Regulatory Innovation Zones for Smart Energy Networks

Regulatory Innovation Zones
for Smart Energy Networks
Current activities contributing to Innovation Action
A4-IA0-4 „Regulatory Innovation Zones”
of the SET-Plan Action 4 Implementation Plan
September 2018

© 2018 - ERA-NET SMART ENERGY SYSTEMSMichael Hübner, bmvit 2
Michael Hübner
• Austrian Federal Ministry of Transport, Innovation and
Technology Department of Energy and Environmental
Technologies (Smart Energy Systems, Smart Grids)
• Co-Chair SET-Plan MS Working Group on SET-Plan Action 4-
Energy Systems and Networks (SET-Plan Steering Group)
• Chair National Stakeholders Coordination Group
“Smart Networks for the Energy Transition”
(European Technology and Innovation Platform ETIP SNET)
• Coordinator ERA-Net Smart Energy Systems
• EXCO International Smart Grids Action Network (ISGAN)
– a TCP of the International Energy Agency (IEA)
 michael.huebner@bmvit.gv.at
 https://www.linkedin.com/in/
michael-huebner-bmvit/
 https://twitter.com/MichaelLonGUAT

The European Strategic Technology Plan
Strategic Energy Technology Plan (SET-Plan)
The SET-Plan is the technology pillar of the EU's energy and climate policy
The SET-Plan, adopted by the European Union in 2008, is a first step to establish an energy technology
policy for Europe. It is the principal decision-making support tool for European energy policy, with a
goal of:
• Accelerating knowledge development, technology transfer and up-take;
• Maintaining EU industrial leadership on low-carbon energy technologies;
• Fostering science for transforming energy technologies to achieve the 2020 Energy and Climate
Change goals;
• Contributing to the worldwide transition to a low carbon economy by 2050.

10 Key Actions of the SET – PLAN
• 10 Key Actions (2015)
• „Declarations of Intent“ (2016)
• Member States and Stakeholders

SET-Plan Action 4:
Energy Systems and Networks

SET-Plan Action 4 - Landscape
IWG
IWG
IWG
IWG
IWG
MSWG
A4
ETIP SNET
Governing Board
European
Commission
ETIP SNET Working Groups NSCG
ERA-Net SES
Smart Grids +
RegSys
European Technology and
Innovation Platform on
Smart Networks for the Energy
Transition
SET-Plan
Steering
Group
(EC + MS)
ETIP RHC
ETIP PV
ETIP Geothermal
Stakeholders
• transnational
• national
• regional
• Industry
• reseach
• academia
• need owners
EERA-JPs

SET-Plan Action 4 Implementation Plan (1)
Flagship Initiative 1: Develop an Optimised European Power Grid
Enabling the appropriate level of reliability, resilience and economic efficiency, while integrating variable
renewables, such as wind and solar generation by providing increased flexibility thanks to innovative tech-
nologies enhancing customer participation, integrating better storage, making the best use of connections
with other networks (e.g. heat and cold, transport) and optimising the use of flexible sustainable combined
power and heat generation.
Flagship Initiative 2: Develop Integrated Local and Regional Energy Systems
that make it possible to efficiently provide, host and utilise high shares of renewables, up to and beyond
100% in the local or regional supply by 2030, enabling regions and local communities to realise their high
sustainable energy ambitions. They shall provide tailor-made solutions that meet the local and regional
requirements and demand. At the same time they shall link to a secure and resilient European energy sys-
tem, enabling the participation in inter-regional exchange of energy as well as in sharing responsibility to
maintain the overall system, considering a sustainable use of local and global resources.
Published Jan 2018

