Smartgrids: Europe’s electricity networks speak to consumers


By Maher Chebbo

Today’s grids in Europe serve us well but all the evidence points to major changes. They are in excess of 40 years old. Are companies going to replace them as they are, or take the opportunity for fresh thinking? We face the very real and significant challenges of climate change, security of supplies, and Europe’s competitive position. There are also new customer requirements and new technologies to consider.

The SmartGrids design has been developed as the combined vision of more than 200 experts across Europe, from engineers to business people, from academics to politicians. But the SmartGrids design is about much more than wires: it is about a revolution of the whole electricity ecosystem – a whole new architecture to enable a secure and sustainable future for Europe, a change in focus where customers are empowered to decide from whom, when and how to consume.

The European mission will lead the regional efforts towards promoting and deploying distributed generation technologies to the extent that such effort benefits energy consumers, the energy European system and the environment through the optimisation of the value chain from energy providers to the end consumers. A new generation of affordable ICT infrastructure has to be developed to support the deployment of the SmartGrids, covering changes, complex business processes and enabling the efficient functioning of the deregulated energy market for the benefit of European citizens and businesses. The architecture of such distributed system landscapes has to be designed, standards must be created and widely supported, and comprehensive and reliable IT applications will need to be implemented. ICT will make it possible for future distributed energy systems to be self managing, self sustaining and robust, and will enable dynamic re-organisation and coordination of services markets.

Therefore the Internet-based infrastructure will be tightly coupled with the energy domain, and used to support the development of new mechanisms for trade based on supply and demand in the electricity market. Different models and scenarios for a highly distributed information-based energy infrastructure will emerge. Transaction platforms will provide services such as electronic marketplaces, facilitating the commercial activity associated with the buying and selling electricity and its derivatives, not only for utility companies but also for decentralised consumers and producers.


AMI with seamless standardised integration between management systems (e.g. enterprise resource planning, asset management and billing and customer services) and large scale deployed meters for Industrials and residential

The SmartGrids vision was defined in 2005 and a Strategic Research Agenda (SRA) was published in 2007. That vision will be brought to reality with the Strategic Deployment Plan (SDD), which will be published in early 2008 and will illustrate concrete projects that require to be executed with the right priority and timeframe in order to achieve the European energy policy goals 2020.

Working Group (WG) 3 on Demand and Metering focusing on customer integration in the marketplace identified the following research activities in the SRA:

  1. Tailored tariffs for different customer groups Business models for different market players in different market contexts (DSOs, ESCOs, energy traders, metering service companies, wholesalers, energy suppliers)
  2. Demand response (DR) programmes based on AMM and IC technologies for large scale application
  3. Energy data management for large scale applications
  4. Service Oriented Architectures and ICT solutions
  5. Simulation and evaluation models for demand side management (DSM) programmes
  6. Economic solutions for home automation and energy management systems
  7. Simplified and real time billing and multi-metering
  8. Business cases and market entry of innovative value added services
  9. Smart grid operation through active distribution networks
  10. Real time energy balancing in distribution networks
  11. Energy on demand.

In debating deployment scenarios, barriers, costs, opportunities and business case projects to achieve the European energy policy goals, specifically energy use reduction by 20 percent compared to the 1990 level, WG3 has come to the conclusion that customer related projects to be deployed should have a clear measurable target and a clear business case and that customers should be the main stakeholder. WG3 was to suggest, during the General Assembly in Germany in November a progressive deployment starting with easy to implement and easy to deploy “quick wins” and moving step by step to more sophisticated R&D requiring more investment while at the same time creating more returns. The group has defined a pyramid of five steps or “maturity” stages where enabling technologies (from basic to advanced) have been identified. By cumulating energy use reduction at each stage of the pyramid, the European energy goals can be achieved by 2020. The stages are:

  1. Increased awareness, transparency, efficient consumption
  2. Dynamic pricing signals to active consumers
  3. Automatic consumption decision support systems
  4. Consumer acting as supplier “prosumer” (active retailing)
  5. Pan-European electronic European Energy Marketplace (eEEM).

Electronic meters and Automated Metering Infrastructure (AMI) are the enabling technologies for a customer-centric approach to the networks of the future. There are two major priorities in demand and metering, the customer gateway to the market and effective demand side management, which can be achieved through innovation and standardisation.

AMI should achieve the end-to-end integration across the supply chain from generation to consumers. To comply with this objective, WG3 has defined the following characteristics/ R&D topics required by future AMIs:

  • Definition of minimum set of functions/services of the meter
  • Direct bidirectional communication must be supported
  • Multi-channel direct user communication (not necessarily via the revenue meter)
  • Multi-modal interfaces on the meter (towards multi-utility meters)
  • Common representation of metering data and functionality
  • Tackle security and privacy issues
  • Support short term contracting
  • “Roaming” between multiple suppliers/tariffs
  • Customer data should be available via an independent grid operator or other independent entity and via user controlled procedures (privacy, e.g. similar to banking system)
  • Customer meter data management should be linked to the EDM (reconciliation/management functions)
  • Close to “real time” information flow
  • Periodical/on demand data acquisition (import/export)
  • Interaction with online services at the network/enterprise side
  • Monitoring, visualisation and modeling tools for the new infrastructure.

When the previously specified functions of future AMI systems are met, we are moving closer towards the ‘Internet of things‘, where almost all devices will be interconnected and able to interact. The same will hold true for energy metering devices. New information-dependant intelligent energy management systems will be needed for an infrastructure capable of supporting the deregulated energy market. Intelligent electronic meters will have to be installed for millions of households and companies and connected to the future transaction platforms.


Electronic European energy marketplace (eEEM) where consumers can buy and sell power in a fully automated environment linking active consumers to the Internet

These e-meters provide new opportunities and challenges in networked embedded system design and electronics integration. They will be able to provide almost real time data that in turn will have a significant impact on existing and future energy management models. Decision and policy makers will be able to base their actions on real world, real time data. Households and companies will be able to react to market fluctuations by increasing or decreasing consumption or production, thus directly contributing to increased energy efficiency.

Research efforts will have to deal with the opportunities and challenges associated with the goal of closely linking ICT and energy. Development of an appropriate security, safety and risk concept and architecture for an electronicallybased energy market will be the core. In addition, an interoperability framework will need to be developed to enable the interoperation of the abundance of interfaces and systems that will inevitably result from a highly decentralised electronically-based energy market. The transition from the current grid to the future smartgrids requires not only technology readiness but also intensive change management meeting the agenda of the key stakeholders.

To conclude, no energy innovation can happen without the combination of a smart vision, i.e. SmartGrids, smart technologies (e.g. smart meters), smart processes (e.g. SAP processes for utilities), smart roadmap and finally smart stakeholders.

The vision is achievable, but it can’t be bought “off the shelf”. There is now an urgency for research, demonstration and deployment projects. But the technology alone is not enough. It is a key to success that the technical issues are addressed together with their commercial and regulatory implications in a liberalised energy market.

The time is ripe for a revolution in Europe’s electricity networks that talk to the end consumers. The vision has been created, now it is time to act. The SmartGrids design is about making connections and enabling choices: choices for governments, choices for companies and choices for commercials, industrials and customers at home. It is time for empowered customers to self-manage their energy to achieve European energy goals 2020.