RETHINKING THE ELECTRICITY GRID

14 May 2012

Presented by:

PATRICIA DE SUZZONIADVISOR TO THE CHAIR OF CRE (French Energy Regulator)

STRIKING A BALANCE

IN THE MIDST OF CHANGE

May 13-16, 2012

Québec City, Québec (Canada)

TODAY’S AGENDA ON SMART GRIDS

ICER report on the regulatory approaches to the implementation of smart meters

The French case: from smart meters to smart grids  

Objectives and regulation in the European Union

TODAY’S AGENDA ON SMART GRIDS

The French case: from smart meters to smart grids 

Objectives and regulation in the European Union

ICER report on the regulatory approaches to the implementation of smart meters

ICER REPORT ON SMART METERING

ICER: a voluntary framework for cooperation

Implementation of smart meters so far has been a complex task, advice needed

A portfolio of case studies based on jurisdictions with direct experience

6 MATURE MARKETS STUDIED

Electricity and gas (large-size markets): France (35M electricity, 11M gas customers) Italy UK

Electricity (medium-size markets): Canada-Ontario (4,8M customers) Sweden (5,2M) USA- Colorado (3M)

MAIN FINDING 1: LEADERSHIP IS NEEDED

A clear decision on which organisation is leading on smart metering policy is needed at an early stage Government, NRA, commercial body

If commercial body, sound legal and regulatory framework is needed

MAIN FINDING 2: MARKET DESIGN MUST BE CLEAR

Clear roles & responsibilities for market participants Ownership of meters Minimum functionalities of systems Standards to ensure interoperability How and when costs of implementation can be

recovered …

MAIN FINDING 3: SMART METERING PROJECTS SHOULD BE WELL PREPARED

Usefulness of pilot exercises before full implementation

Implementation may take years to be completed

An impact assessment to develop sound policy proposals

The proposed smart meter model should accommodate future developments in technology and market

MAIN FINDING 4: CUSTOMERS HAVE TO BE EMPOWERED

Engagement of

consumers in the

policy-making

process Specific customer protection measures,

e.g. data privacy & cyber security Customers’ need of simplicity with more

complex tariff structure

TODAY’S AGENDA ON SMART GRIDS

ICER report on the regulatory approaches to the implementation of smart meters

The French case :

from smart meters to

smart grids

Objectives and regulation in the European Union

THE FRENCH CASE: A PROACTIVE REGULATOR

CRE created as an independent Authority in 2000

Engaged in smart grids since the beginning

A 2-step approach:

Smart metering Smart grid

SMART METERING AS A FIRST STEP TO SMART DISTRIBUTION GRIDS

Dialogue with stakeholders• Consumer bodies, retailers, DSOs, TSO,

Administration, equipment manufacturers, system integrators

Control of Linky Pilot and cost-benefit analysis 300 000 smart meters 2010/2011

Regulation of roll out July 2011: roll out mandatory for 35 million customers January 2012: minimum functionalities

THE THINK TANK APPROACH

In 2010, CRE organised a conference and as a follow up released « The electricity of the future: a worldwide challenge »

Permanent forum / quarterly workshops

www.smartgrids-cre.fr

HOW TO REGULATE SMART GRIDS

Three key objectives of Smart Grid regulation:

Ensure a fair distribution of added value

Develop / incentivise

investment of general interest

Have a leading / coordination role

TODAY’S AGENDA ON SMART GRIDS

• ICER report on the regulatory approaches to the implementation of smart meters

• The French case: from smart meters to smart grids 

• Objectives and regulation inthe European Union

A TOOL TO MEET AMBITIOUS OBJECTIVES

EU energy policy’s 4 key objectives:

Smart grids are a mandatory tool to meet these objectives

Well-functioning markets Security of Supply

Energy efficiency and renewables

Interconnection

HOW TO FINANCE

Major investment but estimates vary• 450€/customer would lead to 115 B€ investment for

EU distribution grids between 2013 and 2023

Business models / scope of regulation / grid tariffs

SMART GRIDS: FROM INNOVATION TO DEPLOYMENT

2011 EC communication No regulation of smart grid infrastructure so far

2009: 80% target by 2020 for electricity smart meters• 2012 EC recommendations to Member States on

minimum functionalities and cost-benefit analyses

Standardisation in progress Role of interconnection and market

mechanisms

Thank you for your attention

www.smartgrids-cre.fr

The ICER Report on Smart Metering is available at

www.icer-regulators.net

ANNEXES

THE EU 2020 AGENDATHE LEGAL FRAMEWORK

The Climate-Energy Package (2008)• Increasing renewable energy supply to 20% of total demand• Reducing consumption by 20% with respect to 1990 levels• Reducing greenhouse gas emissions by 20% with respect to

1990 levels

The 3rd Energy Package (2009)• 80% equipped with smart meters for electricity, cost-benefit

analysis conducted by Member States by Sept 2012

The Energy Efficiency Directive revision under discussion (2012)

OVERVIEW OF SMART GRID INVESTMENT AND IMPLEMENTATION ACROSS THE EU

Projects/category Total 277 implementation sites

Inve stments /category Total 3848.7 M€

Project investments (M€)

75

Investments (M€) / No. of project implementation sites per country

Other

Storage

Transmission automation

Home application

Distribution automation

Integrated systems

Smart meters

Source: JRC, IEProjects represented can span over more than one country and can include more than one category. Three projects are not represented in this picture: Kriegers Flak project, a supergrid between Germany and Denmark total investment of 507 M€; smart meter roll-out and AMI in UK, estimated investment of 11897M€; and smart meter roll-out in Sweden, spanning approximately 150 projects and amounting to a total investment of approximately 1500 M€.

APRIL 2011 EC COMMUNICATIONSMART GRIDS FROM INNOVATION TO DEPLOYMENT

Developing common European standards Adressing data privacy and security issues Allowing regulatory incentives for

deployment Ensuring competitive services to

customers Supporting innovation and rapid

application

CEER POSITION PAPER ON SMART GRIDS

Public consultation led to a consensus on 3 main priorities for regulation:• To focus on the outputs of network companies• To encourage cooperation among stakeholders to

address the barrriers• To encourage innovation while protecting customers