SET-Plan Action 4 Implementation Plan (2)
Innovation Activities

Upcoming Events
• WORKSHOP on PV Self Consumption- International exchange of R&D Project
Leaders and Living Lab Initiatives
• (October 23rd 2018, Belgian Energy Hub, Brussels)
• A4-IA2.2-5 Families of living labs to develop technology - service systems for direct
use of PV energy on an aggregated level of multi-family buildings, districts or
communities
ttps://setis.ec.europa.eu/system/files/set_plan_esystem_implementation_plan.pdf
(page 84).
• More Information
• Registration
•
Symposium on Interoperability at Connectathon Energy 2019
• (January 28-31 2019, Vienna)
• implement action A4-IA0-5 “Process Chain for Interoperability of ICT Systems of
the SET-Plan Action 4
• More Information

Regulatory Innovation Zones
Energy SandBoxes
Actual activities contributing to Innovation Action
A4-IA0-4 „Regulatory Innovation Zones”
of the SET-Plan Action 4 Implementation Plan
September 2018
Fernando Garcia, Co-chair National Stakeholders Coordination Group

National Stakeholders Coordination Group
Introduction
Regulation
MarketInnovation
Regulatory
Innovation Zones -
SandBoxes

Introduction
Regulation
MarketInnovation

Conference - Webinars
►In the 3th National Stakeholders Coordination Group Meeting, 22/5/18
►Innovation Sandboxes? How to coordinate innovation efforts with
regulatory developments.
►2 Webinars end Sept (14th) - Oct (in preparation).
►Energy Sandboxes / Regulatory Innovation Zones: closing the gap
between innovation and market. Participation UK, Netherlands,
Germany, Portugal, France, Singapore.
►Objective: knowledge sharing regarding the implementation of
Innovation Sandboxes.

Proposal for further steps
►Deeper analysis of the Innovation Sandbox mechanism.
►Contents:
►Conceptual description of the mechanism
►Guidelines, best practices and recommendations to implement new
SandBoxes or improve existing ones.
►Catalog with the SandBoxes implementations
►Collaboration between the Activity A4-IA0-4 dedicated to Regulatory Innovation
Zones (Set Plan’s Implementation plan) and ISGAN Academy.

Thank you for
your attention!
Fernando García
FUTURED Representative
ETIP SNET NSCG cochair
fgarciama@naturgy.com
www.etip-snet.eu www.futured.es

Ofgem’s Innovation Link
Daniel Kirk
September 2018

Fast, frank, feedback Regulatory sandbox
Input into policy
development+
Innovation Link team services

Clear demand:
150+ diverse innovators
contacted us, 70+ steers
sent
Feedback service - impact

Overall satisfaction
>80%
Feedback service - impact

What is a regulatory sandbox?
What a sandbox is
• Agreement to lighten Ofgem’s regulation for a trial.
• Offers relief from a licence condition (derogation) or bespoke guidance on interpretation that we
agree to be bound by for duration of trial.
• In practice we jointly develop trial plan with applicants, helping them understand what is possible.
What a sandbox is not
• A sandbox is not a means to change regulation on a permanent basis.
• A sandbox is not an endorsement from Ofgem for a specific business model, product or service.

Successes
• Many applications, ~80 across two windows. We helped most applicants
proceed with their business without a sandbox.
• Offered 7 sandbox trials, facilitating community energy and peer-to-peer.
• Huge learning for Ofgem on:
– what aspects of regulation cause barriers
– availability of new technology and
– propositions people would like to offer
• Generated global interest from energy regulators and policymakers.
Sandbox so far

Sandbox so far
27
Lessons
• Unclear to businesses what they can and can’t do. Commonly need advice, not
a sandbox.
• When propositions are blocked it is often by a complex mix of industry norms,
existing systems, charges, codes and licences.
• Licensed suppliers and community energy companies can collaborate to launch
local schemes.
• Start-ups want to be able to signal low regulatory risk to investors.
• Businesses are focused on launch, not trials.
The trials are in their early stages so we’ll continue to learn over the next 2 years. We are
working on next steps, including expanding the sandbox tools to include possible derogations to
the BSC.

