are required due to the challenges the system will face

in the coming years. Immediate attention is needed to ensure that Malta is able to

deliver affordable and secure energy, as well as supply an increasing demand for

water, without endangering the environment. [46]

Current problems the Maltese Smart Grid should tackle:

7% Non-technical revenue electricity losses;

23% non-technical revenue water losses;

20% of 6-monthly bills issued on estimated readings due to no-shows;

€1m annual incremental cost to provide bi-monthly actual bills;

The cost of producing electricity varies by season and time of day. Tariffs do

not correlate price with the cost of production;

Malta is expected to become the world‟s first Smart Grid Island by 2012. The

Maltese Smart Grid not only includes the energy sector, but works together with the

water sector in a synergy that is of crucial importance for this country. Due to its

geographic location, Malta has limited fresh water supplies, and has few domestic

energy sources. In Malta, water and electricity are inextricably clear. Roughly one-

third of Malta‟s water comes from three aging plants that squeeze the salt out of

seawater through reverse osmosis (RO). Another third is pumped out of Malta‟s

shrinking aquifers by approximately 8600 private borehole owners who extract water

free of charge. About a quarter is pumped out of Water Services‟ own boreholes. The

energy production and resources may be found in the following tables [47]:

[45]


July, 2010 118


Electricity Production Consumption Exports Imports Losses ***

(TWh)

2.146* 1.832* 0** 0** 0.314

Country

comparison to

the world

131 136

*2007 est.

**2009 est.

***The discrepancy between the amount of electricity generated and/or imported and the amount


Table 22 Resources


Reserve

Oil**(bbl/day)

0* 19.000* 0* 17,910* 0*

Natural Gas

(cu m) 0* 0* 0* 0* 0*

*2007 est. or 2008 est. or 2009est.




6.8.2 Smart Grids

The 70 million euro project is being conducted by IBM. The deal includes new grid

infrastructures, replacement of 250,000 analogue electricity and water meters and

state of the art communications software. That will enable the national utilities and

their customers to better manage energy and water use.

Included advance IT:

Grid communications - identifying problems with the grid much more

quickly.

Remotely monitor and suspend meters - save money by not having to employ

meter readers, and cutting illegal clients.

More choice in tariffs – display internet window to allow customers to

understand their technical and commercial data, to track current consumption

and choose the most appropriate tariffs.










July, 2010 119

Monitor demand much more accurately, saving on emissions by not having to

over-estimate electricity use, and identifying more accurate patterns of use.

Advanced automated meter-management system will also allow the firm to

improve its water loss-management initiatives.

IBM has spent the past couple of years developing a variety of software to make the

power grid smarter. The Intelligent Utility Network Coalition, which includes a

group of utilities that are interested in bringing electronics to the electricity network,

was formed by IBM in 2007. The important advantage of companies like IBM is that

they are in contact with all parts of the electricity value chain. Therefore, they can be

very important partners, as to connect meter makers, energy management firms, and

wireless sensor distributors with utilities.

Being Europe‟s first mover, the Maltese network could provide valuable information

about how an entire community responds to these new tools.

On the other hand, even if Enemalta squeezes every last cent from its grid, the

potential for much higher electricity and water prices looms. Enemalta has no plans

to replace its oil-fired power plants, so it will be subject to the vagaries of the

petroleum market for the foreseeable future. To further complicate matters, studies

show that saltwater is infiltrating Malta‟s aquifers, which supply about 60 percent of

the country‟s freshwater. That will inevitably lead to a shift toward more seawater

desalination and more energy consumption. Being an electric island the problems of

energy dependence need to find solutions, higher efficiency is only a part of the

solution. Inevitably more investments in generation will be needed, the penetration of

renewable sources and cheaper thermal generation.

SMART GRIDS IN OTHER COUNTRIES Smart Grids Benchmarking

July, 2010 120

7 SMART GRIDS IN OTHER COUNTRIES

7.1 UNITED STATES


The US is the world's third-largest country by size (after Russia and Canada) and by

population (after China and India), with over 310 million residents. It has the largest

and most technologically powerful economy in the world, with a Gross Domestic

Product (GDP) of more than $14 trillion, this means a per capita GDP of $46,400.

The US is the world energy producer and consumption leader. The nation has a

variety of natural resources including the world's largest coal reserves with 491

billion short tons accounting for 27% of the world's total. The nation also counts with

important oil and gas reserves. However, resource imports also play a vital role in

energy generation, imported oil accounts for about two-thirds of US consumption

(see table 24). Due to the vast geographical extent, climate varies between the

different regions. This is another factor that condition energy demand.

Figure 32 United States Gross Electricity Generation (2009).

Source: U.S. Energy Information Administration wwww.eia.doe.gov


July, 2010 121



(PWh)

4.11 3.87 0.024 0.057 0.274

Country

comparison to

the world

1 1

*2007 est. or 2008 est. or 2009est.



Table 24 Resources


Reserve

Oil**(bbl/day)

8.514

million * 19.5 million*

1.433

million* 13.47

million*

21.32

billion

bbl*

Natural Gas

(cu m)

582.2

billion*

657.2

billion*

28.49

billion*

112.7

billion*

6.731

trillion*

*2007 est. or 2008 est. or 2009est.




7.1.2 Smart Grids

The United States of America is determined to change current energy model, to fight

climate change and ensure security of supply. The Energy Independence and

Security Act of 2007 is an Act of Congress concerning the U.S. energy policy. One

of the key provisions treated was the modernization of the electricity grid to improve

reliability and efficiency. However the global economic downturn, the sub-prime

mortgage crisis, investment bank failures, falling home prices, and tight credit

pushed the United States into a recession by mid-2008. The financial crisis comes in

a time of needed new investments in the American power sector. The American

Recovery and Reinvestment Act of 2009, abbreviated ARRA and commonly referred

to as the Stimulus or The Recovery Act, is an economic stimulus package enacted by

the 111th United States Congress in February 2009. These Act intended to create

jobs and promote investment and consumer spending during the recession.










