Smart grids: Making connections


EU plans to move towards a low-carbon economy depend upon a transformed cross-border transmissions system that can integrate renewables and smart meters alike, offering energy consumption savings at source. But is Europe on track to meet the challenge?


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Europe currently relies for the transmission of its electricity on a grid system that was substantially designed in the post-World War II period. Power grids in the 20th century were originally built as local grids which over time became augmented and inter-connected.

The largest and most “mature” of these divided and distributed electric power on a bulk basis from a relatively small number of central power stations, mostly fuelled by coal, oil and gas. As awareness of the dangers of climate change has grown, so has a conviction that this system is no longer ‘fit for purpose’ in the 21st century. 

Today, grid systems transmission and distribution operators need to consider a bewilderingly complex range of demand and supply issues such as: the environmental impacts of fossil fuel use, the challenges of switching to cleaner but more ‘variable’ power sources such as wind and solar energy, security of supply in terms of diversified supply needs and protection from cyber-attack, and ‘smartmeters’ which can regulate electricity usage at the point of consumption, and could one day turn electricity consumers into producers. 

According to the EU’s energy roadmap for 2050, cumulative grid investments between 2011 and 2050 will cost between €1.5 trillion and €2.2 trillion, depending on the amount of support provided to renewable energies.

But in all of the EU’s scenarios, electricity is forecast to nearly double its share of energy demand from 22% to between 36% and 39%. To meet the EU’s 2020 targets, the Commission’s Blueprint for an integrated European energy network estimates that €140 billion will need to be invested in the electricity grid by the decade’s end.

Some of this will go to upgrading existing transmission lines and distribution networks. But beyond environmental concerns, the purpose of a smart grid is to digitally gather, distribute and act on information about the behaviour of suppliers and consumers in order to improve the efficiency, reliability and cost of electricity services.

‘Smart meters’ are a critical part of this effort, as they allow consumers to cut their energy consumption, their bills, their carbon emissions and the stress that is placed on electricity grids at peak times. But only around 10% of EU households currently have a smart meter, despite an updated electricity directive in 2009's third energy package which is intended to deliver them to 80% of European homes by 2020.