BAKGRUNN (fra kommisjonsmeddelelsen, engelsk utgave)

The EU2020 agenda comes across with a clear message for Europe. The EU’s future economic growth and jobs will increasingly have to come from innovation in products and services for Europe’s citizens and businesses. Innovation will also contribute to tackling one of the most critical challenges Europe is facing today, namely ensuring the efficient and sustainable use of natural resources. The development of our future energy infrastructure must reflect this thinking. Without serious upgrading of existing grids and metering, renewable energy generation will be put on hold, security of the networks will be compromised, opportunities for energy saving and energy efficiency will be missed, and the internal energy market will develop at a much slower pace.

Smart Grids could be described as an upgraded electricity network to which two-way digital communication between supplier and consumer, intelligent metering and monitoring systems have been added. Intelligent metering is usually an inherent part of Smart Grids. To advise on policy and regulatory directions for the deployment of Smart Grids in Europe, the Commission has set up a Smart Grids Task Force, which has issued a report outlining expected services, functionalities and benefits. These are largely agreed by industry, public authorities and consumer organisations and are described in the attached Staff Working Paper.

The benefits of Smart Grids are widely acknowledged. Smart Grids can manage direct interaction and communication among consumers, households or companies, other grid users and energy suppliers. It opens up unprecedented possibilities for consumers to directly control and manage their individual consumption patterns, providing, in turn, strong incentives for efficient energy use if combined with time-dependent electricity prices. Improved and more targeted management of the grid translates into a grid that is more secure and cheaper to operate. Smart Grids will be the backbone of the future decarbonised power system. They will enable the integration of vast amounts of both on-shore and off-shore renewable energy and electric vehicles while maintaining availability for conventional power generation and power system adequacy. Moreover, the deployment of Smart Grids provides an opportunity to boost the future competitiveness and worldwide technological leadership of EU technology providers such as the electrical and electronic engineering industry, consisting mostly of SMEs.

Finally, Smart Grids provide a platform for traditional energy companies or new market entrants such as ICT companies, including SMEs, to develop new, innovative energy services while taking due account of data protection and cyber-security challenges. That dynamic should enhance competition in the retail market, incentivise reductions in greenhouse gas emissions and provide an opportunity for economic growth. As such, Smart Grids can make an important contribution to the new strategy for smart, sustainable and inclusive growth, including the objectives proposed under the flagship initiative for a resource-efficient Europe and Europe’s energy and climate goals, which are at the heart of the internal market for energy. The Third Package provisions and especially Annex I.2 of the Electricity Directive (2009/72/EC) explicitly oblige Member States to assess the roll-out of intelligent metering systems as a key step towards the implementation of Smart Grids and to roll out 80 % of those that have been positively assessed. Smart Grids are also identified as a way for Member States to meet their obligations to promote energy efficiency.

In addition, the Energy End-Use Efficiency and Energy Services Directive (2006/32/EC), for which the Commission is currently analysing the need for revision, calls for metering that accurately reflects the final customer’s actual energy consumption and provides information on actual time of use. The European Council of February 2011 recognised the important role of Smart Grids and invited Member States, in liaison with European standardisation bodies and industry, ‘to accelerate work with a view to adopting technical standards for electric vehicle charging systems by mid-2011 and for smart grids and meters by the end of 2012’. Over the long term, the Commission’s Communication on a Roadmap for moving to a competitive low-carbon economy in 2050 identifies Smart Grids as a key enabler for a future low-carbon electricity system, facilitating demand-side efficiency, increasing the shares of renewables and distributed generation, and enabling electrification of transport.

In Europe, over € 5.5 billion has been invested in about 300 Smart Grid projects during the last decade. An overview is presented in Picture 1. Around €300 million has come from the EU budget. The EU is still in the early stages of the actual deployment of Smart Grids. Today, only around 10 % of EU households have some sort of smart meter installed, although most do not necessarily provide the full scale of services to consumers. Nonetheless, those consumers with smart meters have reduced their energy consumption by as much as 10%.

Some pilot projects suggest that actual energy savings can be even higher.Other pilot projects have indicated that Smart Grids can make a major contribution to CO2-emission reduction. The Smart 2020 study, measuring the global impact of Smart Grids, estimates a 15% reduction in CO2-emissions, while the EPRI study reports a reduction of nearly 9 % in the total domestic carbon emissions generated by the US power sector in 2006. The European Bio Intelligence study concludes that Smart Grids could reduce the annual primary energy consumption of the EU energy sector by almost 9% by 2020. Smart Grids are expected to generate new jobs and bring additional economic growth. The smart household appliances market is projected to grow globally from $ 3.06 billion in 2011 to $ 15.12 billion in 2015. It is further estimated that expected investments are roughly 15 % for smart metering deployment and 85 % to upgrade the rest of the system.

At present, there is a considerable gap between current and optimal investment in Europe, which can only partly be explained by the current economic downturn. Grid operators and suppliers are expected to carry the main investment burden. However, unless a fair cost sharing model is developed and the right balance is struck between short-term investment costs and long-term profits, the willingness of grid operators to undertake any substantial investment might be limited.

Investors are still struggling to find the optimal model for sharing costs and benefits along the value chain. Neither is there clarity on how to integrate the complex Smart Grids systems, how to choose cost-effective technologies, which technical standards should apply to Smart Grids in the future, and whether consumers will embrace the new technology.

These challenges need to be tackled as soon as possible in order to accelerate Smart Grid deployment. The Commission proposes to focus on:
(1) developing technical standards;
(2) ensuring data protection for consumers;
(3) establishing a regulatory framework to provide incentives for Smart Grid deployment;
(4) guaranteeing an open and competitive retail market in the interest of consumers;
(5) providing continued support to innovation for technology and systems