July, 2010 122

An important part of this funding is destined for the US Department of Energy DEO,

and particularly Smart Grids. As president Obama announced on November 9th,

2009:

“Today I am pleased to announce that under the Recovery Act, we are making the

largest ever investment in a smarter, stronger and secure electric grid. This

investment will come in the form of 100 grants, totalling $3.4 billion, that will go to

cities, power companies, utilities and other partners who applied with plans to install

smart grid technology in their areas,” - President Obama at Florida Power and

Light‟s Next Generation Solar Energy Centre.

Therefore a $3.4 billion commitment to initiate the largest single electricity grid

modernization investment in U.S. history, adding significantly to the DOE‟s

continuing commitments to spur the nation‟s economic recovery with funding

provided under the American Reinvestment and Recovery Act of 2009 (ARRA).

Additionally, numerous U.S. state incentives and private funds are also helping

electric utilities deploy pilot projects aiming at shifting to a sustainable energy model.

The new policy allows managing your electricity use and budget at the same time.

According to president Obama it is expected to save consumers more than $20

billion over the next decade, on their utility bills. Such an investment will create

tenths of thousands of new jobs all across America in areas ranging from

manufacturing and construction to IT and installation.

Under the Energy Independence and Security Act of 2007 (EISA), the National

Institute of Standards and Technology (NIST) is assigned the “primary responsibility

to coordinate development of a framework that includes protocols and model

standards for information management to achieve interoperability of Smart Grid

devices and systems…” [EISA Title XIII, Section 1305]. Therefore NIST must

respond as the urgent need to establish protocols and standards for the Smart Grid.

[51]


July, 2010 123

The Federal Energy Regulatory Commission and the National Institute of Standards

and Technology are the parties responsible for developing regulating and standards at

the federal level.

At the moment state public utility commissions are taking different approaches.

Regulation varies from state to state. Some states are mandating certain performance

requirements and customer access to data, while others are not.

The specific case of California Public Utilities Commission (CPUC) has initiated a

rulemaking to consider policies for California investor-owned electric utilities to

develop a smarter electric grid in the state. The proceeding will consider setting

policies, standards and protocols to guide the development of a smart grid system

and facilitate integration of new technologies such as distributed generation, storage,

demand-side technologies and electric vehicles [50]. California will have deployed

two-way communicating meters in 12 million homes over the next couple of years.

Majority of US stakeholders surveyed consider the aggregated cost for the whole

smart grid value chain will have a cost per customer ranging from the $100 to $200.

There are over 100 ongoing projects, several in each state. A detailed list can be

found in the recovery act selections for smart grid investment grant awards and on

the Smart Metering Projects Map – Google Maps.

7.2 AUSTRALIA


In recent decades, Australia has transformed into an international leader, with a

competitive and advanced market economy. During the 1990s, Australia was one of

the members of the Organisation for Economic Co-operation and Development or

OECD, with fastest growing economies. A performance due in large part thanks to

economic reforms adopted in the 1980s. Currently, the government is focusing on

raising Australia's economic productivity. Australian environmental awareness is

also growing. Examples of this are the passing of emissions trading legislation, and

other climate-related issues such as drought and devastating bushfires aid projects.


July, 2010 124

Concerns in the long-term include climate-change issues such as the depletion of the

ozone layer and more frequent droughts, and management and conservation of

coastal areas.

The Australian electricity sector is characterized by its abundant and diverse natural

resources. These goods attract high levels of foreign investment and include

extensive reserves of coal, iron ore, copper, gold, natural gas, uranium, and

renewable energy sources. A series of major investments, such as the US$40 billion

Gorgon Liquid Natural Gas project, will significantly expand the resources sector.

The following tables reflect Australian energy generation and resources.



(TWh)

239.9* 222* 0** 0** 17.9

Country

comparison to

the world

17 16

*2007 est. or 2008 est. or 2009est.



Table 26 Resources


Reserve

Oil**(bbl/day)

586,400 * 953,700* 332,400* 687,200* 1.5

billion

bbl*

Natural Gas

(cu m)

45.22

billion* 34.2 billion *

19.48

billion *

5.377

billion *

849.5

billion*

*2007 est. or 2008 est. or 2009est.




7.2.2 Smart Grids

Australia is already working on an advanced metering infrastructure as the first step

toward a future intelligent grid. The Essential Service Commission (ESC) body took

the decision to implement an Interval Meter Roll-Out (“IMRO”) on July 2004.










July, 2010 125

The Ministerial Council on Energy (MCE) approved the distributor led rollout of

smart metering where the benefits outweigh the costs, in order to enable consumers

to make more informed choices and better manage their electricity use and

greenhouse gas emissions, reduce demand for peak power with potential

infrastructure savings, and drive efficiency and innovation in electricity business

operations and retail market competition.

In Victoria, increasing summer electricity demand peaks by air conditioning caused

extra investments on low use plants [34]. Introduction of smart meters to customers

was seen as a mechanism to link wholesale and retail markets. The government

changed legislation as instigated by the ESC of Victoria. Installation started in 2006

for dedicated categories, and in 2013 about one million smart meters should be

installed.

The Australian regulatory drivers are described by ESC in the „POSITION PAPER:

INSTALLING INTERVAL METERS FOR ELECTRICITY CUSTOMERS –

COST‟. The key aims are listed below [39]:

Increase the efficiency of the combined wholesale and retail electricity

markets. - When customers respond to high price signals by reducing their

demand for electricity or shifting usage to other lower-priced times. The

market benefits from the reduced need for capacity to meet otherwise higher

peak demands. The benefit arises from the avoided capacity cost in the

generation, transmission and distribution systems where capacity increases

are all driven by peak demand in summer.

