European commission Directorate-General for Research Information and Communication Unit B-1049 Brussels Fax (32-2) 29-58220 E-mail:
of electricity is a fundamental requirement for providing European citizens, societies and economies with essential energy resources.
meet growing electricity demand, enable a trans-European electricity market and integrate more sustainable generation resources (including renewable sources), presents major challenges.
This vision would lead to new products, processes and services, improving industrial efficiency and use of cleaner energy resources while providing a competitive edge for Europe in the global market place.
All this makes smart grids an important element for achieving the largest knowledge-based economy in the world.
predominantly carbon-based generation technologies, located remotely from demand centres. The energy challenges that Europe is now facing are changing the electricity generation landscape.
The drive for lower-carbon generation technologies, combined with greatly improved efficiency on the demand side
will enable customers to become much more interactive with the networks. More customer-centric networks are the way ahead,
and proposes an ambitious strategy to make a reality of this vision for the benefits of Europe and its electricity customers.
fulfilling customers'needs whilst responding to the changes and challenges ahead; Accessible: granting connection access to all network users, particularly for renewable power sources and high efficiency local generation with zero or low carbon emissions;
assuring and improving security and quality of supply, consistent with the demands of the digital age with resilience to hazards and uncertainties;
providing best value through innovation, efficient energy management and‘level playing field'competition and regulation. The vision embraces the latest technologies to ensure success,
Advances in simulation tools will greatly assist the transfer of innovative technologies to practical 1. Executive Summary 5 VISION AND STRATEGY I ELECTRICITY NETWORKS OF THE FUTURE application for the benefit of both customers
Developments in communications metering and business systems will open up new opportunities at every level on the system to enable market signals to drive technical and commercial efficiency.
Making it happen Enabling Europe's electricity grids to meet the challenges and opportunities of the 21st century and fulfil the expectations of society requires intensified and sustained research efforts.
It is essential that this takes place in a coherent way addressing technical, commercial and regulatory factors,
and allow business decisions to be made by companies in an environment of stability. Key elements of the vision include:
and grid services, ensuring that they will accommodate a wide range of operating situations; Establishing shared technical standards
and enhance their services to customers; Ensuring the successful interfacing of new and old designs of grid equipment to ensure interoperability of automation and control arrangements.
Job opportunities will be broadened as the networks require workers with new skills and integration across new technology areas.
An increasingly liberalised market will encourage trading opportunities to be identified and developed. Smartgrids networks will,
For a successful transition to a future sustainable energy system all the relevant stakeholders must become involved:
The vision will stimulate constructive dialogue between all stakeholders involved in the electricity sector and help to ensure the European public and private investments required for the implementation of the research and development (R&d) strategies.
The time is now The electricity grids that serve European consumers today have evolved over more than a hundred years.
Responding to needs The electricity sector faces new challenges and opportunities which must be responded to in a vision of the future:
increased interest in electricity market opportunities, value added services, flexible demand for energy, lower prices, microgeneration opportunities;
applying efficient investments to solve infrastructure ageing; Security of supply: limited primary resources of traditional energy sources, flexible storage;
and opportunities of liberalisation by developing and enabling both new products and new services; high demand flexibility and controlled price volatility, flexible and predictable tariffs;
liquid markets for trading of energy and grid services; 2. The origins of Smartgrids The Smartgrids European Technology Platform for Electricity Networks of the Future began its work in 2005.
Its aim was to formulate and promote a vision for the development of Europe's electricity networks looking towards 2020 and beyond.
What lies at the heart of this vision and what does it hope to achieve?
