Commission cautious on smart grids

The European Commission is waiting to hear from an expert group before deciding on a possible legislative framework for smart grids. But a high-ranking official cautioned that any potential regulation would only emerge from industry demand.

The European Commission will decide whether to launch a new initiative on smart grids after hearing the initial results of an expert group working on their implementation, according to a forward-planning document published on the EU executive's website.

The task force, set up in November 2009 to draw up recommendations for the EU executive, is due to report its first findings in June. These concern the functionalities required of smart grids and the need for standards, as well as recommendations for regulation on data safety and the roles of the actors involved in developing intelligent grids.

The Commission planning document lists four potential actions for a framework, which is provisionally planned to be adopted at the end of 2011.

In the first option, the EU executive would do nothing, while the second would see it issue a communication on the roles of the actors involved in smart grid development and table recommendations for them, which would also include a monitoring mechanism on deployment at both national and European level.

The other two options would see smart grids regulated directly under the framework of the EU's thrid energy liberalisation package. The Commission would either establish a set of guidelines and specific recommendations for member states on the implementation of smart grids under the package, or develop a new annex for the directives in the package to lay down a European legislative framework and timetable for the deployment of smart grids.

"The objective of this EU initiative would be to develop the specific regulatory framework on smart grids to harmonise the implementation of smart grids in the EU under the provision of the third energy package," the document states. It would therefore help coordinate action at EU level and ensure consistency with other EU policies, including the upcoming energy infrastructure package and the energy action plan, it adds.

Commission warned not to rush into new regulation

A senior Commission official said that any new initiative and funding at EU level should be based on "practical implementation of challenges at a regional and local level".

Speaking at a conference in Brussels on 14 April, Philip Lowe, director-general for energy at the Commission, said he would like to see people working on regional initiatives to come forward with practical proposals on what they need from Europe in terms of standardisation, technology and enforceable rules on particular aspects of interconnection, for example.

"Yes, we will be prepared to go further and make further proposals, further funding," he said, adding that he thinks now is a crucial time for business, regulators and transmission system operators to "tell us what's really required".

"I don't think the mood is for another set of regulations proposed in abstract by the Commission but a mood of really getting on with the job of making this work and actually supporting those initiatives which look like being successful with a bit of public support," he said.

The director general argued that one of the most important challenges for the Commission is to convince the investment community that the third energy package will be properly implemented to make the European energy market a reality. But considering that the figures required for new infrastructure investment amount to trillions, he said there might be a need for some public investment.

"Probably in some areas, beyond the fact that we have a substantial amount of private investment potentially involved, particularly in smart grids and smart metering, there may be a need beyond research and development money for some impetus to be given from public sources to the creation of projects which involve perhaps more risk and long-term view than would have been possible by private companies alone," Lowe said.

Smart grids are digitised electricity grids that enable two-way communication between suppliers and consumers and feature an intelligent monitoring system to track electricity flows in all directions.

Smart grids are viewed by policymakers as a tool to reduce network losses, increase the reliability of the grid and allow large amounts of intermittent renewable power to be connected to the grid. Moreover, they allow consumers to sell energy back to the grid.

Despite the lack of EU legislation on the deployment of smart grids, the third energy package adopted in 2009 encourages the long-term modernisation of European grids. In addition, the new electricity directive paves the way for the roll-out of smart meters, which are often considered as a first step towards smart grids, by requiring smart metering systems to be fitted in 80% of homes where deemed cost-effective by 2020 (EURACTIV 25/03/09).

In October 2009, the Commission published its long-awaited funding map for the Strategic Energy Technology (SET) Plan (EURACTIV 07/10/09). It earmarked €2bn of public and private investment to the 'European electricity grid initiative' in order to enable 50% of Europe's networks to operate as smart grids.

  • June: Task force to report on smart grid implementation.
  • Nov. 2009: European Commission expected to present new Energy Infrastructure Package.

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