Energy past, present and future 2
What is a Smart Grid? 4
Smart Metering 5
Demand Response 5
Energy Storage 8
Active Network Management 8
Feed-In Tariffs 9
Micro Grids 10
Electric Vehicles 10
What about Gas? 11
What is Smart Metering? 12
The Benefits of Smart Metering 13
Talking to Meters 13 Disclaimer!
A Thick or Thin Centre? 14 This is intended to be a brief, informal and easy to understand guide
What’s a clip on meter? 14 to some of the issues around smart grid and smart metering. It is not
How Will Consumers Respond? 15 exhaustive by any means. It is based on my understanding, which may be
different to others’ understanding! Both these areas are developing rapidly,
Central Communications Model 15
and we don’t yet know how things will work out in the UK. So don’t take
What’s the Plan? 17
any of what you read here as definitive – instead use it as a starting point
ElectraLink’s Position 18
for your own research. But do feel free to email me if you want to discuss.
The Smart Interoperability Portal 18
The Interim Service 19 Aaron Forshaw, December 2009
Who are the Stakeholders? 20 email@example.com
Energy past, present and future
Climate change. Energy security. Rising energy demand. will see new centralised generation (lots of new nuclear
Renewables. Technology. These are some of the issues shaping for example), but also lots of new distributed generation.
our energy future. In the UK we have a heritage of stable, Power will continue to flow out from the centre, but we’ll
reliable energy supply, underpinned by excellent engineering also see more two-way flows: the steady state base power
and long-term investment in power generation, transmission generated by nuclear will be complemented by highly
and distribution. Power flows from centralised generation variable and local renewable generation such as wind
(predominantly gas, coal and nuclear power stations) through and photo-voltaic (PV), meaning that at different times
transmission and distribution networks to consumers. When different areas will either be exporting or importing energy.
we switch on the lights, we can be confident they’ll work. And to make this work, there will be a step-change in the
information we collect to monitor and run the network.
But all that’s going to change.
We’re now at the start of a transition – we need to figure
(Well, hopefully not the bit out how to move from the centralised grid around which we
about the lights working) designed all our energy consumption – electricity flowing from
large, predictable generation plant through transmission and
Climate change is forcing us to cut carbon emissions. Oil distribution networks to consumers, to a grid where there is
and gas reserves are finite; geo-politics and economics more, smaller, less predictable and more distributed generation,
dictate we don’t rely on them too heavily. Energy demand with power flowing in different directions at different times.
is rising (recession driven downturns notwithstanding).
And technology (e.g. electric vehicles, heat pumps) asks All this while ensuring stability and
more of our resources, but offers answers too. continuing to keep the lights on.
It seems likely that the future will see a change both in They are big issues, and the challenges are huge. “Smart” is
generation mix, and the ways in which power flows. We a word of the moment, and for sure we’ll need to be smart.
“S mart Gr
rch for efinition
If you sea elpful d
What is a Smart Grid? ty of h
The term “Smart Grid” seems to mean different things to The sorts of things that Smart Grid includes are:
different people and in reality probably encompasses a broad
range of business and engineering developments, frequently • Smart Metering (you need to measure
serviced by some kind of ICT. Generally, “Smart Grid” falls more it before you can control it)
in the domain of the electricity distribution and transmission
organisations, compared to “Smart Metering” where in the UK • Demand Response (managing consumption
at least the thinking is more around supplier businesses. in response to supply conditions)
• Energy Storage (storing excess generated power
In December 2009 the Energy Networks Strategy
so it can be used at times of higher demand)
Group (ENSG) published “A Smart Grid Vision” for the
UK.1 The “vision” includes a definition of smart grid, • Active Network Management (optimising the network in real
which is probably as useful as any other you’ll find: time to get more capacity before reinforcement is required)
“A Smart Grid as part of an electricity power • Renewables (integrating large scale renewable /
micro generation into the distribution grid).
system can intelligently integrate the actions
of all users connected to it - generators, • Micro-grids (networking a collection of small, modular
generation sources in a low voltage distribution system)
consumers and those that do both - in
order to efficiently deliver sustainable, Smart grid technologies can be de-centralised (e.g. remote
economic and secure electricity supplies.” micro-grids, localised generation) or centralised (e.g.
aggregation of micro-generation to form a virtual power station).
