The European Commission’s Joint Research Centre (JRC) has published a major survey of current smart grid projects across Europe. Smart Grid projects in Europe: lessons learned and current developments collates information on 219 projects with a total budget of around €5.5 billion ($7.7 billion). The study provides a snapshot of the current state of Europe’s smart grid investment. In general, the findings confirm the key messages of Pike Research’s recent report on Smart Grids in Europe, which estimated that Europe will invest around €56 billion in smart grid technology by 2020.
Not surprisingly, smart meter rollouts dominate projects in the deployment stage, even allowing for the skew given to the figures by Italy’s 30 million plus smart meters. As well as large scale pilots in France, Spain, and deployments across Scandinavia, a roadmap is emerging for smart meter rollouts across much of Europe. Even Germany, which has been the big unknown, is now preparing for a national smart meter program in the wake of its decision to abandon nuclear power and increase the focus on renewable energy sources. Outside of smart meters progress is much slower, but on the positive side more projects are in the demonstration phase rather than pure R&D and there is a strong focus on addressing issues of integration and scalability to pave the way for larger scale rollouts in time for 2020.
It is also significant that after smart meters, system integration represents the largest category of projects, with 34% of projects (representing 15% of the investment) addressing the integration of different smart grid technologies and applications. This has been one of the strong points of the European research model, with an emphasis on combining relatively mature technologies to meet complex goals around network efficiency, demand management, and renewables integration. It is also notable that many of these projects are looking at both technology integration and the development of market platforms that can coordinate transactions across system operators, energy providers, consumers, and other stakeholders.
Another key finding of the report is a significant geographical imbalance, with most of the projects located in EU-15 countries, with EU-12 (new Member States, mostly in Eastern Europe) lagging behind. While the leadership of the larger countries is to be expected, EU energy policy will need to address the slow progress being made in other parts of Europe if its objectives for an integrated market are to be met. Significantly, Denmark, Germany, Spain, and United Kingdom account for around half of the projects covered, which in part reflects the importance of renewables integration as a driver for smart grid innovation in Europe.
Another characteristic of the projects is their multidisciplinary nature, with a considerable degree of collaboration between network operators, academia, research centers, manufacturers, and IT companies. This is important not only in terms of addressing the complexity of smart grid projects but also the parallel goal of using smart grid investments to boost European industry and develop a global technology leadership in this space. It also reflects the importance of the role of the European research investment programs which mandates cross-sector and cross-border collaboration.
In terms of investment models, the key role played by the Distribution System Operators (DSOs) is clear. DSO-led projects account for 27% of projects and 67% of investment. This also points to the importance of developing a regulatory environment for operators that can enable future large scale investment in network improvements. Generally, European regulation still focuses on cost efficiency rather than investment in smarter systems and broader energy policy goals. The report calls for an incentive model that can help accelerate network investment and points to the United Kingdom and Italy as countries where regulators are developing innovative approaches.
The report also highlights the importance of consumer awareness and participation in these projects. Arguably, more needs to be done in this regard particularly as we move from proof-of-concept engineering trials to demonstration projects and deployments that require greater customer engagement. Related to this issue is the relatively poor response the survey team received with regard to their questions on data privacy. The European Commission and the Smart Grids Task Force have emphasized the need for a ‘privacy-by-design’ approach that will embed privacy protection at the core of smart grid projects. The responses to the survey suggest that privacy is still being considered as an afterthought in too many cases.
Overall, the survey paints a picture of steady progress but with some significant barriers still to be addressed before large scale deployment becomes a reality. The next 18 months will be critical to the development of smart grids in Europe. If smart grids are to provide the necessary underpinning to Europe meeting its 20-20-20 goals, we will need to see progress in several key areas:
The JRC proposes to develop its survey as an on-going project to monitor Europe’s progress against these and other key goals. As such, it will be a valuable tool in helping policy makers and market players assess progress and understand the further measures that may be needed.
Tags: Electric Vehicles, Energy Management, Renewable Energy, Smart Energy Practice, Smart Grid Practice, Smart Grid Security, Smart Industry Practice, Smart Meters, Smart Transportation Practice
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