Smart GridsThe Power Grid of Tomorrow                      An Extract           1
Smart Grids. The Power Grid of Tomorrow – An ExtractThanks to its early installation of more than 32 million automated sma...
Smart Grids. The Power Grid of Tomorrow – An ExtractThis booklet offers a summary of the themes that are dealt with in the...
Smart Grids. The Power Grid of Tomorrow – An ExtractThe EnergyLab Foundation was founded in              The Scientific Me...
Smart Grids. The Power Grid of Tomorrow – An Extract                                                          development ...
Smart Grids. The Power Grid of Tomorrow – An Extracttechnologies and models; the widespread              invest the entire...
Smart Grids. The Power Grid of Tomorrow – An ExtractIn view of these considerations it is              constitute a proble...
Smart Grids. The Power Grid of Tomorrow – An Extracteliminate the great variety of technical             nonetheless well ...
Smart Grids. The Power Grid of Tomorrow – An Extractincluding the following (in order of the             long period/an an...
Smart Grids. The Power Grid of Tomorrow – An ExtractElectricity Grid Initiative (EEGI) put in             to the size of t...
Smart Grids. The Power Grid of Tomorrow – An Extractmetering system constitutes the only                objects, something...
Smart Grids. The Power Grid of Tomorrow – An Extractemission of mandate M/441 to the                     assume the contou...
Smart Grids. The Power Grid of Tomorrow – An Extractdocument on smart grids published at the             guaranteeing a hi...
Smart Grids. The Power Grid of Tomorrow – An Extractcountries like those of Europe to developing           and to its mana...
Smart Grids. The Power Grid of Tomorrow – An ExtractBut the European goals for 2020 also                 massive presence ...
Smart Grids. The Power Grid of Tomorrow – An Extractgrids in a strictly Italian context and to do          order     for  ...
Smart Grids. The Power Grid of Tomorrow – An Extractprovided for to support pilot projects onactive networks.             ...
Smart Grids. The Power Grid of Tomorrow – An Extractelectricity system particular types of RES             particular the ...
Smart Grids. The Power Grid of Tomorrow – An Extractprinted a number of important initiatives,especially on the regulatory...
Smart Grids. The Power Grid of Tomorrow – An Extract           ...
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Executive Summary - Smart Grid


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Executive Summary - Smart Grid

  1. 1. Smart GridsThe Power Grid of Tomorrow An Extract 1
  2. 2. Smart Grids. The Power Grid of Tomorrow – An ExtractThanks to its early installation of more than 32 million automated smart meters, Italy findsitself in a particularly favourable position to take advantage of the development of intelligentelectricity networks. This evolution in the overall electricity network is a necessary step inorder for the nation to be able to equip itself with an infrastructure capable of managing thenew challenges the energy system faces, such as a greater production of energy fromrenewable sources, an increase in energy efficiency and the reduction of emissions of climate-altering gases.The entire electricity system is in fact on the point of being invested by what might well bedescribed as a “storm of innovation”.This innovation is not only going to affect electricity systems, i.e. distribution and transmissionnetworks, but will also have a significant impact on the development of renewable energies. Infact, the generation of electricity, traditionally carried out in large, centralised sites connectedto transmission networks, is engaging to an ever-greater extent small- to medium-sized plantsin the vicinity of users, who – once the plants have been connected up to distributionnetworks - then become “prosumers”: producers and consumers at one and the same time.Moreover, the distribution networks of the future will make it possible for small consumers toparticipate more actively in the market, providing them with instantaneous, detailedinformation on consumption levels as well as access to channels of communication with amultiplicity of subjects (energy suppliers, service aggregators, network managers). The newuses that will be made of electricity – such as electric cars and heat pumps for heating – willin their turn have a significant impact on the distribution network, obligating it to assume agreater degree of dynamism and flexibility.And nor is this “innovation storm” limited to smart grids. Rather, it is heading directly towardsthe heart of the electricity system as a whole. In fact, it would be much more accurate tospeak of a revolutionary shift towards a new “smart power system”.Put in other words - and as is in fact made explicit in the preface to the book - “The futurethat awaits us is a future with more electricity and less primary energy”. 2
  3. 3. Smart Grids. The Power Grid of Tomorrow – An ExtractThis booklet offers a summary of the themes that are dealt with in the book Smart Grid. Lereti elettriche di domani. Dalle rinnovabili ai veicoli elettrici il futuro passa per le reti intelligenti(Smart Grids. The power grid of tomorrow. From renewables to electric vehicles the futurepasses through intelligent networks) published in May 2011 and presented in Palazzo Marini inRome (the Italian lower house of parliament).The idea of extracting a brief summary from the longer document arose out of a desire tomake available to a wider public an insight into the extensive and detailed investigation thatthe Milan-based foundation Fondazione EnergyLab has been carrying out in relation to thetheme of smart grids in Italy. In particular, the booklet reproduces the preface andintroduction of the original text.The work is the product of the combined efforts of a group of experts that gravitate aroundthe Laboratorio Smart Grid (Smart Grids Laboratory), a project conceived of, developed andpromoted by Fondazione EnergyLab. The contents of the booklet fully express the multi-disciplinary approach characteristic of the work of the laboratory. The research in questionlasted for over a year and the final result is the fruit of a highly articulated and carefullyorchestrated effort that engaged a range of figures from various areas of the academic,government and business worlds.In particular, the protagonists included professors from Milan’s five universities and variousresearch centres – members of the foundation – as well as a range of people from thegovernment and business worlds.EditorsMaurizio Delfanti Politecnico di MilanoAndrea Silvestri Politecnico di MilanoAuthorsGiuseppe Buglione IEFE – Università Commerciale “L. Bocconi”Massimo Bogarelli Politecnico di MilanoAntonio Capone Politecnico di MilanoMichele De Nigris Ricerca sul Sistema Energetico – RSEDavide Falabretti Politecnico di MilanoMassimo Gallanti Ricerca sul Sistema Energetico – RSELuca Lo Schiavo Autorità per l’Energia Elettrica e il GasMarco Merlo Politecnico di MilanoValeria Olivieri Politecnico di MilanoClara Poletti IEFE – Università Commerciale “L. Bocconi”Mauro Pozzi Politecnico di Milano 3
