From smart technology to smart consumers: for better system reliability and improved market efficiency

The new pricing schemes, enabling smart grids technologies and remote control equipments allow retail consumers to procure demand response resources and participate more intensely in the efficient functioning of markets. This fact is inducing significant changes regarding the roles historically attributed to the different operators acting along the supply chain. It is also involving improvements in markets efficiency, system reliability, and of course regulatory models (Clastres, 2011). This paper aims at focusing on two different benefits, although not incompatible, of smart technology and retail consumers' activation. - The first focus lies on smart grids technology's potential and on smart consumers in enhancing the reliability of power systems. - The second focus is based on the potential of smart grids technology to improve markets efficiency. Regarding the many aspects contained in these two -restricted- sides of benefits, this paper studies smart grids and demand response (DR) programs adoption in California, Germany, Illinois and the UK and is articulated in four points. First, it describes the challenges linked to peak load and peak prices and discusses the instruments becoming available through short-term demand side activation as well as the barriers to procure greater flexibility. Second, this paper deals with demand response and smart metering as a way to enhance wholesale and retail markets efficiency. At last, it discusses the regulatory mechanisms available to the authorities to give the sound incentives for adopting smart grids technology, in order to respond to the real needs encountered by the systems

From smart technology to smart consumers: for better system reliability and improved market efficiency

The new pricing schemes, enabling smart grids technologies and remote control equipments allow retail consumers to procure demand response resources and participate more intensely in the efficient functioning of markets. This fact is inducing significant changes regarding the roles historically attributed to the different operators acting along the supply chain. It is also involving improvements in markets efficiency, system reliability, and of course regulatory models (Clastres, 2011). This paper aims at focusing on two different benefits, although not incompatible, of smart technology and retail consumers' activation. - The first focus lies on smart grids technology's potential and on smart consumers in enhancing the reliability of power systems. - The second focus is based on the potential of smart grids technology to improve markets efficiency. Regarding the many aspects contained in these two -restricted- sides of benefits, this paper studies smart grids and demand response (DR) programs adoption in California, Germany, Illinois and the UK and is articulated in four points. First, it describes the challenges linked to peak load and peak prices and discusses the instruments becoming available through short-term demand side activation as well as the barriers to procure greater flexibility. Second, this paper deals with demand response and smart metering as a way to enhance wholesale and retail markets efficiency. At last, it discusses the regulatory mechanisms available to the authorities to give the sound incentives for adopting smart grids technology, in order to respond to the real needs encountered by the systems

Demand side management in an integrated electricity market: what are the impacts on generation and environmental concerns ?

International audienceSmart Grid technology appears necessary to succeed in activating the demand through demand side management (DSM) programs. This would in turn improve energy efficiency and achieve environmental targets through controlled consumption. The many pilot projects led worldwide involving smart grids technology, brought quantitative evaluations of DSM measures on electricity load. Efficient DSM instruments must be fine tuned to respond to very specific issues arising from the generation mix, the integration of intermittent energies or the level of outage risks faced during peak period. Efficient DSM strategies are illustrated through a model involving five countries that carry these different features and under the assumptions of isolated and fully interconnected markets. This paper aims at bringing recommendations regarding the instruments that should be implemented to maximize the benefits of smart grids technology and demand response. Finally, it tends to emphasis the issue of homogenized energy efficiency policies, critical in the building of internal energy markets such as the one the European Union is envisioning

Investing in meshed offshore grids in the Baltic Sea: catching up with the regulatory gap

The connection of cables from offshore wind parks to interconnection lines is receiving growing attention in Europe as a way to minimise the costs of laying down future offshore transmission grids in a wind-heavy system. Although important technical breakthroughs are enabling transmission system operators to engage in such hybrid forms of architecture, substantial regulatory challenges and uncertainties over the legal definition of the new architecture are preventing progress. Anchored in current European legal frameworks and targets, this paper critically reviews the national framework conditions that treat the development of transmission grids as regulated assets, focusing on the distribution of connection costs, the access grid tariff and the investment incentives faced by transmission system operators (TSOs) in recovering costs. The paper develops an ideal regulatory framework and compares it to the current regulations in countries around the Baltic Sea in order to assess their suitability for supporting Meshed Offshore Grids (MOGs). The results of this paper highlight the heterogeneity of national regulatory frameworks and the deviations from our recommendations. It is found that Germany lives up to the recommendations best, followed by Denmark, which suggests they have the regulatory potential to pioneer a MOG project in the Baltic Sea region. This is followed by consideration of two clusters of countries defined by their proximity to the ideal framework, assuming a three-step development of MOGs, and following ever more progressive regulatory adjustments. The results of the paper will provide policy-makers with indications for how to take action in order to facilitate offshore hybrid grid investments and improve the inclusion of the regulatory challenges in technical-economic assessments

From passive to active: Flexibility from electric vehicles in the context of transmission system development

Electrification of transport in RES-based power system will support the decarbonisation of the transportsector. However, due to the increase in energy demand and the large peak effects of charging, the passiveintegration of electric cars is likely to undermine sustainability efforts. This study investigates three differentcharging strategies for electric vehicle in Europe offering various degrees of flexibility: passive charging,smart charging and vehicle-to-grid, and puts this flexibility in perspective with the flexibility offered byinterconnections. We use the Balmorel optimization tool to represent the short-term dispatch and long-terminvestment in the energy system and we contribute to the state-of-the-art in developing new methodologiesto represent home charging and battery degradation. Our results show how each step of increased chargingflexibility reduces system costs, affects energy mix, impacts spot prices and reduces CO2 emissions untilthe horizon 2050. We quantify how flexible charging and variable generation mutually support each other(¿100TWh from wind and solar energy in 2050) and restrict the business case for stationary batteries, whereaspassive charging results in a substitution of wind by solar energy. The comparison of each charging schemewith and without interconnection expansion highlights the interplay between European countries in terms ofelectricity prices and CO2 emissions in the context of electrified transport. Although the best outcome isreached under the most flexible scenario at the EU level, the situation of the countries with the cheapest andmost decarbonised electricity mix is damaged, which calls for adapted coordination policy at the EU level