Smart grid reference covers all points SCADA, EMS, OMS ,...

1. Table of Contents
Chapter 1. SmartGrids: Motivation, Stakes and Perspectives . . . . . . . .
1.1. Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.1.1. The new energy paradigm. . . . . . . . . . . . . . . . . . . . . . . . .
1.2. Information and communication technologies serving
the electrical system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.3. Integration of advanced technologies. . . . . . . . . . . . . . . . . . . . .
1.4. The European energy perspective. . . . . . . . . . . . . . . . . . . . . . .
1.5. Shift to electricity as an energy carrier (vector) . . . . . . . . . . . . . .
1.6. Main triggers of the development of SmartGrids. . . . . . . . . . . . . .
1.7. Definitions of SmartGrids . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.8. Objectives addressed by the SmartGrid concept . . . . . . . . . . . . . .
1.8.1. Specific case of transmission grids . . . . . . . . . . . . . . . . . . .
1.8.2. Specific case of distribution grids . . . . . . . . . . . . . . . . . . . .
1.8.3. The desired development of distribution networks:
towards smarter grids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.9. Socio-economic and environmental objectives . . . . . . . . . . . . . . .
1.10. Stakeholders involved the implementation of the
SmartGrid concept . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.11. Research and scientific aspects of the SmartGrid. . . . . . . . . . . . .
1.11.1. Examples of the development of innovative concepts. . . . . . . .
1.11.2. Scientific, technological, commercial and
sociological challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.12. Preparing the competences needed for the development
of SmartGrids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.13. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.14. Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chapter 2. From the SmartGrid to the Smart Customer:
the Paradigm Shift. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.1. Key trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.1.1. The crisis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.1.2. Environmental awareness . . . . . . . . . . . . . . . . . . . . . . . . .
2.1.3. New technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.2. The evolution of the individual’s relationship to energy . . . . . . . .
2.2.1. Curiosity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.2.2. The need for transparency . . . . . . . . . . . . . . . . . . . . . . . .
2.2.3. Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.3. The historical model of energy companies . . . . . . . . . . . . . . . .
2.3.1. Incumbents in a natural monopoly . . . . . . . . . . . . . . . . . . . .
2.3.2. A clear focus on technical knowledge. . . . . . . . . . . . . . . . . .
2.3.3. Undeveloped customer relationships . . . . . . . . . . . . . . . . . .
2.4. SmartGrids from the customer’s point of view . . . . . . . . . . . . . .

2. 2.4.1. The first step: the data revolution . . . . . . . . . . . . . . . . . . .
2.4.2. The second step: the establishment of a smart ecosystem . . . . .
2.4.3. The consumers’ reluctance . . . . . . . . . . . . . . . . . . . . . . .
2.5. What about possible business models?. . . . . . . . . . . . . . . . . . .
2.5.1. An unprecedented global buzz… and the search for a
business model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.5.2. Government research into a virtuous model of regulation . . . . . .
2.5.3. An opening for new stakeholders . . . . . . . . . . . . . . . . . . . .
2.6. Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chapter 3. Transmission Grids: Stakeholders in SmartGrids . . . . . . . .
3.1. A changing energy context: the development
of renewable energies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.2. A changing energy context: new modes of consumption . . . . . . . . .
3.3. New challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.4. An evolving transmission grid. . . . . . . . . . . . . . . . . . . . . . .
3.5. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.6. Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Table of Contents vii
Chapter 4. SmartGrids and Energy Management Systems . . . . . . . . . .
4.1. Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.2. Managing distributed production resources: renewable energies . . . .
4.2.1. Characterization of distributed renewable production . . . . . . . .
4.2.2. Integrating renewable energies into the management process. . . .
4.3. Demand response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.4. Development of storage, microgrids and electric vehicles . . . . . .
4.4.1. New storage methods . . . . . . . . . . . . . . . . . . . . . . . . . .
4.4.2. Microgrids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.4.3. Electric vehicles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.5. Managing high voltage direct current connections . . . . . . . . . . . . .
4.6. Grid reliability analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.6.1. Model-based stability analysis . . . . . . . . . . . . . . . . . . . . . .
4.6.2. Continuous measurements-based analysis: phasor
measurement units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.6.3. Dynamic limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.6.4. Self-healing grids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.7. Smart asset management . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.8. Smart grid rollout: regulatory needs . . . . . . . . . . . . . . . . . . . . .
4.8.1. The need for pilot projects . . . . . . . . . . . . . . . . . . . . . . . .
4.8.2. Incentives for investment in grid reliability . . . . . . . . . . . . . .
4.8.3. Renewables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.8.4. Investment incentives for energy efficiency . . . . . . . . . . . . . .
4.8.5. Cost/profit allocation. . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.8.6. New regulatory frameworks . . . . . . . . . . . . . . . . . . . . . . .
4.9. Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.9.1. The case of smart grids . . . . . . . . . . . . . . . . . . . . . . . . . .
4.9.2. Work in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.9.3. Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.10. System architecture items. . . . . . . . . . . . . . . . . . . . . . . . . . .

3. 4.10.1. Broaden the vision . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.10.2. Taking vertical changes into consideration . . . . . . . . . . . . . .
4.10.3. Developing integration tools . . . . . . . . . . . . . . . . . . . . . .
4.11. Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.12. Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chapter 5. The Distribution System Operator at the Heart
of the SmartGrid Revolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.1. Brief overview of some of the general elements of
electrical distribution grids . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.2. The current changes: toward greater complexity . . . . . . . . . . . . . .
5.3. Smart grids enable the transition to carbon-free energy . . . . . . . . . .
5.4. The different constituents of SmartGrids . . . . . . . . . . . . . . . . . .
5.5. Smart Life. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.6. Smart Operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.7. Smart Metering. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.7.1. The Linky project. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.7.2. New services for customers . . . . . . . . . . . . . . . . . . . . . . . .
5.7.3. Smart meters can significantly modernize grid management . . . .
5.8. Smart Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.9. Smart local optimization . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.9.1. Distributed generation . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.9.2. Active management of demand. . . . . . . . . . . . . . . . . . . . . .
5.9.3. Means of distributed storage . . . . . . . . . . . . . . . . . . . . . . .
5.9.4. New uses including electric vehicles . . . . . . . . . . . . . . . . . .
5.9.5. Local optimization of the system. . . . . . . . . . . . . . . . . . . . .
5.10. The distributor ERDF is at the heart of future SmartGrids . . . . . . .
5.11. Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chapter 6. Architecture, Planning and Reconfiguration
of Distribution Grids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.1. Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.2. The structure of distribution grids . . . . . . . . . . . . . . . . . . . . . .
6.2.1. High voltage/medium voltage delivery stations . . . . . . . . . . . .
6.2.2. Meshed and looped grids . . . . . . . . . . . . . . . . . . . . . . . . .
6.2.3. Types of conductor . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.2.4. Underground/overhead. . . . . . . . . . . . . . . . . . . . . . . . . . .
6.2.5. MV/LV substations. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.3. Planning of the distribution grids . . . . . . . . . . . . . . . . . . . . . . .
6.3.1. Principles of planning/engineering. . . . . . . . . . . . . . . . . . . .
6.3.2. All criteria to be met by the proposed architectures. . . . . . . . . .
6.3.3. Example on a secured feeder grid . . . . . . . . . . . . . . . . . . . .
6.3.4. Long-term and short-term planning . . . . . . . . . . . . . . . . . . .
6.3.5. The impact of connecting DGs on the MV grid structure . . . . . .
6.3.6. Increasing the DG insertion rate in the grid . . . . . . . . . . . . . .
6.3.7. Proposal for a new looped architecture: the hybrid structure . . . .
6.4. Reconfiguration for the reduction of power losses . . . . . . . . . . . . .
6.4.1. The problem of copper losses. . . . . . . . . . . . . . . . . . . . . . .
6.4.2. Mathematic formulation of the optimization problem . . . . . . . .