  4. 4. Smart Grids. The Power Grid of Tomorrow – An ExtractThe EnergyLab Foundation was founded in The Scientific MembersMilan in 2007 with the goal of creating anetwork of actors in the energy field Università Commerciale “L. Bocconi”including universities, the business world Università degli Studi di Milano Bicoccaand regional and local government. It is a Università Cattolica del Sacro Cuorenon-profit organization whose members Politecnico di Milano Università degli Studi di Milanoinclude Milan’s 5 major universities. The RSE – Ricerca sul Sistema Energeticofoundation promotes research andinnovation in all areas of the energy sector,operating by way of 6 laboratories focusingon different themes: RenewableEnergies, Smart Grids, NuclearSecurity, Electric Mobility, EnergyEfficiency and Access to Energy inDeveloping Countries.The foundation’s legal status as aparticipatory foundation makes it possiblefor it to undertake non-profit activities,furnishing support to its members andpresent and future partners. To Contact Us: The EnergyLab Foundation Piazza Trento, 13 20135 Milan (Italy) Phone +39 02 7720.5265 Fax +39 02 7720.5060 4
  5. 5. Smart Grids. The Power Grid of Tomorrow – An Extract development of distributed generation sufficient to meet the objectives laid down in the European directive on climate change), it is also necessary to take into account the implications of the objectives fixed by the directive for the internal market for electricity - an integral component of the so-called “third energy package”, which points all European countries in the direction of smart metering as a necessary path to pursue - once an appropriate costs/benefits analysis has been conducted – in order to extend the benefits of liberalisation to all users. And even that is not the end of the story. In the not too distant future thePreface commercial distribution networks of theAn “innovation storm” for the entire world’s biggest automobile manufacturerselectricity system are going to introduce into the marketby Luca Lo Schiavo1 plug-in electric vehicles that will result in new loads for the electricity network. AtThe European targets of producing a the moment, from the point of view ofgreater quantity of electricity from the amount of power that will berenewable sources, increasing energy absorbed, these loads remain extremelyefficiency and reducing emissions of difficult to predict, even though in allclimate-altering gases (the so-called “20- probability they will be fairly limited vis-à-20-20 by 2020” package) entail – in order vis the total demand for energy and infor these goals to be actually achieved - a any case very efficient in terms of thevery substantial change both for overall quantity of primary energy usedEuropean electricity networks in general for individual mobility compared withand Italian networks in particular. traditional vehicles with internalAnd nor is that all. In addition to the combustion engines.modifications in network design and What is involved, then, has three facets:management necessary to allow for a the development of distributed generation and its consequential integration - notwithstanding its traditional reputation1 The Executive Office of the Autorità per l’Energia for being made up of sources that are notElettrica e il Gas (Regulatory Authority forElectricity and Gas). The opinions expressed in amenable to programming - not only intothis preface are the personal opinions of the distribution networks but also into theauthor. They do not represent the officialpositions of the Electricity and Gas Authority and electricity market thanks to thedo not commit it to any course of action in the development of advanced forecastingfuture. 5
  6. 6. Smart Grids. The Power Grid of Tomorrow – An Extracttechnologies and models; the widespread invest the entire electricity system. Fromadoption at the European level of smart this point of view, one could even arguemetering (an area in which Italy is a that smart grids run the risk of being aglobal frontrunner) and the opportunities misleading brand, given that what isthis offers to end-users as well as new required are not (just) intelligentmarket subjects such as demand networks but (also, and above all)aggregators capable of commercialising network users capable of exploiting thedemand-response services; and, lastly, in opportunities that the technologicala by-now imminent future, electric innovation makes available, appropriatelyvehicles driven by “mobile electricity adapting their own production andconsumers”, not just furnished with the consumption plants. In short, thisfreedom to chose their own supplier, just impending “innovation storm” does notlike the more traditional “fixed electricity stop at smart grids but rather goes rightconsumer”, but also protagonists bearing to the very heart of the electricity system.a new need: access to recharging Indeed, it would be much more accuratefacilities not only in private locations like to speak of a “smart power system”.the garages of family homes and There is no doubt that the role of thecompany premises but also in public enabling technology for this new smartplaces or at least in places open to the power system will be played bypublic. Thus, the challenges for the information and communicationselectricity networks of the future are truly technology (ICT) but equally clear is theimmense, so much so that a recent study fact that the developments in technicalin Britain (the LENS project - Long-term regulation will be just as important notElectricity Network Scenarios) conducted just in the traditional sector ofon behalf of the Office of the Gas and electrotechnics (handled at the EuropeanElectricity Markets (OFGEM, the British level by European Committee forregulatory authority) has defined as Electrotechnical Standardisation“unprecedented” the degree of innovation (CENELEC)) but also, and to a morethat electricity systems will either have to decisive extent for the success of theface up to in the very near future or that changes taking place, in thethey are in fact already in part communications applications to be put inexperiencing. In this phase of massive place (to be based on standard protocolsand in part unpredictable innovation the and hence of an open and non-role of regulatory authorities will be proprietary type) to guide the definitioncrucial not only in order to furnish the of technological solutions in such a waycorrect stimuli for investment in smart as to leave the market as free as possiblegrids but also – as is correctly suggested and to minimise the costs andin this book in the chapter dedicated to technological complexities that users ofregulation – in order to adjust all those the intelligent network will have toregulatory frameworks that have anything do with this out-and-out “storm ofinnovation” that is very shortly going to 6