and opportunities, bringing benefits to all users, stakeholders and companies that perform efficiently and effectively. enables Europe's electricity grids to meet the challenges and opportunities of the 21st century;
fulfils the expectations of society; strengthens the European business context for the electricity sector and its international opportunities. 7 VISION AND STRATEGY I ELECTRICITY NETWORKS OF THE FUTURE Interoperability of European electricity networks:
supporting the implementation of the internal market; efficient management of cross border and transit network congestion;
improving the long-distance transport and integration of renewable energy sources; strengthening European security of supply through enhanced transfer capabilities;
renewal of the existing power-plants, development of efficiency improvements, increased flexibility towards the system services, integration with RES and DG;
Demand response and demand side management (DSM: developing strategies for local demand modulation and load control by electronic metering and automatic meter management systems;
Politics and regulatory aspects: continuing development and harmonisation of policies and regulatory frameworks in the European union (EU) context;
considering changed demand of an ageing society with increased comfort and quality of life. According to the International Energy Agency (IEA), European electricity consumption is projected to increase at an average annual rate of 1. 4%up to 2030
social and political demands placed on energy supply. Smartgrids will use revolutionary new technologies, products and services to create a strongly user-centric approach for all customers. 8 E u R O P E A n T E C H N O
L O G Y P L a T F O R M S m A r T G r
I D S A broad spectrum of stakeholders As markets across Europe become more liberalised and dynamic,
every stakeholder will help to shape the Smartgrids system. What are the different needs and responsibilities that will feed into the project design?
and will include value added services, energy services on demand and total connectivity. They will be asking for connection of in-house generation, the ability to sell surplus generation back to the grid,
Network owners and operators are called upon to fulfil customers'expectations in an efficient and cost effective way.
They are required to undertake necessary investments to guarantee high levels of power quality and system security,
while assuring adequate remuneration for their shareholders. Investment remuneration and stable regulatory frameworks will be necessary for a level playing field competition in a liberalised market.
Energy service companies: Companies will have to satisfy the growing needs of users. Some users will seek simple turnkey products.
As with grid companies, technology providers will have important investment decisions to make. A shared vision will be critical to ensuring sound strategic developments that provide open access, long-term value and integration with existing infrastructure.
Innovation will be needed in relation to networks, demand, and for generation, both distributed and centralised, as grid system operational characteristics change.
Customers will benefit from the opportunity to choose the energy supplier that best suits their requirements.
Customers, providers, researchers and lawmakers are implicated all in the future of electricity provision. 9 VISION AND STRATEGY I ELECTRICITY NETWORKS OF THE FUTURE Generators:
and the demands. It will be important for the future to ensure the continuing close involvement of generation companies, understanding the electrical characteristics of their equipment,
The European market for energy and related services should be supported by a stable and clear regulatory framework,
which secure a grid with increasingly open access, a clear investment remuneration system and keep transmission and distribution costs as low as possible.
Increasing competition is expected to keep a downward pressure on energy prices, but a more environmentally friendly energy mix may bring cost challenges.
They will have the opportunity to offer demand side response products and services to the grid.
Common technical rules and tools need to be adopted by the different players regarding data exchange, modelling grids, ancillary services and their users.
Thanks to Smartgrid technologies, products and services, European Companies will be able to get ahead in international business. 10 E u R O P E A n T E C
In response to new challenges and opportunities, electricity networks have begun to evolve. The aim is that they accommodate more decentralised generation services,
with many actors involved in the generation, transmission, distribution and operation of the system. At the same time, centralised generation and high voltage bulk-transmission of electricity will continue to play a major role for the foreseeable future.
A shared vision of the opportunities for all stakeholders remains an essential ingredient in successfully achieving efficient liberalised markets.
Such a vision is fully compatible with a competitive commercial environment: it reduces investment risk;
Smartgrids: The Vision Europe's electricity networks in 2020 and beyond will be: Flexible: Fulfilling customers'needs
whilst responding to the changes and challenges ahead; Accessible: Granting connection access to all network users, particularly for RES and high efficiency local generation with zero or low carbon emissions;
Assuring and improving security and quality of supply, consistent with the demands of the digital age;
Providing best value through innovation, efficient energy management and‘level playing field'competition and regulation. Commercialisation, whether in Europe or internationally, can only take place
it is not a purely technical venture. The overall goal of the project is to develop a strategy for research, development and demonstration.
and allow business decisions to be made by independent companies in an environment of stability. Smartgrids:
New technologies-for generation, networks, energy storage, load efficiency, control and communications, liberalised markets and environmental challenges-require a shared vision and strategic implementation plan for Europe
This will ensure that the networks of the future meet the needs of tomorrow's customers and a broader spectrum of stakeholders.
Increasing participation of customers in the energy field; European and national policies encouraging lower carbon generation, new and renewable energy sources and more efficient use of heat energy;
and manage the technical challenges and opportunities for integrating new generation technologies into Europe's grids;
The need for investment in end-of-life grid renewal in an innovative way to better position the networks for the next 50 years of operation;
The desire to deliver benefits to customers at the earliest opportunity; The need to reduce uncertainty and risk to businesses making investment decisions;
The progress in technology, which allows improvements in operation and new services at reasonable costs. Successful development and deployment of a vision for electricity grids has application beyond Europe.