Provided the capacity and incentive for customers to manage this electricity

consumption more efficiently.

Increase price efficiency and product innovation.

Bring operational network management improvements and increase the

availability to the network businesses of more data for network planning

purposes.

Increase the accuracy of settlement and ensure equity between customers.


July, 2010 126

Therefore in Australia the regulatory drivers are all related to shifting demand peaks.

The problem of a high peak is that all the power system must be designed for the

moment of maximum load even if it is only for very short periods of time. Given the

forecasted consumption is expected to double in the next 40 years. The energy model

must become smarter, to avoid potential problems. For this reason it is necessary to

reduce demand peak and an optimal price signal should help solve this problem in

the short and long term.

The Victoria government has since run trails to asses cost and benefits of an

accelerated rollout of interval meters with different communications technologies,

under different scenarios.

Summing up Australia needs to reduce load peak. Smart meter rollout programs are

expected to be implemented in the next decade. Currently multiple projects for the

implantation of Smart Grids are being approached by the different utilities as the

market is somewhat deregulated. More importantly these projects aim to proof cost

benefit analysis and are of an important scale, over 100,000 connection points.

Expected aggregated cost for Smart Grid infrastructure is in the range of $200 to

$300 per customer. There are not yet plans for implementing a Smart Grid, but Smart

Meters as a first step towards these future networks are already on their way, with

expected off 10% for domestic home owners. Nevertheless, Australian institutions

like the Institute for Sustainable Futures, UTS calls for the importance of correct

regulation due to the uncertainty of the topic and advice to diversify in other parts

needed to change the current energy model. Because, even if smart metering

technology and dynamic electricity pricing have the potential to solve part of the

economic and environmental sustainability problem. It is important to be cautious

about what can actually be achieved through use of price signals. UTS considers it is

likely that equivalent or better reduction in demand can be achieved using non-price

measures, such as regulation to improve energy efficiency equipment and distributed

energy.


July, 2010 127

7.3 BRAZIL

Brazil is the only developing country considered in this study. Brazil's economy

outweighs that of all other South American countries and Brazil is expanding its

presence in world markets. The vast extent of the country and the high natural,

having important crude oil and gas reserves, make it very interesting from an energy

perspective.

Brazil is the tenth largest energy consumer in the world (see table 27). The Brazilian

energy matrix is based on renewable sources, particularly hydro, although small

renewable power generation, like wind, are being deployed rapidly in the north east

of the country thanks to the favorable conditions. Another important source of

renewable energy is bio fuels, based on sugar cane. A minor part of the mix comes

from nuclear power, accounting for 3% of the energy produced in the country.



(TWh)

438.8 404.3 2.034 42.06 74.53

Country

comparison to

the world

11 10

*2007 est. or 2008 est. or 2009est.



Table 28 Resources


Reserve

Oil**(bbl/day)

1.973

million 2.52 million 570,100 632,900

12.62

billion

bbl

Natural Gas

(cu m) 12.62 billion 23.65 billion 0

11.03

billion

365

billion

*2007 est. or 2008 est. or 2009est.













July, 2010 128

Brazilian policy does not consider the construction of a smart grid as a priority. An

investment of such an extent, that would have to be higher to that of developed

countries since the grid is less developed, is absurd in a country struggling in

economic terms. Many share the idea that the power sector in Brazil is not strong

enough to force the development of technologies and that rich countries should

proofed a cost saving investment before. However, others consider that since

investments must be made anyhow to develop the grid, it would be better to already

get ahead and develop an automated grid. In any case the Brazilian government has

the last word, and up to date, only standards and smart meter deployment is being

discussed in detail.

In Brazil there is a governmental group which is working on a standard called PIMA

(Protocol Implementation Infrastructure for Advanced Metering), which must direct

the needs of industry when developing a Smart Grid system. Next year a regulation

will probably force utilities to go to electronic meters instead of electromechanical

ones. The Government in this country always take the lead, and this is why almost

always utilities can't reach their needs.

The PIMA is a communication protocol that provides interoperability among

network components. All PIMA electronic meters shall have mass memory, active

and reactive measurements, cut-off relay and a communication media that is still

under analysis (probably PLC + RF or just RF). The project aims to create a unique

language that can be used for all meters and other intelligent devices on the network,

by all the manufacturers.

CONCLUSIONS Smart Grids Benchmarking

July, 2010 129

8 CONCLUSIONS

8.1 Discussion

Our work has identified smart grid deployment concerns at an international level,

identifying needs and benefits as well as current and future regulatory expectation on

the studied subject.

As a primary objective this study aims to further understand the complex dilemma of

smart grid regulation. It is critical to allow all stakeholders to understand the views

and practices of the other roles involved. In this paper voluntary answers from

different stakeholders have allowed us to achieve this objective by benchmarking

current state of deployment.

Survey results have shown an easy and time effective way to collect sometimes

dispersed information.

A comparison between our results and already established consultancy bodies show

we have obtained coherent answers. This has been possible thanks to the cooperation

of voluntary stakeholders. That has the benefit of being objective, making this

analysis highly reproducible and robust. Therefore, allowing further studies to follow

progress in smart grid regulation over the following years.

It is important to note that analysis has been computed by aggregating answers from

different nations and roles. In any case following this approach, there is a trade-off,

to gain some advantages by aggregating results, but we incur in the disadvantage of

losing origin and role of response. A more in depth analysis distinguishing between

response origin and role would bring further results. Unfortunately, due to the lack of

time the decision to conduct an aggregated response was considered as the best

solution. In addition, as a preliminary analysis we do not consider this to be an error,

since at current state of deployment, and given the level of uncertainty, aggregated

responses may better reflect deployment.