  7. 7. Smart Grids. The Power Grid of Tomorrow – An ExtractIn view of these considerations it is constitute a problem, given that suchimportant to make clear that the applications do not require anytransition towards a smart power system interaction with active and passivegoes well beyond the phase of network users.automating the networks, a phase that But the real benefits of incorporating anhas already been set in motion in Italy ICT layer into an electricity system can beover the last decade by distribution obtained only if the end-users too, bothcompanies as a consequence of the those that immit power and those thatencouragement provided by a regulatory extract it, are connected up with thisframework incentivating service quality. layer and are able to modify their own behaviour in accordance with the electronic information made available - be it economic (related to the market) or technical (related to the efficient working of the distribution network and, more generally, to a better management of the overall electricity system). The need to involve network users so as to exploit to the maximum the potentialities deriving from making the system “smart” is therefore the obvious reason why it is no longer possible to use non-proprietary protocols, as in the case of the mere automation of networks. Instead, it is essential to use open protocols that network users are able to adopt on their own interface devices in correspondence with the distributor offering the lowest price. It is also the responsibility of the energy regulator to ensure that, on the oneIn certain respects this phase has already hand, there are no practices orinvolved the adoption of very advanced requirements on the part of networksolutions, ranging from the widespread managers that result in complications oruse of HV-MV transformer automated costs for network users that are notcontrol to the automatic search and strictly necessary and that, on the otheridentification of malfunctions. In fact, if hand, the users of the network respectthe problem consisted only in the the technical stipulations necessary forautomation of the network, non- the correct working of the network. Inproprietary communications protocols this regard it is worth noting the work(like those used up to now by the major that the Electricity and Gas Authority hasdistribution companies) would not carried out over the past few years to 7
  8. 8. Smart Grids. The Power Grid of Tomorrow – An Extracteliminate the great variety of technical nonetheless well worth mentioning somestipulations used by the various of the reasons that have led the authoritydistributors – particularly well-known to move in this direction.were the norms of the “DK” series In the first place, it is necessary to recallimplemented by Enel distribuzione (ENEL that starting out from 2004, i.e.Distribution) – and to replace them with a immediately after the major blackout thatsingle set of technical connection rules struck the Italian electricity system indefined by the authority on the basis of September 2003, the Electricity and Gasthe technical work carried out by the Authority progressively introduced aComitato Elettrotecnico Italiano (the series of feed-in-tariffs to promoteItalian Electrotechnics Committee, the “strategic” investments in electricitynational organ for standardisation) in networks (subsequently these werecollaboration with the offices of the extended to gas networks as well). In aregulatory authority itself together with second phase of regulating electricityvarious independent technicians (the so- networks, the so-called 2nd Regulatorycalled Norma CEI 0-16). This project has Period (2004 – 2007), these incentives –already been completed for high and which take the form of an increase in themedium voltage distribution networks, weighted average cost of capital (WACC)whereas it is still underway – but should - were initially limited to investmentsbe completed very shortly, certainly provided for by the Piano di sviluppo dellabefore the end of 2011 – for low voltage rete di trasmissione nazionale (RTN)networks. In fact, the work that the (Development Plan for the Nationalauthority has requested the CEI to Transmission Network) but by the 3rdconduct on these latter networks is by Regulatory Period (2008 – 2011) theynow more or less complete (the new were also extended to a certain numbernorms for low voltage networks should go of special investments in distributionunder the name CEI 0-21). networks, including experimental projectsApropos of the need for open protocols in in the area of “active networks”. Thesmart grids and in particular the need to underlying idea has been that someavoid generating unnecessary costs for investments are not adequately promotednetwork users, it should to be underlined by output-based incentives relating tothat among the requirements necessary service quality parameters (SAIDI andto have access to the incentives provided SAIFI+MAIFI) but that these nonethelessfor by the Electricity and Gas Authority’s warrant attention in that their failure toResolution ARG/elt 39/10 in respect of materialise could act as an obstacle topilot projects in the field of smart grids is innovation or damage consumers.that of the use of public domain In the second place, it is by now a well-communications protocols. Even though established principle that electricitythe concrete results that the authority’s systems need to evolve in the direction ofdecision has had in Italy to stimulate a management of an active type. Thisexperimental smart grid projects are evolution is necessary in order to achieveextensively described in this book, it is a number of important objectives, 8
