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Nov 21, 2013 (3 years and 8 months ago)

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« Smart Grids

» : the backbone
of a future decarbonised power
system ?


Dr. Joëlle de Sépibus

Visiting Professor College of Europe

Outline


From monopoly to competition in the
European electricity markets:


The climate challenge:


The decarbonisation of power production


The deployment of «

Smart Grids

»: the
backbone of a future decarbonised power
system ?



The ‘traditional’ monopoly

structure of the electricity industry


Alternative current

is at the root of the current
structure of the power industry:


A system which generates electricity in large power
stations at remote sites and carries it over long
networks to distant users


Management by a vertically integrated company:


Power generation


Transmission (high voltage networks)


Distribution


Supply of electricity (billing, metering)


Progressive Liberalisation of the
European Electricity Market


Shortcomings of the monopoly system:


Large scale investment and lack of competition


Those who planned, managed, and operated the
system did not carry any of the risk and did not suffer
if they erred


Difficult introduction of small
-
scale electricity
production


Response of the European Union:


Progressive introduction of competition for generation
and supply of electricity under the influence of the
neo
-
liberal ideology

The Legislative Electricity
Framework of the EU


The first legislative initiative


The ‘first’ Electricity Directive (1996)


The second legislative package


The ‘second’ Electricity Directive (2003)


The Cross
-
Border Regulation (2003)


The Security of Supply Directive (2005)


The third legislative package



The ‘third’ Electricity Directive (2009)


The Second Cross
-
Border Regulation (2009)


The Regulation establishing an Agency for the
Cooperation of Energy Regulators (ACER) (2009)


Liberalising the European
Electricity Markets


Main principles:



Competition in the generation and supply of electricity
and freedom of choice for customers


The networks remain a monopoly


Non
-
discriminatory third party access (TPA) to
networks


Unbundling’ rules for vertically integrated companies
(accounting, legal, ownership unbundling)


Designation of national energy regulators


Creation of an
Agency for the Cooperation of
Energy Regulators

The EU „climate and energy
package“
-

2007


New commitments by the EU for 2020
:


Pledge to reduce the EU GHG by 20% (1990)


Increase the share of renewable energy (20%)


Increase of energy efficiency by 20%


Legislative framework:


Package of measures (2009)


Amendment of the Emission Trading Scheme (2013
-
2020)


New Directive for Renewable Energies


The Directive on Carbon Capture and Storage (CCS)


Strategic Energy Technology Plan (the ‘SET
-
Plan’)

Climate related challenges for the
liberalised electricity markets


Reduction of CO
2

emissions


Low carbon generation of electricity (switch
from coal to gas, equipment of fossil fuel
power stations with CCS)


Increase of renewable energy sources (RES)


Small
-
scale production (solar, onshore wind,
geothermal, biomass)


„distributed generation“


Large offshore wind production


Increase of energy efficiency

The effects of liberalisation for a
decarbonised power sector


For a thorough appraisal see, in particular:



Joëlle de Sépibus
,

The Liberalisation of the Power Industry in the
European Union and its Impact on Climate
Change

A Legal Analysis of the Internal Market in
Electricity
,

WTI

Working Paper No 2008/10


Network
-
related barriers for RES


‘Traditional’ networks:


Largely «

passive

» management of networks (coal, nuclear,
gas)


Principal barriers for the introduction of small
-
scale RES


Despite «

unbundling

» and regulated TPA still bias againt small
distributed generation (highly concentrated market)


‘Unfair’ network tariffs (high connection charges)


Insufficient «

intelligence

» of aging networks


Principal barriers for the introduction of large
-
scale RES,
especially wind offshore


Insufficient transmission capacities and interconnection capacity
between Member States

The Response of the EU….the
Deployment of « Smart Grids

»

Smart Grids:




upgraded electricity networks to which
two
-
way digital communication between
supplier and consumer, intelligent
metering and monitoring systems have
been added




What is a
Smart Grid
?