28
Thank You
For more information on this work you can contact us at …
Innovation Link: innovationlink@ofgem.gov.uk

29
Experiment Article
Webinar ETIP SNET, 14 September 2018
Elbert Jan van Veldhuizen, ACM

30
ACM
• ACM is the Dutch Regulatory Authority for
– TSOs and DSOs (electricity and gas)
– Wholesale and retail electricity and gas markets.
• Also: Consumer Authority, Competition Authority, and
Telecom/Post regulator

31
Legal framework – Electricity law
• Dutch Electricity law
– Decided on by democratic legislature
– Should respect European law

32
Legal framework - Netcodes
• National netcode(s)
– Mostly proposed by TSOs and DSOs
– ACM decisions, based on Electricity law
– Open for appeal
• Party may request ACM derogation of netcode
– Specific, temporary
– Cannot overrule Electricity law
• Important for ACM: protect consumers

33
Proposed Experiments by DSOs
• Direct current net
• Flexible transport tariffs
• Wind farm on cheaper grid interface
• Combined wind farm + PV Park

35
Direct current (2/2)
• Experiment on one location
– 750 VDC, producing and consuming
– Max 200 kW per connection, 1 MW total
• Legal:
– Dutch electricity law: ‘electricity’
– Netcodes: AC based
– Netcodes are limiting
• Dutch electricity law: non-discrimination
– Change of codes not possible
– Derogation is specific, temporary case

36
Flexible grid tariffs (1/3)

37
• For 10/20 kV customers
– Half of grid tariff is peak based
– Greenhouses are reluctant to use cheap
renewable electricity when it raises the peak
• ‘Traffic light system’
– Based on grid use expectations
– When ‘green’, use does not
influence the peak

38
• Tariff system is part of the netcode
• Effect of this new system unknown.
• Different tariff structure can potentially have impact on
earnings of DSOs
• So DSOs did not want to change netcodes yet
• Proposal not against electricity law
• Derogation (specific, temporary case)

39
Wind farm grid interface (1/2)
HS / MS
Station
According to netcode
Experiment
MS Ring
Cheaper

40
Wind farm grid interface (2/2)
• Experiment:
– More capacity on MS ring when producer connected to ‘end’ of ring?
– But capacity was more than normally allowed
• Netcode prescribe a higher tariff
• ACM concluded that lower tariff was:
– Technically not necessary for experiment
– Discriminatory
So no derogation was given

41
(Maybe) New law
• Discussions on changing the electricity law
• Experiments
– for TSOs and DSOs;
– for energy transition;
– derogation of electricity law and/or netcodes,
– maximum number of consumers in experiment; and
– ministry decides on request

The SINTEG programme:
Smart Energy Showcases - Digital Agenda for the Energy
Transition
Dr. Karl Waninger
Projektträger Jülich

“Energiewende” Targets until 2050
44
Source:Ecofys2018basedonBMWi2016,UBA2018,AGEB2018
2020 2030 2040 20502025 2035 2045
.
Energy
Efficiency
% greenhouse gas
reduction (vs. 1990)
% gross electricity consumption
Final energy productivity
(vs. 2008)
Primary energy demand in buildings (vs.
2008)
Primary energy consumption (vs. 2008)
% gross final energy consumption
Final energy consumption in transport (vs.
2005)
Climate
Renewable
Energy
-40
-55 -70 -80 to -95
+2.1% p.a. (2008-2050)
35 40 to 45
50 65
80
55 to 60
18
30
45
60
-20 -50
-10
-40-15 to -20
-80
27.6%
(2016)
36%
14.8%
(2016)
-6%
1.1% p.a.
(2016)
-15.9%
(2015)
+1.3%
(2015)
Achieved 2017
4,380 PJ
(2008)
.
Energy
Efficiency
% greenhouse gas
reduction (vs. 1990)
% gross electricity consumption
Final energy productivity
(vs. 2008)
Primary energy demand in buildings (vs.
2008)
Primary energy consumption (vs. 2008)
% gross final energy consumption
Final energy consumption in transport (vs.
2005)
Climate
Renewable
Energy
40
55
70 80 to 95
+2.1% p.a. (2008-2050)
35 40 to 45 65
80
18 30 45 60
-20
-50
-10 -40-15 to -20
-80
27.6%
(2016)
36.2%
14.8%
(2016)
-6.0%
1.1% p.a.
(2016)
-15.9%
(2015)
+1.3%
(2015)

