23 Jul 2012
Pöyry have recently published a report produced for the European Commission

Pöyry, as part of a tripartite consortium including Vassa ett and Oxford University, have recently published a report produced for the European Commission which (a) established metrics and methodologies which can be applied across the European Union to determine/assess the carbon benefits and energy savings which smart grids could deliver; (b) modelled and analysed the performance of those metrics for a representative sample of EU Member States and (c) provide recommendations on the implications for the EC's role in setting policy in relation to the development of smart grids across the EU.

Key findings and recommendations are that:

(i) The major benefits of Smart Grids lie in what they enable – the use of demand-side resources, in place of investment in more generating capacity and the infrastructure (such as copper) to accompany it. Use of Smart Grid functionalities to deliver effective demand-side programmes could produce emissions savings of up to 6% as early as 2020. The biggest driver of Greenhouse Gas emission reductions is the lowering of Greenhouse Gas emissions intensity, predominantly due to maximum use of zero carbon generation and more efficient use of fossil fuel generation through use of demand side management.

(ii) 98% of all savings by 2020 would be made by residential consumers – not because this sector alone has the potential for energy savings, but because it has the most support in the form of smart meters, feedback and other enabling programmes. The most important single factor for residential reductions in total and peak demand was the rollout of smart meter systems with two-way communication and a HAN interface allowing for low-cost feedback, pricing signals and automation options, supported by customer education.
(iii) As the benefits of smart grids in one market can spill over into other markets, purely national assessment of emissions savings is incomplete.  The modelling indicates that further expansion of interconnection (e.g. through a European ‘Super Grid’) can be mutually beneficial with the development of Smart Grids in individual Member State's national markets. Thus development of Super Grid and Smart Grids are both compatible and interlinked.

(iv) However, our modelling indicates that some Member State markets are likely to reach only 1/10 of  their demand side flexibility potential in the reserves and ancillary services markets by 2020, due primarily to regulatory barriers and related market frameworks and design features.

(v) Therefore the main long-term challenge for Smart Grid development to help deliver secure and economic reduction of Greenhouse Gas emissions is not the rollout of new ‘smart’ technologies, but creating the regulatory frameworks and market structures which will allow us to take full advantage of them.

For a copy of the report please click here.