  9. 9. Smart Grids. The Power Grid of Tomorrow – An Extractincluding the following (in order of the long period/an annual period an inversionurgency of the need): of the flow of power from medium to highan increased possibility of connecting up voltage in consequence of the surplusunits of distributed generation, power/an excessive amount of powerguaranteeing a better contribution (today introduced by distributed generation inabsent or negative) on the part of such respect of/compared with the load in thatunits to the security of the overall fraction of time. This focus on problemselectricity system; deriving from flow inversion in thethe introduction of techniques of load context of the existing system ofcontrol on the part of the system; protections finds its roots in its turn in thethe introduction of greater opportunities studies commissioned by the authorityfor end-users (in the future also mobile from the Politecnico di Milano betweenend-users) to participate in the electricity 2006 and 2008, the results of which weremarket by way of making use of published as Appendix B of Resolutionelectronically conveyed information in ARG/elt 25/09 (in Chapter 3 of this bookrelation to prices. a detailed explanation is provided ofAll these objectives can be realised only these research results and their partialby way of introducing suitable extension to LV, as illustrated in this casecommunications systems that will bring to in the Appendix to Resolution ARG/eltcompletion existing electricity networks. 223/10). Basically, the idea was toIn a very simplistic manner it is possible confront the major problems already into describe this evolution by saying that part evident by selecting pilot projects fordistribution networks must to some the “smartisation” of medium voltageextent resemble transmission networks. distribution networks in contexts whereIn Italy for many years now the latter the penetration of distributed generationhave been completely automated and had already reached levels such as tosubject to control as well as furnished require new technologies and newwith communications systems capable of techniques for the “active” managementexchanging appropriate electronic signals of the networks and to do this with anwith network users. adequate degree of involvement on theThe necessary gradualness of the action part of the users of the networks (all theto be taken has led operators to focus while, as has already been explained,attention (since as early as 2007, in the limiting as much as possible the costs ofform of the Electricity and Gas Authority’s modifying the plants of active and passiveResolution 348/07) on “medium voltage users by way of using standard and non-active networks”. This concern later proprietary communications protocols).found expression in the determination, It is important to underline that theseformalised in the authority’s Resolution experimental projects, although of limitedARG/elt 39/10, to limit the pilot projects dimensions, are moving in the sameeligible for incentives to MV distribution direction that is being pursued by thenetworks in which there occurs for at European Commission with its recentleast 1% of a given year/a given year- industrial initiative the European 9
  10. 10. Smart Grids. The Power Grid of Tomorrow – An ExtractElectricity Grid Initiative (EEGI) put in to the size of the network as opposed toplace by the Directorate-General for its smartisation.Research as part of the Strategic EnergyTechnology Plan (SET): to pass from aphase, by now fairly well-established, ofcarrying out research projects in thelaboratory (i.e. in test facility plants) to anew phase - without doubt more critical –of conducting experiments in the fieldwith “real clients, real plants and realvoltages”. This approach has also beenproposed in the position paper of theEuropean Regulatory Group for Electricity From a more long-term point of view, itand Gas (ERGEG), published in July 2010 will eventually be necessary to extend theand frequently referred to in this book. process of smartisation to LV networks, toThis publication also discusses the reason which much larger numbers of users arewhy the Electricity and Gas Authority connected. So far as these networks areintroduced the reference to medium concerned, the fundamental challenge involtage (MV: 1-35 kV) as an essential Italy is to take as much advantage asrequirement for the pilot smart grid possible from the investments that haveprojects to be selected for admission to already been made in smart metering. Tothe special fedd-in-tariff programme this end the Electricity and Gas Authorityconsisting in an increase in the WACC of has made it obligatory to use bihourly2% for a period of 12 years. In fact, energy prices in respect of all users. Thisthree quarters of the renewable energy requirement has been in place forproduced in Italy is generated on MV domestic users since 1st July 2010 andnetworks. The problem of integrating will by fully phased-in by the end of 2011.massive quantities of power generated by What is involved is probably the biggestrenewable sources – a process likely to experiment in the world of differentiatedbe characterised by “intermittent prices on the basis of the time of use.immission”, which may provoke excessive The authority intends to monitor thevariations in voltage along transmission effect of this experiment very carefully,lines – arises prevalently in relation to taking advantage amongst other things ofmedium voltage networks. By contrast, so the financial assistance furnished byfar as high voltage networks are Ricerca di sistema. The aim of theconcerned (at least at the national level), initiative is to introduce electricity pricestechnologies for the remote control of that reflect costs (cost-reflectivity) in suchproduction plants are already available. a way as to furnish users – and,The problems present in high voltage indirectly, the makers of electricalnetworks in some parts of Italy need to appliances – with information as to thebe related back more than anything else economic value of the consumer choices that are made. The Italian smart 10
