1.
Energy
ENER B3Energy
SMART GRID ASPECTS OF THE WINTER PACKAGE:
FACILITATING A FLEXIBLE RETAIL MARKET
Kostas STAMATIS
Directorate-General for Energy
European Commission
WORKSHOP
“DEFINING SMART GRIDS: CONDITIONS FOR SUCCESSFUL IMPLEMENTATION”
Session 1: Technical and regulatory aspects and recommendations for effective
smart grids deployment under the provisions of the winter package
Barcelona, 9th February 2017
European cooperation Network on Energy Transition in Electricity

2.
Energy
ENER B3
Recent policy drivers
Winter package
 Electricity market and consumers
 Renewables & bioenergy
sustainability
 Energy Efficiency Directive
 Energy efficiency of buildings
 Ecodesign
 Governance
 ....
Energy Union

3.
Energy
ENER B3
Market design not fit for VRES E generation

4.
Energy
ENER B3
Making demand side more flexible
Prosumers
Supplier
DSO TSO
Power exchange
market
Supply
&flexibility
Balancing
Market /
Ancillary services
Commercialdomain - Supply
Regulated domain
Generator
Flexibility
purchase
contract
Mutualexchange of operational
and contractual data
Flexibility
procurement
Grid access &
Generation
management
Commercialdomain - Flexibility
Possible relations between market roles
Information
exchange
Financialadjustment
mechanism
BRP
BRP
Aggregator
Distribution network
constraint
management
Smart
metering and
data
DSOs to use
flexibility and
DSO/TSO
Aggregators
and access to
the market
Smart Grids Task Force (2015)

5.
Energy
ENER B3
Roll out of Electricity
smart metering by 2020:
 22 CBAs, 17 MS: large-scale
roll-out
 ~ 72% EU consumers
 195 million meters
 € 35 billion
Smart metering: the picture today
ref. COM(2014) 356; SWD(2014) 189

6.
Energy
ENER B3
Current situation and problem:
• Smart metering projects are going ahead…
 roll out of smart meters according to Electricity Directive
(+CBA  80%  2020)
 full roll out of smart meters only planned in 17 MS
(+2 selective roll-outs)
• …however problems still exist
 not all fit for purpose (lack of functions & interoperability)
 enabling technologies not widely accessible
Smart metering: problems identified

7.
Energy
ENER B3
• In positively assessed cases (currently 17 + 2 MS):
 define national functionalities according to European standards and
ensure interoperability
 socialise the costs to the roll-out segment
 monitor costs/benefits including those for consumers
 Target: At least 80% of the smart metering shall be installed by 2020
Proposed smart metering framework I

8.
Energy
ENER B3
• In Member States which do not intend still to go ahead:
 right to request a smart meter - to be installed within 3 months with a set
of minimum functionalities defined by Member State
 cost should be supervised by Member States and borne by the end user
 Member States shall periodically assess changes in technology and
assumptions of CBA
 when CBA becomes positive, Member States to roll-out 80% within 8
years
Proposed smart metering framework II

9.
Energy
ENER B3
• Proposed smart metering functionalities:
 provide near real time information to consumer on actual
consumption in order to support energy services
 follow security and data protection EU requirements
 fit for active consumers
 provide data to be available to consumers or service
providers of their choice
 enable measurement and settlement at the same time
intervals as the imbalance period in the national market
 Appropriate advice and information to consumers on the
full potential of the smart meter and privacy issues
Proposed smart metering framework III
Functionalities
Interoperability
Connectivity
Fit-for-
purpose
smart
metering

10.
Energy
ENER B3
Current situation and problem:
• Fair market access for demand response according to EED…
 General principles and rules to ensure participation of demand
response in all markets
• …but market barriers continue to exist
 service providers (aggregators) are effectively banned in some MS
 many markets remain effectively closed to DR
 granular price signals are not passed onto consumers
 consumers do not always have access to markets
Demand response: problems identified

11.
Energy
ENER B3
Enabling demand response:
 Entitlement to a dynamic electricity price contract
 Transfer Art 15.8 EED to electricity directive and
 Remove market barriers for aggregators
 Introduce additional rules for flexible markets (electricity regulation)
Enabling active consumers and energy communities:
 Entitlement to all consumers to generate, self-consume, store or sell self-
generated electricity while ensuring non-discriminatory network tariffs
Proposed framework for DR and new services

12.
Energy
ENER B3
Currently activated demand response
 15 GW activated through incentive based DR
 6 GW activated through price based DR
Demand response activation 2030
 Business as usual scenario
 Activated: DR 35 GW
 Net Benefit: 4.4 bn euro/annum
 Policy scenario enabling price and incentive based DR
 Activated: DR 52 GW
 Net Benefit: 5.6 bn euro/annum
160GW
Theoretical demand
response potential in
2030
100GW
Theoretical
demand response
potential today
21GW
Demand
response
activated today
Demand response potential and benefits

13.
Energy
ENER B3
Current situation:
• Smart metering systems, in 17 (+2) Member States  more granular
consumption data and new services
• Existing provisions in Electricity Directive not fit for new developments
Proposed measures:
 Define responsibilities for parties involved in data handling
 Set principles on non-discriminatory and transparent access to data
 Certification and compliance of the parties responsible for data handling,
including DSOs
 Standardised data format
Creating a level playing field for access to data
Support active
consumer and new
services
Facilitate switching
and billing

14.
Energy
ENER B3
Wind and solar growth and ratio to total capacity
Making distribution networks more flexible I
Wind and solar
is on the rise
with a large
part connected
to distribution
grids

15.
Energy
ENER B3
Problems identified:
• Current framework at EU or national level does not:
... allow DSOs to be flexible and cope with variable RES and new loads
... clarify DSO role in specific tasks
Proposed measures:
 Enabling framework for DSOs to procure and use flexibility
 DSO tasks in storage, EVs infrastructure and data management
 Cooperation between DSOs and TSOs alongside a EU DSO entity
Lower grid
costs and
tariffs
Neutrality of
DSOs in new
tasks
Making distribution networks more flexible II

16.
Energy
ENER B3
Current situation and problem:
− In most cases DSO remuneration favours network expansion solutions
− Diversity of distribution tariffs create different market conditions for distributed
resources across EU
Proposed measures:
 EU-wide principles for distribution network tariffs
 DSOs to prepare multiannual development plans
 ACER recommendation and network code on network tariffs
 Monitoring smart grid development and transparency of network tariffs
methodology and costs
Efficient grid
operation
and planning
Support
innovative
solutions
Facilitate the
integration of
distributed
resources
Distribution network tariffs and DSO remuneration

17.
Energy
ENER B3
https://ec.europa.eu/energy/
https://ec.europa.eu/energy/en/topics/markets-and-consumers/smart-grids-
and-meters

18.
Energy
ENER B3
European
Commission
Technology
Supply
ConsumersDSOsTSOs
Regulators
ICT&Energy
•Ad-hoc expert working groups
High Level
Steering Committee
30+ associations representing all stakeholders
350+ experts from national regulatory agencies and industrial market actors
9 DGs
European Smart Grids Task Force (SGTF)
https://ec.europa.eu/energy/en/topics/markets-and-consumers/smart-grids-and-meters/smart-grids-task-force

19.
Energy
ENER B3
Standards and interoperability
Data privacy, data protection
and cyber-security
Regulatory issues
Industrial policy and infrastructure
European Smart Grids Task Force is working on key challenges

20.
Energy
ENER B3
Investments in Smart Grids projects (2013, excl. metering)
459 smart grid projects - €3.15 billion
26% R&D and 74% Demo & Deployment
Next update: still in 2017