July, 2010 130

Quantitative answers have been acquired, by aggregating individual answers and

constructing histograms. Qualitative results have been obtained by analyzing direct

survey results and additional regulators research papers.

Following is a summary of the key finding of this master thesis:

Histogram analysis reflects the survey has accomplished enough answers,

also obtaining answers from all key roles. Proving the versatility and

uncomplicated advantage of using survey analysis as a tool to gather

information.

There is a general consent that smart metering devices will see deployment

within the next decade, as a first step towards a smart grid. This view is

shared by both direct survey responses as well as by European regulatory

bodies, such as Eurelectric, giving higher validity to our results.

Future benefits from the implementation of smarter networks are identified.

Demand side management ranks as being a very important benefit, ensuring

customers will play a vital role in the future energy model. Other benefits

such as the penetration of renewable sources of energy, higher efficiency,

integration of electric vehicles, advanced energy storage systems and the

issue of substitution of aging infrastructures, are all considered to be

important drivers towards automated networks, but not as much as DSM. On

the other hand, the least important driver identified is higher energy quality,

probably due to the already satisfactory levels achieved in most countries

participating in the survey.

In the same manner barriers to deployment have been found. The clearest one

for which a general agreement exists is the lack of standards, there is a too

high risk in deploying an investment of this character with no guarantee of

legitimacy. The problems concerning high investment decisions within a

context of uncertainty of future benefits are also important. Stakeholders also

consider as an important barrier the lack pilot projects being conducted,

necessary to perform detailed cost benefit analyses. The least relevant barrier

ranked in the survey is data confidentiality. However as already reflected


July, 2010 131

earlier, the lack of a clear regulation, understood and shared by all, is a

controversial issue. Not sharing a common view is a tremendous barrier.

Finally, to the majority of volunteer agents surveyed the implementation of a

smarter grid is considered to be necessary to cope with global warming

effects. Many considering deployment more as a necessity than as an option.

Summarized in the following table are the needs and regulatory principles followed

by surveyed countries.

Table 29 Smart Grids Worldwide Summary

Country Needs Regulation

EU Environmental compromise –

20/20/20 objectives

Aging Assets – Important

blackouts in large cities in the

last decade

80% of total meters must be smart by

2020

Spain 82% energy dependent

High penetration of renewable

sources

Weak interconnections

Rules to regulate: network efficiency,

renewable energies, smart meters and

smart grids, but the economic sources

to finance the developments is still not

clearly define

100% of total meters must be smart

before 31 of December 2018

multiple pilot projects

Austria Not yet addressing the Smart Grid

development

France Nuclear generation – low

flexibility important to flatten

load curve

French regulation is already working

on a program to install 34 million new

smart meters, called Linky, due in less

than five years

Multiple pilot projects

Germany Energy mix based on coal, high

penetration of renewable and

phase out of nuclear production

implies a volatile generation

Automobile industry to electric

vehicle

Not yet addressing the Smart Grid

development. Pilot projects – with

€140 million budget

Greece High energy dependency


Regulation on smart grids is lacking

in Greece

Portugal High energy dependency

High penetration of renewable

sources

Portuguese government directives to

develop the Smart Grid concept exist,

but there is no regulatory support for

them

multiple projects

UK Security of supply problem by

the year 2015


Smart grids are still in a pilot phase

Roll out of electricity and gas smart

meters to all homes in Great Britain

with the aim of completing the roll

out by the end 2020

Multiple pilot projects


July, 2010 132

Malta Total energy dependency

Electricity is necessary to obtain drinking water

No interconnections

first nation to deploy a fully operational smart grid

USA Energy dependent

Green jobs

Fight climate change

Ensure security of supply

The Energy Independence and

Security Act of 2007 - key provisions

treat the modernization of the

electricity grid to improve reliability

and efficiency.

The American Recovery and

Reinvestment Act of 2009 -.

$3.4 billion commitment to initiate

the largest single electricity grid

modernization investment

Australia Efficiency - high peak problems Since 2004 working on an advanced

metering infrastructure as the first

step toward a future intelligent grid.

Interval Meter Roll-Out (“IMRO”) to

be implemented in the next decade.

multiple projects for the implantation

of Smart Grids

Brazil High losses Currently no regulation on the subject

of smart grids

The survey processes have a number of limitations that have affected our results,

such as misunderstood stakeholders‟ answers. Yet in any case, assuming the

existence of errors, these have been considered good enough by project developers.

In summary, our results show that survey technique can be used to benchmark and

asses stakeholder communication and help all parts involved understand the complex

dilemma of future smart grid regulation. Further research must be performed to

assure the method is viable, but primary results are promising and reflect worldwide

concern and interest in solving communication difficulties in between stakeholders.

8.2 Possible Future Progress

In the following section the ideas and expected possible outcome of the author are

reflected.

Firstly let us recall once more that some areas of the electricity chain are to be

regulated for its specific characteristics that make it an essential service.


July, 2010 133

For European Union member states the 20/20/20 objectives are less than ten year

away. Other countries as the United States are also keen on advanced energy

efficiency. However, to implement a project of such extent, a number of years are

necessary. If a smart grid is to be deployed in the next decade, it is time to start

making decisions, standards and clear action plans are needed, or grids will continue

unaltered.

In order to develop a road map, it is of vital importance to understand views and

practices of all stakeholders in order to develop duties and rights for each player. The

first step is to analyze if it is possible to consider the problem from an economic

perspective, as explained in the introduction.

In this case, we have to consider that networks are as smart as society wants them to

be. The problem is purely economic. This dilemma can be understood considering

we have a three variables problem: (i) cost, (ii) security of supply and (iii)

environment (see figure 33).

Figure 33 Energy policy diagram.