We’ll talk about all these ideas in the next few pages.
1 Available at http://www.decc.gov.uk/en/content/cms/what_we_do/
Smart Metering different scales; an electricity trader can manage a portfolio of
Isn’t that covered in the second half of this guide? Well responding sites whereas a consumer could use price sensitive
yes, but smart meters are a key part of any smart grid. A appliances to do their tumble drying at the optimal time.
smart meter doesn’t just record meter readings. It can also
measure voltage and current profiles, phase sequence
and angles, active and reactive power, distortion, outages What about supply response?
and more. All of which could be very helpful to the network Essentially that’s what we do now.
operator in understanding quality of supply issues.
Generation is flexed to meet demand,
What can we do right now? with National Grid continually balancing
the system. The problem with supply
We’re a way off having a smart meter in every home (see the response is that it is inefficient – in
order to respond rapidly coal and gas
section later on for timescales), and maybe that would give a
network operator more data than they really want anyway. But
there are things we could do more quickly. For example, putting plant need to be kept warm on standby.
a smart meter into secondary substations could reveal a lot of And of course we’re going to see much
information about where losses are occurring. And we could also more nuclear generation in future – and
since nuclear is either on or off – it
use that to more quickly identify outages and other problems.
Demand Response doesn’t help at all with balancing.
Demand Response is all about being able to flex your demand
in response to supply conditions (prices). This can work on
Portfolio Management Smart Appliances
If a trader can manage the demand across their portfolio, If price signals were published in real time then smart appliances
they can seek to gain value in a number of areas e.g: could in principle switch themselves on or off in response.
Assuming that this price sensitivity was reflected in tariffs,
• Get the best market price before gate closure consumers could perhaps be motivated to reprofile their demand
to reduce peak load. This in turn should lead to a more efficient
• Reduce imbalance costs (e.g. by reducing demand generation portfolio, as there would be a reduced requirement
if renewable generation is less than expected) for generation to be on standby to meet peaks in demand.
• Frequency control (get paid for providing
This is a part of the scope of another EU funded project,
frequency control services)
known as BEYWATCH 3. They plan to do a trial of the
• Triad (reduce demand in the three peak concept in Loughborough. And in the US manufacturers
half-hour periods in winter). such as Whirlpool and GE are motoring ahead with smart
appliances such as water heaters4 and tumble dryers.
The EU funded EU-DEEP2 project tested this approach in the
UK and concluded that demand response could be profitable The Smart Home
down to a flex level of somewhere between 40KW and 140KW. Smart appliances could be one element of the “Smart
Home” – a home that automatically manages its energy
(that’s something like the equivalent use and digital content (entertainment), security, and
of between 1600 and 5600 domestic perhaps enables eHealth management (e.g. remote
access by health professionals to patients at home).
freezers being switched on or off)
2 http://www.eu-deep.com/ 3 http;//www.beywatch.eu
Energy Storage • Compressed Air – air is compressed and stored, and
Compared with other commodities (gas, orange juice, pork then mixed with fuel to power combustion turbines.
bellies etc...) electricity has historically been very difficult to
store. As a consequence our infrastructure is engineered to • Hydrogen – electricity is used to produce
meet peak demand, which means that much of it is running hydrogen, which can later be combusted.
at less than capacity for significant periods of time. That’s There are more, and this is a very exciting field. Some
why we need to keep those inefficient coal and gas power- technologies will be appropriate for the UK, some won’t.
stations on standby, and we build networks that for much
of the time are over-specified. Renewables could make that
Watch this space....
