Smart meters are regularly cited as key to managing more flexible power systems, but speakers at a recent industry gathering in Copenhagen, Denmark were clear there needs to be more cooperation between Transmission System Operators and the local Distribution System Operators if this technology is to be used to its full potential and help move forward the energy transformation
The flexible operation of power systems is nothing new, but the need for flexibility in real time on the demand side as well as the supply side of power systems is a fresh challenge for system operators. In a future with more electric vehicles and heat pumps, it will be vital for operators to know exactly where charging and discharging is happening in the grid and what the network can manage in terms of input and output. New technologies, such as smart meters, are being touted as part of the solution. “It is not an acute problem, the network can manage a lot, but we have to consider changing the network design, otherwise conflicts will arise between what a Transmission System Operator (TSO) requires and what a Distribution System Operator (DSO) needs to deliver,” says Helle Juhler-Verdoner, managing director of the Danish Intelligent Energy Alliance. Giving operators better visibility of supply and demand will also help ensure optimal use of existing infrastructure and avoid massive investments in equipment because of random requests for capacity by TSOs, she adds. “It’s a given that we want electrification and so we need to consider the long-term challenges,” says Juhler-Verdoner. “DSOs must be closely involved and be left to determine when and if there is spare capacity as they have the knowledge about local networks.” Networks must be correctly designed and they need to be supported by the right tariffs, she adds. Smart metering will help achieve these aims, give operators a clearer insight into their networks and allow consumers greater access to their electricity, heat and water data, she believes.

Consumer responsibility

Denmark’s TSO Energinet is already working to strengthen cooperation between energy companies and DSOs. “We need a market set-up which ensures that flexibility is used in the best possible way and that those requiring flexibility, whether that be the TSO or the DSO, remove any barriers,” says the company’s Signe Horn Rosted. “The market set-up has to support the flexibility required by the DSO when handling bottlenecks and by the TSO when stabilising the grid,” she says. “No one has any interest in an unsuitable structure that creates problems elsewhere in the grid.” For many, one of the instruments needed to make this work is smart metering. Helen Steiniger at Germany’s Next Kraftwerke, which already uses data technology to manage its virtual renewables power plant, compares smart metering to a plane’s black box and says it will open up a world of opportunities. “If we know how much is consumed each second, then we can think in a new way. Now we assume that everybody consumes in the same way, but of course this is not true. Some people go on holiday, some work from home and so on.” But rather than relying on industry to manage the demand side, Steiniger calls for the onus to be shifted to consumers and for them to be rewarded with lower prices to consume in a more intelligent way. “If we could get the demand side to ramp up or down depending on how much solar or wind there is, that would make for a more sustainable system,” she says. “Now, if demand is high and there is little solar or wind, we ramp up on coal, especially in Germany, and that’s unsustainable.” One problem is the overcapacity of power in the market, which flattens out prices. In a situation of scarcity, demand is covered by a cheap reserve capacity, usually coal, and especially brown coal, she adds. This means that prices stay flat. “You need peak prices to have flexibility in the market,” says Steiniger — removing overcapacity will be an incentive to achieve this. With its high levels of renewable energy, Denmark has worked with greater flexibility than other countries for a long time, but it too will change to focus more on consumers in the future, says Horn Rosted. This will mean moving away from all consumers paying a fixed tariff to the network operator. “Today, a network company is not allowed to make it cheaper for the flexible consumer,” says Juler-Verdoner. “We want to see the consumer who disconnects at times when the network is strained being rewarded.” This will require a change in the Danish Electricity Supply Act law and for the TSO and DSOs to agree on a future tariff structure. Other countries will need to follow suit. Energy group Ørsted is starting to show the way forward, offering differentiated electricity prices throughout the day. This means that consumers can shift their consumption to times when purchase prices are low; turning on a dishwasher or washing machine later in the evening or plugging in an electric vehicle overnight. To create awareness among consumers about when to save energy and when to change electricity consumption, it is vital to have up-to-date data that arrives with relative frequency. Juhler-Verdoner and Steiniger agree the consumer is unlikely to spend much time managing their data and consumption, paving the way for new business opportunities for third-party companies. Granting a third-party company access to a consumer’s data raises the question of data protection, but Philip Graff, partner at law firm Bird & Bird, does not see this as an issue. “It is only a problem if you can identify a person, or a family. But if you can anonymise the data, then there is no problem.”

Writer: Karin Jensen