4. 6.4.3. Combinatorial optimization . . . . . . . . . . . . . . . . . . . . . . . .
6.4.4. Different approaches to finding the optimal configuration. . . . . .
6.4.5. Reconfiguration of the partially meshed grids . . . . . . . . . . . .
6.5. Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chapter 7. Energy Management and Decision-aiding Tools. . . . . . . . . .
7.1. Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.2. Voltage control. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.2.1. Introduction to voltage control in distribution networks . . . . . . .
7.2.2. Voltage control in current distribution networks . . . . . . . . . . .
7.2.3. Voltage control in distribution networks with
dispersed generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.2.4. Voltage control conclusion . . . . . . . . . . . . . . . . . . . . . . . .
7.3. Protection schemes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.3.1. MV protection scheme . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.3.2. Neutral grounding modes . . . . . . . . . . . . . . . . . . . . . . . . .
7.3.3. Fault characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.3.4. Power outages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.3.5. Impact of decentralized production on the operation of
protections of the feeder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.4. Reconfiguration after a fault: results of the INTEGRAL project . . . .
7.4.1. Goals of the INTEGRAL project. . . . . . . . . . . . . . . . . . . . .
7.4.2. Demonstrator description . . . . . . . . . . . . . . . . . . . . . . . . .
7.4.3. General self-healing principles . . . . . . . . . . . . . . . . . . . . . .
7.4.4. Some results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.5. Reliability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.5.1. Basic concepts of the Monte Carlo simulation. . . . . . . . . . . . .
7.5.2. Conclusion on reliability. . . . . . . . . . . . . . . . . . . . . . . . . .
7.6. Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chapter 8. Integration of Vehicles with Rechargeable Batteries into
Distribution Networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.1. The revolution of individual electrical transport . . . . . . . . . . . . . .
8.1.1. An increasingly credible technology . . . . . . . . . . . . . . . . . .
8.1.2. Example: the Fluence ZE . . . . . . . . . . . . . . . . . . . . . . . . .
8.1.3. What are the consequences on the electrical network? . . . . . . . .
8.1.4. Demand management and vehicle-to-grid . . . . . . . . . . . . . . .
8.2 Vehicles as “active loads”. . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.2.1. Energetic services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.2.2. Frequency regulation. . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.2.3. Load reserve and shedding . . . . . . . . . . . . . . . . . . . . . . . .
8.2.4. Other services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.3. Economic impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.3.1. A potentially lucrative but limited market . . . . . . . . . . . . . . .
8.3.2. New business models . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.3.3. Market integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.4. Environmental impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.4.1. Synergy with intermittent sources . . . . . . . . . . . . . . . . . . . .
8.4.2. Energetic efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5. 8.4.3. Other advantages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.4.4. Evaluating environmental impacts . . . . . . . . . . . . . . . . . . . .
8.5. Technological challenges. . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.5.1. Architecture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.5.2. Communication infrastructure . . . . . . . . . . . . . . . . . . . . . .
8.5.3. Control strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.5.4. Feedback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.6. Uncertainty factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.6.1. Electric vehicle adoption . . . . . . . . . . . . . . . . . . . . . . . . .
8.6.2. Viability of demand management . . . . . . . . . . . . . . . . . . . .
8.6.3. Technological factors . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.6.4. Economic factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.7. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.8. Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chapter 9. How Information and Communication Technologies
Will Shape SmartGrids. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.1. Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.2. Control decentralization . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.2.1. Why smart grids will not be “intelligent networks”. . . . . . . . . .
9.2.2. From the “home area network” to the “smart home grid”:
extension of the local data network to the electrical grid for the home . .
9.2.3. The “smart home grid” for the local optimization of
energy efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.2.4. From the home to microgrids: towards the autonomous
control of subnetworks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.3. Interoperability and connectivity . . . . . . . . . . . . . . . . . . . . . . .
9.3.1. “Utility computing”: when the electrical grid is a model
for information technologies . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.3.2. Avatars of connectivity, when moving up from the physical
layer to information models . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.4. From synchronism to asynchronism . . . . . . . . . . . . . . . . . . . . .
9.4.1. Absolute and relative low-level and top-level synchronism . . . . .
9.4.2. From asynchronous data to asynchronous electricity . . . . . . . . .
9.4.3. From data packets to energy packets . . . . . . . . . . . . . . . . . .
9.5. Future Internet for SmartGrids . . . . . . . . . . . . . . . . . . . . . . . .
9.5.1. Towards a shared infrastructure for SmartGrids and physical networks:
sensors
9.5.2. Towards a shared infrastructure: SmartGrids in the cloud . . . . . .
9.6. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.7. Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chapter 10. Information Systems in the Metering and
Management of the Grid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.1.1. Classification of the information systems . . . . . . . . . . . . . . .
10.1.2. Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.2. The metering information system . . . . . . . . . . . . . . . . . . . . . .
10.2.1. Presentation of the metering system . . . . . . . . . . . . . . . . . .
10.2.2. Architecture of the metering system . . . . . . . . . . . . . . . . . .

6. 10.2.3. The manipulated data . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.2.4. The deployment of a metering system . . . . . . . . . . . . . . . . .
10.3. Information system metering in the management of the grid . . . . . .
10.3.1. Links with IS management of the distribution network . . . . . . .
10.3.2. The SmartGrid triptych. . . . . . . . . . . . . . . . . . . . . . . . . .
10.4. Conclusion: urbanization of the metering system. . . . . . . . . . . . .
10.4.1. Two approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.4.2. The “pro’sumer’s” information . . . . . . . . . . . . . . . . . . . . .
10.4.3. Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.5. Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chapter 11. Smart Meters and SmartGrids: an Economic Approach. . . .
11.1. “Demand response”: a consequence of opening the electricity
industry and the rise in environmental concerns . . . . . . . . . . . . . . . . .
11.1.1. The specific features of electricity . . . . . . . . . . . . . . . . . . .
11.1.2. The impact of introducing competition . . . . . . . . . . . . . . . .
11.1.3. The impact of the objectives for reducing CO2 emissions . . . . .
11.2. Traditional regulation via pricing is no longer sufficient to
avoid the risk of “failure” during peaks . . . . . . . . . . . . . . . . . . . . . .
11.2.1. Coping with failures . . . . . . . . . . . . . . . . . . . . . . . . . . .
11.2.2. Expensive advanced means reduces the incentive to invest . . . .
11.2.3. Emphasizing the seasonal differentiation of prices . . . . . . . . .
11.3. Smart meters: a tool for withdrawal and market capacity . . . . . . . .
11.3.1. Towards a market of withdrawal . . . . . . . . . . . . . . . . . . . .
11.3.2 Who is financing the installation of the meters? . . . . . . . . . . .
11.3.3. What are the economic results of the operation? . . . . . . . . . . .
11.4. From smart meters to SmartGrids – the results . . . . . . . . . . . . . .
11.5. Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7. Chapter 1
SmartGrids: Motivation, Stakes and Perspectives
1.1. Introduction
Power systems, after several decades of slow development, are experiencing
tremendous changes due to several factors, such as the need for large-scale
integration of renewable energies, aging assets, energy efficiency needs and
increasing concerns about system vulnerability in the context of the multiplication of
actors in free energy markets The complexity of operations is increasing, which will
ultimately require the introduction of more intelligence in the grid for the sake of
security, economy and efficiency, thus allowing the emergence of the “SmartGrid”
concept.
1.1.1. The new energy paradigm
The current operation of electrical networks is based on four levels resulting
from the structure of the global electrical system:
– Power generation: most power is generated by large units installed in strategic
locations for operation with respect to the power grid.
– The transmission system, which allows power to be transferred from large
power plants to large consumption centers and other sub-transmission and
distribution systems. This is the backbone of the whole power system, which
contains sophisticated equipment and has highly centralized management.
– Distribution grids: these are at the interface between the transmission grid and
the end user (the customer). They are connected to the transmission grid through
“interface buses” called “substations” via transformers and, for economic reasons
and simplicity of operation, are generally operated in radial structures. They are thus
characterized, in the absence of significant local generation sources (interconnected
at the distribution level), by unidirectional energy flows (energy traditionally always
flows in the same direction, from the substation to the end user).
– End users are mostly passive customers characterized by “non-controllable”
loads and do not contribute to system management.
The first three levels, although institutionally unbundled in a deregulated
environment with responsibility domains clearly defined, are closely interdependent
and are governed by specific physical laws, related in particular to the generation–
consumption balance or to respecting technical constraints. This system as a whole
was designed with the objective of generating, transmitting and distributing
electrical energy under the best conditions of quality and economy. Regarded as the
most complex system ever built by man, it is made up of millions of kilometers of
lines and cables, generators, transformers, connection points, etc. It also integrates
several voltage levels, sophisticated protection and control equipment and centers.
On the level of the French electrical grid, for example, there are some
1,300,000 km of electrical lines and cables. Moreover, most electrical systems on
the level of a continent are interconnected (such as in Europe or in North America),
giving a “gigantic” dimension to this system, whereas its control still remains
limited in scale (performed on the level of each country, at best).
The control of this system is currently very centralized and arranged
hierarchically on the level of each electricity company or each network operator,
whereas any disturbance can potentially result in a wide-spread impact (on the level
of the interconnected system). An example of this global disturbance effect is the
outage of November 4, 2006 in Europe, where a disconnection of an electrical line
in the north of Germany resulted in a large disturbance across Europe (partition of
the interconnected zone in three areas of different frequencies, with a load shedding
of 5,000 MW in France, etc.).
Similarly, in 2003 a line in Switzerland that was tripped resulted in a total
blackout in Italy. A similar incident that occurred a month earlier in the USA also
affected a large portion of the North-east US grid including Canada (about 50
million customers lost power). The specific feature of these disturbances is that they
have affected several states (or countries) and electricity companies that are
interconnected but do not have a global control system.