problem even harder. But renewables coupled with energy
storage could be a killer combo – wind and solar being used Active Network Management
to store up energy reserves which can then be discharged Active Network Management (ANM) is what is says - monitoring
at peak times, smoothing out the demand curve. and controlling the distribution network actively, rather than
passively. It is particularly pertinent when considering the
The pumped storage scheme at Dinorwig in North Wales is a great technical constraints around connecting and operating
example of large scale energy storage – water is pumped uphill renewable or distributed generation – which by their nature
at times of low demand. Other types of energy storage include: tend to be intermittent. Passive management of these would be
about reinforcing the network, or limiting generation capacity,
• Batteries – particularly interesting when we think about electric to cope with the worst case scenario. Active management
vehicles and the huge storage capacity they might have – they is about managing generation and constraints in real time,
could be used for emergency generation or load balancing. and integrating with other smart grid technologies to make
Batteries could also be integrated with photo-voltaic cells.5 optimal use of the network without requiring reinforcement.
5 See for example this scheme in Manchester: http://www.manchester.
Renewables The scheme will be tweaked in April 2010, and will continue
Renewables are a driving force for smart grid technologies to focus on supporting large-scale renewable projects.
- the variability of renewable generation means that we
you – wind
need more in the way of automated management. The UK Feed-In Tariffs
to a house near s...
Renewable Energy Strategy 20096 highlights smart grid
o to-voltaic c
as an enabler for swifter deployment of renewables.
How do we support investment in renewables? Currently this Feed-In Tariffs will make installing renewable energy in
is done via the Renewables Obligation (RO). Put simply, UK your home much more rewarding. As well as cutting your
electricity suppliers have been obliged to source an increasing electricity bill – by generating some of your own – you’ll get
proportion of their energy from renewable sources. Generators of paid for every unit of power you create. That’s right – read
renewable electricity are given a Renewables Obligation Certificate it again. You benefit twice for every unit you produce.
(ROC) for every MWh of renewable electricity generated, and the
ROC transfers to the purchasing supplier. Suppliers then meet Feed-In Tariffs are the subject of a consultation process7 – but
their obligation by presenting sufficient ROCs – so they need to the draft proposals indicate that the name “feed-in” is a bit of a
buy enough ROCs to meet their obligation. Where suppliers can’t misnomer. Rather than just incentivising feed-in to the distribution
cover their obligations with ROCs they have to pay an equivalent grid, they incentivise generation. The tariff structure is as follows:
amount into a fund, the proceeds of which are then shared
out between those suppliers who did meet their obligations. • A fixed payment for very unit generated
So suppliers are incentivised to buy renewable electricity. • A payment for every unit exported
• Offset of import costs.
6 http://www.decc.gov.uk/en/content/cms/what_we_do/ 7 http://www.decc.gov.uk/en/content/cms/consultations/elec_financial/elec_financial.aspx
The consultation process in ongoing. You can probably Micro Grids
guess that the renewable lobby argued for higher tariffs; Micro Grids are low voltage distribution systems of
other parties argued for lower tariffs in order not to distort small generators, which can be connected to the main
competition. By way of example, a wind turbine of less than distribution network, or can be operated in “island” mode
1.5kW would attract a generation tariff of 30.5p per kWh. i.e. disconnected from the rest of the network. They can
A PV installation could attract up to 36.5p per kWh. Export also encompass techniques such as micro pumped storage,
prices are likely to be in the region of 5p/kWh – so there’s battery storage, micro-CHP and micro-generation.
money to be made. Government think the tariff levels should
provide a rate of return to small investors in the region 5-8%. The concept has again been tested by an EU funded project
– there is a presentation at http://ec.europa.eu/research/
’t afford the
But I still can
up-front investm Micro grids may be suitable for regions that are geographically
distant from main networks. Interest in the UK may be more
Even though the FITs should help make investment in renewable around networks for communities or green developments.