Green dotted line represents the environmental objectives. Red dotted line represents the security

limits. The orange zone represents the area where the optimal energy policy is located

We have the possibility to choose our location within this diagram. We can have

cheap green energy, but then it will not be secure; otherwise have secure cheap

energy, but then it will not be green; or green and secure energy at a very high cost.

It is clear that a compromise between the three variables must be achieved.


July, 2010 134

Furthermore given that politically a series of green objectives and a sufficient level

of security of supply must be provided. The problem is reduced to finding the

minimum cost at which this can be achieved. The orange colored area is the ideal

working zone.

Recall that if the total cost necessary to implement the new grid is smaller than the

future benefits, then existence of a competitive market should lead to the deployment

(recall equation 2).

Total Costs < Future Benefits Competitive Market (2)

Yet even if the total cost is higher than the future benefits but the benefits are still

considered necessary to fulfil with international compromise, then the executive

should implement incentives to reach the objectives (recall equation 3).

Total Costs > Future Benefits (NECESSARY) Incentives (3)

Identifying which equation to follow is crucial, but in order to choose, regulators

must have a clear idea of the costs and benefits.

However, this consideration can only be made in a new market where the product

justifies the price. In our case, the smart grid implementation cannot be justified

economically. Every stakeholder will get different advantages, but none of them,

individually or in conjunction will pay the deployment cost. On the other side, the

regulator is the only agent that can anticipate the future benefits in the medium term,

and the one who has the visibility of the political needs of the country.

Considering that the main agent involved in the smart grids implementation are the

DSOs, it is needed to define a scenario to recover the massive investment required.

The DSO will not invest in network electronic equipment, communication

infrastructures, automation and management systems, when an important part of the

benefits will not impact the regulated business. Therefore, the body that has the


July, 2010 135

possibility and responsibility to lead the process and define the subsidies and the fair

return over the investment is the regulator.

The final success of the implementation will not come from the current way to run

the market with the new equipments, but by the incentive to the consumers to take

advantages of the new possibilities the smart grids will bring. Particularly, in the

Spanish case, since the tariff presents a recognized deficit, this will be a challenge for

the regulator. The effort has to be: first of all to integrate in the tariff all the current

costs, and secondly show the advantages in costs for consumers as a result of the new

implementations.

A worst case scenario not mentioned throughout most reports is the case of

impossible implementation. The struggling economic situation means most

politicians are trying to avoid higher electricity tariffs. This is unfeasible with the

needed investments in a smart grid. In the case, there is no economic possibility to

deploy, the truth must be assumed and grid automation must wait for better days.

However, most politicians have already showed their commitment to develop a smart

grid within their electrical network; and smart metering, as a first step, has been

shown to already be a reality. Smart meters are a fundamental part of smart grids and

it would be a shame not to fully obtain all possible benefits. The smart grids second

step would be grid automation that could very possibly be much more important for

system security. Smart metering will bring efficiency through commercial and

energy saving programs. But emergency situations are to be solved by system

operator.

Under the technical point of view, the pilot projects are developing step by step the

different components that are needed for the final implementation. New

interoperability standards and equipments are produced, and the doubts of the

different services and future possibilities are being clarified. By analyzing the

different projects and the effort involved, it can be stated that shortly, the technical

problems will be solved. The following question is how, when and who will be


July, 2010 136

responsible for the massive implementation, and under my personal point of view,

only the politician and/or their regulators, will have the answer.

After analysing a number of pilot projects that aim to prove cost benefit analysis. The

first difference that complicates analysis is vertical integration. In the real world

some parts must be regulated while other parts may be left to free market

competition. The problem of conducting a pilot project is that all benefits are

collected by a single player as in a traditional scheme, following vertical integration.

Benefits are then within the same utility. In the real world, this is much more difficult

to do because windfall profits and losses will appear in between agents, creating

barriers for deployment.

Therefore, key issues to be addressed are which costs are regulated, or in other word

which cost are politically and strategically necessary to: firstly, comply with energy

sustainability in terms of environment and system security; and secondly, promote a

market for new energy services which create added value, providing sustainable

industry and jobs.

To succeed in today's environment, fresh business models are needed, as well as

changes in business architecture, protocols, rights and pricing terms to facilitate

emerging products and services enabled by new technologies.

As an attempt to further help develop new energy models this thesis proposes a smart

grid regulatory scheme merely based on observed energy market developments and

not having attempted any mathematical model.

The hypothetical regulatory scheme proposes differentiating between regulated and

liberalized smart grid element as follows.

While grid automation is still a controversial topic, with uncertainty in level of

automation, it must in any case remain a regulated activity. This is reasonable since

the grid is a natural monopoly and system operator must have control over system

security in real-time and in the long-term.


July, 2010 137

On the other hand, this thesis has proved that demand side management is considered

as the key driver to smarter grids development. Smart metering as a first step is

currently the only confirmed feature of future grids. The fundamental role of smart

meters for the whole system is increase overall efficiency through correct price

signals, reducing peak demand. Energy liberalized retailing has shown to be more

efficient, through the existence of competition.

Smart meters current standards do not have the technical capacity to provide system

operators real-time information necessary to better run the system. To do so grid

elements like protection relays are necessary.

Therefore, it could seem logical to partly deregulate smart metering to allow

competition to allocate benefits correctly. Smart meters will provide valuable

information for retailers to bring new tailor made products but not system security.

However there are two key issues for smart meters to be regulated: firstly, regulated

distribution companies have traditional been responsible for electricity meter

readings and the meter registers information to pay for regulated and liberalized

activities. Secondly, and more importantly in a free retail market it could bring

market barriers to free competition.

What could be a regulatory mistake that could cause competition problems could be

the lack of interoperability. Smart meter devices must be able to communicate with

any collector using any communications module.

Today, considering the economic interests at stake and the huge data base necessary,

it is very complex to implement an open interoperability scheme. When considering

a subject as complex and broad as smart grids, we are considering a new paradigm.