There is significant benefit for jobs in Europe and for European businesses internationally. A prerequisite is the adequate technical staff trained by high level universities and other technical schools.
It's not a vision for specific infrastructure projects or about the details of investment funding and risk management;
This market evolution, associated with an efficient regulatory framework, will promote economic growth and play a key role in the EU's competitiveness strategy.
Increasing competition will encourage efficiency and spur on technological progress and innovation. As a result, the internal market is expected to provide benefits to the European citizens such as a wider choice of services and downward pressure on electricity prices.
Security and Quality of Supply: Modern society depends critically on a secure supply of energy.
Significant investment will be required to develop and renew these infrastructures: the most efficient way to achieve this is by incorporating innovative solutions, technologies and grid architectures.
The Environment: Besides issues of primary energy supply, the major disadvantage of fossil fuels is that they emit CO2, SO2,
Global investments required in the energy sector for 2003-2030 are estimated an $16 trillion, according to the IEA.
In Europe alone, some €500 billion worth of investment will be needed to upgrade the electricity transmission and distribution infrastructure.
cost-effective and gentle on the environment. 3. Driving factors in the move towards Smartgrids The current climate demands change in the way electricity is supplied.
SECURITY OF SUPPLY ENVIRONMENT 14 E u R O P E A n T E C H N O L O G Y
and investment remuneration in innovation The best strategy for managing these uncertainties is to build flexibility and robustness into the networks.
ensure a favourable regulatory environment; help to develop supportive financial markets; and create attractive education,
leading to win-win solutions for economic growth, social development and environmental protection. Smartgrids: Enhancing grid flexibility
Ensure harmonisation of regulatory and commercial frameworks in Europe to facilitate cross-border trading of both power and grid services (such as reserve power,
and enhance their services to customers. Research is needed to help identify the most cost-effective technologies and measures.
and no end-to end communications. Traditional grid design has evolved through economies of scale in large centralised generation and the geographical distribution of generation resources (locations near coalfields
as demand rises and traditional resources are depleted. Major players have been brought together to define a clear vision of the future,
Future models for electricity grids have to allow for changes in technology, values, the environment and commerce.
which future challenges and opportunities can be met. However the change should be accomplished through an incremental rather than a revolutionary approach
and the grid control centre undertakes an overall supervisory role (active power balancing and ancillary services such as voltage stability).
value added services Coordinated, local energy management and full integration of DG and RES with large-scale central power generation Extensive small, distributed generation connected close to end customers Harmonised legal frameworks
facilitating cross-border trading of power and grid services Grids of Tomorrow 17 VISION AND STRATEGY
I ELECTRICITY NETWORKS OF THE FUTURE Future models for the electricity grids have to meet the changes in technology, in the values in society, in the environment and in commerce.
Thus security, safety, environment, power quality and cost of supply are all being examined in new ways
and energy efficiency in the system is taken ever more seriously for a variety of reasons. New technologies should also demonstrate reliability
sustainability and cost effectiveness in response to changing requirements in a liberalised market environment across Europe.
it can bring the benefits of competition, choice and incentives for an efficient development. The change might be described better as a revision of the traditional monopoly-based regulation of electricity supply.
Scarcity of primary energy sources on one hand and climate change on the other is likely to greatly affect decisions on new investments in generation.
demand response; demand side management; and energy storage. Additional standby capacity might be required, which could be called upon
whenever the intermittent RES ceases to generate power. It may be economically efficient to seek a European solution for balancing power rather than national ones.
Smart metering, with two way communications capability and greatly improved user information is now a reality
They present significant opportunities and challenges for all stakeholders: for example, multilateral participation in the real-time balance between supply and demand.
Conceptually, a demand reduction is equivalent to a generation increase in the balancing process: avoidance of usage or local generation enables each user node in the future network to behave as both sink and source.
Extending the definition of generation to commercial and industrial demand customers and individual households allows demand management to be treated as a form of indirect generation.