Main Challenges and Solution Layers
› Energy Efficiency
› Flexibility
› Digital Transformation
› System Stability
› R&D&I - Technology
› Policy and Regulation
› Market Transfer
› Society
45

SINTEG - Smart Energy Showcases
Digital Agenda for the Energy Transition
46

Objectives of SINTEG
› Transformation to smart networks for connecting generation, demand, storage and
grid
› Developing scalable solutions as blueprints for a future smart integrated energy
system and for mass markets
› Implementing solutions in large pilot (showcases)
› Gathering information on necessary adjustments to the regulatory framework by
creating “regulatory sandboxes”
› SINTEG – VO came into effect 21.06.2017 providing project partners with certain “experimental
options” transgressing certain regulations
47

Showcase Regions
› 12/2016 – Start of projects in 5 showcase regions
› – Accompanying Research to support Showcases
Nr. Showcase Region
Partners
fund. (non
fund.)
Funding
[Mio.]
1 C/sells: large-scale showcase in the ‘solar arch’ region in southern
Germany
South 51 (45) 44
2 Designetz: a modular concept – from isolated solutions to an
efficient energy system
West/Central 31 (15) 30
3 enera: The next big step in the energy transition North-west 32 (45) 51
4 NEW 4.0: The energy transition in northern Germany North 36 (21) 44
5 WindNODE: showcase for smart energy from the north-east of
Germany
East 47 (25) 37
Total all federal states 197 (151) 206
48

General Aspects of Showcase Regions
› More than 300 companies, universities, research centres and other
stakeholder involved
› Companies provide more than € 300 Mio. own funds  more than €
500 millions total
› Central common aspects to meet objectives of the program:
› system integration of REs
› system stability with high shares of renewables
› energy efficiency
› flexibility
› iMsys – Roll out and digital transformation
› Business models
› But each showcase region has it’s own focal points
49

Enera – the next big step
Facts
 High share of renewables > 170 %
 390,000 inhabitants; approx. 200,000 households
 1.75 GW installed RES (onshore wind: 1.5 GW, offshore wind: 175 MW; another
1,000 MW envisaged)
Objectives
 Increasing flexibility of distributed generators, loads, storage
 Treating ancillary services as regional goods
 Rolling out and management of 4.000 smart meters
 Implementing a platform for “Smart Data and Services”
 Integrating 30-60 start-ups to develop new business models
50

NEW 4.0 – energy transition in the north
51
Facts
 Large center of energy demand (Hamburg) with rural region as center of supply of wind
energy (Schleswig-Holstein)
 Project is to demonstrate that 70 % share of renewables in region’s supply providing full
energy security will be possible by 2025
Objectives
 Finding efficient ways of dealing with local surplus electricity
 Two-way strategy
− Better export to other regions
− Greater flexibility to use energy locally
 Greater flexibility mainly by means of demand-side (load management, storage, sector
coupling [100s of MW])
 Minimizing “must-run capacity” of conventional power plants with the help of innovative
ancillary services, DSM and flexible CHP

Designetz – a modular concept
Facts
 Rural renewables vs. industrial centers of demand  typical situation in Germany
 Distributed energy (mix of solar and wind) supplying industrial centers of demand
Objectives
 Responsibility for the system across grid levels
 Cascading, bidirectional procedure
 Higher grid levels requesting flexibility from lower grid levels
 Lower grid levels providing flexibility and predictions of grid state
 Using smart meters, sensors and actuators to assess and control the state of
distribution networks
 Integrating gas and heat (PtG, PtH, etc.) as demonstrators
52

