We will not be able to transform the energy system without smart grids. Michael Villa gives an overview on their development in Europe. He is Executive Director of smarten, a European business association which strives for the integration of consumer-driven solutions in the clean energy transition.
Mr. Villa, can you tell us what smart grids are?
Smart grids help integrate a larger proportion of variable renewable energy into the system and support a cost-effective decarbonization. They require an active system management of their network to increase their resilience and integration of all consumers. Smart grids need system operators to be neutral market facilitators which procure flexible services from decentralized energy resources on the market.
Which steps need to be taken at European level for the implementation of smart grids?
First and foremost, Member States have to implement the EU Electricity Market Design: national regulatory authorities have to provide incentives to system operators to move from a CAPEX to a TOTEX approach and set out indicators, comparable throughout the EU, to measure progress towards an increase in their smartness. Up to now, positive developments already occur at transmission level, while significant progress is expected at distribution grid level.
Which European countries serve as models for the rest of the continent?
How “smart” a grid is can be weighed up and evaluated from numerous different perspectives.
At distribution grid operator level, Great Britain and the Netherlands are the Member States with more advanced local flexibility markets while countries like France, Finland and Ireland have recently set the regulatory framework for their distribution system operators to become smarter by procuring flexibility services.
Compared to distribution grid operators, the framework for the market-based procurement of all decentralized energy resources by transmission grid operators is more advanced, even if it is not ideal. Finland, Italy and Romania have now joined France, Greece, Ireland, Slovenia and Spain in setting clear rules for the market-based procurement of ancillary services.
The transmission grid operators in France, Finland, Germany, Slovenia and the UK have also taken into account the potential use of all decentralized energy resources as an alternative to expanding the grid in their 10-year grid development plans. This is the foundation to create truly smart grids.
The introduction of smart meters is another key element for the development of smart grids and innovative tariffs, for example dynamic electricity price offers. Several Member States have either already introduced smart meters or are in the process of doing so. It is worth highlighting that in Romania strong delays are being experienced, while Germany has put a halt to its roll-out following a decision from the Higher Administrative Court.
It will also be crucial to deploy smart meters fully interoperable with both energy management systems and smart grids to ensure seamless data exchange and energy system integration.
Which challenges still need to be overcome?
Beyond the limitations outlined above, the lack of data transparency is a major obstacle. The lack of visibility into the grid prevents the introduction of new, innovative services and the efficient functioning of markets which are open to demand-side resources.
Operators of smart grids should publish real-time information on their congestion, carbon intensity and energy mix.
What can be done to further advance smart grids?
The definition of a Network Code for demand-side flexibility and an Implementing Act on data access are crucial in Europe. They would make it easier for system operators to obtain flexibility from consumers in a harmonized way and turn them into truly smart grids that can solve congestions and accomplish their tasks by relying on the potential of digitalization and energy system integration.
EM-Power Europe: The grids of the future are smart
smartEn is a partner of EM-Power Europe which will be held from May 11–13, 2022, in Munich. The international exhibition for energy management and integrated energy solutions focuses on the efficient distribution and use of renewable energy as well as smart energy management in smart grids and microgrids. Other topics featured are grid infrastructure, energy services and operator models. In addition, EM-Power Europe supports companies on their way to climate neutrality.
At the accompanying EM-Power Europe Conference on May 10-11, renowned experts will talk about current topics such as renewable energies in smart grids, the role of flexibility potential for a balanced power grid and the inclusion of prosumers in the electricity market. The Conference will have a practical focus. Many of the presentations will be given by utility companies themselves and they will report on their experiences.