Thursday, 28 February 2008

The Electric Utility of the future...

The European Commission's 2006 Green Paper "A European Strategy for Sustainable, Competitive and Secure Energy" stressed the fact that Europe has now entered a new energy era - the way you respond to the implementation of the Smart Grid is now business critical. No one is saying this will be easy but major industry changing projects are already underway. So, how will your business respond to technological challenges and opportunities for integrating new technologies into European electricity grids?

The overriding objectives of European energy policy and practice will be sustainability, security of supply and competitiveness, which means implementing a logical and reliable set of policies and measures to achieve them.

The need to renew Europe's electricity networks, meet growing electricity demand, enable a trans- European electricity market and integrate more sustainable renewable resources are all major challenges to the industry today. In this context, much research and development has been done - now is the time for implementation. The European electricity networks of the future must be:

* Adaptable: to meet consumer needs whilst having the capacity to respond to unforeseen challenges

* Accessible: particularly for renewable power sources and high efficiency local generation with zero or low carbon emissions

* Secure: assure and improve the security and quality of supply
Cost-effective: provide best value through innovation, be energy efficient and ensure fair competition.

Why do we need to take action now?

New technologies are flooding into the market which provide new tools for generation, networks, energy storage, load efficiency, control and communications. All providing opportunities for your business to develop and implement future proof strategies. This means that each decision you make is even more vital if you are to reap the true benefits of an integrated demand management system, and how to benchmark your current projects against those of the industry leaders.

Challenges the industry faces:

* Changing European and national policies will encourage lower carbon technologies and will require the implementation and integration of renewable energy sources into the grid

* How to manage and prioritise the technological challenges and opportunities for integrating new technologies into grids

*Finding new ways to invest in obsolete grid systems to better provide the networks for the next generation of operation

* Assessing how to reduce uncertainty and risk to businesses making investment decisions relating the intelligent utility of the future - and how to sell the business case to those at the top

* Identifying the technologies that deliver both short and long term wins at a reasonable cost

* The need to drive forwards interoperability agreements to help the industry as a whole

* Selling the vision of the intelligent grid to an economy creeping towards recession

Moving beyond the planning phase pilot projects are starting to deliver with the Smart Grid Facilitation Act 2007 in the US leading the charge and notification of the GridWise initiative (completed by the DOE's Pacific Northwest National Lab.) findings that consumers will reduce their energy use based price signals are key indicators that progress is being made.

So how far are we down the route to the Smart Electric Power Distribution grid of the future?

Well, we're definitely making headway but it's going to take some serious work and certainly don't expect this to be a quick turnaround. But the recent report released by Platts and Capgemini indicated that the majority of those surveyed are embracing new technology to improve grid performance and in an industry that has seen little change in the last 50 years it really is a key indicator that things are changing.

So what will we get from Smart Grids?

Well, there's a great deal of hype out there and indeed cross industry argument about whether it will be BPL or some other solution which will drive forward the Smart Grid revolution. However, the intentions are (among many others) that we'll be able to deliver high quality, reliable electricity to an increasingly power hungry consumer, improve grid reliability, manage load demand more effectively and benefit the consumers pocket through efficiency gains.
How much do we need to invest?

EU Member States need to invest at least 400-450 b€ in transmission and distribution infrastructures over the next three decades according to a statement from the European Commission. Depending upon distance between new generation and a robust grid (e.g. off-shore wind, concentrated solar power), a further 10 to 25% share of connection costs may add to the global grid investment.

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