Focus on smart electric grids

Existing energy grids must be modernized in order to adapt to a changing energy world as well as to the gradual emergence of decentralized production sources. More and more smart grids are being built in Europe and seem to be an adequate, effective solution. This piece is an introduction to a series of articles on smart grids published on the web-magazine Energy 3.0, which will provide readers with an overview of innovating projects involving this new kind of grid management system.

A decentralized and communicating energy model which helps match production and consumption and secure balanced supply

According to Jean-Marie Chevallier, Professor of economics at the Paris-Dauphine University and former director of the Centre of Geopolitics of Energy and Raw Materials, “the process gained momentum after Barack Obama mentioned smart grids in a famous speech. Industry leaders worldwide started thinking of ways to use new technologies in future grids (automation, measurement, monitoring, system control…) with a view to shaping supply and reducing demand when it is too high. This is about using ICT throughout the chain, from the production site to the switch in the consumer’s home.” (source)

Smart grids are electric grids fitted with ICTs and are thus actual examples of what the energy sector may look like at the digital age, as depicted by Rudy Provoost in his book Energy 3.0. Such technologies make up a communicating system providing real-time information about itself, making it possible to know how much energy is available at any given moment. In practical terms, smart grids enable instant flow control as well as grid interoperability (i.e. a grid compensating a shortage on another); they also allow for the integration of renewable energy sources and the reduction of consumption.

The goal of smart grids is to maintain balanced energy flows from distributors to consumers by matching production, distribution and consumption. They thus improve supply security and overall energy efficiency (by minimizing loss and overconsumption) while reducing the impact of electricity generation on the environment.

Upgrading existing networks to foster smart grids

Developing smart grids requires an upgrading of electricity distribution networks, market and funding schemes. European countries gradually implement regulatory frameworks to foster the emergence of smart grids.

As of today, France does not have a specific legal framework for smart grids, although the 2010 Electricity Market Bill does include a number of provisions:

• Energy providers must have shedding capacities, in particular in the case of consumption peaks;

• Regulated electricity prices to encourage consumers to cut consumption during peaks;

• Free consumer access to consumption data.

A regulatory framework is also being designed at the EU level, in order to enable the interoperability of technologies and applications within a unified European energy market. The climate and energy package signed in 2008 provides for the mainstreaming of smart metres by 2020 (provided that they are affordable). The directive 2006/32/CE of the European Parliament and of the Council from 5 April 2006 on energy end-use efficiency and energy services acknowledges that the adequate knowledge of energy consumption profiles through smart metres could result in energy savings opportunities.

However, several players in the sector agree to consider that the regulatory environment that will foster the development of smart grids remains to be created. For instance, they stress that smart grids do not yet benefit equally all players in the sector and call for genuine incentive regulation.

This notwithstanding, many successful smart grid projects have already been launched, which players in the sector will try to use as showcases for this cutting-edge technology.

Energy 3.0 Webmag world tour of smart grids :

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