8. This system, which remained relatively stable for nearly a century, underwent
significant changes at the end of the 20th Century. These changes were triggered by
the liberalization of energy markets and its consequences, in terms of the
multiplication of actors, partitioning of responsibility, lack of cooperation between
system participants, etc.
Moreover, with the growing environmental concerns of our modern societies,
building new electrical infrastructures such as overhead electrical lines and even
generation units based on energy from fossil fuels has become increasingly difficult.
Acceptance of such assets by local populations is decreasing (NIMBY or Not in My
Back Yard syndrome).
These concerns, combined with requirements for security of supply, have led
various institutional authorities to decide to set up regulatory incentives in favor of
renewable energies, clean transportation facilities and energy efficiency, often
linked to ambitious objectives. Some renewable energy units will be connected
directly at the transmission system level, such as large wind farms. The smaller and
medium-sized ones (often below several dozen megawatts) will be integrated into
distribution systems. These last generation units are referred to as distributed
generators.
The development of these energy sources has a strong impact on the traditional
functioning of electrical grids, at the transmission system level as well as at the
distribution system level.
Whereas transmission systems, considered to be the backbone of the electrical
system due to their role in ensuring the generation–consumption balance and overall
system security, are already well equipped with very sophisticated control and
monitoring systems. Distribution systems have been designed differently for
economic reasons, particularly because of their wide-spread and distributed nature.
Indeed, distribution systems have not historically been designed to integrate a large
number of generation units, namely decentralized or distributed energy resources.
Moreover, distributed generators are often intermittent in nature (photovoltaic
and wind energy, for example). This implies specific management if their
penetration rate becomes significant (beyond a certain threshold).
The end-user segment has also considerably evolved. Consumers, who were
“passive” and did not interact dynamically with the electrical system, are currently
in a transformation process, thanks notably to the development of the “smart meter”
and related energy boxes. They can, for example, offer load control and response
options, thus enabling them to participate in solving some network constraints,
reducing peak demands or offering other services necessary to the system.
Figure 1.1. Electric system organisation (Source: TI and IDEA)

9. Moreover, with the development of distributed generation the end user can,
while being a consumer, become a producer or source of energy storage. The
consumer thus becomes “active” or even “proactive”, when all the possibilities of
“load control”, “local generation” or “energy storage” are included depending on
regulations, market design or available technologies. Similarly the expected
development of the plug-in hybrid electric vehicle (PHEV) with its charging
characteristics and storage possibilities, will contribute to the complexity of system
management. These changes encourage engineers and researchers to devise new
solutions to tackle the associated challenges while satisfying changing needs,
avoiding over-investing in this system, while optimizing the whole energy chain.
Figure 1.2. Example of the interconnection impact of wind turbine generation on
the voltage profile of a distribution power grid
The electrical network is a facilitator for all electrical uses and allows the added
economic value to be increased for all components connected to it. This can be
achieved thanks notably to the characteristics and capability of the power grid to
geographically and temporally aggregate all different means of generation and widespread
customers.
This power grid is now faced with an upheaval as significant as the advent of
electricity. The solutions that will have to be imagined to tackle the challenges
generated by these upheavals involve the introduction of more intelligence in the
grid while taking advantage of advanced information and communication
technologies (ICTs). All these considerations lead to the concept of an intelligent
network or SmartGrids.
Figure 1.3. SmartGrids from the power grid to the end user
It is important to note that in this chain, for the reasons explained above, the
distribution grids are in a particular position. They undergo a major paradigm shift,
mainly because of their direct link with the traditional (end user) and new uses
(PHEV). The advent of distributed generation, often of intermittent type, is
increasing the requirement for preserving or even improving the quality of supply,
and integrating new technologies (metering, storage, sensors, ICT-based equipment,

10. etc.) into the existing infrastructure. Distribution grids are thus at the forefront of
SmartGrid development to allow added value to be provided to all users who are
connected to it.
1.2. Information and communication technologies serving the electrical system
The recent development of ICTs at reasonable cost offers possible solutions for
the electrical system that were unimaginable only a few years ago. Thus, the
possibility of installing meters with bidirectional communication with the network at
the site of the end user, even with embedded intelligence for energy management, is
changing the future vision of these networks. This interaction between the end user
and the power system – whether it is through an energy supplier, an aggregator, a
commercial broker or the distributor itself – can be done through various
communication media, but have a direct impact on the electric system.
Electrical networks are already equipped with various means of communication
as well as with sophisticated software for supervision and control centers. However,
these technologies are usually dedicated to the transmission system, whose
importance is predominant in overall security. There are also advanced technologies
at the level of substations, such as the French digital control-command station that
has a link to the transmission system. Likewise, one of the first applications of the
Internet for business-to-business (b2b) use was in the field of electrical networks:
namely to provide market participants with simultaneous and non-discriminatory
access to the same information on available transmission capabilities for example.
Beyond this application, the potentialities offered by the Internet have been (and still
are) considered for various grid needs, such as Web-based services, applications not
requiring real-time control, observation and monitoring with no critical information,
etc.
On the level of the distribution system, the penetration of these technologies is
much less visible. We can always mention the French example of the tariff signals
through power line communications (PLCs) or the management of end users’
subscriptions during peak/off-peak hours. The democratization of ICTs, with
equipment such as asymmetric digital subscriber line or “ADSL” boxes that bring
and gather several media services at the end-user side and bidirectional
communication possibilities offered by smart meters, however, has highlighted the
opportunities that these technologies are able to bring to the flexibility of the
electrical system.
Figure 1.4. Communication and intelligence embedded into the grid
ICTs for power grids exist as embedded software, whether at the level of
components or control centers, and means of physical communication (PLC,
dedicated lines, fiber optics, wireless, WiFi, ADSL, etc.). A particular interest is
associated with the following functions:
– the smart meter with its different variants: broadband bidirectional
communication, with or without load control tools and energy service, offers
(intelligence) using different communication media;
– advanced devices for energy management and energy services (often called
“energy boxes”) at the point of the end-user, which are either linked to smart meters
or take advantage of ADSL potentialities;
– the intelligence associated with various domestic, tertiary or industrial
consumption components, related to energy efficiency or the reliability of the power
grid itself. The typical example is the intelligent and decentralized load-shedding of
home appliances that act on the fluctuation of the grid frequency or voltage;
– observability, supervisory control and network management linked with
generation and consumption. This concerns intelligent sensors and their
management, the transmission and processing of an increasingly large volume of

11. information, and the software-assisting grid operators for real-time application,
including network security even at the level distribution systems (advanced
distribution management system or DMS);
– the intelligence carried by “objects” or “devices” within the electrical network
characterizing the following chain: measure, analyze, decide, act, communicate. We
can find this chain on a set of applications, from protection and switching devices to
decentralized voltage control and self-healing technologies. It is the concern of the
whole distribution automation, with more specific functions on distributed and
autonomous control capabilities.
These developments thus relate to a large range of technologies and affect all the
participants interacting within the electrical system. It thus implies that all these
pieces of equipment, actors and systems are interoperable.
1.3. Integration of advanced technologies
The paradigm shift set out above – particularly at the distribution grid, the
development of information technology and communications (ITCs), the increased
maturity of certain components of energy conversion (based on power electronics) –
are some elements that have contributed to the emergence of new technologies that
will influence the evolution of these power grids. Some particular examples are
discussed below:
– The smart or communicating meter: several countries have launched largescale
projects replacing conventional meters located with residential consumers with
smart meters (this replacement operation involves tens of millions of meters,
depending on the size of the network or the jurisdiction of the utility concerned). In
France for example, a complete roll-out of 35 million of these smart meters is
scheduled by 2018. Figure 1.5 depicts the structure of the French “LINKY” smart
meter. Among the reasons why this change has become necessary, we can mention
the introduction of competition and the possibility for customers to choose their
energy supplier. Currently, in some countries the development of these meters is
also linked to regulatory requirements (such as in Europe). This will allow
residential load curves or profiles to be known. Reading of the meter is processed
remotely and may therefore serve as a portal linked to other purposes, with regards
to power quality and energy services for example. We can therefore expect some
optimization in the management of customer consumption (such demand–response
services at the appliance level, optimization of energy bills, bundled home services,
remote maintenance, security, etc.). Beyond these aspects, we understand the
potential of such devices for all value-chain stakeholders: consumers, energy
providers, aggregators, grid operators, balancing entities, etc.
– Actuators integrated into the power grid: these are generally devices that are
based on power electronics. They better manage power flows or other network
variables, such as voltages or fault currents. Their use can also include the
possibility of managing grid architectures in emergency conditions (fast looping and
unlooping devices for radial architectures, superconducting or static fault current
limiters, adaptive medium and low voltage compensators and voltage regulators,
etc.).
– Fast switching devices and intelligent protection: significant progress has been
made in switching devices, such as frequent operation remotely-controlled switches.
The costs have therefore been reduced and the lifespan of the equipment increased
which allows new network operating modes that were not previously possible. Such
protections have also become more efficient and can self-adapt to their environment.
Henceforth, we can envisage new patterns of grid operation enabling the
management of a power system closer to its limits.
– High-performance and cost-effective sensors whether associated with existing
devices or not: the distribution networks are, for example, very weakly equipped in
terms of measurement devices, which poses the problem of observability. The
emergence of inexpensive sensors combined with adequate communication
possibilities opens up additional opportunities in terms of observability. Thus,
distribution grids can be better controlled in real time. There are some devices that
already incorporate these measurement possibilities, such as communicating fault
passage indicators. Affordable sensors based on MEMS (micro electromechanical
systems) technologies for distribution grids is an example of such advanced sensors.