energy worthwhile, there still are of course many people who
won’t be able to meet the up-front cost. Consumers may Electric Vehicles
expect to see a range of energy companies taking advantage Step out in the streets if Britain today and the chances are
of the new incentives and offering services to install renewable you won’t be hit by an electric vehicle. Wait a few years
generation at your property, and handle the finance for you. though and the situation could be very different. London8
and Newcastle9 are just two cities which have announced
What about Gas?
electric car ambitions, and the UK government is keen.10 Most of the smart grid talk at the moment is
about electricity. Gas is different – it can be
Electric vehicles pose challenges but also opportunities stored, and it takes a long time to get from the
for electricity networks. Charging your battery as soon beach to the supply point so there isn’t the same
as you get home from work would be a big no-no – need for real-time balancing of the system.
coinciding with the evening peak demand would cause But never-the-less, look out for gas innovation
serious problems. But programming it to charge over- too – active control of thermostats for example
night (maybe from 1am to 6am) might help smooth the could help to ease peak load constraints.
demand profile over the 24 hour period. Will network
assets be able to meet even this demand? Charged car And gas storage is beginning to play more and more
batteries could possibly be used as a giant energy storage of a vital role in the wider gas market, by increasing
reservoir, sending power back into the network to smooth the reliability and security of supply and demand in
out the peaks. Are battery technologies up to this? Will many regions around the globe. Gas storage facilities
consumers want to participate? Is it economical? I don’t are becoming increasingly important to secure
know, but expect to see work on this in the coming years. future supplies of gas for customers, power stations
and for the UK as a whole as our dependence on
Electric vehicles will require a new infrastructure – a imported gas increases. At present, the UK can only
roll-out of physical charging points and supporting store around 4% of our annual gas consumption,
network assets, a billing and revenue control compared to Germany and France who have the
framework, and everything else needed to enable capacity to cover over 20% of their needs.
deliver of electric vehicles to a mass market.
What is Smart Metering?
Smart Metering will radically alter the way we record and
manage energy consumption with the ability for consumers
and suppliers to monitor – in close to real time – how much
energy is being used, and what the cost of that energy is.
And Smart Metering is a necessary part of the Smart Grid.
A Smart Meter can record Time of Use (ToU) consumption
i.e. it measures when consumption occurred (down to the
half hour or smaller interval), as well as how much was
consumed. ToU data is useful because that information can
be used to encourage consumers to change their behaviour.
Smart meters can send and receive information or
instructions – so as well as reporting ToU data or register
readings they can support credit and pre-payment modes,
accommodate different tariffs, send messages to the
consumer and allow remote enabling or disabling of supply.
Smart meters can be used in electricity, gas, water
and other metering situations - although the costs
and benefits in each case will be different.
The Benefits of Smart Metering Talking to Meters
Many benefits are articulated, with different A head-end system is used to manage
emphasis depending on who is talking: communications to meters. A variety of technologies
are proposed for the head-end to meter link:
• Accurate billing
• GPRS (always on, can cope with large
• Improved retail competition volume of data, pay by usage)
• Tariff innovation with ToU tariffs • Power Line Carrier (slower response times,
effectively free from meter to data concentrator
• Better, lower cost, pre-payment service
but then need GPRS back to the head end)
• Lower costs for suppliers, due to use of accurate data,
• Wi-Fi (relatively cheap, high power
and automation of the meter reading process
requirement means limited coverage)
• Enablement of smart grid technologies
• Radio (long range, requires additional infrastructure)
• Energy efficiency and reduced carbon emissions
• Broadband (high bandwidth, could piggy back Digital
From an EU legislative point of view, increased retail Britain rollout, but not owned by utility company)
competition is the key benefit. For suppliers there is the
opportunity to both cut costs and innovate. Governments
are keen on the envisaged carbon savings.
What’s a clip on meter?
A Thick or Thin Centre? A clip-on meter clamps
Debate about precisely which functions should be provided onto one of the fuse box
by the central communications service continues. A “thin” cables and measures
centre might do data retrieval (reading the meter), routing consumption.
of data and access control (allowing authorised parties
It might be useful for
to access relevant functions on the meter). A “thick”
centre could additionally provide registration services (e.g. behaviour, but doesn’t
consolidating the 14 existing MPAS services), a single connect to the supplier
meter data management service for all meter data, data so can’t be used for
collection, data aggregation, data provision for consumer billing or much else.
portals, converged electricity and gas processes etc…..