This landmark change in the concept of grid operational management may now become a reality,
enabled by modern technological developments including end user communications access. 5. Setting up Smart Power grids Electricity grids of the future are Smart in several ways.
Demand management becomes an indirect source of generation and savings are rewarded. Secondly the new system offers greater efficiency as links are set up across Europe
and customers take on an active role. 20 E u R O P E A n T E C H N O L O G Y
Value added services Forecast information Offshore wind Microgrid Wave energy Demand side management Fuel cells Compressed hydrogen storage H2 production and filling sation 22
and a more efficient transmission grid will contribute by improving the opportunities for RES and DG.
An increasingly liberalised market will encourage trading opportunities to be identified and developed. In addition to energy trades between Member States,
In 2020, energy service companies will let everyone to have access to the provision of electricity supply services such as the demand management capabilities.
modern communications means and the increased awareness of customers, local electricity supply management will play a key part in establishing new services that will create value for the parties involved.
In this context, metering services will represent the gateway for access to the grid of the future
and will have a critical consequence on power demand evolution. For this reason, electronic meters, automated meter management systems and telecommunications together with other communications systems that use electricity supply networks as their delivery infrastructure will serve as enabling technologies.
Information and Communication Technology (ICT) and business process integration will be valuable tools in the real time management of the value chain across suppliers, active networks, meters, customers and corporate systems.
Wide area monitoring and protection (WAM & WAP) systems will be applied to manage the congestions in the transmission systems in a way that improves the security and reliability of grid operation.
Supporting new initiatives Distribution companies will deal with customers who are more aware of the possibilities offered by the market and their on-line response.
demand side management and converging utilities; communication and billing services. Regulatory bodies will develop harmonised rules to favour competition on a nondiscriminatory basis in the EU context.
This will guarantee open access at all levels, ensuring the removal of unnecessary barriers and ensure access to common benefits and incentives.
Harmonised regulation will underpin a common EU energy strategy. This will provide the basis for establishing a Europe-wide market for energy, real-time balancing power and ancillary services open to both power producers and load management operators.
Free trade throughout Europe will be facilitated by standardised, open communication means, transparent rules and a liquid cross-border trading.
Congestion management will be handled by a market-based system. Increasing efficiency Advanced power electronics will allow variable-speed operation of electric generators
Broadband communications will be used to access virtually all power producers and loads on every power level and with very low cost.
Working it out together For a successful transition to a future sustainable energy system all the relevant stakeholders must become involved:
for example allowing network companies to conduct limited commercial activities with respect to long time investments. Grids will become intelligent systems with flexible
and European citizens with a highly secure electricity supply on a most cost-effective basis with minimum damage to the environment, in line with European related policies.
communication at every level is essential. Effective dialogue between stakeholders will ensure that relevant information influences the system design.
The latest technologies will be incorporated into the network and the approach will remain flexible to accommodate further developments.
and regular interaction with stakeholders is required to respond to future challenges and opportunities. Future work should adopt a techno-economic system approach for a trans-European network.
This calls for the development of: distribution grids accessible to distributed generation and renewable energy sources,
transmission grids with minimum negative side-effects on the environment and the society; secure transmission grids that can comply with different forms of generation including large and small, controllable and non-controllable, variable and intermittent sources;
which is ineffective in meeting the needs of tomorrow's European customers and businesses; It will guard against a lack of harmonisation of European technical standards, regulatory and commercial frameworks;
DSM and flexible energy storage and would also create opportunities for novel types of equipment and services, all of
New business and trading opportunities can be envisaged-based on new power sources new power consumption habits and new regulation, all of which favour cleaner and more efficient generation and consumption as well as the development of a flexible,
and communication transfer possibilities among all players. Keeping it real It is important to emphasise the role of ICT in particular telecommunications in adapting electricity networks to the real time actions
a serious effort is needed to effectively use communications equipment for a distributed real-time control of electricity networks.
The real time performance of the internet as communication means is known to be very difficult to assess
The function of the active distribution network is to efficiently link power sources with consumer demands,
Some connections will rely on bilateral contracts with distributed generators for ancillary services. Rules will have to be defined to outline physical and geographical boundaries of contracting.
local and global services and trading issues, adaptability without information overload, control issues. Final stage:
A distribution network management regime using real-time communication and remote control to meet the majority of the network services requirement.
