Smart grids: roles, responsibilities and recommendations for funding in Europe


By Tahir Kapetanovic

In Autumn 2009, the EU Commission established a dedicated Task Force for Smart Grids2 , with three expert groups to address specific issues of relevance. The tasks and scope of work of the Expert Group 3 were to elaborate:

  • Recommendations on the roles and responsibilities of the actors involved in the implementation of smart grids
  • Definition of criteria and recommendations for the funding of smart grids deployment
  • Recommendations regarding the needs for any additional legal framework at the EU level, in support of the smart grids deployment.

The EG3 participants encompass a wide range of stakeholders, including transmission and distribution network operators, electricity market participants, equipment vendors, information and telecommunication equipment providers, standardisation organizations, regulators, etc.

The work of the EG3 has been organised in the three steps, of which in the first a detailed analysis of the issues below was conducted:

  • Expected benefits from smart grids for their own organisations
  • Smart grids features provided by their own organisations
  • Smart grids features needed from other actors
  • Defined decision criteria for the deployment of specific smart grids features
  • Roles and responsibilities within the own organisation relating to smart grids deployment
  • Anticipated or already identified interfaces and interaction with other actors in the electric power supply chain required for smart grids deployment
  • Needs for any additional legal framework in support of smart grids deployment.

A synthesis of these issues was drafted into a working document. After intensive discussions and review, the final EG3 draft deliverable was presented at the Steering Committee of the EU TF on 22 June 2010. This deliverable document will be finalised taking into account comments and suggestions from the Steering Committee meeting, in September 2010. This deliverable first summarises the current roles and responsibilities of the actors in the electricity supply chain.

Then a number of specific and directly applicable recommendations have been proposed by EG3 in relation to interfaces and recommendations for funding. Moreover, the criteria, benefits and a template tool for assessment and elaboration of the most useful smart grids functions/features have been developed.

The future roles and responsibilities for the deployment of smart grids have been elaborated on for all kinds of actors in the electricity supply chain.

A process proposed for the evaluation of benefits and recommendations for funding of specific smart grids projects and activities is presented in the figure.

The key recommendations are as follows:

  • Funding Recommendation #1: Basic functions need to be provided by transmission or distribution system operators within the scope of the applicable regulation and tariffs and considering legal provisions. In the distribution grids of today, this is often one kind of incentive regulation, combined with quality regulation.
  • Funding Recommendation #2: The importance to avoid cross subsidising or double financing is emphasised. If some additional funding beyond the regulated tariffs is used, this needs to be considered in relation to any regulatory incentives, to avoid any cross subsidies.
  • Funding Recommendation #3: Funding for the supplementary functions (depending on each individual case) is also within the scope of the applicable regulation and tariffs – under the conditions that the overall benefits are passed to all customers paying those tariffs and that transparent and economically efficient deployment is ensured.
  • Funding Recommendation #4: In relation to the listed (and possible new, or presently yet unknown) emerging features in combination with the supplementary and basic ones, it is recommended to establish a multidimensional mapping in terms of smart grids benefits and criteria1.
  • Funding Recommendation #5: In terms of benefits, the key criteria in deciding on possible funding through the additional socialisation within grid tariffs shall be based on the optimised (maximised) area in the Figure 2 in the EG3 deliverable mentioned above.
  • Funding Recommendation #6: The evaluation of applicable and recommended funding options for the given features in smart grids deployment shall be based on completing the template for evaluation of which is described in the EG3 deliverable document

Concluding and recalling the tasks and scope of work defined for EG3, it is important to emphasise that the Group’s deliverable document, even after its finalisation in September 2010, is not intended as a static item but rather envisaged as a practical toolset for use by grid operators and grid users and also as a toolset that will be further developed as the deployment of smart grids across the EU become a reality.