Economic, Environmental, Regulatory and Policy analysis of smart grids: report of the GREAT project

Abstract

Developing sustainable, reliable and affordable electricity production and supply networks has become the main objective of the European Union’s energy policy. To achieve this goal, and to allow for an active participation of consumers in the electricity market, two main directions are followed: the deployment of renewable and distributed generation technologies, and the introduction of smart grid technologies in the current production and supply network topology. However, several barriers of technical, environmental, economic and social nature limit a large scale roll-out of these technologies. The main objective of this report is twofold: firstly, conduct an economic and environmental impact analysis of both energy and smart grid technologies, focusing on the realization of carbon emission savings, and secondly, list the regulatory barriers towards large scale deployment, by means of an elaborate analysis of the regulatory framework in place within Great-Britain, Ireland, The Netherlands and Belgium (Flanders region). Both outcomes are combined to formulate concrete policy recommendations for the development of a smart grid system within communities and small and medium enterprises.

The concept of smart grids is still quite vague and several studies only define smart grids by reporting its principal characteristics. Within the GREAT project’s framework, we distinguish three different levels towards smart grids: 1. System Today 2012: The current common power system in the partner countries (Belgium has been taken as a case study) 2. System “SOFT “SMART 2020: The grid foreseen for 2020, with increased integration of renewable energy sources. This includes the integration of ICT technology (SCADA, AMI) at transmission and distribution network level. 3. System “STRONG” SMART 2020: Smart grid also at the consumer level, which in addition combines the smart transmission and distribution network with local smart components for households and SMEs. The LCA analysis is performed comparing level (1) with level (2). As for (3) the CO2 savings for the operational use of consumer applications have been calculated, but not the full LCA, i.e. not including manufacturing and recycling.