Following our annual conference in January, we began the first of our 2014 series of workshops. In line with our efforts to better involve consumer organisations in the regulatory process, we held a dedicated workshop with national consumer bodies on this topic. In this interactive event, regulators and consumer bodies shared best practices on issues such as training, information sharing and capacity building. Following a public consultation, the resulting CEER advice willl be presented to the Citizens’ Energy (London) Forum in Autumn 2014. CEER also held a joint event (under Chatham house rules) with EURELECTRIC on the subject “Electricity Distribution Networks: Backbone of the Smart Energy System”. The CEER annual work programme and news alerts announce to stakeholders how they can get involved in our work (see our calendar of next public consultations and workshops).
This month our feature article (below) is on Smart Regulation and Smart Grids with CEER’s latest Smart Regulation report. To find out how smart grids work, try the interactive games on our energy customers webpage.
In terms of international news, the International Confederation of Energy Regulators (ICER) has a call for articles for the next edition of the ICER Chronicle. It invites papers from regulators, academia, industry, consultants, consumer groups etc. For more on it and other ICER activities, see the international section below.
Smart Regulation for Smart Grids
What is a smart grid? A smart grid is an electricity network that is designed to help manage different users in an (cost) efficient way, in order to ensure sustainability in our power systems and maintain high levels of quality and security of electricity supply and safety for consumers.
Why are smart grids becoming increasingly necessary? The increasing number of small generation units and the amount of volatile renewable energy make it necessary to reinforce the future grid. Smart grids are an evolution of the conventional/traditional grids and with technical devices (e.g. communication) and organisational arrangements, a greater use of the existing grid should be possible – no new/additional grids would be necessary. This is of particular relevance to customers as they will be able to become increasingly involved in energy markets, enabling customers to follow and manage their electricity consumption more actively. This could lead to lower costs for the energy system and overall energy bills.
What’s in the CEER Smart Regulation report? CEER’s smart regulation report reviews the different ways in which European countries approach the development of smart grids, focusing on the regulatory approaches that enabling Smart Grids Solutions (“Smart Regulation”). CEER collected this information through an online questionnaire to its member national regulatory authorities (NRAs). 27 NRAs responded to the questionnaire. The CEER “Smart Regulation” Report is a follow-up to the 2011 CEER Status Review of Regulatory Approaches to Smart Electricity Grids. The main topics addressed in this paper are: - The definition of smart grids - The regulatory and commercial challenges related to smart grids - Plans for implementation of smart grids - Encouraging innovative solutions in electricity networks - Cost benefit analysis for the demonstration and deployment of smart grids - Potential performance indicators.
Main Findings The report found a varying status of smart grids development in different countries. 10 countries have rollout plans (and Great Britain has a high level route-map). In most countries, the government and DSOs are responsible for monitoring implementation of the smart grids plans (and in some countries the NRA is also responsible for implementation).
Different incentive mechanisms (regulatory mechanism, government initiatives and EU initiatives) to encourage network companies to pursue innovation/demonstration projects either exist already or are planned. Incentives to encourage DSO innovation are mostly funded through network charges. Demonstration projects have already started in 19 countries. In some countries, dissemination of demonstration project results is mandatory whereas in others it is on a voluntary basis.
An increasing number of NRAs indicated that a cost-benefit analysis (CBA) has been carried out: (9 countries in 2013, versus 4 in 2011). In most countries, the CBA aims to identify the net benefits of smart grids compared to business as usual. 3 countries also performed an analysis at the level of the demonstration projects.
Regulators across Europe are highly aware of the importance of performance indicators. In 2010, European energy regulators identified (see the Smart Grids Conclusions Paper) a set of 34 performance indicators that help regulators quantify the effects/benefits of the “smartness” of a network. CEER has found a move towards quality and efficiency as several NRA indicated that they use some of the indicators either for monitoring or as a revenue driver.
CEER’s recommendations to improve more efficient, reliable and high-quality electricity networks CEER strongly advocates for the deployment of smart grid solutions where they are a cost-efficient alternative to existing solution, and as a first step in this direction, finding ways of incentivising network companies to pursue innovative solutions where this can be considered beneficial from the viewpoint of society. CEER further recommends ensuring dissemination of the results and lessons learned from demonstration projects.
Public Consultations & Events
• CEER Response to European Commission’s consultation on State Aid • CEER report on European regulatory approaches enabling Smart Grids Solutions (“Smart Regulation”) Visit our websiteto be updated on our future consultationsandevents.
International
The ICER Chronicle is regulators’ online publication on international energy regulation. Packed with interesting articles from a broad stakeholder base (regulators, academia, industry, consultants and consumers) it promotes ICER’s goal of enhancing regulatory knowledge around the world. Hurry up and submit your article for the 2nd edition of the ICER Chronicle before 14 March 2014.
ICER is also pleased to announce that its pilot e-mentoring programme for women regulators is up and running. In this pilot project, 38 pairs of mentors and mentees (some of whom live continents apart) are matched.
