The national strategy

The Energy Networks Association (ENA) released its national strategy for smart grids in September. Energy Source & Distribution looks at the challenges facing a united industry.

At a press conference in London in November, International Energy Agency (IEA) executive director, Nobuo Tanaka and chief economist, Fatih Birol presented the results of the IEA World Energy Outlook 2010 (WEO). The WEO 2010 looks at how the energy system will evolve in the next 25 years, taking account of the broad policy commitments that have already been announced by countries around the world to address climate change and growing energy insecurity. The WEO also focuses on how emerging economies will increasingly shape the global energy landscape, the role of renewables for a clean and secure energy future and the benefits of phasing out fossil-fuel subsidies.

The IEA also released the first phase of its IEA Smart Grid Technology Roadmap at the Korea Smart Grid Week on Jeju Island in South Korea. The IEA published its key findings and new regional CO2 emission reductions and smart grid drivers analysis. This smart grid roadmap document also provides advice on required actions for stakeholders to support smart grid development and deployment, including advice for electricity generators, system operators, government and regulators, technology and solution providers, consumers and environmental groups.

Two months earlier, the ENA published its own call to action, the National strategy for smart electricity networks at the Australian Financial Review National Energy Conference in Sydney. The strategy is the first board-driven, co-ordinated, national approach from the energy network industry to pave the way for the development of smart electricity networks.

“We believe that smart networks are the key, not only to strengthening Australia’s energy network, but to empower businesses and consumers with the ability to make a real difference to the way we use energy,” ENA CEO, Andrew Blyth states.

“This will ultimately lead to more efficient energy supply, emissions reductions and the ability for consumers to actively control how they use their energy.”

The ENA developed the national strategy for smart electricity networks to provide a framework for the smart network activities that the electricity distribution businesses are undertaking jointly through ENA. The aim of the strategy is to inform stakeholders of the drivers and objectives of smart networks, inform stakeholders of the priorities and issues ENA is looking to engage with them on, and facilitate information sharing and co-ordination, which will contribute towards a timely and cost-effective transition to smart networks.

The strategy details the challenges faced by the industry. Electricity businesses around the world are facing a challenge – to supply increasing amounts of electricity while meeting community and government calls for more reliable, environmentally sustainable and affordable energy supplies.

The demand for increasing supplies of electricity is primarily driven by a growing population, combined with lifestyle choices to live in larger houses with fewer residents and an increasing number of appliances. In particular, the level of peak demand (the maximum demanded at any given time) is growing significantly and, in some areas, already exceeds the capacity of the electricity network for a few short periods each year.

More specifically, the challenges faced by electricity network businesses include the need to meet growing energy demands, especially at peak times, improve the reliability and quality of electricity supplies; ensure the electricity network is secure against threats, such as terrorism or natural disasters; moderate electricity cost increases; and equity issues.

Electricity network (poles and wires) businesses are meeting these challenges by changing the way they operate and gradually modernising their networks with smarter technologies – in essence integrating information and communications technologies (ICT) into existing electricity network infrastructure and business systems to create a smart electricity network (or smart grid). This prudent investment approach enables the minimisation of costs compared to more traditional solutions.

In addition to providing overall guidance, the strategy sets out the critical activities that ENA is undertaking throughout 2010 to 2012. This gives an indication of the specific issues that ENA will be looking to engage with stakeholders on during this time.

“The National Electricity Market is guided by the overarching National Electricity Objective, which is to promote efficient investment in, and efficient operation and use of, electricity services for the long-term interests of customers of electricity with respect to price, quality, safety reliability, and security of supply of electricity, as well as the reliability, safety and security of the national electricity system,” the strategy states.

ENA and its members consider that, ultimately, the objectives of smart networks can be distilled into four categories. These are to improve the cost-effectiveness of network operations and investments, create a platform for customer choice, improve the reliability, quality and security of electricity supplies, and facilitate a reduction in carbon emissions.

According to the strategy, the associated changes in the functionality of electricity networks provides the opportunity for electricity distribution businesses of the future to enable the provision of a greater range of services than in the past. In addition to delivering an ‘essential service’, smart electricity networks will be an enabler of a range of other products and services that will benefit customers, the Australian economy and the environment.

Looking into the future, the strategy states that the widespread adoption of distributed and renewable electricity generation, energy storage technologies and electric vehicles will facilitate a reduction in Australia’s carbon emissions. However, the large scale connection of such intermittent power sources has the potential to adversely affect network performance, and hence will require smarter networks to ensure the reliability and quality of electricity supplies is not diminished.