Forward View
be to the benefit of consumers in terms of lower prices. Having originated in the UK in 1990 with the privatisation of the electricity supply industry in England and Wales, and in Scandinavia in the mid-1990s with the development of a competitive market for power generation, full deregulation is now sweeping across Europe from north to south. However, the EU target for full deregulation by 2007 has been missed, and about 50 per cent of the markets are still making the transition to full competition.
Managing consumption Market structure impacts the strategies for smart meter deployment, and approaches in European markets therefore differ. Ideally, the Distribution System Operator (DSO) should be responsible for the implementation of a smart meter that will measure the electricity consumption by the hour; with energy retailers then able to supply not only electricity and electricity saving advice, but also the tools for managing consumption according to price and/or environmental concerns within the concept of a free market. A number of markets in Scandinavia are following this type of model, whereas in many other parts of Europe, smart grid discussions gravitate around the more complex model of the DSO being responsible for metering and providing consumers with tools for controlling consumption of electricity. Certainly, there are no technical reasons to combine metering and the controlling of energy consumption. Te data input to the controlling unit can be distributed via the internet or by wireless networking technologies such as GSM and, in a competitive electricity market it would most likely be easier for the retail supplier of electricity to submit one price tag to the consumer than for a DSO to submit many price tags from multiple retailers. In addition, when a consumer changes supplier, it would be up to the new supplier to change the home energy management tool, whilst the DSO would have no need to be involved in the process.
Promoting consumer choice When designing smart grid concepts, it is essential to define the role and tasks of the DSO in a way that will release the creativity and competitive forces of a free and open market. A well-designed home energy management tool might be considered as a key differentiator for one electricity supplier, and could just as easily be introduced by a competitive player – provided it is linked to the supplier’s price tag for electricity. Moreover, a smart grid controlled centrally with non-conditional disruptions enforced by the
DSO with a direct connection to a consumer’s household appliances risks being viewed as a ‘big brother’ approach. Rather, a smarter, simpler and more efficient approach to promoting efficient energy consumption is required. A basic home energy
management tool can be as simple as an SMS message, whereby the consumer receives an SMS when the tariff passes above a certain level, thus enabling them to make an informed decision as to whether they wish to turn off their appliance(s). It can also be extremely sophisticated, with automatic control and regulation of electricity-intensive equipment such as air conditioning, outdoor heating, washing machines and tumble dryers. It could even deliver a reverse mode for EV batteries, thus fully supporting peak shaving schemes.
Te most important consideration for any smart grid strategy is that in the same way as a consumer should have the freedom to choose their vendor of electricity based on the most competitive price, they should also have the freedom to choose the best supplier of automation services for their electricity consumption. A smart meter supplied by the grid company that is a monopoly would not afford the consumer this choice. And a consumer able to request a home energy management tool based on their personal preferences is much more likely to use it effectively. Essentially, the change in the energy mix requires
smart metering that gives consumers right tools to move their consumption of electricity according to their requirements, preferences, and in response to periods of high or low supply. Utilities will need the means to measure consumption every hour at the point of delivery, and the capability to transmit tariff information to the consumer, by the hour, if they are to successfully influence consumer behaviour. Crucially, metering must be the responsibility of the DSO, not the retailer, if smart grids are to be implemented without compromising the important separation of transmission and distribution from generation and sales of electricity. ●
Ulla Pettersson, based in Stockholm, Sweden, is a member of the advisory board for POWER-GEN Europe 2011, Europe’s leading event for the international power industry, and will be chairing a conference session at the show on Nuclear Plant Operational Excellence. Pettersson is also the founder and director of ‘e for energy Management Consulting’, a consulting firm assisting utilities and oil corporations with strategy development, business planning, transformation projects and performance improvement.
www.e-for-energy.se
www.engineerlive.com 9
“The smart grid might also be the tool with which to address the issue of renewables representing an intermittent source of power generation.”
Ulla Pettersson, member of the advisory board for POWER-GEN Europe 2011,and founder and director of e for energy Management Consulting
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