Global warming and the effect of carbon dioxide (CO²) emissions on the environment are of growing concerns to countries worldwide, none more so Europe, where the European Union (EU) has pledged to deliver one-fifth of the region's energy from renewable energy sources by 2020. In response to this, many European countries have introduced targets to reduce energy use. For the UK, this comes in the form of the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme, introduced in April 2010 and tasked with reducing carbon emissions by businesses by 20 percent come 2020; And then by 80 percent come 2050.
The Asian connection
Over in Asia, during the past 20 years, industrial development has led to a rapid rise in the volume of emissions. However, on a per-capita basis, emissions in this region are still at the bottom of the global scale. For example, China is the second-largest emitter, but has very low emissions per capita.
One of the biggest contributors to CO² output is the electric utility industry, which accounts for around 25 percent of global CO² production; And with it carries the ignominious reputation as the highest producer across all industries. For this reason, utilities are faced with the added pressure of drastically curbing both their own and their customers' energy use, with smart grid infrastructures providing one of the clear options to achieving success.
Smart grids the answer. Not a top priority
This lack of understanding around the technology is evident in utilities' awareness of the use of renewable energy within the smart grid. One study found that only 6 percent of utilities questioned across EMEA had considered increasing their levels of renewable generation as a top priority over the next five years. What is perhaps more surprising is that some utilities surveyed across the region, including utilities from the UK, France and Greece do not consider raising the level of renewable generation to be one of their top three priorities.
Survey findings
In a recent study, Oracle surveyed 152 North American C-level utility executives to understand utilities' visions for the upcoming decade for a research report. "Smart Grid Challenges & Choices, Part 2: North American Utility Executives' Vision and Priorities" revealed how smart grid plans and expectations are evolving and how utilities are communicating these changes to their customers.
While 71 percent of utilities said that securing customer buy-in is a key step needed to drive the success of smart grids, just 43 percent said they were educating their customers on the smart grid's value proposition.
Further, utilities that had implemented pilot programmes or system-wide smart grid deployments anticipated that just 38 percent of customers would take advantage of energy conservation programmes--like smart metering pilot programmes, in-home energy management programmes, programmable thermostats and incentives for reducing energy loads, etc.--once available.
Utility executives agreed, however, that their top priorities for the next 10 years would be in improving service reliability (40 percent) and controlling customer costs (40 percent).
One country placing significance on the integration of renewable energy sources into the smart grid was Turkey, with 100 percent of its utilities considering it their top priority over the next five years.
The driver here is that Turkey's energy use is expected to double over the coming decade, with the demand for electricity likely to increase even faster. Turkey has the goal of increasing its renewable energy resources in electricity by 30 percent come 2023, to meet the growing demand. Hardly surprising then that the country's utilities place so much importance on the benefits that the smart grid can offer in relation to renewable energy source integration.
Renewable energy important to Australia
Whereas in Australia, renewable energy represents 5.2 percent of total energy consumption. In the five years to 2009, renewable energy consumption grew by 3.5 percent, faster than any other energy source. Renewable energy is an essential part of Australia's low emissions energy mix and is important to the country's energy security.
In 2010, the Australian government introduced a Large-Scale Generation Target of 41,000 gigawatt-hours of renewable generation from power stations, alongside the Small-Scale Renewable Energy Scheme. The latter is an uncapped scheme to support rooftop solar power and solar hot water, to ensure a renewable energy share of 20 percent of electricity supply by 2020.
Renewable generation via smart grids a key option
While many countries may not currently consider the smart grid's capabilities to integrate renewable energy into the grid as one of their top priorities, what is promising is that around two-thirds of utilities in EMEA do have plans to evolve their grids in order to support the technology and the subsequent level of renewable generation.
The vast majority of German utilities have already started planning their smart grid capabilities. This is a very positive step, especially when considering recent information from DENA, the German energy agency and adviser to the German government. This states that the country is currently producing "too much" solar power, meaning the country's ageing grid is having to cope with huge surges when the sun is shining.
Government subsidies have encouraged German citizens and businesses to generate their own solar energy and to sell the surplus electricity to the grid. However, the initiative has been a victim of its own success, and the uptake has been so rapid that solar capacity is now causing problems to the existing infrastructure, with the output projected to hit more than 30 gigawatts by the end of 2011.
The problem is that feeding too much solar power into the grid could cause instabilities within the current infrastructure. Smart grid adoption overcomes this issue, giving utilities the ability to store solar energy and then efficiently feeding it into the grid during periods of peak demand or when other energy sources are low.
EU's giant super grid
Furthermore, as EU countries continue with plans to link their clean energy projects around the North Sea in the form of a giant universal grid--being labelled a "super grid"--this could potentially offer Germany an outlet to distribute any excess solar power to members of that "super grid". In return, Germany could--during the winter months when solar energy is low--source its renewable energy from elsewhere, maybe wind turbines off the Scottish coast.
It is clear to see that the smart grid provides many benefits with regard to renewable energy. Yet only around half of utilities in EMEA have a system in place to educate their customers on the environmental benefits of the technology. For utilities to get the most out of the technology, and ultimately produce less CO², they must increase their understanding of the smart grid for their own operational benefit and of smart meters, which can then be passed on to customers empowered to manage their energy usage more closely.
Smart meter data a key component
The key to delivering as many benefits as possible from a smart grid infrastructure is the ability to extract intelligence and manage the data created by smart meters. One such software application is Meter Data Management (MDM). As a key component of the smart grid platform, MDM allows utilities to manage the vast quantity of data gathered from smart meter deployments, helping turn the data into actionable intelligence. This enables utilities to improve their service by accurately responding to the demands placed on the grid. For instance, MDM allows utilities to see when power is in peak demand, meaning they can feed more energy from renewable sources into the grid to meet customer demand.
Customer information system holds the key
Another technological innovation that can enable utilities to manage data volumes more efficiently is a customer information system (CIS). A CIS is an enterprise-wide software application allowing companies to manage all aspects of the relationship with their customers. The system helps turn customer data into intelligence, which delivers satisfaction and customer loyalty. An effective CIS can play a crucial role in the education of utilities' customers and making them aware of the immediate environmental benefits of the smart grid and how they can use it to best effect.
Additional benefits can also be gleaned from implementing an intelligent CIS, especially when supported by a smart grid infrastructure. Better forecasting and management of energy demands placed on the grid can be made. Moreover, the solution is able to provide optimisation capabilities to determine the best mix of energy and resources required to handle changing voltage requirements within certain areas.
Legislation and regulation's role
As the environmental cost of excessive CO² becomes increasingly apparent, legislative and regulatory pressure will continue to grow on many and their respective utilities providers. Renewable sources of power will be bought sharply into focus over the next few years and systems that encompass the ability to integrate and deliver them intelligently across the grid will be instrumental in delivering long-term environmental goals for everyone's benefit.
Mr Bastian Fischer is Vice President of Industry Strategy at the Oracle Utilities Global Business Unit. He is a recognised industry leader with extensive experience in the utility industry, customer side energy management, electric vehicles and charging infrastructures, smart grids
BY: Bastian Fischer, VP and General Manager, Oracle Utilities, EMEA