The EIF dinner debate on smart grids on 12 April coincided with the publication of the European Commission Communication "Smart Grids: from innovation to deployment". Currently only 10% of European households use smart technologies. The Commission Communication is looking to find consensus on the various challenges facing further smart grid deployment.
In its Communication, the Commission focuses on 5 areas: technical standards, data protection of consumers, cyber security, the adjustment of the regulatory framework and the guarantee of an open competitive market. Now Europe has to make the right political choices to make smart grids a success. What will be the challenges facing the grid?
The goal of smart grids is to make the present electricity grid become a network that can intelligently deliver the right energy service at the right time and create a sustainable, economic and secure electricity supply. The target set by European policy makers is to reach 20 % of that total energy supply coming from renewable resources by 2020. However, in order to reach the overall 20 percent goal, more than 20 percent of the electricity will have to come from renewables by 2020. With that in mind, the electricity grid will have to be improved to enable the new tasks required from it by society.
Predictions on the energy mix by 2020 say that wind energy will deliver 20% of the electricity to the grid, and 13% will be solar energy. Whatever the exact numbers will be, this will have a tremendous impact on our electricity grids. It is not about the amount of energy a grid has to carry that is important. The most important element of a grid is the power that has to flow through the grid elements at any point in time. In other words if you use variable inputs like solar and wind energy you need a flexible (higher!) capacity of the grid.
For instance, if at a certain moment a lot of wind is available and the sun is shining brightly then the generation of electricity will be (Europe wide) higher than demand. In order to balance the system, storage, demand side response and eventually curtailment of renewable resources will be needed (2020 targets). Therefore a lot of new technologies, market based incentives, control interactions, flow assessments, will become necessary. New types of demand may be integrated in the system, such as the electric or plug in hybrid vehicle, to pool resources efficiently.
Driving all those interactions will require a lot of data management. The intelligent meter will be the gateway to these services. Technically this is all possible, but two majors questions have to be solved. The first one is the reliability. Using data communication networks to control the energy flow in real time may bring this reliability in danger. The other question concerns privacy. We should avoid that real time consumption can be linked for instance to the presence or absence of the occupants of a building. Solutions have to be found, such as using aggregation on a low level (say 50 houses) in a virtual power plant environment that reduces the spread of information to the individual behaviour.
Another challenge is that smart grids are more expensive than classical grids as they have to fulfil more requests from society: organising the market, delivering electricity with a very high level of reliability, supplying more energy services than before, enabling to harvest renewable energy resources. This will cost money and the necessary financial incentives have to be given to the market parties to deliver, both regulated and in the competitive area. And last but not least we must remember that smart technology requires the right ICT solutions: broadband technology (and roll-out) for instance is a key enabler in these processes. ICT as such will have a major role to play in climate change strategies.
Solutions are possible, but not evident. Walking the path may be different from knowing the path and Europe needs to intelligently address the issues at stake to succeed in effective smart grid deployment.