12. Affordable synchronized measurement units at the distribution level can also be
included in the category of advanced sensors.
– Advanced energy management system and specifically DMS: these functions
can be located in the traditional control centers or distributed/decentralized into
distribution grids (intelligent substation or decentralized Supervisory Control And
Data Acquisition [SCADA]). At the distribution level, for example, it allows the
gathering of grid information at different locations and triggers real-time actions that
were not possible until now.
– Energy storage devices: even though the potential for large-scale storage is
now extremely small and the overall cost relatively high, we can expect significant
developments in storage in the future, especially in relation to the development of
intermittent renewable energy sources;
– Etc.
One of the structuring elements for these new technologies in the distribution
system consists of ICT contributions. These technologies may offer great
possibilities for innovation and flexibility at very low cost. They do, however, have
a negative side in terms of the risks associated with these technologies (from the
aspect of security).
Figure 1.5. Structure of the French LINKY smart meter, courtesy of ERDF
1.4. The European energy perspective
The development of the European energy landscape is primarily influenced by
factors such as:
– climate change and environmental concerns;
– security of supply;
– opening of the European domestic energy market and the integration of new
Member States;
– aging infrastructures related to generation, transmission and distribution assets.
Thus, the European Union (EU) has recently adopted “the climate and energy
package”, with ambitious sustainable development objectives such as:
– 3 × 20% for 2020, indicating the aim to reduce CO2 emissions by 20%
compared to 1990; and
– to increase energy efficiency by 20% and increase the share of renewable
energies to 20% (35% in the energy mix) within the existing electrical infrastructure.
This defines a way forward for the transition towards a more energy efficient and
carbon-free society. All stakeholders in the electricity sector are affected and
significant evolution is underway in the electrical grid to accommodate the assigned
targets. This also implies heavy investment in low-carbon technologies and other
technical innovations, which are seen as key enablers of this change.
Moreover, the EU generation assets need to be renewed, with an expected
replacement (the retirement of about 300 GW) and expansion (of about 600 GW) of
capacity by 2030, while consumption is expected to increase by an average of 2%
per annum. The need for the renewal and expansion of transmission and distribution
infrastructure, including the accommodation of renewable energy sources and
distributed generation, is foreseen to represent about 850 billion euros by 2030

13. (source IEA).
The EU is very active in adopting renewable energy sources, particularly solar
and wind energies. Thus, in 2008, 80% of the worldwide photovoltaic capacities
were installed in Europe, an increase of 92.9% between 2007 and 2008 (+ 4,592.6
MWp). In 2010, the total EU-installed photovoltaic (PV) capacity has reached
29,327.7 MWp (22.5 TWh generated energy), representing a growth rate of about
120% on average [EUR 11].
Likewise, in 2008 the installed wind energy capacity of the EU reached
65.933 GW, i.e. 54.6% of the world’s installed capacity in that year [EUR 11]. In
2010, the capacity of wind power installed in EU countries reached 84,278 MW
(about 10% of the total European electricity generation capacity) [EWE 11]. This
represents an increase of 12.2% of installed cumulative capacity.
After being one of the most dynamic markets for wind generation (particularly
driven by Germany and Spain), the rate of market growth has slightly decreased in
the past couple of years (9,295 MW in 2010 compared to 10,486 MW in 2009).
Figure 1.6a. Cumulative worldwide installed wind power capacity from
1990 to 2010 (Data sources: BTM, EWEA, GWEC and WWEA
[BTP 10], [EWE 10], [GWS 10], [WWE 10])
Figure 1.6b. Cumulated PV generation capacity installed in
EU countries by 2010 (in MW) [EUR 11]
Figure 1.6c. Evolution of the installed capacity of wind power (in GW) worldwide [EUR 11]
In this landscape, it is interesting to highlight the special case of Denmark, which
at an early stage faced the development of renewable energies, especially wind
turbines. Figure 1.7 is an illustration of this evolution from the 1980s and later
1990s.

14. Figure 1.7. Evolution of the distributed generation landscape in Denmark (source: Eltra)
On the left of Figure 1.7, we can see the situation of power generation in the
1980s (centralized system).
On the right of Figure 1.7, we can see the power generation situation in the late
1990s (multiplication of distributed generation). This has forced Denmark to come
up with innovative solutions for managing its electrical system beyond the back-up
provided by its neighbors via interconnections. The concept of cell structures for
system operation or EDISON (electric vehicles in a distributed and integrated
market using sustainable energy and open networks) experimentation (pilot project)
dealing with synchronization of the availability of wind energy with electric vehicles
for charging or injection processes can be mentioned here.
The French market also followed this development, more specifically from
2005–2006, with improved regulatory inventive conditions. Figures 1.8 and 1.9
illustrate the remarkable evolution of the installed capacity for both PV and wind
generation.
Thus, we can see the cumulated wind capacity installed multiplied by a factor of
approximately 1,000 between 1996 and 2008. At the end of 2009, this capacity
reached 4,400 MW (an increase of approximately 30% between 2008 and 2009).
The installed PV capacity has more than doubled each year since 2006. However, it
has to be noted that the recent revised regulatory laws on feed-in tariffs for gridinterconnected
PV cells have resulted in some slowing of the increase in PV power
being installed in the French market.
Evolution of wind parks in France
Figure 1.8. Evolution of the French cumulated and annualyl installed
wind power capacity since 2000
Figure 1.9. Evolution of the cumulated and annualyl installed PV capacity since 2000

15. These energies are characterized by their intermittency, which makes it difficult
to guarantee the power produced with the necessary accuracy during preparatory
operations or the day-ahead market, even with the sophisticated forecasts that we
now have. With the hypothesis of a lack of back-up generation (no sufficient
reserves) with the required dynamics for system security and the current storage
possibilities, the development of these energies without controlling their output
powers can jeopardize the production–consumption balance and thus the security of
the electric system as a whole.
Figure 1.10. Output power of a wind farm over a month (in the UK)
Figure 1.11. Output power of a PV farm at
Vinon sur Verdon-France, May 31, 2009
This variability and lack of control of these generation units considerably affects
the traditional grid operation schemes. Up to now, conventional generation units
were perfectly controlled and adapted to the fluctuation of consumption. It is only in
extreme cases that load shedding is needed. A growing part of generation is not
currently controlled and consumption is characterized by its increasing spatial and
temporal variability. Thus, the traditional solutions appear to be inappropriate to
ensure the security and energy efficiency requirement, particularly in an insecure
economic context (there is the need for investment optimization).
This significant evolution of the EU energy landscape represents remarkable
technical, economic and social challenges. In this context, the sustainability targets
issued by European policymakers cannot be achieved without a stepwise
transformation of the existing network infrastructure into a SmartGrid.
1.5. Shift to electricity as an energy carrier (vector)
The recent sharp increase in the price of oil and gas is a major concern for
society. The case in France, for example, with regards to the share of electricity that
comes from nuclear power argues for intensification of the electricity carrier as an
energy vector. Furthermore, the development of renewable energy and the expected
development of PHEVs favor this perspective. Some scenarios on the evolution of
demand (consumption) in electrical networks in France show an average increase in
consumption in the range of 1–2% per year, depending on the scenarios considered.
In this forecast of consumption increase, despite the expected future gains in energy
efficiency and conservation, the shift to electricity as an energy carrier is a
significant aspect.
1.6. Main triggers of the development of SmartGrids
The phenomena and drivers of the SmartGrids concept are various,

16. encompassing technical, economic and regulation aspects. Taking into account these
elements, we can summarize the main triggers (a non-exhaustive list) leading to the
concept of SmartGrids, as being:
– change of the energy paradigm, notably characterized by the advent of freedom
of the energy markets, the development of distributed generation and the advent of
renewable energies and the multiplicity of actors in this landscape which require:
- non-discriminatory access to the grid,
- management of the intermittency of renewable energies,
- management of the observability and dispatchability of distributed
generation,
- etc.;
– the aging of the existing electricity infrastructure;
– a need to adapt the network for large-scale integration of distributed generation
under the best security and economic conditions (the need for optimization of
investments). This adaptation requires a more flexible network and flexible
components, including better automation;
– technological innovations in terms of ICT, power grid equipment (fast circuit
breakers/switch with frequent operations at affordable prices, protection, sensors,
etc.) and smart meters that can embed intelligence for service offerings related to the
optimization of consumption (consumer–energy provider interaction);
– increased need for quality of supply (which may vary depending on the
application or any other criterion) including the security of energy supply;
– the need to face the increasing complexity of the electrical system in its spatial
(interconnections) and temporal (dynamic) dimensions.
1.7. Definitions of SmartGrids
There are many different views of the SmartGrid concept. This makes clear the
fact that although the main drivers for SmartGrid development are relatively similar
in different parts of the world, the priorities are different. For example, within the
EU, the challenge of the integration of renewable energies, energy efficiency and
EU market integration in the framework of a carbon-free economy are priorities. In
the US, however, blackouts, peak-demand situations and aging assets are the main
priorities.
In China, the fast development of the grid, the need to integrate large-scale wind
farms in the north and interconnecting the different provinces are immediate
priorities, while the development of PHEV, PVs and microgrids are also fastemerging
issues. The EU Technology Platform1, for example, provides a very
comprehensive definition of the SmartGrids concept, encompassing technological
solutions, market issues, communication technology, standardization and regulatory
regimes. Referring to the EU SmartGrids Technology Platform, the concept of
SmartGrids is defined as an “electricity network which intelligently integrates the
actions of generators and consumers connected to it in order to efficiently deliver
sustainable, economic and secure electricity supplies.”
The US Department of Energy gives a more detailed definition of SmartGrids. It
states that “a smart grid is self healing, enables active participation of consumers,
operates resiliently against attack and natural disasters, accommodates all
generation and storage options, enables introduction of new products, services and
markets, optimizes asset utilization and operates efficiently, provides power quality
for the digital economy” (source: US DoE).
Although there are several definitions and descriptions of the SmartGrid concept,
it can be summarized as an integration of electricity infrastructure and the
embedded/decentralized ICT (software, automation and information processing).
The coupling of the two infrastructures provides the required “intelligence”. This
intelligence can be deployed at various levels of the network (generation, network
hardware, consumption, monitoring and control). In this context, the SmartGrid
concept is a significant development that, from the existing network, can only be
achieved in increments.
This development will most likely lead to major adjustments modifying the core
mission of distribution system operators, for example, through moving from the
traditional model of delivering one-directional electricity to the active management
of grid flows and information.