The transmission and distribution networks are both active, with harmonised and real-time interacting control functions and efficient power flow.
as a small source of power or as ancillary services supporting the network. Virtual utilities (or virtual electricity market) adopt the structure of the internet-like model and its information and trading capability, rather than any hardware.
if all stakeholders form a shared vision for future grids and develop an implementation framework that is consistent with the liberalised business model.
Smartgrids:‘‘Enabling'technologies Active distribution networks, revealing characteristics of today's transmission grids; New network technologies that facilitate increased power transfers and losses reduction (e g.
Wide deployment of communications to enable grid automation, on-line services, active operation, demand response and DSM;
but also economics & market, regulatory & legal and environmental aspects. A skills shortfall is a key risk to the successful adoption of the Smartgrids vision for Europe.
Rules and regulations A further distinguishing feature of grid innovation, particularly in a liberalised sector, is the regulatory and legal environment in
It is only through wide deployment (sometimes called‘roll out')that benefits will be seen by European customers
and that international market opportunities will be released. 30 E u R O P E A n T E C H N O L O G Y
and strategies Lighthouse pilot projects Catalyst projects Matching processes and feasibility evaluation Commercial adoption with benefits delivered to customers
a group of high-level stakeholders came together with one primary objective: to define a coherent and unified industry-driven approach to tackling major economic, technological and societal challenges, of vital importance for Europe's future competitiveness and economic growth.
More specifically, an Advisory Council has been established to develop and consolidate a joint Vision and put forward a Strategic Research Agenda that sets RTD priorities for the medium to long-term.
to mobilise the private and public investments required for the implementation of the RTD strategies.
and opportunities ahead are responded to efficiently for the benefit of all stakeholders in Europe. It will do this in a number of ways.
ETP-Smartgrids must ensure widespread cooperation and sufficient investment to fund extensive research. It is divided into different bodies, each
The platform must mobilise private and public investments to allow crucial research to be carried out.
including cross border exchanges of electric energy and grid services; A strategic approach to developing a range of new and innovative grid architectures that can be deployed on distribution and transmission grids as the situations demand. 32 E u R O P E A n
T E C H N O L O G Y P L a T F O R M S m A r T G r
Smartgrids will not be a purely technical venture. It is recognised that commercial and regulatory issues must be addressed in parallel with technical development
ETP-Smartgrids unites high-level stakeholders in defining a vision of the future development of grids.
TP Secretariat Information Office IT Support Service Network Assets Networks Operations Demand and Metering Generation and Storage PLATFORM OPERATIONS New and ongoing projects and initiatives (EC+MS national,
enable participation of associations of stakeholders. Electricity Networks of the Future Technology Platform 35 VISION AND STRATEGY I ELECTRICITY NETWORKS OF THE FUTURE AC Alternating current CHP Combined Heat and Power CO2 Carbon dioxide DG
Distributed Generation DSM Demand Side Management ETP European Technology Platform EU European union FACTS Flexible AC Transmission Systems GDP Gross domestic product GIL
Gas Insulated Line HVDC High Voltage Direct current ICT Information and Communication Technology IEA International Energy Agency NOX Nitrogen oxides R&d Research and development RES Renewable
RAND is not-for-profit, nonpartisan, and committed to the public interest. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.
and communication technology ISP internet service provider MOOC Massive open online courses (MOOCS) NBIC nanotechnology, biotechnology, information technology and cognitive science SCENIHR Scientific Committee on Emerging and Newly Identified Health Risks 4
the second phase of the project split trends into three streams, namely the economy, governance and power, and society.
RAND Europe is an independent not-for-profit policy research organisation that aims to improve policymaking and decisionmaking in the public interest,
14 2. 1. Social computing is transforming communications, but the extent of global interconnectedness may be expected less than...