Clip on meters are
A thin centre could be cheaper and less disruptive to implement, being tested as part
but would not offer the same benefits of scale, efficiency and of the EDRP trials.
process improvement of a thicker centre. A thicker centre
would be more complex, and if implemented in a “big-bang”
style could be very risky – processes and people across Maybe now is a good time to read
the industry being faced with a huge amount of change. ElectraLink’s paper on “Preparation For
UK Smart Metering”, 1st August 2009
If only there was a way to start thin and get thicker...
http://www.electralink.co.uk/upload/Downloads/Preparation for UK Smart Metering.pdf
How Will Consumers Respond? Concerns have been raised about access to data, and how
Good question. OFGEM have been managing, on behalf of the this data might be used. For example, perhaps your energy
Government, the Energy Demand Research Project (EDRP). supplier could examine your half-hourly consumption of
EDF Energy, E.ON, Scottish Power and Scottish and Southern electricity to determine when you turn on the dishwasher,
Energy are each running trials to look at how consumers respond and glean more information than you’d like about how you
to have better information about their energy consumption. live your life. There are of course many instances where
we make detailed information about ourselves available
The trials are made up of a combination of interventions: (think supermarket loyalty cards etc...) but perhaps the
smart meters, real-time display devices, additional billing difference here is in the perceived lack of ability to opt out.
information, monthly billing, energy efficiency information
and community engagement. Due to complete in Autumn Central Communications Model
2010, reports on progress are available six monthly. You Following analysis of three models for Smart Metering
can read these reports and make your own judgement.11 infrastructure (Competitive, Centrally Managed and Central
Communications), Government consulted on its preference
It is planned that the roll-out of smart meters will include issuing and concluded in December 200912 that the Central
a Home Display Unit (HDU) to households. This will be a Communications model was the right choice for the UK.
device that communicates with the meter, and presents energy
consumption information in a relevant and useful way that enables ElectraLink has been leading the debate in this area. Neil
consumers to better manage their use of energy. This could be Beckwith’s white paper of July 200813 outlined the many
an area for innovation and differentiation between suppliers. benefits of an industry scale Smart Interoperability Portal, and
this is the concept currently being developed by ElectraLink.
Security and privacy are also of course big issues for consumers.
11 http://www.ofgem.gov.uk/sustainability/edrp/Pages/EDRP.aspx 12 See consultation details at http://www.decc.gov.uk/en/content/
13 Whitepaper: http://www.electralink.co.uk/upload/Downloads/whitepaper.pdf
What’s the Plan?
In their consultation response, Government outlined the
high level plan. First, OFGEM and DECC are leading
The EDRP trials are
work to develop a “Prospectus”. This will include a
statement of design requirements, a commercial and
testing the impact
regulatory framework, a timetable for the roll-out and a
plan for the rest of the smart metering programme. The
of energy efficiency
prospectus is due to be completed summer 2010.
advice, as well as
The next stage is Detailed Design, which is expected to
take around two years. This detailed design will prepare
the functional specifications for smart metering, and the
detail of the commercial framework. As well as the central
metering and billing,
systems, energy companies will need to design changes
to their systems (such as customer billing etc....).
on energy demand. So build and implementation of the systems should start
around summer 2012. It’s hard to imagine that the build
will take less than two years, which would mean that large-
scale rollout commences in mid 2014 (but the planning is
embryonic, and will likely have changed by the time you read
this. Get in touch with ElectraLink for an up-to-date view).
So what happens in the interim period between
now and the start of the large-scale rollout?