17. Figure 1.12. SmartGrids: convergence of physical and digital infrastructures (source EPRI)
1.8. Objectives addressed by the SmartGrid concept
The SmartGrid concept must thus face the above-mentioned challenges. It is
possible to assign technical objectives related to innovations and solutions to the
problems raised and socioeconomic objectives presented by the integration of the
active consumer in his or her societal dimension. These objectives must also be
assigned to the business models related to the necessary transitions of this system
towards a more intelligent one.
As already indicated, transmission grids have historically integrated much more
intelligence and sophisticated equipment including ICTs than distribution grids in
order to manage the overall system security requirements. Thus, we can distinguish
the objectives addressed by transmission grids from those addressed by distribution
grids.
1.8.1. Specific case of transmission grids
The change in the energy paradigm has also affected transmission grids, namely
through:
– Liberalization of energy markets and multiplicity of actors: this has resulted in
responsibility partitioning, the necessity to manage actors that may have divergent
interests including non-discriminatory treatment and motivation for any decision
with an impact on these actors. Moreover, the management of information in this
context has become of paramount importance for the system operation.
– Large-scale development of renewable energies, such as large wind farms
exceeding some dozens of MW that are directly interconnected at the transmission
level (higher than 63 kV, for the French example). These energies are fast
developing, particularly for the offshore wind farms. However, as far as
transmission grids are concerned, these energies have impacts on the whole
interconnected system (e.g. the large-scale development of wind farms in Germany
inevitably impacting the whole interconnected European electricity grid.
– Observation of distributed generation affecting the transmission grid at the
local level and the traditional decoupling.
– Observation of distributed generation that may affect the transmission grid at
the local level specifically. The traditional decoupling of transmission and
distribution grids is being challenged by the development of distributed generation.
Indeed, a large-scale development of distributed generation may cause reverse
energy flows for certain periods, from distribution to transmission, thus affecting
upper voltage levels (transmission). However, these decentralized generation units
are not currently observable in most cases and most are within the jurisdiction of
distribution grids.
– European (or continental) integration: the multiplicity of transactions and the
development of large-scale intermittent generation at a continental (European) level
require continental (European) observation of the entire network and a perfect
coordination of system operators. The first observation “bricks” have already been
launched between some countries in Europe, such as the CORESO platform.
However, such cooperation and information sharing must be generalized to a larger
scale (a whole “interconnected” grid) while addressing business (actors) and
technical information on all generation means, especially on intermittent energy
including real-time applications. The very large dimension of these interconnected
systems combined with responsibility partitioning, however, means that this is
currently a highly challenging task.
Furthermore, we can add to these factors – which are linked to each other – the
increasing difficulties of building new overhead lines or the need to operate power

18. grids ever closer to their security limit.
The intelligence objectives at the level of transmission grids are therefore
strongly associated with these factors in the view of maintaining the generation–
consumption balance. It is therefore of paramount importance to preserve the overall
system security in optimum economical conditions. The objectives are clearly of a
different nature compared to those of distribution grids.
1.8.2. Specific case of distribution grids
Distribution grids are facing different challenges to those of transmission grids
based at the interface between the transmission and end user. As such, the objectives
are those related to its evolution with respect to its link with the end user, distributed
generation and new usages, such as PHEVs.
In technical terms, the major objectives of the SmartGrid can be summarized as
follows:
– enabling large-scale integration of renewable energies including all storage
options, facilitating PHEVs and increasing the participation of consumers (the
concept of the active consumer and optimization of consumption) under the best
possible conditions of economy, energy of quality and security of supply;
– strengthening the overall energy efficiency, namely by significantly enhancing
the efficiency of the energy chain as a whole and reducing the environmental impact
of the whole electricity supply system;
– allowing an easy and efficient management of the system, while facing the
increasing complexity of the system, including the management of a large amount of
data; and
– developing interoperability between the various actors and stakeholders (e.g.
between transmission and distribution systems).
1.8.3. The desired development of distribution networks: towards smarter grids
The expected operating modes of distribution grids in the up-coming years will
depend on the stakes they face and on the objectives that will be assigned.
The following four elements can characterize the expected qualities of these
networks:
– Accessible: the networks will accommodate all generation, storage and
consumption options required for connection.
– Economic: the focus will be put on grid investment and operations that give the
greatest advantage in the use of infrastructure, allowing costs to be optimized for the
benefit of all users.
– Flexible: redundancy of paths will be increased with respect to building up new
grid materials/equipment in order to optimize the efficiency of existing energy paths.
This will allow the grid response to be optimized with respect to users’ needs as well
as to various disturbances affecting it while fulfilling system security, economical
and environmental requirements.
– Reliable: to ensure and increase the safety/security and quality of supply.
Given the challenges mentioned above, combined with various inherent
constraints of power grids (capital-intensive infrastructure, difficulties of building
new power lines, increasing complexity, interaction with the end user, etc.), the
evolution of these grids must include the integration of some form of intelligence in
structure and management. Many countries all over the world are now integrating
this dimension (SmartGrids in Europe, the US, China, Japan, etc.). The introduction
of this “enhanced” intelligence in distribution networks, for example, is a challenge
in itself. It can help (in the more or less short- to medium- term) if we modernize
this infrastructure which, as we mentioned previously, had benefited less from
advanced grid-embedded technologies when compared to transmission systems.
Obviously, this will require investments to achieve these “quality” goals because
there is a significant “gap” between the current state of the grid and the target
representing a more intelligent network.
1.9. Socio-economic and environmental objectives
Beyond the technical objectives, other objectives related to externalities can also
be highlighted, such as the effect of innovations, the creation of value and
employment, the improvement of knowledge, the management of expertise, or the
improvement of carbon footprints.
SmartGrids are regarded as an “integrating and structuring concept”. They create

19. value by intelligent system integration and can involve the development of other
economic sectors (ICT infrastructure, electrical equipment, home automation,
energy services, environment, etc.). Thus, structuring projects related to SmartGrids
is likely to trigger large-scale innovations, not only in the electrical sector but also in
other sectors linked with this concept.
Figure 1.13 comes from a study conducted by EPIC/SAIC, USA on the expected
benefits of SmartGrid initiatives on technical issues (improving quality, solving
constraints, etc.) as well as on environmental benefits and job creation issues.
Figure 1.13. Example of SmartGrid benefits distribution by value segment
(source: EPIC/SAIC, USA)
1.10. Stakeholders involved the implementation of the SmartGrid concept
Several actors are involved including all “stakeholders” who can interact with or
be integrated within the system vision of the SmartGrid concept:
– Consumers, whose expectations must be taken into account regarding the
quality of energy supply, environmental concerns and the lowering of energy bills.
The installation of smart energy meters will transform the nature of consumers by
actively and simply affecting the consumption pattern while retaining consumers’
comfort.
– System operators (transmission and distribution) in charge of system security
and energy quality under acceptable economical conditions will have increased
means of acting on the operation of the network while taking advantage of available
ITCs.
– Manufacturers of electrical equipment who will develop and provide
components and solutions that are intended to ensure the functioning and security of
the network.
– ICT service providers who develop and deploy software and other information
equipment to support information, monitoring and control functions of the grid and
its components; it also includes telecommunication systems providers.
– Centralized and decentralized energy producers, who are interested in network
development to prevent limitations of their integration into the grid.
– Energy and service providers including aggregators, who will thus take part in
the organization of the system and will be able to offer energy services.
– Research and innovation centers whose results will be implemented at a reallife
scale on the network after having been tested in a laboratory.
– Education and training institutions such as universities who will have a
prominent role in preparing the competences and capitalizing the expertise required
for the development of SmartGrids.
– Regulation authorities, such as the French Energy Regulatory Commission
(CRE-Commission de Régulation de l’Energie), local authority and electricity
organizations representatives, such as Fédération Nationale des Collectivités
Concédantes et Régies, and energy agencies, such as the French Ademe.
– Standardization organizations.

20. Figure 1.14. Interaction of energy and information actors
1.11. Research and scientific aspects of the SmartGrid
In view of the drivers and objectives mentioned above, the SmartGrid concept is
in itself an important and ambitious research program over different timescales
(short-, medium- and long-term). It involves several stages including research,
development, pilot demonstration, feedback and finally deployment processes.
Several research projects are underway throughout the world. These projects are
either funded by government agencies or community organizations (such as the
European Commission in Europe or the Department of Energy in the US) or
industrial entities and consortia.
1.11.1. Examples of the development of innovative concepts
SmartGrid activity is carried out within the G2ELAB (Grenoble Institute of
Technology, UJF and CNRS) and IDEA (a research center involving individuals
from EDF, Schneider Electric and Grenoble Institute of Technology). The scientific
orientation is based on achievements in the field of automation of grid functions, the
integration of renewable energy sources, the demand-side response, energy-flow
optimization and the coupling of electricity infrastructure with ITCs.
This guideline specifically relates to the development of innovative concepts for:
– The distribution of intelligence (self-adaptive voltage controller, decentralized
decision process and intelligent protection, for example). These kinds of devices
allow the insertion rate of distributed generators to be significantly increased within
the existing network through solving specific distributed generator integration
constraints for example. Study cases and achievements can be found in [RIC 05],
[TRA 07], [KIE 09], [THA 06] including advanced decentralized or coordinated
control function, such as voltage control per cell or islanding and automatic
synchronization of portions of the grid;
Figure 1.15a. Distributed generation and voltage profile in distribution systems

21. Figure 1.15b. Intelligent voltage control modes in distribution systems
in the presence of distributed generation
Figure 1.15c. Voltage management through conventional control
(active/reactive or P/Q) on a test network
Figure 1.15d. Intelligent control of the voltage on a test network (source: IDEA at
http://www.leg.ensieg.inpg.fr/gie-idea)
– Self-healing power grids: this concept concerns distribution grids. The power
grid must quickly detect and even anticipate, isolate and restore safe operation in an
optimal and automated way after the occurrence of a fault. An example of this
achievement can be found in [HAD 10c].