With the beginning of a new philosophy, with new communications, new equipment

and new services appear, but it is important to consider the different time frames. In

the next paragraphs we consider a future development that would increase efficiency

on the very long term, when the previews problems mentioned are mitigated, and

data interoperability is viable.


July, 2010 138

As an alternative to bring competition benefits, the proposed scheme hypothesises

the existence of a regulated smart meter. This device would ensure freedom of

energy provider and minimum technical and commercial requirements. Additionally,

thanks to the implementation of smart meters, retailers will be able to deploy what

we have chosen to call smart boxes (see figure 34). A Smart Box is a device that

collects the information from the smart meter and brings added value services such

as display screens showing specific tariffs, home automation and other new services.

That will bring much higher efficiency and smarter energy use than smart meters that

on their own do not bring major benefits to the system. The idea that a smart meter

on its own will make consumers shift their energy use, is, to say the least, very

optimistic.

Figure 34 Smart Meters and Smart Boxes

Under the smart box, competition between retailers would have the important

advantage of actually having differentiators in energy supplier, something that will

change energy markets worldwide. The new energy service companies and current


July, 2010 139

retailers that face the problem and find effective solutions will succeed. At a

regulatory level ensuring the basic needs for the smart meter will be enough to gather

information for billing and long term security of supply.

The following figures show a possible road map for the grids of the future. The

evolution from the traditional power grids to the future grids is shown in figures 35,

36 and 37.

Figure 35 Traditional Scheme.

In the traditional scheme, system operation was relatively simple; Communications

were used in the HV transmission to ensure system security.


July, 2010 140

TSO

DSO

Generation

CURRENT SCHEME

Distributed Generation

Co

mm

un

ication

s

EnvironmentEnergy

IndependenceRising Cost

Power Reliability

Green JobsModern

InfrastructureRegulated: System Operation

Demand (LV)

Demand (HV/MV)•Smart Meter

LiberalizedRetailing

Co

mm

un

icatio

ns

Figure 36 Current Scheme

As the new drivers to smart grids arrived in the last decade, system operation

complexity increases, as does the liberalized electricity business. Communications

start to play a vital role to achieve system efficiency. Distributed generation, requires

higher grid flexibility, and smart meters for energy intensive consumers allow

finding more optimal energy usage. The grid slowly becomes smart.


July, 2010 141

CommunicationsTSO

DSO

Generation

Demand (HV)•Smart Meter

System Operation•ComunicationsFUTURE SCHEME

High DG

EnvironmentEnergy

IndependenceRising Cost

Power Reliability

Green JobsModern

Infrastructure

Demand (LV)•Smart Meter•Prosumers•Evs•Energy Storage

LiberalizedRetailing

Co

mm

un

icatio

ns

Co

mm

un

ication

s

Figure 37 Future Scheme

As communication systems advance, this allow information gathering, with which

system operation may have higher flexibility, and hence allows deploying further

solutions. The energy model shifts to a new paradigm, which allows doing more with

less.

A timeline is provided in figure 38. Two basic phases can be considered:

Phase 1 – Smart grid deployment. The assembly of a new energy grid that

will be able to cope with the future requirements.

Phase 2 – New services deployment. Innovative new technologies will allow

the deployment of many new products and services.


July, 2010 142

Figure 38 Smart Grid Deployment Timeline

Finally smart grids and metering may be a part of the solution to a sustainable energy

model, but looking into the future we must consider them as the corner stone for the

upcoming power system management, bringing new services that today we cannot

even imagine.

References Smart Grids Benchmarking

July, 2010 143

REFERENCES

Some of the parts of this thesis have been taken from the following references:

[1] Carlos Batlle. Training Course on Regulation of Energy Utilities. Module 6.

Deregulation of the generation activity: Wholesale markets in electricity. 2009.

www.iit.upcomillas.es/batlle

[2] http://ec.europa.eu/environment/climat/climate_action.htmREN21 (2009).

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reported/

[4] http://www.pvresources.com/en/top50pv.php

[5] http://www.geysers.com/

[6] http://www.renewableenergyworld.com/rea/news/article/2006/05/america-and-

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[7] Union of Concerned Scientists. How Biomass Energy Works

[8] How the Energy Sector can deliver on a climate agreement in Copenhagen

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[10] http://www.amsc.com/products/applications/utilities/smartgrid.html

[11] http://www.smartgrids.eu/?q=node/163

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[13] America's Oil Dependence. 2004

[14] Energía y Sociedad: Smart grids redes inteligentes Marzo de 2010

[15] GE energy http://www.itsyoursmartgrid.com/energy_issues/index.html

[16] Energy Information Administration. "Greenhouse Gasses, Climate Change, and

Energy." May 2008.

[17] Energy Information Administration. "Net Generation by Energy Source by Type

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[18] Natural Resources Defense Council. "Safe, Strong and Secure: Reducing

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[19] U.S. Department of Energy. “The Smart Grid: An Introduction.”]

[20] HowStuffWorks.com. “How Blackouts Work.”

