Grid, reference

A lot of uncertainty still surrounds smart grid implementation, so network operators must make full use of any information emerging from smart grid trials, says Bob Currie

The low-carbon transition is the toughest challenge distribution network operators (DNOs) have faced for more than 30 years. They know that demands on the electricity system a decade from now will be radically different, but there is little certainty about how quickly the transformation will happen, or exactly how.

Ofgem’s Low Carbon Networks Fund has been an important vehicle in motivating grid operators to update their networks for the low-carbon transition. Other smart grid trials are also now under way. Smarter Grid Solutions is involved in several of these initiatives. We have noticed some shared challenges and common learning.

Lesson one is that location is a vital consideration, given that significant volumes of distributed generation, energy storage and other technologies are rarely present in discrete areas. UK Power Networks chose Cambridgeshire for its Flexible Plug and Play Low Carbon Networks project because there was sufficient renewable generation and windfarm connection applications in process to conduct meaningful trials and technology demonstrations.

Second, customer engagement in smart grid projects has been a hard nut to crack. This is no surprise considering that distribution grid operators have had no reason historically to launch large-scale consumer engagement programmes. Even well-seasoned consumer-facing utilities have struggled to sign up domestic customers for smart meter trials (see box on facing page). But commercial customers such as generators and housing developers have also been slow to participate in project trials, claiming they cannot find information on how to join the smart grid journey.

DNOs have been partnering with trade and community bodies, organising town hall community events and establishing customer-facing website pages. But it will take time and arguably a concerted national education drive to make consumers and businesses truly understand the importance of their role in building a smart grid.

Technology choice has also been an issue. There is no standard or industry-endorsed smart grid technology on the market – and it is difficult to see how any will emerge in the UK until 2015 when Ofgem’s new RIIO regulatory framework will give greater clarity on the incentives grid operators and smart grid technology will need to deliver against. Until then, DNOs are having to take some tough decisions on what technology to trial and how much to invest.

In terms of human resources and skills, most DNOs are in the throes of deciding whether to invest in a dedicated and healthy-sized future networks team, or to keep the team lean and draw on relevant expertise from across the organisation when needed.

Several influential working groups are springing up to address various issues around creating a smart grid, but with resources already spread thinly, grid operators are not well represented at these groups. As a result, many are dominated by large global smart grid vendors which, in the longer term, could mean some smart grid technology could move on without the vital perspective of the operators themselves.

Despite the issues they face, many grid operators still want to get ahead of the game now and not wait for RIIO in three years’ time. Scottish Power is introducing real-time smart grid technology to manage voltage constraints to create additional grid capacity for a hydro-generator in Waen Fawr, north Wales. Over time, there are plans to extend this to include other new generators in the area seeking grid connections.

The Orkney Smart Grid, a collaboration between Smarter Grid Solutions and Scottish and Southern Energy Power Distribution, has connected almost 20MW of additional wind generation to an “at capacity” grid, saving an estimated £30 million in capital grid upgrades. The project has stimulated a number of new renewables projects – many community owned – that otherwise would have struggled to gain access to the grid, plus appetite for future projects.

The road towards smart grids is likely to become smoother and better signposted for DNOs after 2015. In the interim, it is vital to take stock of the smart grid projects already under way to continuously re-evaluate what technology, skills and resources are needed – and how best to address the challenges faced.

Bob Currie is technical director and co-founder of Smarter Grid Solutions

Smart meter adoption carrots and sticks

According to recent research, only 5 per cent of UK householders have a smart meter installed and only 12 per cent of bill payers said they knew a “fair amount” about the technology. If utilities do not find innovative methods to engage with customers, smart meter adoption will not improve and potential benefits will be lost. Outlining logical arguments about the mutual benefits of smart meters is not enough.

Money – either making it or saving it – is one of the biggest incentives for consumers. Because smart meter consumption can be reviewed every 15 minutes, utilities could perform regular proactive rate analysis for customers, enabling them to advise on the benefits of a different rate without altering consumption patterns. The whole process could even be automated by online rate analysis tools controlled by customers. This approach has been piloted by some mobile phone companies, where consumers choose the phone tariff that suits their personal needs for voice, text and data.

Adding an element of competition can also act as an incentive, in particular for younger consumers. For example, utilities could launch regular energy-saving competitions with rewards, encouraging customers to compare their own consumption with that of their neighbours or friends, via social media. This approach has been successfully used by the travel industry. For example, some hotel chains offer a single Facebook sign on which allows customers to compare and review their travel experience. Customers are more likely to take advice or product recommendations from fellow consumers rather than a vendor, and in the long run, this approach can help drive invaluable brand loyalty.

Finally, government and industry may have to ask if there is a point at which they effectively start penalising those without smart meters. In transport, pricing London Oyster cards cheaper than paper tickets and cheaper online season ticket renewals have helped drive mass adoption of those cheaper-to -run schemes.

Supriyo Dey, senior consultant, utilities practice, Infosys

This article first appeared in Utility Week’s print edition of 26th October 2012.

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