Efficiency, Security, Reliability Driving Smart Grids in Europe

By Peter Moray, EUROPEAN Utilities Telecom Council

The term smart grid describes many aspects of development within the electricity and energy sectors. To some, it is increasing the level of intelligence and information gathering in transmission networks; to others, it is the development and implementation of smart metering; and for yet others, it is the continuing development of flexibility in the management of distribution networks.

European electricity networks for decades have provided the link between large generating stations (often in remote parts of the countryside) and population centers where demand is greatest. They were designed for a unidirectional power flow from the points of electricity production through a transmission and distribution network or networks to provide energy to end consumers.

European concerns about global warming and the wish to meet international targets on the emission of pollutants generated from fossil fuels have led to a greater focus on renewable sources and providing this new energy within the distribution network at a point much closer to end customers. Figure 1 illustrates this principle. Any increase in local or distributed generation will reduce the demand for fossil fuels from large generating stations and the load on transmission lines, in turn lowering the losses inherent with these networks.

Because electrical energy cannot be stored to great extent, a primary role of the transmission and distribution networks has been to ensure enough energy is available in real time to meet customers’ demands. Until recently, production has been supportive of demand, but increasingly for some regions, demand can be greater than supply. In such circumstances, it is necessary to disconnect customers to preserve the energy network’s stability and integrity. To minimize these occurrences, energy distribution network operators will look for a measure of control of energy demand (demand-side management) that will allow the supply-demand balance to be made at a local rather than national level.

This two-pronged approach, a large increase in renewable generation and implementation of demand-side management, will enable Europe to move closer to its emissions-reduction target. For distribution companies, however, these developments create significant problems.


Implementation of Large-scale Renewable Generation


Distribution networks were designed for unidirectional power flow and not for energy to be injected at a local level. The modelling of power flows and network performance becomes complex. By definition, renewable energy output is less predictable and more volatile than that of large generating plants. Renewable energy will come from many diverse sources: photovoltaic, wind farms, wave power and small hydro plants, to name a few.

To manage their networks within statutory performance parameters, distribution companies must understand much more about what is happening on their networks in real time, measuring network performance at the lowest voltage level and potentially at every customer premises. While the latter requirement can be met with smart metering solutions, and demand-side management supports the cost of such solutions, the former requirement means developing communication solutions that can communicate in real time with any element of plant on the network. Many items of plant are by design in remote areas.

In addition, having gathered the large amount of data, a company must implement the aggregation of supply and demand at an <, local level. This will be achieved through the development of an application (an energy management system) that can interface to and make decisions based on information from a range of existing applications: distribution management system, network outage management, building management system and avalanche telephone call management (trouble call).

The major challenge facing distribution companies is delivering this complex solution cost-effectively and within any constraints of being a regulated, asset-based business. Because large-scale distributed generation is taken up by small and medium enterprises and domestic customers—presumably in some random way—the solution must provide sufficient flexibility to allow energy network and application re-configuration. This will be necessary because smart grid islands can appear anywhere in the network, which will need to control local energy inputs. To date, the industry has no experience in controlling some areas of network that include renewable energy alongside areas in which there is no renewable energy.


Demand-Side Management


In Europe, an energy company or retailer owns the customer, and the distribution company delivers the energy. In some regions this might be the same company, but in many regions they are separate organizations. Complicating matters, the customer usually has a choice of energy retailers and is free to change the energy supplier at any time. This increases the number of participants in the complexity of demand-side management solutions.

Demand-side management, also known as demand response and control, relies on the energy company’s ability to influence customer demand to reduce the total energy consumed.

Influencing factors might be: providing customers energy consumption data in real time, using higher or lower pricing to influence total consumption or peak demand, providing quality of service signals to customer, or allowing the energy company to control demand on selected appliances.

It is unclear which will have the greatest effect, and research is continuing to establish the real benefits. Customers will be at the center of the new energy market rather than on the periphery of an infrastructure network. Figure 2 illustrates why this is necessary. Customers will have a choice in reducing demand, but should customers allow energy companies some level of demand control, then agreement on which services are affected must be reached.

The term commercializer in the figure identifies an energy retailer, or, in the future, perhaps an energy aggregator operating in the open energy market buying wholesale energy and offering it to customers in a flexible pricing package.


Smart Metering and Communications


A key enabler to driving greater efficiency in energy usage will be a new metering solution capable of making the necessary measurement on consumption and power quality while enabling price signals to be sent to customers. Automatic meter reading (AMR) has been used in some regions for many years, but largely it used a one-way communications solution. Smart metering requires some level of data storage at the meter and the ability to send and receive signals through a two-way communications network.

At the simplest level, the smart meter will be capable of measuring and storing the levels of energy flow in both directions and have the capability to measure power quality parameters. The meter also will interface to energy retailers or commercializers who will use the data to facilitate demand-side management and energy billing. In the competitive energy market, meters will be required to interface to any energy retailer operating in the market. This challenge is promoting the development of operating standards so the market can function.

Some organizations perceive smart meters as sophisticated devices able to support many value-added services, e.g., smart meters could become home hubs, homewide communications devices controlling appliances and energy demand. The level of functionality in smart meters has a significant effect on the design and cost of the communications network required to support the overall solution.

Providing a communications solution to reliably serve every dwelling within a country is a challenge. In some European countries, there is a thriving competitive telecommunications market in fixed and mobile networks, and such competitive markets should be leveraged to produce economical solutions. In other European countries, the competitive element of the market only exists in the mobile sector, and it is difficult to promote fixed network competition so options are more limited. As an alternative to the competitive telecoms market, distribution companies might develop communication solutions that serve smart grid needs and support the requirements for smart metering.

Communications technology is not an issue; there is a range of technology and service options to support smart metering. The challenge is to create a solution or solutions that can support diverse meter functionality that is flexible to deploy in dense urban, urban and rural communities and is cost-effective.

Some European countries have mandated smart metering for new housing stock, and several governments have committed to smart metering across all businesses and dwellings within 10 years. The Italian utility company ENEL leads the way with smart metering in a program that in 2006 converted all electricity meters (a total of 27 million) to smart meters. The U.K. government has committed to smart metering for all energy meters, electricity and gas (some 47 million meters) and is consulting on the most appropriate, economical way to implement the solution. The introduction of gas meters in such a scheme creates new technical challenges because smart gas meters need a battery source for the communications solution. To extend battery life, the communications must be very low-power. This raises the prospect of the gas meter communicating via a home communications network.


The Role for ICT


Information communications technologies are recognized as the key enabler of the smart grid, whichever form it takes. Utility companies must gather more data from their network infrastructures than before and be capable of processing that data to deliver greater efficiency from networks and to manage the demand–supply relationships at household, building or business levels. In one of the U.K.’s 14 distribution regions, there are potentially 50,000 network points, any of which might need to be monitored and controlled. While the communication technologies are available to meet this challenge, sophisticated energy management solutions capable of processing the information companywide or nationwide are not yet proven. That remains the greatest hurdle to the European vision of the smart grid.

Peter Moray is the director of the European Utilities Telecom Council (EUTC). Based in Brussels, Belgium, the EUTC was recently awarded a three-year contract by the EU’s Information Society & Media Directorate to educate the European utility and technology industries about the importance of ICT for smart distributed generation in Europe. EUTC sponsors the annual European Utility Telecom Conference, being held 4-6 November 2009, in Budapest. EUTC is an independent operating unit of the Utilities Telecom Council.


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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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