These reflect the unstable and fast-changing global environment in which the Union is navigating.
political and economic environment facing the European union over the next 20 years'.'The report acted as a pilot project setting the scene for further investigation and evaluation of global trends in 2030 in the field of (i) international relations and governance,(ii) society,
economic growth and interconnectedness together with rising levels of education in many parts of the world have enabled a technological revolution in life sciences.
the development of these technologies may have a positive contribution in meeting social challenges, for instance by potentially revolutionising work, changing structural relationships between labour and capital,
this Research Report will concentrate on trends within information and communication technologies (ICTS), as it is the individual area that is likely to have an impact on the everyday lives of citizens to the greatest extent.
global communication with individualised expression'.'13 exercise conducted for this study suggested that divides are not likely to be determined by access to the internet
Finally, technology may act as an accelerator, exacerbating existing inequalities between those who can afford access to it
However, as digital natives are increasingly socialised in ICT environments, previously existing income-determined barriers of access to political participation and education could be overcome (see discussion on e-participation and e-learning below).
while at the same time producing expanded opportunities of political participation and empowering others (Hacker et al. 2009). As new technologies are presumed to represent an S-shaped adoption curve,
and technological progress offer new opportunities to harness these initiatives to promote social-policy goals and ultimately overcome the societal challenges posed by financial and institutional crises (Helliwell et al. 2013). 2 ICTS are key enablers of social innovation by increasing efficiency and effectiveness,
Digital technologies provide opportunities for new types of social innovation through the‘network effect'of collective, dispersed or large-scale intelligence.
tools such as multicriteria decisionmaking and social return on investment analysis may allow policymakers to take explicitly into account the social innovation aspect of their decisions.
and e-government services. 2 Social innovation is defined in this context as new responses to pressing social demands by means that affect the process of social interactions (BEPA 2010). 15 2
. 1. Social computing is transforming communications, but the extent of global interconnectedness may be expected less than The presumption of sustained technological progress
Assumptions about rising profits from progress in the fields of cloud computing and new business models associated with data analytics sustain the presumption of increased use of these technologies by the private
Microblogging is the use of social network services specifically created for the sharing of brief entries and content,
such as Jaiku or Twitter. 18 services are perceived as global platforms, 84.2%of Facebook relationships and a large percentage of Twitter relationships were found to be clustered along country lines (Gonzalez et al. 2011;
(and also the increasing socialisation of younger generations in ICT environments) is highly likely to influence outcomes in all human social activities political participation (discussed more in detail below) and health and consumer behaviour (Contractor 2010;
as well as the formation and exploitation of social capital and cultural identities (Ellison et al. 2011; Oh et al. 2014;
and individual users and stakeholders find themselves increasingly locked in to specific technologies, business models and social identities. 22 Source:
presenting a novel form of competition for traditional establishments (Ally 2009). 24 Figure E. 3. 1:
Part of the literature and the discussion that took place in the Delphi Expertlens process undertaken in the course of the project has focused on the demand for a novel paradigm for provision of education made necessary by the neuropsychological characteristics of the young generations that grew up using networked technologies.
However, other findings suggest that the demand for ICTS in education by young people is not increasing as dramatically as these theories would suggest (OECD 2012a.
Governments are likely to make increasing use of technology-related applications in particular e-services, Big data analytics and network-based open policymaking in decisionmaking and providing services to the citizen.
and strategies applied in general and by specific sectors for delivery of essential services (United nations, 2012). 27 Figure E. 4. 1:
Similarly, the evidence suggests that the use of social network services may be a tool for the empowerment of minorities.
However, minorities and young people whose participation indicates that these services have a prodemocratic effect are usually unprivileged citizens who tend to consume less news through more traditional venues online and off (Gil de Zuniga et al. 2012.
and strategies applied in general and by specific sectors for delivery of essential services (United nations, 2012). 28 institutions in the coming decades.
or provide information on Google's services. 30 Figure E. 4. 4: Percentage of user-data requests filed by governments where Google provided at least some of the data requested10 Source:
demand for systematic incorporation of SI in the policy toolbox, replacing public sector services with grassroots initiatives Medium Online and informal forms of education will have increasing impact on access to education and outcomes
Technological progress and growing degree of interconnectedness, fiscal constraint, limited ability to change educational systems, skills demand,
unmet demand on labour market for certain skills++Medium term Need to make educational systems responsive to these developments,
unmet skills demand Medium e-government and online engagement potentially empower citizens Technological progress and growing degree of interconnectedness,
demand for services e-government benchmarking data (EU, UN)+ Short to medium term Unequal accessibility and ubiquity of services and citizen engagement across Member States and between strata of society,
responsiveness of the democratic system and process to demand for interaction with citizens High 32 Trend Drivers Indicators Evidence-base (0/+/Time horizon Outcomes for the EU Uncertainty
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