  11. 11. Smart Grids. The Power Grid of Tomorrow – An Extractmetering system constitutes the only objects, something which, for thatsystem in the world catering for 30 matter, is not even necessary for themillion users. In fact, this unique objectives that guided the decision toopportunity to operate in the field on develop remote control meters towardssuch a vast scale has made us the envy the end of what we might now refer to asof the rest of the world. Great interest “last century”. The principal objectives athas been provoked, for example, by the the time were: to read data ondecisions the authority has taken in consumption at a distance - be itrelation to the passage to the regime of periodically or on request - for one-offan obligatory bi-hourly price for clients (a operations, for example, in the event of aservice offering a greater degree of user switching from one supplier toprotection) or in relation to the use of the another; and to remotely controlcapabilities of electronic meters to furnish operations like connecting anda minimal, indispensable service even in disconnecting the power supply or settingthe event of a failure on the part of the maximum amount of power available.domestic electricity consumers to meet Turning our attention towards the future,payment requirements (the management a connection between an electronic meterof failure to pay/late payment). The and Internet, for example, would make itauthority has chosen to follow the possible to offer real-time services thatstrategy of extracting the highest possible are not yet available. It is quitevalue from the investment in electronic legitimate, then, to laud themeters. This investment is being foresightedness of the people whorecuperated by way of an increase in the gambled on the introduction of remotecomponent of tariffs corresponding to control meters. It is no less legitimate,capital investment. By the same token, however, to begin to work on the secondhowever, the initial investment has generation of meters (the Electricity andalready made it possible to render more Gas Authority has fixed a useful technical-exacting the efficiency factor (the X economic life of 15 years for the currentfactor) which governs the reduction of electronic meters, and we are by nowthe operating costs of distribution well into the second half of this period),companies according to the logic of a identifying new services that mightprice cap, introduced in Italy by the law benefit users and deriving from these theestablishing the Electricity and Gas technical characteristics that the newAuthority (Law No. 481/95). meters will require (in line with a modelThere is little doubt that, if someone were that makes use of the Quality Functionto design a smart metering system today, Deployment Methodology).they might well make choices different to The vigorous encouragement that thethose that were made some 10 or more European Commission has given to theyears ago in Italy. The configuration of spread of smart metering systems in EUthe system of remote control that is member countries both by way of thecurrently in place does not provide for a norms contained in the so-called “3rdreal real-time control of the end-point Energy Package” and by way of the 11
  12. 12. Smart Grids. The Power Grid of Tomorrow – An Extractemission of mandate M/441 to the assume the contours of an out-and-outEuropean standardisation organisms change of paradigm. The current studies(CEN, CENELEC and ETSI) has recently in nanotechnology could well lead to theprovoked an important change in the development of industrial applications indirection of the opening of systems for the accumulation of energycommunications protocols: the such as to provoke a total change in theestablishment of the consortium Meters composition of the stock of road-boundand More, which has made possible the vehicles in the course of just a fewdisclosure of the communications protocol decades. The increase, on the one hand,used in the major European initiatives in of the capacity of on-board vehiclethe area of the remote control batteries – all the time maintaining theirmanagement of low voltage meters (in high performance and limited size - andItaly, with Enel distribuzione, and in the reduction, on the other, of rechargingSpain, with Endesa). The availability of times to times that are compatible with athis protocol in a non-proprietary form brief stay at an electric car power stationwill constitute an important step towards (without, then, having to effect a longthe possibility of home and building stop-over to recharge the battery butautomation, which, as has been only a brief stop) are the two factorsdemonstrated by the most successful which will determine the speed of theinitiatives up to date especially in the electric mobility revolution.United States, lie at the basis of energy The perspective within which to correctlysaving in the domestic use of electricity. frame the “innovation storm” that isDistributed generation and smart about to hit the electricity sector, then, ismetering, then, are two key factors in the more general. It does not relate just toevolution of electricity networks towards electricity networks in the strict sense butsmart grids. This evolution, however, is rather invests the entire system, includinggoing to intersect with other crucial the end uses of energy, not least thosedevelopments such as energy efficiency that as of today are not yet practisedin respect of end uses and most other than in a extremely limited manner,importantly the electrification of individual such as electric mobility (individual andtransport. Since these themes are the commercial).object of other parallel initiatives It is to be hoped (and realising this hopecurrently being undertaken by Fondazione is the job of the regulator) that the wholeEnergyLab, they are dealt with only evolution of this process, destined topartially in this book. unfold over a very extended period ofThe future that awaits us is a future with time, unerringly attributes a central rolemore electricity and less primary energy. to the end-user of the system. The needThe electrification of individual transport for a user-centric approach was, for thatin particular (i.e. road-bound vehicles) matter, the principal methodologicalwill bring with it over the next few recommendation advanced by thedecades a change in the logic of energy European Association of Energyconsumption which will in all probability Regulators (ERGEG) in its consultation 12
