The European grid was not designed with intermittent energy sources in mind. What is being done to ensure that the grid becomes sufficiently reactive to accommodate the levels of renewable energy foreseen in the SET-Plan?

The management of electricity networks under stable frequency and voltage conditions implies a continuous exact balance between power generation and load consumption. Any unbalance, if not properly managed, can evolve into unstable conditions, potentially opening the way to blackouts.

Up to a few years ago, the only variable in the electricity system was the load. Hence, generators were operated to follow load variations closely in order to maintain equilibrium with the required safety margin to ensure secure operation of the system. More recently, nearly all European countries experienced abrupt growth in renewable energy sources (RES) such as wind and photovoltaic, which are intrinsically variable and, to a certain extent, difficult to predict. This fact has increased the level of complexity of system management and, to avoid dramatic consequences, there is an urgent need for increased system flexibility.

The only way to cope with this new situation is to implement smart grid solutions. The evolution towards smart grids is a must, and represents at the same time a need and an opportunity to evolve towards a more efficient and sustainable electricity system.

Innovative control functions based on extended observability, effective use of storage, and demand response, all enabled by the use of information and communications technology (ICT) at all voltage levels, and the related market and regulatory frameworks, are some of the solutions that need to be applied in the grid, after successful demonstration by dedicated key projects at national and European level.

There are a number of grid-related energy calls in Horizon 2020. What do you see as the main RD&D priorities for smart grids under the next framework programme?

In line with the new trends in Horizon 2020 calls, within the European Energy Research Alliance Joint Programme on Smart Grids (EERA JP SG), we have identified a set of research areas that we believe need to be tackled with a coordinated approach at EU level. These research areas represent our vision of the main R&D priorities for smart grids, in a 2035 perspective. We are very conscious about the absolute necessity to address these in a holistic and technologically neutral manner, exactly as in the new Horizon 2020 calls.

On an aggregated level, these research areas are as follows: network operation; energy management; ICT for smart grid control systems and interoperability; electrical storage integration; and transmission networks. These five research areas are deemed to be key for ensuring the current or an even higher level of grid stability in the presence of a very high penetration of distributed generation from RES.

We know perfectly well that several other research aspects need to be addressed to ensure the seamless implementation and deployment of advanced network technologies. Among them, the design of proper market and regulatory frameworks is important, to support the system evolution and hence to allow smart grid technology to be exploited to its full potential. We are teaming with other initiatives (for example the Implementing Agreement for a Co-operative Programme on Smart Grids - ISGAN¹) to ensure that all aspects are properly covered.

What are the main factors hindering the smartening of the European grid, and what needs to be done to overcome these obstacles?

The electricity system as we know it has been operating for many decades. Its evolution towards smart grids is already taking place, but this cannot be fully accomplished in only a few years. In fact, the electricity system is one of the most complex and strategic assets of a country or a continent and hence its evolution is a very costly process that needs to be properly managed. What we also need to take into account that typically new grid infrastructures are intended to stay in operation for very long periods of time (30 years or more). Therefore, as with all radical evolutionary changes, there are several factors hindering the smartening of the European grid and their relevance differs significantly according to the perspective of the various grid stakeholder groups.

For example, current uncertainty about how future energy markets will develop and hence about the related return on investments and business models, is holding grid stakeholders back from large-scale investment in the grid. Standardisation aspects also need to be addressed to ensure an adequate level of interoperability between the different technology providers, thus ensuring the creation of a correct competitive technology framework that is the most effective guarantee of continuous development. Finally, the deployment of smart grid solutions implies very rapid growth in data flows: concerns related to data collection, privacy and security are increasing among all players and, in particular end-users, sometimes resulting in opposition to the change.

Market design, interoperability and data security are three new topics that have been included by the EERA JP SG in its new 4-year R&D activity plan (2014-2017).

In summary, to expedite smart grids deployment, it will be necessary to simultaneously address the various open issues from the viewpoint of the regulatory framework, market design and technology. Development of these issues should be fully aligned to ensure that they are mutually reinforcing rather than work against each other.

What are the main challenges currently facing utilities deploying smart grid technologies, and what can be done at a research and/or policy level to help them address these challenges?

Utilities are presently facing several practical challenges in deploying smart grid technologies. As electricity grid infrastructure is a vital asset, all the developments must be made on the system while it is live and functioning. This is why any solution must first be developed and tested in the laboratory, checked in terms of system integration in extended test beds, trial tested in real life on a small scale in demonstrators before being extended and deployed. This process takes time and effort and requires that many activities are carried out in parallel to achieve consistent results in an acceptable time frame.

Much can be done at a policy and regulatory level, and governments should be more aware of the importance of smartening networks to achieve the policy goals they are aiming at: there will be no extended integration of variable renewables, no outstanding electrical mobility, no load flexibility, no possibility for customers to participate in the energy market without smart grids. Regulators need also to act to facilitate and motivate investment in smart technologies and solutions. A transition from “input based” regulation which remunerates the assets and their management, towards an “output based” regulation which takes into account the achievement of targets may be a good way forward in this respect.

In fact, one of the main challenges faced by utilities is related to receiving fair remuneration for their investments in innovation: to be properly compensated for the added value of offered services, while keeping the implementation costs manageable.

Technical barriers are also present on the path toward smart grids: the first one being a profound understanding of the architecture of smart grids themselves. A large effort is therefore needed between stakeholders to develop a common language and a common approach towards smart grid developments. Smart grid technologies for each individual function are mostly available, even if not always off-the-shelf, but interoperability is not yet assured and significant effort is still required at pre-standardisation level.