L
ike blinded men with an elephant

Smart Grid


Modernised

electricity

delivery

system

which

monitors,

protects

and

automatically

optimizes

the

operation

of

its

interconnected

elements



The

Smart

Grid

sits

at

the

intersection

of

Energy,

IT

and

Telecommunication

Technologies

Smart Grid


„when power meets
intelligence“


.

Communication between

system components

Interdisciplinary technologies:

Data collection, processing and recombination

Market

Grid Operation

Smart

Generation

Smart

Distribution and
Transmission

Smart

Consumption

Smart

Storage

Principal goals of the

„Smart Grid“


to integrate national networks into a market
-
based, truly pan
-
European network


to guarantee a high
-
quality of electricity supply
to all customers and to engage them as active
participants in energy efficiency



to anticipate new developments such as the
electrification of transport


to substantially reduce capital and operational
expenditure for the operation of the networks,
while maintaining the security of the system

Principal goals of the

„Smart Grid“


Backbone of the future decarbonised power
system:


to transmit and distribute up to 35% of electricity from
renewable sources by 2020 and a completely
decarbonized electricity production by 2050, in
particular through the integration of vast amounts of
both on
-
shore and off
-
shore renewable energy


Strong incentives for efficient energy use, combined
in particular with time
-
dependent electricity prices
(„peak
-
shaving“)

Roadmap for a competitive low
-
carbon economy in 2050


Communication from the Commission
(2011) 112:


“Smart Grids are a key enabler for a future
low
-
carbon electricity system, facilitating
demand
-
side efficiency, increasing the shares
of renewables and distributed generation, and
enabling electrification of transport”

EU legal framework for „Smart
Grids“


Electricity Directive (2009/72/EC):


Obliges Member States to define an implementaiton
plan for the roll
-
out of intelligent metering systems


Energy End
-
Use Efficiency and Energy Services
Directive (2006/32/EC):


Regulatory incentives should encourage that a
network operator to earn revenues that are not linked
to additional sales, but based on efficiency gains


European Council (2011):


Invitation of MS to liaise with European
standardisation bodies ‘to accelerate work with a view
to adopting technical standards for electric vehicle
charging systems and for smart grids and meters‘

EU support for the deployment of
„Smart grids“


Technology push



RTD&D projects since 2003, more than

300
Million EU support


European Smartgrid Technology Platform
(launched 2006) (
www.
smartgrids
.eu
)


European Energy Infrastructure Package, 2010 and
2011:
http://ec.europa.eu/energy/infrastructure/index_en.ht
m


SET
-

Plan


European Electricity Grid
Initiative (launched 2010
(
https://www.entsoe.eu/rd/eegi/
)

EU support for the deployment of
„Smart grids“


Coordination activities:


Task Force for Smart Grids, launched in 2009


Invitation by the Commission of all relevant institutional
actors and market stakeholders „t
o make regulatiory
recommendations to ensure EU
-
wide consistent, cost
-
effective, efficient and fair implementation of Smart Grids
http://ec.europa.eu/energy/gas_electricity/smartgrids/taskforc
e_en.htm



Communication of the European Commission on
Smart Grids, COM(2011)202
-

12 April 2011


Communication of the European
Commission on Smart Grids


Identified challenges:



Consumer engagement at all levels


Protection, handling and security of data


Standardisation and interoperability


Regulatory framework and incentives

for
infrastructure investments and roll out

Communication of the European
Commission on Smart Grids



Standardisation and interoperability
:


Diverse mandates for standardisation given to
CEN, CENELEC and ESO by the Commission
in 2010


Regulatory framework and incentives



If evaluation of the Energy Services Directive
shows that progress is insufficient, the
Commission will consider the establishment of
a
Network Code on Tariffs


The road to a Smart Grid is
still long and its success
uncertain…..





Dr. Joëlle de Sépibus

Joelle.desepibus@wti.org