SMART ENERGY: TECHNOLOGY INSIGHTS FROM ANA AGUADO, SECRETARY GENERAL, EDSO FOR SMART GRIDS Amy Ryan, Deputy Editor, spoke with Ana Aguado, new secretary general for EDSO for Smart Grids, gaining insight into how the role of DSOs in Europe are changing toward employing a more customer-centric model in the new energy landscape. Here is what she had to say: 1 What is your overall vision and how do you aim to achieve these objectives in your new role as Secretary General of EDSO for Smart Grids? Global trends in energy are changing the traditional electricity model as we know it. Climate change, energy security and the rise in distributed resources are amongst the main drivers forcing the distribution system operator (DSO) to adapt and evolve. As a key component of the energy value chain, the DSO plays a pivotal part toward achieving a diversified, secure and sustainable electricity system. The EU’s aim of establishing a competitive internal energy market, along with EU policy and proliferation of smart meter and smart grid deployments, has and will continue to have an impact on the traditional role of the DSO. Adding to this, electricity consumers have become an integrated part of the power system through interaction with the grid via smart grid technologies (smart meters, vehicle-to-grid). As the main interface between energy and end user, DSOs will have to become increasingly flexible, as customers are given more and more control over their energy consumption. Electricity consumers have become an integrated part of the power system through interaction with the grid via smart grid technologies 30 I must begin with a statement. The energy sector in Europe is at a crossroads, facing the biggest transformation seen since the liberalisation of energy markets in Europe. Despite the many uncertainties about its future – for example, what the energy mix, retail market and cross-border networks will look like – one thing is clear: electricity distribution companies are increasingly facing the same challenges as transmission system operators (TSOs); meaning that DSOs will have to operate their networks very similar to what TSOs do since you have not only consumption, but also increased amounts of generation connected to distribution of which the great majority is variable. My vision is to see this recognised and addressed in national regulation, at EU level and among key stakeholders within the European territories. DSOs are, of course, unique in that they are directly connected to every consumer in Europe. Part of the responsibility of helping consumers become more active participants in the energy market, therefore, falls on the DSOs – and they have embraced the challenge. 2 What do you think are the main challenges facing DSOs presently? The shift from centralised to distributed generation in Europe means that the regulatory frameworks in many Member States needs to catch up. DSO network costs have decreased over the best part of three decades, incentivised by regulation, but have started to rise again due to this shift. National regulation really needs to support short-term investment in testing and deploying new and smart solutions in order to keep future networks costs in check, which would be considerably higher in a business as usual scenario. Since much of this distributed generation is variable in nature, DSOs have to be able to make use of tools that will allow them to continue to provide one of the most fundamental services to citizens and economies that exist – a stable and high quality supply of electricity. The hurdles in the way are many, although not insurmountable! The right market set-up for flexibility, whether from generators or consumers, is one of the largest challenges at the moment. Another issue is that DSOs are having to defend their ability to control what is happening on their own networks. A number of the new Network Codes being drafted at European level, in their current form, may threaten this. I would also like to highlight the very important matter of cyber security, which DSOs, and almost every sector, is facing. Smart grids rely on communications and increased volumes of data, and these must be kept secure from commercial abuse and malicious intent. 3 The European energy market is undergoing a ‘paradigm shift’ with a significant increase in decentralised generation, smart meter rollouts and proliferation of smart grid-connected technologies – radically changing the electricity grid as we know it today. How are DSOs approaching change management? It is precisely this paradigm shift in generation that is driving smart metering and smart grid solutions in Europe. DSOs are at the forefront of these developments, working with technology providers, policy makers, academia, innovative service providers and retailers to make their networks future-ready. A very important part of this is research, development and demonstration on a large scale using real people and businesses. The European Union has been very supportive in this respect, putting forward funding for projects involving numerous member states and stakeholders that can help to address the yet unanswered questions relating to how smart grids could function, and taking into account national differences. In particular, the activities of the European Electricity Grid Initiative (EEGI) organised METERING INTERNATIONAL ISSUE – 6 | 2014