Energy Efficiency

The Last Word: Developing the Smart Grid

Issue 6 and Volume 9.

A recent study by Oracle Utilities reveals that organisations in the EMEA region are making progress towards the adoption of smart grids and smart meters. Nonetheless, argues Bastian Fischer, utilities are yet to fully understand or appreciate the potential benefits that the technology can offer for the increased use of renewable energy.

Global warming and the effect of carbon dioxide emissions on the environment is of growing concern to countries worldwide, so much so that the EU has pledged that by 2020 one fifth of the region’s energy will come from renewable energy sources. In response to this, many countries have introduced targets to reduce energy use. 

In the UK, for example, this comes in the form of the Carbon Reduction Commitment Energy Efficiency Scheme which was introduced in April 2010, and requires companies to reduce carbon emissions by 20% by 2020 and 80% by 2050.

As well as this, the European Union has launched the Emissions Trading Scheme, which calls for large emitters of CO² to monitor and annually report their CO² emissions. Through the initiative, the ETS pledges to cut CO² emissions by 34% below 1990 levels by 2020.

There is undoubtedly increasing pressure on organisations and countries to become greener. One of the biggest contributors to CO² emissions is the electric utility industry, accounting for a quarter of all carbon dioxide emissions worldwide, the largest share amongst all industries. For this reason, utilities are faced with the added pressure of curbing both their own and their customers’ energy use. One way this can be achieved is through the successful implementation of smart grid infrastructures.

Smart grids deliver a series of benefits to utilities which can help in the reduction of carbon emissions, including the capability of managing distribution grids more effectively in order to create fewer emissions. What is more, the technology enables utilities to integrate renewable energies, such as wind, water and solar, into the grid. This means that sources of power from high carbon emitting energy sources, such as fossil fuels, can more effectively be substituted with renewable energies in an effort to reduce emissions, and consequently help meet EU targets.

However, despite the many benefits of the smart grid, a recent study conducted by Oracle Utilities, titled ‘The EMEA Smart Grid Rollout’, found that, while over a third of utilities across the region have made progress towards the adoption of smart grids and smart meters, the vast majority of utilities do not realise the full capabilities it delivers.

Addressing the lack of awareness

This lack of understanding around the technology is evident in utilities’ awareness of the use of renewable energy within the smart grid. The study found that only 6% of utilities questioned across Europe, the Middle East and Africa (EMEA) consider increasing their level of renewable generation as a top priority over the next five years. What is perhaps more surprising is that some utilities surveyed across the region, including utilities from France, Greece and the UK, do not consider it to be one of their top three priorities.

One country that does place significant importance on the capabilities of integrating renewable energy sources into the smart grid however, is Turkey, with 100% of Turkish utilities surveyed considering it as their top priority over the next five years.

This can be attributed to the prediction that energy use within Turkey is expected to double over the coming decade, with the demand for electricity likely to increase even faster. Furthermore, Turkey aims to increase its renewable energy resources in electricity by 30% by 2023 to meet the increasing demands placed on its grid. With this in mind, it is hardly surprising that the country’s utilities place so much importance on the benefits the smart grid brings in regards to renewable energy.

While many countries may not currently consider the smart grid’s capabilities to integrate renewable energy into the grid as one of their top priorities, what is promising, as found in the report, is that two thirds of utilities surveyed do have plans to evolve their grids in order to support the technology and the subsequent level of renewable generation.

In fact, four fifths of German utilities surveyed have already started, or have plans to evolve their systems so that they are capable of supporting the smart grid. This is not only good news for utilities across Germany, but also for those across Europe. According to DENA, the German Energy Agency and adviser to the German government, Germany is faced with a unique problem in that it is currently producing too much solar power during the summer months. Feeding too much solar power into the grid could cause instability within the current infrastructure and lead to further problems. However, the implementation of smart grids can help tackle this problem. Smart grids enable the power gathered from the solar source to be retained in energy storage systems which can then feed into the grid during periods of peak demand, or when other renewable energy sources are low.

Furthermore, the smart grid can play an important role as countries across the EU formally draw up plans to link their clean energy projects around the North Sea in the form of a giant universal grid, being labelled as a ‘supergrid’.

One criticism of renewable power has always been that due to unpredictable weather patterns it is unreliable. However, with a supergrid in place, Germany could distribute the excess solar power it generates to members of the supergrid who are not generating enough solar power during the summer months, while during the winter months, when solar energy is low, it could source its renewable energy from wind turbines off the Scottish coast.

It is clear to see that the smart grid provides many benefits in regards to renewable energy, yet ‘The EMEA Smart Grid Rollout’ found that only half of utilities surveyed across the region have a system in place to educate their customers on the environmental benefits of the technology. For utilities to get the most out of the technology in order to reduce their own and their customers’ carbon emissions, utilities must increase their knowledge of the benefits of the grid and smart meters, which they can then pass on to their customers. The Netherlands, Sweden and the UK are already well on the way to doing this with 100% of utilities surveyed, from the respective countries, having in place a communications programme to educate their customers about the environmental benefits of the smart grid.

However, in order to successfully implement a smart grid infrastructure and reap the full benefits of the capabilities available, utilities must take it upon themselves to leverage the tools that enable them to extract intelligence and manage data created by smart meters. One such software application is meter data management (MDM), a key component of the smart grid platform. MDM allows utilities to manage the vast quantity of data gathered from smart meter deployments helping turn the data into actionable intelligence, enabling utilities to improve service by accurately responding to the demands placed on the grid. For instance, MDM allows utilities to see when power is in peak demand, meaning they can feed more energy from renewable sources into the grid to meet customer demand.

Another technological innovation that can enable utilities to manage data volumes more efficiently is a customer information system (CIS), which is an enterprise-wide software application that allows companies to manage every aspect of their relationship with a customer. The system helps turn customer satisfaction into customer loyalty. Therefore, an effective CIS could play a crucial role in allowing utilities to educate their customers on the environmental benefits of the smart grid.

Furthermore, an intelligent CIS delivers additional benefits, especially when supported by a smart grid infrastructure. For instance, it can enable better forecasting and management of the energy demands placed on the grid. Moreover, the solution is able to provide optimisation capabilities that can determine the best mix of energy and resources required to handle changing voltage requirements within certain areas. Consequently, a CIS could not only play an important role in educating customers of the renewable benefits of the smart grid, but it also enables utilities to provide the best mix of energy needed to satisfy the demands placed on the grid.

Smartening up

As pressure grows on various organisations and countries around the world it is increasingly important that utilities begin to realise the full benefits of the smart grid, especially its capabilities to integrate renewable sources. Similarly, as alternative sources of energy begin to run low, it will be crucial for utilities to have in place a system that enables them to input renewable energy into the grid. 

Smart grids will be critical in helping utilities meet the various regulatory demands placed on them in an effort to reduce carbon emissions and integrate renewable sources, as well as helping them cope with the increasing power demands of growing populations and improved infrastructures across the globe. Renewable energy can play a crucial role in helping utilities meet these demands, and the smart grid can play a vital role in making it a reality.

Bastian Fischer is vice president and general manager of Oracle Utilities, EMEA