[21] Economía del Sector Eléctrico. Fundamentos Económicos de la Regulación y

Modelos de Mercado. Mariano Ventosa, 20 de octubre de 2003

http://green.blogs.nytimes.com/2010/02/15/gains-in-global-wind-capacity-reported/

http://green.blogs.nytimes.com/2010/02/15/gains-in-global-wind-capacity-reported/

http://www.pvresources.com/en/top50pv.php

http://www.geysers.com/

http://www.renewableenergyworld.com/rea/news/article/2006/05/america-and-brazil-intersect-on-ethanol-44896

http://www.renewableenergyworld.com/rea/news/article/2006/05/america-and-brazil-intersect-on-ethanol-44896

http://www.ucsusa.org/assets/documents/clean_energy/how_biomass_energy_works_factsheet.pdf

http://www.iea.org/weo/docs/weo2009/climate_change_excerpt.pdf

http://www.leonardo-energy.org/what-definition-smart-grid

http://www.amsc.com/products/applications/utilities/smartgrid.html

http://www.smartgrids.eu/?q=node/163

http://www.amsc.com/products/applications/utilities/smartgrid.html

http://www.itsyoursmartgrid.com/energy_issues/index.html

http://www.eia.doe.gov/bookshelf/brochures/greenhouse/Chapter1.html

http://www.eia.doe.gov/bookshelf/brochures/greenhouse/Chapter1.html

http://www.eia.doe.gov/cneaf/electricity/epa/epat1p1.html

http://www.eia.doe.gov/cneaf/electricity/epa/epat1p1.html

http://science.howstuffworks.com/blackout.htm


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[22] Training Course: Regulation of Energy Utilities. Module 10.A “Electricity

distribution”. Tomás Gómez San Román (2008 - 2009)

[23] Proyecto Piloto de MOVilidad ELEctrica: MOVELE. Departamento de

Transporte.

[24] http://science.howstuffworks.com/earth/green-

technology/sustainable/home/mobile-energy-management.htm

[25] http://www.homecontrols.com/why_automate

[26] http://www.icax.co.uk/on_site_renewable_energy.html

[27] International Energy Agency. December 2009. Global Gaps in clean energy

research development and demonstration

[28] http://www.electricdrive.org/

[29] CEESA Project. WP.3. Future Electric Power Systems

[30] http://www.fctec.com/fctec_basics.asp

[31] Proyecto Movel. Proyecto Piloto de MOVilidad ELEctrica. Instituto para la

Diversificación y Ahorro de la Energía . Departamento de Transporte

[32] http://home.vicnet.net.au/~eag1/Intervalmeters.htm

[33] http://share.aemo.com.au/smartmetering/default.aspx

[34] http://www.aemo.com.au/

[35] Advanced Metering Infrastructure in Victoria

[36] Salzburg Smart Week. http://www.salzburg-ag.at/kundenservice/smart-metering/

[37] Infrastructure. Australian energy market commission

[38] National Smart Metering Program. Work Program Structure and Consultation

Process. NSMP

[39] Business Requirements Work Stream. MCE Policy Objectives to Smart

Metering Business Requirements Advanced. NSMP

[40] Smart Grids and Networks of the Future – EURELECTRIC VIEWS

[41] http://www.inovcity.pt/pt/rede-inteligente/inovgrid/

[42] Distributed Generation and Microgeneration and its Impacts. Joao A. Peças

lopes INESC & FEUP May 2010.

[43] http://www.google.com/google-d-s/intl/es/tour1.html

[44] http://quarknet.fnal.gov/toolkits/ati/histograms.html

[45] http://www.businessgreen.com/businessgreen/news/2235721/malta-smart-grid

http://science.howstuffworks.com/earth/green-technology/sustainable/home/mobile-energy-management.htm

http://science.howstuffworks.com/earth/green-technology/sustainable/home/mobile-energy-management.htm

http://www.homecontrols.com/why_automate

http://www.icax.co.uk/on_site_renewable_energy.html

http://home.vicnet.net.au/~eag1/Intervalmeters.htm

http://www.google.com/google-d-s/intl/es/tour1.html

http://quarknet.fnal.gov/toolkits/ati/histograms.html

http://www.businessgreen.com/businessgreen/news/2235721/malta-smart-grid


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[46] Smart Grid In Malta - Sean.Barbara

[47] https://www.cia.gov/library/publications/the-world-factbook/geos/mt.html

[48] http://spectrum.ieee.org/energy/environment/maltas-smart-grid-solution/0

[49] http://www-935.ibm.com/services/us/gbs/bus/html/ibv-electric-utility-

innovation.html

[50] http://www.cpuc.ca.gov/PUC/energy/smartgrid.htm

[51] NIST Framework and Roadmap for Smart Grid Interoperability Standards,

Release 1.0

[52] "Austria Renewable Energy Fact Sheet" (PDF). Europe's Energy Portal. 2008-

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[53] E-Energy German Smart Grid Projects Overview EPRI Smart Grid

Demonstration Advisory Meeting, June 2010 Paris/EDF Andreas Reinhardt and

Lutz Steiner, Ancillary Research www.e-energy.de

[54]

[55] Towards a Smarter Future: Government Response to the Consultation on

Electricity and Gas Smart Metering. December 2009. Department of Energy and

Climate Change. Website: www.decc.gov.uk

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http://www.iea.org/textbase/pm/?mode=pm&id=3789&action=detail

[56] REE. Preliminary Report. The Spanish Electricity System 2009.

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[57] REE Web Site. Monthly Report. Excel Serial data

[58] CNE Web Site. Información Estadística sobre las Ventas de Energía del

Régimen Especial

[59] BOE 312 2007/12/29 Orden ITC/3860/2007

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http://www-935.ibm.com/services/us/gbs/bus/html/ibv-electric-utility-innovation.html

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[65] RD 1110/2007, defines the unified regulation for the measure point in the

Spanish electric system

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[67] DENISE Project Official WEB. http://www.cenit-denise.org

[68] DENISE PROJECT. Partnership presentation. http://www.cenit-

denise.org/pcd/impe/descarga?uuid=c2c09015-fcd7-11dc-ba78-bddfdfb9a42f

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http://www.energiaysociedad.es/

Term Definitions Smart Grids Benchmarking

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TERM DEFINITIONS

Term Definition

AMR Advance Meter Reading

AMI Advanced Metering Infrastructure

CBA Cost-benefit analysis

CCS Carbon Capture Storage

CEER Council of European Energy Regulators

CENELEC Comité Européen de Normalisation Électrotechnique

CHP Combined heat and power

CNE Spanish Regulator - Comisión Nacional de Energía

CT MV/LV transformation location. Centro de Transformación

DC Direct Current

DER Distributed energy resources

DG Distributed generation

DNO Distribution network operator(s)

