Can European energy savings be reached in 2020 without smart meter ICT enabling processes?


By Maher Chebbo

The information and communications technology (ICT) sector at present accounts for 2% of global carbon emissions (in the UK, ICT is responsible for up to 20% of carbon emissions generated by government offices). This is as much as civil aviation. The real gains from green ICT will come from developing energy efficient solutions that impact the other 98% of global emissions.

ICTs are a contributor to global warming, but more importantly they are the key to monitoring and mitigating its effects. The International Telecommunications Union (ITU) has stressed that ICTs are also part of the solution to climate change, and could help curb emissions by anywhere between 15 and 40%, while the Smart 2020 study has estimated that smart technology could reduce global emissions by 15%.

ICTs, if directed to sustainable uses, could increase energy efficiency in all areas of the economy while continuing to account for 40% of Europe’s productivity growth.

Global energy demand is predicted to increase 60% over the next 30 years. Without action, the EU’s energy consumption is expected to rise by as much as 25% by 2012, which would increase EU emissions despite renewable energy targets. EU energy dependency could rise 50 to 70% by 2030.

Moving from the energy inefficient present to the energy optimised future will be a major challenge. According to the International Energy Agency, Euros 1,000 billion will be spent to deploy smart grids by 2030 (an average of Euros 45 billion a year representing a capex of 11% based on a Euros 400 billion annual turnover in the power sector), half spent on generation and half on transmission and distribution. Utilities allocate 2 to 6% of their turnover for IT spending (an average of 4% when investing intensively in market liberalisation and smart grid deployment representing an additional investment of Euros 176 billion by 2030 to reach Euros 352 billion of total ICT spending by 2030).

Energy generation and distribution uses one third of all primary energy. Electricity generation could be made more efficient by 40% and its transport and distribution by 10%. ICT not only could make the management of power grids more efficient but also could facilitate the integration of renewable energy sources.

A consultation group “ICT for Smart Distribution Networks” involving leading specialists from the technology, communications and IT European community has been working as a task force since June 2008 on the identification of smart grid ICT technologies impacting energy savings1. The goal is to recommend to the European Commission (EC) how ICT can play an important role in reaching European energy goals in terms of 20% energy saving by 2020.

The approach that has been adopted in the EC ICT SmartGrids consultation is to investigate the ICT impact across the whole energy value chain from generation to retailing and end consumers, leading to the identification of an exhaustive portfolio of ICT areas contributing to energy savings:

Area 1: ICT for smart energy consumption processes
Area 2: ICT for smart small and medium user behaviour management
Area 3: ICT for smart large user behaviour management
Area 4: ICT for generation and grid infrastructure readiness
Area 5: ICT for breakthrough industry transformation

It is easier to save energy if one can monitor the consumption as accurately and quickly as possible. Consumers need information that helps them to make more sensible use of energy. If energy can be saved, the benefit can be seen directly in lower energy bills. Moreover, climate change will be slowed, according to the Finnish Environment Institute (SYKE) which launched HEAT (Household Energy Awareness Technologies) aimed at developing a new method to measure electricity consumption and new user services for households that want to improve their energy efficiency.

Heating, cooling and lighting of buildings account for more than 40% of European energy consumption. ICT would, for instance, provide consumers real time updates on their energy consumption to stimulate behavioural changes. In Finland, smart metering has encouraged consumers to increase energy efficiency by 7%.

In the near future new applications can be easily added into home and building automation to save energy. A bioclimatic house may provide energy savings up to 80 to 90% compared to a conventional building. The VTT Technical Research Centre of Finland has launched a theeyear project to develop a platform to make it possible to add energy saving applications into one’s home almost as simply as putting a sticker on a door.

According to the French regulator, CRE, the implementation of smart metering should increase supplier switch capability by a factor 10, decrease non-technical losses by 50%, decrease residential consumption by 5% and decrease CO2 emissions by 5%.

According to the Smart 2020 report, reducing transmission and distribution losses in India’s power sector by 30% is possible through better monitoring and management of electricity grids, first with smart meters and then by integrating more advanced ICTs into the so-called energy internet. Smart grid technologies were the largest opportunity found in the study and globally could reduce 2.03 Gt of CO2e, worth $124.6 billion.

Clustering and prioritisation

Table 1 – Clustering and prioritisation of recommendations

The clustering and prioritisation of the ICT recommendations for the five areas above has led to six priorities for ICT investments to be leveraged (Table 1):
Recommendation 1: Further investments in ICT studies, business cases, surveys, project best practices and go to market of what has worked well in other countries or regions.
Recommendation 2: Investments in automated customer communications (smart metering) to reach 100% smart metering penetration in Europe by 2015 (Time-of- Use to become mandatory).
Recommendation 3: Investments in demand side management, demand response management and real time pricing as key processes for peak load shaving and energy efficiency.
Recommendation 4: Investments in home energy controlling boxes (internet boxlike, that could be linked to a smart meters or directly to the distributor or retailer) that will collect real time energy consumption from smart household appliances and will advise consumers automatically to consume energy smarter.
Recommendation 5: Investments in “losses free” and readiness of infrastructure networks to connect a large scale of distributed generation and renewable energy sources (share of 20% by 2020).
Recommendation 6: Investments in ICT readiness for “mobile electricity consumers” (e.g. plug-in hybrid electrical vehicles – PHEVs, that will become customers of electrical distributors rather than oil companies, or any electricity charging of mobile devices). By implementing these recommendations, it is estimated that significant benefits can be achieved, depending on the stage of each EU country as well as the success to combine smart processes (like demand response) and smart technologies (like smart meters):

  • Peak load shaving: up to 50%
  • Network loss reduction: up to 50%.
  • Consumer energy consumption reduction: up to 25%

[1] Contributors to the study:

  • From industry : SAP (co-chair), Accenture Technology Labs, Alcatel-
  • Lucent, BOOZ & Company GmbH, IBM, IDC Energy Insight , Infineon
  • Technologies, KEMA, Siemens
  • From broader business associations : European Utilities Telecom Council
  • (co-chair), Eurelectric, European Renewable Energy Council, European
  • Centre for Power Electronics, , CIRED
  • From research centres: Enersearch, Cesi Ricerca SpA
  • From European Commission: INFSO, ENV, Joint Research Centre, RTD