  13. 13. Smart Grids. The Power Grid of Tomorrow – An Extractdocument on smart grids published at the guaranteeing a high level of security andend of 2009. This approach must remain reliability in the overall system, are alsothe cornerstone not only of the action of able to deal with the many problems tied tothe independent energy regulation the management of distributed generation,authorities of the various EU member to the possibility of controlling loads, to thestates but also of the network operators promotion of energy efficiency and to athat are planning investments and the greater involvement of active and passivevarious market actors who – thanks to a end-users, not least in respect of the electricity that is more open, more efficient This transformation, which involves thein furnishing services and better equipped entire electricity system, does not seem towith “intelligent” technology – will be able have either a definite form or preciseto obtain economic and environmental confines. Today it is no longer enough justbenefits superior to the admittedly to satisfy the growing demand forsubstantial costs that are necessary in electricity (which up to now has alwaysorder to confront the upcoming “storm of been the principal, if not only, objective ofinnovation” with the right combination of electricity networks); it is also necessary tovision towards the future and respond to new needs not confined – andresponsibility in relation to the existing above all not amenable to satisfaction –service. exclusively within the “electricity world”, a world which, as a consequence, will have to interact with other worlds such as, and above all, the “world of information and communications technology (ICT)”.Introduction The challenge, then, is immense and byby Maurizio Delfanti and Andrea Silvestri now very much present. Ideas on the subject, however, are still rather confused – and not just in relation to the moreAfter the revolution that led from vertically technical or detailed matters. In fact,integrated utilities to a management on the although smart grids have been at thebasis of market models, electricity systems centre of debate on electricity systems for ain the majority of both European and non- number of years, it is still difficult at theEuropean countries are currently passing present time even to identify a single andthrough a new phase of transition. A generally accepted definition. Instead, itrethinking is taking place of the best way to seems easier from one moment to the nextmanage networks, especially distribution and depending on the context to place thenetworks, which need to pass from a emphasis on some specific point, with the“passive” to an “active” mode. This risk, however – and this is the real danger -evolution (with technical implications of of generating still more confusion.unprecedented complexity) is referred to atthe international level by way of the The result has been the spread of anexpression “smart grid”. This term alludes excessively trusting approach: thanks toto highly innovative structures and smart grids, a valid solution for everyoperating modalities which, as well as national context (from the most advanced 13
  14. 14. Smart Grids. The Power Grid of Tomorrow – An Extractcountries like those of Europe to developing and to its management and control.countries) and to be implemented in its Distributed generation is in fact the onlyentirety (from transmission networks to low way possible to reach the goals of anvoltage networks), it will be possible to increase in the production of electricitysolve every problem in the electricity from renewable sources and a reduction insector, from the limited efficiency of the the emission of climate-altering gases, keymarkets to the improvement of service components of the so-called “20-20-20 byquality for end-users, obviously entrusting 2020” package. This reading is born outa determining role in the exercise to a further by an important initiative promotedvaguely defined research activity. by the European Commission, the NER300This book by The EnergyLab Foundation Call for Proposals, which defines amonghas been conceived with the aim of other things the criteria and the parametersproviding a more concrete and technical for the funding of three pilot projects forvision of the evolution underway and of its the management of decentralisedreal underlying causes. Obviously, it runs renewable energies (smart grids).the risk – a risk that we have taken on According to this call for proposals, thequite deliberately – of providing only a increase and development of renewablepartial vision of the problem. In order to energy sources (RESs) connected to theachieve our aim it has been necessary to network represents the principal benefit tonarrow the focus down from the be expected from smart grids. In otherinternational context to a European one words, smart grids are indispensable inand ultimately to the case of Italy and that order to enable the inclusion or better theof a specific Italian region. But it has also real integration of renewable energybeen necessary to examine the various sets sources into the electricity sector.of problems involved in terms of successivefuture time frames, without, however,directing attention too far ahead (is it reallya purposeful exercise, for example, forpeople who are dealing with electricitysystems today to try to imagine - at timeswith extraordinarily passionate involvement- what is going to happen in 2050?).Initially, then, this study concentratesattention on the European scene. So far asthis broad context is concerned, it isbeyond doubt that the principal causes atthe basis of the revolution underway are to At a national level too recent regulatorybe found in the development of distributed provisions (both on the part of thegeneration. There is an urgent need to Electricity and Gas Authority and theconnect up the rapidly growing number of relevant government departments) havedistributed generation units, guaranteeing a confirmed this link: smart grids in Italy arereal contribution on their part to the destined to develop in close connectionsecurity of the overall electricity system with distributed generation.(today, in fact, non-existent or negative) 14
  15. 15. Smart Grids. The Power Grid of Tomorrow – An ExtractBut the European goals for 2020 also massive presence of distributed generationnecessitate the active involvement of the on distribution networks.end-users of energy networks. Over the But what are the major problem areas forlong-term, then, it will be necessary to Italy and what are the priorities and timeintroduce greater opportunities for such scales that have been fixed up to now toend-users (in the future quite probably confront them? Still in terms of the specific“mobile” as well, in the form of owners of guidelines cited above, the authors of theelectric vehicles) to have access to and book have succeeded in drawing out frommake use of electronic conveyed the pathway traced out by the Regulatoryinformation in regard to price/the market Authority for Electricity and Gas a range of(demand response), for example, by way of highly illuminating perspectives. As Luca Loimplementing intelligent meters (smart Schiavo has clearly pointed out in hismeters, which not by chance are preface to the book, attention has firstextensively discussed in this book). been focused on the problems