22. Figure 1.16. Concept of the self-healing network: detect, locate, repair and
re-energize the network after a fault (source: IDEA at http://www.leg.ensieg.inpg.fr/gie-idea)
– The virtual power plant: this is a concept that represents a set of methodologies
for the connection and management of distributed energy resources at a large scale
while taking account the intermittency. Figure 1.14 illustrates an aggregation
possibility of generation, storage and load control, as a single “virtual plant”
allowing the power output of intermittent sources to be guaranteed or better
controlled. An example of this achievement is provided by [SUR 06] and the EU
project FENIX [KIE 09].
Figure 1.17. The virtual power plant: energy mix management and
generation aggregation tool (source: IDEA at http://www.leg.ensieg.inpg.fr/gie-idea)
– Observation of the power grid, particularly for distribution systems. The
transmission grid is concerned with the interconnected system and large-scale
intermittent generation. The observation is an essential function for system control
purposes. It can be viewed from the control center perspective and from sensors that
are coupled to components and system decision processes.
– Reconfigurable grid architectures that increase the acceptable generation rate
or optimize the electrical losses in the presence of distributed generation (energy
efficiency). An example of this achievement can be found in [HAD 09].
– Smart buildings and demand response/load control: this aspect can be
extended to the convergence of the electrical grid with buildings, renewable energies
and PHEV. Figure 1.18 shows possible interactions between different appliances,
storage devices, local generation units, PHEV, energy boxes within a house and the
electrical grid through a smart meter.
Energy
Box

23. Figure 1.18. The smart house with its energy box and smart meter
(source: H3C-Energies at www.h3c-energies.fr/)
The structure of our energy supply, made increasingly complex by these new
types of equipment, energy services and various tariff offers, will lead to the
generalization of energy management systems, communicating with all installations.
The house communicates and becomes intelligent, and the step towards integrated
management of all facilities (household appliances, telecommunication, electricity,
safety, etc.) becomes smaller. Housing is connected, and energy efficiency becomes
a fully-fledged parameter of the building management, on the same level as comfort
or consumption.
1.11.2. Scientific, technological, commercial and sociological challenges
The SmartGrid concept provides a system vision encompassing research,
development, testing, feedback and analysis of the innovative technologies involved.
Its purpose is to achieve specific goals in terms of network management for
improved energy efficiency of the entire value chain, increased penetration of
renewable energies and satisfying new needs such as PHEVs or the involvement of
the end user in energy management, while taking advantage of ICTs. The
implementation of this concept and the track of the SmartGrid objectives require the
same scientific breakthroughs that could lead to significant technological
innovations. Indeed, we recall that SmartGrids allow the convergence of physical
infrastructure (the electrical system) and digital infrastructure (ICTs). It is well
known that the meeting of two disciplines is a source of major innovations. In
addition, although the electrical system is already equipped with ICTs, these
technologies have often been designed separately from the electrical system (as
additional layers), while being the property of the operator.
Nowadays, the cost of ICTs is relatively low, with strong penetration in modern
society. In addition, the deregulation of the electricity market and the multiplication
of actors encourage the use of “on-the-shelf” technologies. This requires
interoperability between the different “SmartGrid objects”, carrying an intrinsic
security, as well as between different grid participants. On the other hand, the
difference in lifespan between ICTs and energy infrastructure raises the question of
the evolution process of the whole integrated system. Taking into account the
significant investments necessary for the implementation of this concept, the
question of technological risk involved in the evolution of the system, specifically
with respect to ICT, is of prime importance.
In this context, it is understood that the challenges are scientific, technological,

24. commercial and sociological. They are remarkable challenges that can only be met
with the establishment of partnerships (and technological processes) involving all
stakeholders in this chain (energy producers, system operators, energy service
providers, electrical equipment and ICT manufacturers, solution integrators,
universities and research centers, standardization bodies, energy associations and
SmartGrids: Motivation, Stakes and Perspectives 29
agencies). Of course, the final customer must also be included as an active entity and
no longer as a passive consumer.
Some examples of the “locks” that need to be addressed at the research level,
without being exhaustive, are discussed below.
1.11.2.1. Scientific and technological locks
These include:
– Integration of renewable energies and management of intermittency for a
global system balance and economics, including the participation of these energy
sources in ancillary services.
– Integration of PHEVs on the grid, their various forms of load and interaction
with the system (injection, consumption, storage, control and services).
– Observability of the grid with a reduced set of sensors (with appropriate
accuracy) or on the basis of smart meters while taking into account real-time
constraints. It also includes data processing and the management of large amount of
information with respect to a dynamic bidirectional communication “grid-smart
meter”. The issue of observability is also critical for interconnected transmission
grids with large-scale intermittent generation as well as at the interface between
transmission and distribution grids and operation.
– Development and implementation of “simple” and cost-effective self-healing
technologies in the presence of distributed generation including at the low-voltage
level.
– Protection/equipment with frequent switching capabilities, allowing multiple
grid reconfigurations for better flexibility and reduced losses (better energy
efficiency).
– Coupling of load control with new usages (PHEVs) or intermittent generation
(convergence of buildings, renewable energies, PHEVs and power grids) within cell
distribution grids or “eco-smart cities”. This part includes coupled models and
simulation tools.
– Understanding the interdependency between the digital (virtual) and the
electrical power (physical) infrastructures. This aspect also falls within the
requirement for coping with increased system complexity and ensuring system
security (including cyber security) while embedding various “smart” technologies
into the grid.
– Planning of SmartGrid investments in an uncertain environment (appropriate
models, stochastic approaches, risk management, etc.) and evolution of power grid
architectures.
1.11.2.2. Commercial and sociological “locks”
These include:
– Business models for diffuse and efficient demand response, including value
capturing and sharing, given the responsibility partitioning of the energy value
chain.
– Levels of technological deployment in an industry accustomed to slow
evolution and transition.
– Acceptability to customers with respect to the intrusion of load control
technologies and smart meters as well as to their “positive” behavior in participating
to demand response.
– Global optima with new usages.
1.12. Preparing the competences needed for the development of SmartGrids
These challenges, ambitious by nature, correspond to the stakes of the 21st
Century. Indeed, through the close entanglement between energy and intelligence
they realize the mindset of young engineers and technicians who were born in the
age of ITCs. SmartGrids require cross-disciplinary competences as well as the
capitalization of expertise, since the future “smarter grid” will have to be built on the
basis of existing power infrastructures (evolution process). Thus, existing training

25. programmes in power engineering need to incorporate knowledge on information
and communication science and vice versa. Currently, curricula addressing
SmartGrid competences are emerging. The need for these competences is growing
and the settling of these new (or evolutionary) training programmes has also to be
generalized. With this in mind, the investment in power grid equipment must be
accompanied by a serious modernization and an effort to recruit young engineers
and technicians who are well armed and motivated to build the intelligent networks
of the future.
1.13. Conclusion
We thus note an increase in complexity related to different parameters,
institutional as well as technical, such as the increased share of intermittent energy
sources, the integration of the end user in energy management who becomes “proactive”,
the multiplication in the number of actors, the issues of interoperability, the
requirement to maintain and even improve the quality of supply, the need to reach
energy efficiency and peak demand control objectives, etc. The implementation of
the SmartGrid concept will thus induce a notable evolution of the entire energy
chain.
This concept will provide a technical framework for large-scale integration of
intermittent energy sources, enhanced energy efficiency, and better functioning of the
network, while tracking environmental targets and ensuring improved security and
quality of supply under the best economic conditions.
The SmartGrid infrastructure will play a broader role than the specific
management of the electrical power grid:
− its functionalities will enable new energy services: smart energy management
of buildings and energy efficiency, security and monitoring services and other home
automation related services;
− its infrastructure could be pooled together with other needs: development of joint
multi-utility SmartGrids (electricity, gas, water) and telecommunication networks by
using the densest network in the world.
Finally, like any technological adventure, “SmartGrids” will provide a source of
technological and societal evolutions whose benefits cannot all be measured yet.
They are likely to include technology transfer to other sectors (home automation and
white goods, logistics, multi-fluid, application domains of artificial intelligence),
catalysis of behavioral and societal evolutions (to support careful management of
energy, other utilities, support to cooperation models and pooling of resources).
This SmartGrid potential must be preserved by a balanced consideration of
stakes and actors with effective and pragmatic management of the transitions from
an economic and industrial viewpoint. Furthermore, it should not lose sight of
human, societal and environmental goals that are specific to energy in general and to
electricity in particular, as well as the need for cooperative operation modes.
1.14. Bibliography
[BTP 10] BTM Consult, World Market Update 2010, BTM Consult, 2010.
[EWE 10] EWEA, Wind in Power: 2010 European Statistics, European Wind Energy
Association, 2010, http://www.ewea.org.
[EUR 11a] www.eurobserv-er.org, 2011.
[EUR 11b] http://observer.cartajour-online.com, 2011.
[EU R12] Smart Grids European Technology Platform, http://www.SmartGrids.eu, 2012.
[GWS 10] GLOBAL WIND ENERGY COUNCIL, GLOBAL WIND STATISTICS, 2010;
http://www.
gwec.net.
[HAD 99] HADJSAÏD N., CANARD J-F., DUMAS F., “Dispersed generation impact on
distribution systems”, IEEE Computer Application of Power, pp. 23-28, 1999.
32 SmartGrids
[HAD 09] HADJSAÏD N., CAIRE R., RAISON B., “Decentralized operating modes for electrical
distribution systems with distributed energy resources”, Article (Panel), IEEE PES
GM’2009, Alberta, Canada, July 26-30, 2009.
[HAD 10a] HADJSAÏD N., SABONNADIÈRE J-Cl., ANGELIER J-P., “Les réseaux électriques
de
distribution: du patrimoine à l’innovation”, Repère REE, Revue REE, vol. 1 pp. 81-95,
2010.

