The following are electricity generation related:
• Mechanisms must be developed to
encourage business models and markets that allow the flexibility required
by variable generation deployment and
ensure reliable system operation;
• Markets must be transparent to allow asset
owners and third parties to enter and offer
conventional, as well as innovative, solutions to provide such flexibility;
• The rise in the number of electricity
consumers who produce small amounts
of electricity at or near the place of
consumption—often referred to as pro-sumers—must be accommodated and,
if possible, turned into an advantage
rather than a problem.
The following are transmission network related:
• Regulatory mechanisms must be refined
to deal with transmission capacity and
interconnections with other countries.
Deploying new transmission is often
complicated by the unbundled and liberalized nature of electricity systems and by
lengthy approval processes;
• Policies must allow timely and adequate
transmission system investment; inadequate investment brings risks of higher
costs in future system failures;
• With transmission systems forming the backbone of security of supply strategies, balance
is needed between the cost of the duties
placed on system operators, paid eventually by system users at large, and internalizing costs of participation in the system of
variable and dispersed generation sources.
The following are distribution network related:
• Introducing “smartness” into distribution
networks is more challenging than it is for
transmission networks because there are
typically hundreds of times more nodes
to be integrated into the ICT systems
than there are in a transmission network.
• Users—whether businesses or consum-
ers will increasingly have some form of
funding awarded to smart grids by the
regulator Ofgem, and by Poland.
The commission also has opened a
public consultation on four more smart
grid projects, involving eight countries,
that could be included in the PCI list
and receive funding. This consultation
process was due to close just after press
deadline on June 26.
As electricity system decarbonization and
decentralization progresses, it is becoming
more complex to plan, control and balance
the system. Energy regulators must find
the most efficient and effective way to
deploy technology to make the grid smart
while still keeping costs in mind when
approving grid connections. This will
ensure that all users connected to smart
grids are in a more efficient situation.
Collaborating on policies and regulations that supports smart grid investment
is perhaps the single most important task
for all stakeholders. As with most policy
issues, the key is to find the right balance
in sharing costs, benefits and risks. The
responsibility for achieving this balance
lies with regulators and, in some cases,
legislators, but it must include input
from all stakeholders.
It seems that lately one of the priorities of the Commission is to facilitate
availability of smart metering to enable
greater participation of businesses and
households in electricity markets via
demand response solutions, organizing
self-consumption and taking advantage
of emerging storage solutions. On a larger scale, smart grids would be required
if extensive cross-border cooperation
between the states and countries, including
relying on over-the-border reserve generation sources, is to gain a substantial shape.
Regulation must adapt to support all
users connected to a smart grid. In doing
so, several key issues must be addressed.
activities envisioned by the commission
as part of the future energy market model.
The availability of funding plays a huge
role in any major infrastructure project.
It is encouraging to see that funding is
already becoming available from a number of different streams specifically for
smart grids. This includes both private
and public funding for smart grid research
and development, and for demonstration
and development projects.
Overall, private and public funding
each account for about half the total budget, although about 90 percent of projects receive some form of public financial
support. Projects in Eastern Europe are
particularly reliant on the Commission
for their public funding.
Although more than half of the total
budget is accounted for by projects in
France, Germany, Spain and the UK, on
average, 70 percent of the projects in any
given country are multinational collaborations of some sort.
The priority given to smart grids is
evidenced by their inclusion in the list of
PCIs under the Infrastructure Regulation
(347/2013). Such projects are given a considerable helping hand through the planning and permit granting process, special
treatment in terms of regulatory funding,
and the opportunity to apply for financial
support from the € 5.85 billion ($6.4 billion) Connecting Europe Facility (CEF).
Although only three projects have so
far been included under the “priority thematic area” of “smart grids deployment”
in the list of PCIs, it is noticeable that one
of them has received the second highest
amount of financial assistance of any
of the electricity projects among the 60
projects that have so far been allocated
CEF funds. At a national level, examples
of public support or incentives for smart
grids include the UK, with innovation