deriving from the massive presence of distributedThe focus of the book then narrows down generation on distribution networks,to concentrate on the Italian context. This, especially in the medium voltage (MV)however, does not by any means constitute sector. Distributed generation on mediuma reductive choice, for it so happens that (and low) voltage networks brings with it aItaly is at the very forefront of number of significant problems, principallydevelopments in the field. This position of tied to the inversion of flow and to thepre-eminence has come about thanks to performance of the systems of protectionthe initiatives that were taken some time that cater for active users. The Electricityago by the relevant operators. A number of and Gas Authority’s Resolution ARG/eltexamples might be cited: the project 39/10 has traced out a possible evolution inTelegestore, for example, boldly conceived distribution networks - in particular in thoseof by ENEL and to date the only initiative of that are characterised by a significantits kind on such a vast scale in the entire amount of distributed generation (inversionworld; or the overall conception and of flow in 1% of annual working hours) -development of the transmission network, towards an active unified under the ownership of By pursuing this logical path - limitingTerna; or, finally, (and most importantly attention to Italy (an extremely significantfrom a long-term point of view) the case at an international level) andcourageous regulatory policies set in place establishing a temporal horizon of just aby the policy-makers of the time. Smart few years - it has been possible tometering distributed on a mass scale and a delineate in this study (fruit of themodern transmission network (which might collaboration of a wide range of highlyalready be classed as “smart”) are in our qualified experts in the field) a highlyview the major distinguishing features of plausible future evolutionary trajectory forthe Italian case in the European context. smart grids.On the basis of these considerations, it is This, then, is the principle objective of thisreasonable to claim that in Italy the book: to investigate and to trace out in aprincipal driver in the direction of active concrete and clearly defined manner thenetworks is constituted today by the future prospects for the evolution of smart 15
  16. 16. Smart Grids. The Power Grid of Tomorrow – An Extractgrids in a strictly Italian context and to do order for the newly implementedso not only at the level of research, technologies (in particular in the field ofidentifying problems and possible solutions ICT) to make it possible to overcome theboth of a technical and regulatory nature, current limitations of smart grids and makebut also at a more practical level, provision for their concrete and fulldescribing the pilot projects currently development - all the while maintaining atunderway and the benefits that are a high level the security and reliability ofexpected to derive from them. the overall system - it is necessary for thereIn keeping with what has just been said, to take place a parallel evolution in boththe sequence of the six chapters of which the regulatory framework (with implicationsthe book is made up (and the structure essentially at the national level) and thewith which they are dealt with) can be seen normative framework (of a technicalfrom two points of view: nature, with not just national but also• in relation to the geographical context international implications). (from international/European to national, even up to the specific case of So far as the modification of the regulatory an experiment currently taking place in framework is concerned, Chapter 2 Milan in the Region of Lombardy); investigates the national and international• in relation to future time horizons (from scene with a view to identifying and long-term evolutions to the time span distinguishing between those areas not on the national level of the next few covered by any regulatory provisions at all years, even down to that of initiatives in and those covered by regulations, norms the field that have already got and requirements that could prove to be no underway). longer valid in the context of a distributionUnderpinned by this interpretative network (especially a MV network) that isframework, Chapter 1, an introduction to evolving into a smart grid. In fact, it isthe entire study, illustrates the fundamental vitally important to analyse all the systemfeatures of smart grids. After listing a series conditions that it is necessary to put inof factors that are leading to their place in order that investment in smartincreasingly extensive implementation in technologies can effectively give play to itsthe electricity systems of various European full potential. In this chapter the authorsand non-European countries, the authors discuss the conditions under which it isoffer a definition of smart grids capable of possible to manage in a “smart” way firsteffectively establishing their peculiarities the supply and then the demand forand objectives even over the very long electricity at the level of the market, theterm. These objectives are then explicated purchase/sale of energy and power deliveryin terms of the functions that smart grids services, referring in particular to the rolemake available. A description is provided that distribution companies will have tonot just of the services, solutions and assume in the future and paying specialsupport infrastructures that smart grids attention to the national context, i.e.offer but also of the principle actors offering a specific treatment of theinvolved in the revolution underway, from regulatory framework in Italy in relation tothe suppliers of the services to the subjects distributed generation and the incentiveswho are expected to benefit from them. In 16