26. [HAD 10b] HADJSAÏD N., SABONNADIÈRE J-Cl., ANGELIER J-P., “Les systèmes
électriques de
l’avenir: les SmartGrids”, Repère REE, Revue REE, vol. 1, pp. 96-110, 2010.
[HAD 10c] HADJSAÏD N., LE-THANH L., CAIRE R., RAISON B., BLACHE F., STÅHL B.,
GUSTAVSSON R., “Integrated ICT framework for distribution network with decentralized
energy resources: prototype, design and development”, Article (Panel) invite IEEE PES
GM’2010, Minneapolis, MN, USA, July 24-29, 2010.
[KIE 09] KIENY C.H., BERSENEFF B., HADJSAÏD N., BESANGER Y., MAIRE J., “On the
concept and the interest of Virtual Power plant: some results from the European project
FENIX”, Article (Panel) invite, IEEE PES GM’2009, Alberta, Canada, July 26-30, 2009.
[RIC 05] RICHARDO O., VICIU A., BESANGER Y., HADJSAID N., KIENY Ch., “Coordinated
voltage control in distribution networks using distributed generation”, IEEE/PES
Transmission and Distribution Conference and Exposition, October 9-12, 2005, New
Orleans, USA.
[SER 09] Syndicat des énergies renouvelables, http://www.enr.fr, 2009.
[SUR 05] SURDU C., MANESCU L., BESANGER Y., HADJSAÏD N., KIENY Ch., “La centrale
virtuelle: un nouveau concept pour favoriser l’insertion de la production décentralisée
d’énergie dans les réseaux de distribution ”, Revue Enseigner l’Électrotechnique et
l’Électronique Industrielle, vol. 3EI, no. 40, pp. 41-48, France 2005.
[SUR 06] SURDU C., MANESCU L., RICHARDOT O., BESANGER Y., HADJSAÏD N., KIENY
Ch.,
GEORGETTE F., MALARANGE G., MAIRE J., LAFARGUE J.P., “On the interest of the virtual
power plant concept in the distribution systems”, CIGRE 2006, Conseil International des
Grands Réseaux Electriques, Paris, France, 2006.
[THA 06] HA PHAM T.T., BESANGER Y., HADJSAID N., “Intelligent distribution grid solution
to facilitate expanded use of dispersed generation potential in critical situation”,
CRIS’2006, Alexandria, VA, USA, September 24-27, 2006,.
[TRA 07] TRAN-QUOC T., MONNOT E., RAMI G., ALMEIDA A., KIENY C., HADJSAID N.,
“Intelligent voltage control in distribution network with distributed generation”,
Conference Internationale CIRED, Vienna, Austria, May 2007.
[WWE 10] WWEA, World Wind Energy Report 2010, World Wind Energy Association,
2010, http://www.wwindea.org.

27. Chapter 2
From the SmartGrid to the Smart Customer
The aim of this chapter is to introduce a new perspective to economic and
technical analysis: that of the individual and the customer. SmartGrids will give the
consumer a new dimension and a new role by accelerating the transition from the
status of “subscriber” to that of a stakeholder in the electrical system.
2.1. Key trends
First of all, we will deal with the key trends that characterize consumers during
the emergence of SmartGrids.
Exercises that consist of identifying trends in terms of consumer behavior are
always risky and can quickly become tedious, so we will restrict the report to three
phenomena that are currently moving across Europe.
2.1.1. The crisis
There is a great temptation to compare this crisis to that of 1929: the period of
strong global growth that proceeded it, the financial speculation mechanisms, the
excessive debts of households in the US, and the shock of the stock market crash.
But when approached from a sociological point of view, this crisis is not
Chapter written by Catherine FAILLIET.
comparable: the levels of wealth, comfort and social protection achieved in
developed countries are much better than those in the 1920s.
The reality of the crisis is above all the deterioration of the economic situation,
whether industrial or household. In 2009, for the first time since World War II, the
gas and electricity demand reduced. Moreover, customers have been facing
growing payment difficulties.
While industrial customers fight to control their costs and save their factories,
an increasing number of residential customers are facing fuel poverty1. The number
of households in this situation is close to 4 million in France and has reached 26%
of households in England.
In reality, the current crisis is putting an end to a cycle – an end whose first
signs manifested in 2001 with the bursting of the dotcom bubble. The need to
“change course” is spreading to a large number of sectors: financial, automotive,
politics, etc.
It’s the end of a consumption model where no questions are asked about
sustainability, resources, environmental consequences, social responsibility, the
origin of manufacture for a product; and intrinsic quality.
The desire to consume is still present, but it is accompanied by a feeling of
responsibility and a desire to consume differently. We are now “adjusting
consumption” and “consuming fairly” to coincide with real needs and desires by
being more aware of all the resources available and combing this with an antiwaste
logic. The crisis also confirms the increase in individualism, a kind of safehaven
in a worrying world. The pursuit of individual well-being becomes a priority
(tools, training, etc.) and nature appears as a resource to serve the rational
development of the individual (health foods, organic products, etc.).
This trend also illustrates a working world that transfers increasing authority
and responsibility to individuals, and no longer to teams. The success of networks
favors the victory of the individual over the group: today, the individual
participates in one or more grids where he can free himself at any moment without
difficulty. The network, is the network opposite of the former “group” that required
binding, durable commitments and specific codes. Individualism leads to people
focusing on their homes and cocooning. People spend more time at home, a
phenomenon illustrated by the development of DIY, decorating and various forms
of assistance and advice to help individuals.
1 Someone is considered to be in “fuel poverty” when more than 10% of their earnings is
spent on their energy bill.
This increase in individualism and the resulting trends also draw new
boundaries. The customers are more critical, more knowledgeable and more
demanding and they expect an increasing personalization of goods and services.
2.1.2. Environmental awareness

28. Awareness of the climate emergency is a worldwide phenomenon and is
turning into a key political topic. From the Kyoto protocol to the European
commitment concerning “three times twenty” (20% decrease in energy
consumption, 20% decrease in greenhouse gas emissions and 20% share of
renewable energies in the generation of energy in 2020) to the French Grenelle,
awareness is creeping in and the desire to act is growing. The ecological
emergency that at the end of the 20th Century was still carried by militants, is now
acknowledged by all.
In France, the Grenelle will lead to a new role for regions and territories that
will have to establish territorial “climate and energy” plans. With more duties and
responsibilities, local governments fully intend to become major and visible
stakeholders for mobilization concerning issues such as distributed renewable
energy, but also concerning demand and infrastructure management (distribution
grid, regulated tariffs, hydraulic generation).
The development of the feeling of responsibility results in an intention to act.
The gap between this intention and the reality is key and sensitive element that will
set the pace for a change in behavior. The consumer feels responsible but refuses
the guilt and throws out the “green washing”.
2.1.3. New technologies
New information and communication technologies (NICTs) are changing the
world and are gradually blurring the gap between the real and the virtual. The
digital revolution was not slowed down by the crisis (rate of computer equipment,
connection time, etc.) but became faster: consumers spend more time at home,
connect more and buy more on the Internet, etc.
Society switched to digital, and the NICTs are now revolutionizing the way we
communicate, consume and work in a continuous flow of data and information.
This information is provided in real time, customized and shaped according to
personal taste and habits, geolocalized. The customer can choose not only the type
of information he wants to have, but also the time and channel he will use. This
limitless quasi-accessibility to real-time information is a new challenge for
businesses: how to avoid being driven into a price war with “smart” customers?
How, during a proliferation of content, to emerge and have an edge over
competitors?
On the other hand, possibilities for coming into contact with consumers are
technically more frequent and precise. Furthermore, the enrichment of content will
also provide a richer, higher quality and more personal relationship with
individuals.
NICTs are also profoundly changing the relationship between time and space.
Individuals are increasingly less concerned with the future. They are reacting to the
incessant flow of personal and business realities. While living in a perpetual
present, everyone is fighting against the clock in increasingly personal ways.
This movement in society is also accompanied by advanced technologies that
contribute to redefining individuals’ relationship with their environment as well as
their ways of interacting. We are moving to a new ecosystem where reality
becomes fluid: everything is more easily accessible (information, products and
services) in real time, and there is a new definition of space segmented between the
rest of the world accessible by technologies and our living space. We are
witnessing strong local-scale re-rooting. The city, districts and street are becoming
rich with new connections, experiences and possibilities. Places affirm their
identity and services on a local scale and are increasingly efficient. Acting on a
local scale makes more sense and is seen to be more efficient, “soft” mobilities are
trendy.
The cell telephone − or the tablet− is the central instrument. It is both
individual, personalized and a tool for communicating with others (“mobile
living”). It is becoming the individual’s true address, his reference and base camp.
The explosion of all kinds of applications intended to make life easier or to distract
illustrates this reality. There is a constant challenge to simplify usage while
enriching customer experience.
The new technologies and the ease they provide to customers who can express
their opinion and find and exchange information give a new dimension to this