ElectraLink’s business is all about interoperability – from The Smart Interoperability Portal is independent of any
the data and network level right up to the governance of particular communications methodology; it supports the
the inter-party agreements that enable smooth market full range of protocols by accommodating appropriate
operation. ElectraLink is continuing to focus on this business head-end systems. This allows existing smart meter
with the introduction of the Smart Interoperability Portal. deployments to be integrated into an interoperable
environment, thus protecting investments already made.
The Smart Interoperability Portal
Interoperability will be key to the success of smart Unlike areas in which utilities remain vertically integrated,
metering, and can be seen at three levels: the UK requires a high degree of interoperability
between different participants at different times. The
• Local devices – will a meter work with a home portal enables this by facilitating and efficient Change
display unit from a competing manufacturer? of Supplier process, and enabling authorised parties to
access appropriate functions and data on the meter.
• Meter communications – will a meter communicate
with a head-end system from a rival company? The portal also offers an opportunity to implement process
improvements such as faster Change of Supplier and
• Market – can a new supplier continue to operate a
electricity/gas process convergence; it gives the central
smart meter that was installed by an old supplier?
communications service the ability to start thin – as a interim
service – and transition to a thicker layer over time.
A demonstration of ElectraLink’s concept has been ElectraLink is currently focussed on helping to solve these
developed by Siemens, with Software AG and eMeter. problems of the interim period by introducing the Smart
This demonstration capability forms part of the proposal Interoperability Portal to the market, as an interim or
currently being made to the Big 6 suppliers. transitional service. The interim service allows suppliers to
operate a smart meter service for consumers, while delaying
The Interim Service large investment in smart metering infrastructure and back-
You probably know that suppliers are already installing office systems until the DECC Smart Metering Implementation
smart meters to some customers. What happens to Programme has produced the Prospectus and Detailed Design.
those meters when the central programme kicks in? Will
they be left as stranded assets, and in this interim period Contact Ian Rose (firstname.lastname@example.org)
what happens when there is a change of supplier? for more information.
Who are the Stakeholders?
There are many; these are a few of the “central” bodies. • MRASCo – administers the MRA and undertakes development
activity in relationship to UK electricity processes. Big
• Association of Meter Operators – trade association changes if there are radical changes to the processes.
representing meter operators. www.meteroperators.org.uk MRASCo is serviced by Gemserv. www.mrasco.co.uk
• Consumer Focus – statutory organisation campaigning for • National Grid – owns the electricity transmission
a fair deal for consumers. www.consumerfocus.org.uk network in England and Wales; operates the entire
system throughout the UK. Owns and operates the gas
• Department of Energy and Climate Change (DECC) – they transmission system throughout Great Britain, and also
are setting the political and government framework within has a gas distribution business. www.nationalgrid.com
which smart metering will operate. www.decc.gov.uk
• OFGEM – Office of Gas and Electricity Markets – will
• Energy Networks Association (ENA) - the industry body regulate changes brought in with smart metering.
for UK energy transmission and distribution licence Currently overseeing the Energy Demand Research
holders and operators. Would want to see a greater Project (EDRP) trials, and managing development of
role for distributors. www.energynetworks.org the Smart Metering Prospectus. www.ofgem.gov.uk
• Energy Retail Association (ERA) – represent the views of the • SPAA Ltd – administers the Supply Point Administration
“Big 6” suppliers, which may or may not coincide with those Agreement in gas. Big changes to process if there is process
of some of the smaller suppliers. www.energy-retail.org.uk convergence. Serviced by ElectraLink. www.spaa.co.uk
• Gas Forum – membership organisation for gas shippers and • XOServe – operate the gas central IT systems.
suppliers; consulted by DECC, OFGEM. www.gasforum.co.uk Running Nexus refresh programme – possible huge
impact by smart metering. www.xoserve.com
Smart Grid. Smart Metering. Everybody’s talking
about them, but what are they? This short,
informal guide will give you a heads-up on
some of the issues. It’s a fast moving field
so stay up-to-date by contacting ElectraLink.
Ground Floor Grafton House 2 – 3 Golden Square London W1F 9HR
www.electralink.co.uk tel: 020 7432 3000