  17. 17. Smart Grids. The Power Grid of Tomorrow – An Extractprovided for to support pilot projects onactive networks. As of today these technologies, oftenStill in relation to the Italian context but referred to by way of the acronym ICT andwith particular reference to the modification extensively discussed in Chapter 4,of the technical-regulatory framework, represent the only approach capable ofChapter 3 describes in a detailed manner resolving the new problems associated withthe impact of distributed generation on the energy networks. In fact, it is only by wayoverall electricity system and in particular of an intelligent use of communicationson Italian distribution networks. In fact, systems that it will be possible to overcomealthough the incentives and the policies in the current limitations of distributedsupport of RESs will make it possible – generation and make provision for a realalbeit in a manner that falls short of an and substantial increase in its contributionideal solution – to reach the “20-20-20 by to the electricity system, all the while2020” objectives a few years ahead of maintaining at a high level the degree ofschedule, there is a need for the networks security and reliability of the system as ato be able to cope with this increasing whole as well as the quality of servicequantity of energy. Through an analysis of offered to users. In the course of thishosting capacity, effected on a very chapter, then, the authors offer aextensive sample of MV networks, the description of all the communicationsauthors of this chapter have been able to technologies that can immediately bedetermine that the most severe limits to applied to monitor, control and co-ordinatethe amount of power that can be installed electricity networks. In addition, andepend on a set of phenomena (voltage illustration is provided of some possibleregulation, problems tied to interface future forms of interaction between the twoprotections, thermal limits on lines) that are systems, with particular attention to smartall related to the question of power flow metering, a key element - over the longinversion. This factor, in fact, constitutes term - of the new architecture, capable ofthe principle indicator of “activity” on actively involving the end-user in thenetworks. Because of this it will be management of the smart grid.necessary in the near future to develop In order to achieve real progress in thetechnologies and solutions that make it direction of the networks of the future, allpossible to implement smart grid possible solutions need to be tested on realprototypes based of the use of networks with both end-users and activecommunications technology. users (loads and generators). Today there is a growing number of projects on smart grids that deal with a wide range of problems in a diversified and detailed manner. These go from activities to promote the comprehensive development of the network in the direction of more advanced standards by way of co-operation and the sharing of research resources and extend to experimental projects aimed at implementing and integrating into the 17
  18. 18. Smart Grids. The Power Grid of Tomorrow – An Extractelectricity system particular types of RES particular the Region of Lombardy) and onplants, to programmes to promote the an immediate temporal horizon (the yearsspread of smart metering and energy between now and 2015), the protagonistsefficiency. The scale of these initiatives of the project Milano Wi-Power, developedvaries widely. Some involve industry in collaboration with A2A, are implementingsubjects, operators and research directly in the field solutions to the mostinstitutions at a global as well as national urgent problems provoked by thelevel (extensively dealt with in Chapter 5); penetration of distributed generation inothers, instead, are more limited in their Italian distribution networks. The evolutionscope but very significant numerically even proposed consists in a new networkthough they relate just to the Italian automation system furnished with acontext. In fact, it is for this reason that it suitable channel of communication betweenwas decided to offer an account of a the the DSO Primary Cabin protections andspecific initiative underway in Milan in the the units of distributed generation thatRegion of Lombardy (Chapter 6). pertain to it with a view to resolving aThus, in the course of Chapter 5 the series of problems relating to flow inversionauthors describe a number of the major and in particular to the current interfaceinitiatives in the field of smart grids, protection systems of active users andfollowing a logical order that gradually thereby allowing for an immediate increaseshifts towards focusing on the Italian in distributed generation in view of thecontext. future development of smart grids. ButAttention is first directed towards initiatives here too we trust that in capturing theof a broader international character, with detail we have not lost sight of the overallan analysis of the principal projects picture. In fact, the in-principle solutionsunderway outside Europe, and then, the demonstrated with reference to thisperspective being narrowed down to the particular case (the project focusing oncontinental scene, an account is given of Milan) are in the process of beingthe various initiatives promoted or financed incorporated into many of the smart gridby the European Commission, be it either initiatives that the Electricity and Gasthose in the ambit of research institutes or Authority has recently (February 2011)those that involve the direct participation of recognised as being eligible for inclusionEuropean distribution system operators under the incentivation measures provided(DSOs) and transmission system operators for by the above-mentioned Resolution(TSOs). Finally, a description is given of the 39/10.Italian scene, which is without doubt at the Let us conclude this introduction with avery forefront of the energy revolution. caveat. We have endeavoured to provide inFollowing this path, we arrive finally at the a simple and direct manner a certainlast chapter. In this the authors offer a number of instruments that might provedetailed description of a specific project, helpful to understand the new frontier ofendeavouring to illustrate the ideas and smart grids. What is involved, however, is aprinciples in question in terms of real and frontier beyond which it is already possibleconcrete actions and solutions. to see an infinite number of possibilities stillFocusing its attention on a specific waiting to be explored. Even more, at thegeographical context (Italy, and in very moment in which this book is being 18
  19. 19. Smart Grids. The Power Grid of Tomorrow – An Extractprinted a number of important initiatives,especially on the regulatory front, are inthe process of being perfected. Inparticular, an examination is being carriedout of a set of legislative initiatives whichhave the potential to influence in a decisivemanner the development of activenetworks in Italy. These very recentinitiatives as well as others (quite possiblyof a technological character) presentlyunderway suggest that we would be well-advised to consider this book simply as anexpression of the current “state of the art”of a science that (to our good fortune)continues to evolve with great ferment andrapidity. 19
  20. 20. Smart Grids. The Power Grid of Tomorrow – An Extract 20