29. trend. In addition, and supported by the development of new marketing channels,
the customer wants to feel that he got a good deal: this is “smart shopping”, which
consists of researching offers, comparing prices and optimizing expenditure
(development of a distributor’s own and others’ low-cost brands, etc.). Finally, the
free product starts to change the benchmarks: a product that has always had to be
paid for and becomes free2 when a stakeholder turns the existing business model
upside down (the press, music, etc.).
Connected technological objects are multiplying in a society of generalized
connection and the struggle to capture “minutes of the human brain” is
intensifying. The consumer clouds the issue. Both well-informed and intelligent,
and sometimes irrational and seeking to entertain themselves – the customer
experience is the new reference point for marketers, thus ending the era of products
and brands.
2.2. The evolution of the individual’s relationship to energy
The consumer’s relationship with energy is still largely dominated by price
sensitivity, and especially in times of crisis and increasing energy prices. Beyond
this point, which remains fundamental, new preoccupations are emerging that are
creating an evolution in the relationship to energy.
2.2.1. Curiosity
Electricity is not like any other product: it cannot be seen, the majority of
customers rarely see the bills3 and they are not yet widely aware that they have the
choice of supplier4. Speeches on the environment have highlighted the theme of
energy, which is becoming an obvious and essential element in political debates.
The development of renewable energies, the announced depletion of fossil fuels
and price volatility are widely discussed in the media. The customers establish a
direct line between the environment and energy, and as such they want to
understand the issues and identify their role and potential contribution. This
curiosity will vary depending on the public’s perception of energy companies and
the maturity of the energy debate. In Germany, a traditionally anti-nuclear country
in which large suppliers (RWE, EON, Vattenfall and EnBW) do not have a very
positive public image, this curiosity about energy is negative. In England, however,
numerous suppliers have seized the emergence of a benchmark regarding the
carbon footprint to advertise both their responsibility and also their determination
to be responsible stakeholders (“we are part of the problem and part of the
solution”).
2 We see today start-up companies such as Serious Energy or Solar City proposing solar
installations or energy efficiency works without initial investment by the customer, the
supplier paying on the achieved gain.
3 Over 80% of customers pay via direct debit in Germany
4 In September 2011, EDF held a 93% share in the electricity market and Suez held an 85%
share in gas.
Energy is becoming an academic, political and public subject and consumers
are discovering this long-ignored issue: they want to understand, choose and adapt
their behavior if they so wish.
This interest in energy issues is emerging. Carried by reality, it transforms the
public’s relationship with energy and their energy provider in a world where access
to information is accelerating. The individual wants to be informed, without
technical jargon and without arrogance. He has the curiosity of someone who is
discovering a complex subject and who will seek to learn from reality. Each price
increase is an opportunity to question the economic principles and the debates on
carbon tax. The Grenelle, for example, will put forward questions regarding the
reduction in the sector’s carbon emissions, etc.
2.2.2. The need for transparency
This curiosity is accompanied by a need for transparency that is not a
phenomenon unique to energy. Access to information is changing the consumer’s
relationship to his supplier. The client (consumer) is educated, he has already
found a great deal of information and data on the Internet and he thus contacts the
company to gather additional information that is consistent with what he already
has. The customer sees all, knows all and can do all.

30. Transparency is the basis of trust, and it’s an essential point of vigilance for
environmental issues. Transparency is required for the supply contract or the mode
of payment, but it can also be used to understand the carbon impact of different
generation technologies. Electricity is a complicated subject and for a long time
has rarely been publicized or debated. The consumer wants to know what he is
buying (e.g. green energy), for what price (e.g. price comparison tools) and from
whom (e.g. values, social and environmental responsibility).
2.2.3. Responsibility
The consumer’s interest in energy is growing based on the ability to access
worldwide information in real time. As mentioned above, this capacity for analysis
allows him to make choices that he makes since he no longer wants companies or
brands that dictate THE solution.
In terms of energy, the customer has understood the importance of the topic
widely reported by the media and in now discovering his role as an individual: he
wants to become a stakeholder in the energy world. Electricity was perceived as a
commodity with a mandatory supplier. We are evolving towards a world where the
customer is interested in energy, wants to become involved in energy choices with
regard to his home (as a residential customer) or territories that he manages (for
local authorities).
This expectation joined the notion of responsibility with the emergence of
“consumer-stakeholders”: consumption becomes a civic act and the customer
chooses the brand that bears his values. He will, in particular, research values
regarding the environment, but also regarding ethical and social responsibility. He
will select brands that, beyond promises, show proof of their commitment.
To illustrate this, a customer generating electricity from photovoltaic panels on
his roof, will become a “prosumer”, a new combination of “producer + consumer”.
At the same time, not every electricity consumer is currently interested in the
environment and the choice falls on him whether or not to modify his purchasing
behavior. The environment is, by nature, a subject where the intention and action
can be distant from one another. This is especially the case when, for example, a
consumer is asked to turn down his heating in order to decrease his carbon
footprint and make a modest saving.
This feeling of responsibility, the basis of action and change in attitude, is
based on the development of a detailed understanding of the way in which he can
act. There is therefore a learning phase to construct.
2.3. The historical model of energy companies
2.3.1. Incumbents in a natural monopoly
In the majority of European countries, energy companies have been key
elements in post-war reconstruction and the governments’ set up the regulatory
framework that was needed to support the development of electrical systems. The
sector is by nature heavily capitalist, and requires strong territorial rooting. The
stakeholders were often integrated companies (from generation to supply). There
was a situation of public, regional and national monopolies.
The 1996 directive on the opening up of markets has profoundly change the
organization of utilities, but in the end has led to few modifications in terms of
market players (there were not really any new newcomers), prices and services.
This was unlike the telecommunications sector, where freeing of the market
occurred during a technological leap forward, with the arrival of mobile phones
and strong growth.
The opening up of markets led to massive reorganizations among utilities:
“unbundling” requires the separation of regulated (distribution) and unregulated
(generation and marketing) activities. For companies that had, for 50 years,
patiently constructed integrated systems, this means a serious reorganization, the
separation of teams and in particular the complete overhaul of information systems.
In concrete terms, the EDF French distribution service operator had to develop a
new information system enabling non-discriminatory access to all suppliers, and
the EDF supplier also had to develop a new system to manage its portfolio and
import data from around 30 million residential customers. The same operation was
also carried out for gas. Investments in information systems reach hundreds of
millions of euros per year, so the customer can as best as possible continue to

31. receive an accurate and punctual bill. These evolutions required for implementing
free markets, mobilize the providers’ significant resources without any value added
for the customer.
2.3.2. A clear focus on technical knowledge
Incumbent operators such as EDF in France or ENEL in Italy have conserved a
strong and positive brand image with emphasis on technical know-how, the
strength of skills and a role of general interest. The EDF symbol for clients is still
the technician’s blue car that moves across France.
Beyond this image, corporate culture is rooted in technology, with a number of
organizations and massive recruitment of technicians and engineers.
Customers and individuals have finally ended up agreeing on “unlimited credit”
– a blank check for the companies concerned – the status of public service or
general interest serving as a guarantee and companies have reported little on the
technological challenges or progress in their sector. The energy companies were
rarely challenged or called upon to explain themselves.
We can compare this with the communication of car manufacturers, who for
example highlight each innovation and make it comprehensible and accessible to
the customer, even though he cannot complete the basic vehicle maintenance
operations (change a bulb, refill the oil, etc.). The customer wants to understand
the innovation and highlight the information which will enable him to enhance his
user image.
2.3.3. Undeveloped customer relationships
Sector monopoly and a strong technical culture eventually led to a very
standard customer relationship. For the customer, what matters is the product and
his contract. In France, the maintenance of regulated prices results in a stable range
of offers unique in the history of consumption (while the life expectancy of
products continues to decrease in other sectors, EDF’s price list has barely changed
in the past 20 years). The consumer is always connected at the subscribed power
and the equipment in the house is powered, which is far from normal marketing
criteria (sex, age, region and socio-professional status, etc.) in terms of quantity
and quality.
If we consider the basic fundamentals of marketing (product, price, placement
and promotion), electricity has remained impervious to the major modes of
marketing for products, brands and customer experience. The client does not know
the product and besides not being able to see it does really know how to use it5.
This knowledge is necessary in order to reduce consumption6.
The opening-up of the market has forced stakeholders to reinforce their
communication. For example, in Germany in 2000 and 2001, the energy companies
were the main advertisers. Very quickly, the efficiency of massive campaigns
proved unsatisfactory and the energy providers remained present (there is a strong
presence in sports sponsorship in France and Germany) but modest.
The two examples of “customer revolution” in Europe are Centrica and
YELLO. Centrica, which used to be known as British Gas, achieved a remarkable
conversion from gas to electricity with aggressive marketing which now enables it
to be the uncontested leading energy provider in England. Today the brand is a
commercial symbol of conquest (to transform gas customers into electricity plus
gas customers). In 2010, Centrica announced a profit of £660 million while other
providers were finding it difficult to make a profit from this activity.
The company YELLO STROM, a subsidiary of EnBW, was the first electricity
company to launch a national service in 2009 in Germany – a country with 900
local suppliers (Stadtwerke). Despite significant efforts in terms of advertising
campaigns (costing more than 10 million Euros for the launch of the brand),
YELLO has never gained more than 1.5 million clients or achieved its expected
profit. However, YELLO has really pushed the marketing barriers of the profession
with a promise of simplicity (product and bill) and customer relationship
management (ethnic marketing to Turkish customers, greeting of customers, etc.).
EDF knew how to innovate and reach customers when using marketing
channels in the 1980s, with the introduction of a “guarantee of services” that
included customer compensation for delays and 24-hour call centers. These
5 Studies show that the clients do not know how to quantify or prioritize electricity use.