C/sells – the solar arch in the south
Facts
 1,200 MW of load, 15,000 distributed PV generation (500 MW); 200 electric vehicles,
1,000 controllable electric heating systems, 600 controllable loads
Objectives
 Energy system organised in cellular form
 Autonomous regional cells that interact at supra-regional level
 Cloud-based infrastructure information system
 Regional markets for ancillary services
 Flexibility transfer between electric power, heat and transport
Baden-
Württem
berg
Hesse
Bavari
a
53

Facts
 Complete balancing zone of one TSO (50Hertz)
 Urban-rural energy cooperation (Berlin and Brandenburg)
 Thousands of controllable loads, > 150 MW
 Installed renewables capacity (in 2014):
 25 GW (59 % wind, 33 % PV),
 42 % share of renewables in electricity consumption
Objectives
 Optimization of overall system: electricity, heat, mobility
 ICT platform connects generators, loads, grids, markets and provides for flexibility (e.g.
flexible industrial loads, PtX, electric mobility, distributed small-scale generators)
 ~800 supermarkets involved, which will act as flexible loads
 New system operation TSO - DSO
 “Regional power plants”/ VPP
54
WindNODE –smart energy from the north-east of Germany

SINTEG regulation – Experimenting Options
› Participating DSO allowed to create an internet platform for interruptible and
switchable loads without engaging other DSO
› Use of renewably generated electricity in front of feed in point by additional load
allowed, if the generation would otherwise be curtailed. But then no compensation
for curtailment. (§ 15 (1) EEG)
55

SINTEG regulation – Experimenting Options
› Final customers: Reimbursement of project-related additional costs for:
› Additional load peaks in annual maximum demand (§ 17 (2) Strom NEV)
› Withdrawal power in times of high load (§ 19 (2) Strom NEV)
› Less usage time (§ 19 (2) Satz 2 StromNEV )
› Storage and Power to X conversion
› Reimbursement of various kinds of consideration for grid usage (EnWG, KWKG,…)
› Reimbursement of 60% of paid EEG apportionment
56

SINTEG regulation - Limitations
› Only for participants in SINTEG
› funding agency –PtJ attests participant status
› Valid only for the duration of SINTEG
› Exception for demonstration purposes only
57

SINTEG regulation - Limitations
› Rules/Deviations valid only if two conditions hold:
› The measures taken serve to stabilize the grid or to avoid grid congestions
› Zero or negative electricity price (day ahead or intraday)
›
Purpose of regulation is strictly to compensate disadvantages from demonstrating
solutions in SINTEG i.e.:
› First step: participants have to pay all considerations and apportionments
› Second step: participants apply at regulator (BNetzA) for reimbursement of additional project
related costs covered by experimental options
› Third step: Profits are deducted from these costs prior to reimbursement
58

Possible Collaboration with International Partners
› Information exchange on project results
› Creation of networks
› Common workshops on transversal topics (e.g.
standardisation)
› Supporting collaboration of International and German
partners in funded projects
› Funded bilateral
projects
› Existing funding
networks like
› ERA-NET SES
59

ERA-NET Smart Energy Systems (SES)
› Funding partners from 21 countries
› Two succesfull joint calls totaling 30
projects (~40 Mio.€ of funding)
› 3rd call in review stage
› 4th call (RegSys) ongoing and focussing
on projects wich build on showcases (e.g.
SINTEG)
https://www.eranet-smartenergysystems.eu/
60

Picture credits front page:
3D-montage: Projektträger Jülich, Forschungszentrum Jülich GmbH
Motive: PN_Photo/iStock/Thinkstock, palau83/iStock/Thinkstock, ©istockphoto.com/vithib, IvanMikhaylov/iStock/Thinkstock
Dr. Karl Waninger
Projektträger Jülich
k.waninger@fz-juelich.de
Tel.: +49 2461 61 9009

Regulatory Innovation Zones for Smart Energy Networks

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