Applied research has a key role in these developments: independent and public research centres involved in the EERA JP SG can set up solutions, develop algorithms, test integrated systems and study optimisation rules without being influenced by single party interests, while keeping an eye on the common benefits. This must be done in close collaboration with the parties that plan and operate the system, with technology providers, ICT operators, NGOs and end-users.

In times of budget constraints, proving the business case for renewable energy technologies has become a key issue. What can be done to create strong business justifications for smart grid applications?

Incentives for renewable deployment have been instrumental in achieving strategic energy goals in times where the cost of the energy produced by innovative generators was higher than that of conventional generation. This has been valid up to a few years ago and the incentive policies have given a strong stimulus to this type of generation. So-called “grid-parity” is currently almost a reality for many such generators.

The electricity generation system in many European countries has been profoundly influenced by this strong evolution towards de-carbonised generation. This fact has changed the panorama in many countries: high efficiency conventional generation which acted as base production is nowadays operated for less than 2000 hours per year, strong variability must be managed with flexibility, important reverse power flows are seen in the presence of distributed generation etc. This also has an important influence on the financial and economic scenario.

Investing in smart grids is important to achieve national strategic goals: however, each stakeholder must receive a financial return on investment and adequate business plans need to be developed. This is not an easy exercise. While deployment costs can be evaluated based on development scenarios, technology alternatives, learning curves, and economies of scale, the benefits of the smart grids alternatives for the different system stakeholders are more difficult to calculate.

In fact, the relation between the investing stakeholder and the parties receiving the benefits is not always clear and straightforward. Here again, applied research can be of great value and the development of cost and benefit evaluation tools is certainly a subject on which research centres and universities can make a significant contribution.

In conclusion, I think it is very important not to stick to the current framework, but to identify the real cost drivers for end users, thus revealing the true value and remuneration for providing the required system flexibility.

How are European initiatives supporting the large-scale roll out of smart grid technology?

The European regulated network operators have a well-defined approach towards the development, demonstration and roll-out of smart grid technology. In fact, within the European Electricity Grid Initiative (EEGI)² a specific roadmap has been developed and implementation plans are being updated yearly, with the assistance of the GRID+³ project.

European governments are also considering smart grids within the framework of their energy strategies and are investing in smart grid solutions and technologies. In view of the necessity to reduce the time-to-market of the system flexibility enhancers, close collaboration and optimal coordination is needed to avoid duplications, particularly in times of financial crisis. New collaborative schemes capable of bringing together European, national and private funds are desperately needed to ensure timely deployment of technologies, and the European Research Area’s ERA-NET⁴ co-funding mechanism is considered a promising option to achieve this goal.

As regards more advanced technologies, still at the pre-competitive stage, the EERA JP SG is addressing, in a co-ordinated manner, unresolved problems in a set of targeted smart grid critical research areas across Europe. Through these EU initiatives we will achieve over-critical mass in terms of research capacity, bridge cooperation between Europe's leading research institutes and increase the use of existing research infrastructure. Last and but not least, we also aim to drive the efforts in the EU Member States towards achieving the targets of the SET-Plan.

The interaction and coordination among the different European initiatives and in particular, cooperation with EEGI and with the Smart Grids European Technology Platform (ETP SmartGrids)⁵ is of utmost importance for the EERA JP SG and a must for Europe as a whole.

What are EERA’s priorities for the medium to long-term perspective aimed at accelerating smart grid deployment?

The main goal of the EERA JP on Smart Grids is to promote the European coordination of smart grid research roadmaps and medium- to long-term research activity, in order to avoid gaps and to avoid excessive overlapping. Hence, one of our main tasks is to align and coordinate with the research effort of the Member States, to elevate the results at European level with the ambition of steering the national smart grid research programmes.

This can be fully accomplished only if the research organisations brought together in the EERA JP SG (at present 19 participants and 14 associate participants, representing 16 EU countries) closely interact and collaborate with the European Commission. Close interaction is also required with organisations representing industrial grid stakeholders such as the EEGI, the European Network of Transmission System Operators for Electricity (ENTSO-E)⁶, the European Distribution System Operators’ Association for Smart Grids (EDSO4SG)⁷ and the ETP on SmartGrids.

Our EERA JP on Smart Grids is planning its R&D activity for the next 4-year period. One of our main priorities is to define a coherent research programme including all strategic research topics to be addressed in order to promote the development and proof of new concepts that will be needed in the management of the future electricity system. Our R&D activity will span from studies, simulations and analyses, to assessment and validation of the main findings at laboratory scale. This will prompt research institutes involved in the EERA JP SG to contribute to specific complementary areas of R&D, and to consolidate the results of national programmes in direct support of the European strategic energy objectives.

Strong support for this approach will be provided by the newly launched European Liaison on Electricity Committed towards Long-term Research Activities for Smart Grids (ELECTRA)⁸ Integrated Research Programme (IRP) on smart grids, which will be instrumental in achieving the EERA JP SG goals and outcomes.

The coordination of smart grid research infrastructure development, in order to stimulate complementary specialization to ensure a more efficient use of future national and European investment in any of these laboratories, is one of our priorities. Another priority is to promote international collaboration in order to exchange research results and to compare R&D topic priorities for research programs in the area of smart grids.

Finally, based on our past cooperation with partners outside of Europe, we see that Europe and European industries are frontrunners in this field and we will have to continue to work hard to strengthen Europe’s leading position.

¹ http://www.iea-isgan.org/

² http://www.gridplus.eu/eegi

³ http://www.gridplus.eu

⁴ http://cordis.europa.eu/fp7/coordination/about-era_en.html

⁵ http://www.smartgrids.eu/

⁶ https://www.entsoe.eu/

⁷ http://www.edsoforsmartgrids.eu/

⁸ http://www.sintef.no/home/projects/sintef-materials-and-chemistry/2014/ELECTRA---/