DOE Department of Energy (US)

DSO Distribution system operator(s)

EC European Commission

EER(s) European Energy Regulator(s)

EHV Extra high voltage

EISA energy independence and security act (US)

Electricity WG Electricity Working Group

EMU Economic and Monetary Union of the European Union

ENS Energy not supplied

ENTSO-E

European Network of Transmission System Operators –

Electricity

EPACT Energy Policy Act (US)

EPRI Electric Power Research Institute

EQS TF Electricity Quality of Supply Task Force

ERGEG European Regulators Group for Electricity and Gas

ESCo Energy service companies


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ESO(s) European Standardization Organization(s)

ETP European Technology Platform

ETSO European Transmission System Operators

EU European Union

EV Electric Vehicle

FACTS Flexible alternating current transmission systems

FCV Fuel Cell Vehicles

FERC Federal Energy Regulatory Commission

FP (5/6/7) (European) Framework Program (for research)

HAN Home Area Network

HEV Hybrid Vehicle

HV High voltage

HVDC High voltage direct current

ICE Internal Combustion Engine

ICT Information & communication technology

IEC International Electrotechnical Commission

IEM Internal Energy Market

LV Low voltage

MV Medium voltage

NIST National Institute of Standards and Technology

NRA(s) National Regulatory Authority (Authorities)

NTP National Technology Platform

OEDER Office of Electricity Delivery and Energy Reliability (US)

OETD Office of Electricity Transmission and Distribution (US)

OFGEM Office of Gas and Electricity Markets

PHEV Plug-in Hybrid Electric Vehicles

PLC Power Line Communication

PV Photovoltaic

R&D Research and development

RD&DD Research, development, demonstration, deployment

RES Renewable energy sources

RF Radio Frequency

SAIDI System average interruption duration index


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SAIFI System average interruption frequency index

SE Smart Energy

SGD Smart Grid Demonstration Program

SGIG Smart Grid Investment Grant Program (US)

SM Smart Meter

SRSM Supplier Requirements for Smart Metering

T&D Transmission and distribution

ToU Time-of-use

TSO(s) Transmission system operator(s)

UoS Use-of-system

US United States

WAN Wide Area Network

Appendix A Smart Grids Benchmarking

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Appendix A – Smart Grid Deployment Survey E-mails

Dear Sir or Madam, As an active stakeholder in the Power Sector, you are probably aware that professional consensus on Smart Grid regulation is lacking. I am writing to ask for your assistance with an important study: “Smart Grid Benchmarking.” To address these important issues, it is critical to understand the views and practices of primary stakeholders such as yourself. My name is Nacho Arronte, and I am a post-graduate student by the Spanish university “Universidad Pontificia Comillas” in the program “Master in the Electric Power Industry”. As a part of the master program I am currently conducting a research thesis to worldwide benchmark Smart Grid regulation and development. I have designed a short, targeted survey that will greatly enhance our understanding of this complex dilemma. Your response is critical to ensure valid results. We hope that you will take a few moments to respond to this survey. While funding limitations preclude compensating you for your time, upon completion of the survey, and under request I will email you a copy of the final report as a small token of our appreciation. To complete the survey, please click below. If the link does not work please ctrl+click or copy and paste the following into your browser:https://spreadsheets.google.com/viewform?formkey=dFprWWxfNkh1WX

BMY056eXhOT2ViQ2c6MA https://spreadsheets.google.com/viewform?formkey=dFprWWxfNkh1WXBMY056eXhOT2ViQ2c6MA Your answers will be securely encrypted as soon as you submit them and will be treated with complete confidentiality. To learn more about the study please write to: [email protected] I greatly appreciate your participation in this important study! Sincerely, Nacho Arronte

https://spreadsheets.google.com/viewform?formkey=dFprWWxfNkh1WXBMY056eXhOT2ViQ2c6MA





Appendix A Smart Grids Benchmarking

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Dear Sir or Madam, Soon the survey: “Smart Grid Benchmarking” will close. Primary responses have been very favorable. I thank respondents for your cooperation. If you have not yet replied I would greatly appreciate if you could dedicate a few moments of your time to complete the survey within the next two weeks. As an active stakeholder in the Power Sector, you are probably aware that professional consensus on Smart Grid regulation is lacking. I am writing to ask for your assistance with an important study: “Smart Grid Benchmarking.” To address these important issues, it is critical to understand the views and practices of primary stakeholders such as yourself. My name is Nacho Arronte, and I am a post-graduate student by the Spanish university “Universidad Pontificia Comillas” in the program “Master in the Electric Power Industry”. As a part of the master program I am currently conducting a research thesis to worldwide benchmark Smart Grid regulation and development. I have designed a short, targeted survey that will greatly enhance our understanding of this complex dilemma. Your response is critical to ensure valid results. I hope that you will take a few moments to respond to this survey. While funding limitations preclude compensating you for your time, upon completion of the survey, and under request I will email you a copy of the final report as a small token of our appreciation. To complete the survey, please click below. If the link does not work please ctrl+click or copy and paste the following into your browser: https://spreadsheets.google.com/viewform?formkey=dFprWWxfNkh1WXBMY056eXhOT2ViQ2c6MA Your answers will be securely encrypted as soon as you submit them and will be treated with complete confidentiality. To learn more about the study please write to: [email protected] I greatly appreciate your participation in this important study! Sincerely, Nacho Arronte

Appendix B Smart Grids Benchmarking

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Appendix B – Eurelectric Smart Grids and Networks of the Future Results


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Nacho Arronte Arroyuelos EL DIRECTOR Pablo Simón / Endesa ...

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