8 October 2015 The evolution of renewable energy integration and the smart grid in Europe: The current situation, challenges and opportunities

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1 8 October 2015 The evolution of renewable energy integration and the smart grid in Europe: The current situation, challenges and opportunities Stefano Besseghini CEO & President Luciano Martini T&D Dept. Director RSE (Italy)

2 Three pillars of EU energy policy: Sustainability Security of supply Competitiveness European Energy & Climate Policy Actions: Energy-Climate policies, security of supply Market liberalisation and integration RD&D Strategic Energy Technologies plan A trajectory for the long term: 2020 objectives agreed in 2008 Newly (2014) agreed objectives for 2030 Political commitments for 2050

3 European Targets for 2030 (agreed 10/2014) % Greenhouse Gas Emissions 20 % Renewable Energy 20 % Energy Efficiency 10 % Interconnection % Greenhouse Gas Emissions 27 % Renewable Energy 27 % Energy Efficiency 15 % Interconnection 2050 ambitions % Greenhouse Gas Emissions Increased Renewable Energy * Increased Energy Efficiency 27% renewable energy in 2030: up to 45% renewable electricity

Currently status of renewables in the EU Wind Power: (end 2013) Capacity 117 GW, Energy 233 TWh Offshore 6 GW, 24 TWh EU share of electricity from wind 7.

4 Currently status of renewables in the EU Wind Power: (end 2013) Capacity 117 GW, Energy 233 TWh Offshore 6 GW, 24 TWh EU share of electricity from wind 7.8% Denmark, Portugal, Lithuania, Spain, Ireland >15% EU installed WIND capacity Solar Energy: (end 2013) Total PV capacity: 81.5 GW Concentrated solar: 2.3 GW EU share of electricity from solar: 3% Much larger in Germany, Spain, Italy Overall EU Power system: 1,000 GW capacity, 3,300 TWh generation

5 Typical Grid structure Bulk Generation unidirectional flows passive grid and users

6 The Evolution towards Smart Grids SOURCE I.E.A. Smart Grids can be described as an upgraded electricity network characterized by a high level of flexibility and self-adaptability fostered by a two-way digital communication between supplier and consumer, intelligent metering and monitoring systems.

7 The drivers for a change Market liberalisation: Prosumers as an actor in the energy scene New business models Reduction of CO 2 emissions Integration of renewables Energy efficiency

8 The Strategic Energy Technologies Plan Technology action supporting European energy policy Accelerate technology development, technology transfer & uptake Reference for coordinated European and national technology innovation Enhance European competitiveness in low-carbon technologies 2020 perspective: European Industrial Initiatives (EII) Public-private partnerships for short to medium term European Electricity Grids Initiative - EEGI Beyond 2020: European Energy Research Alliance Joint programming for medium- to long-term EERA Joint Programme Smart Grids / ELECTRA SET Plan Integrated Roadmap 2014 Holistic view of energy system Integrate consumers, demand-side actions,

9 Smart Grids RD&D projects in Europe Strong commitment to the development & deployment of smart grids in Europe 459 RD&D projects 45% R&D 55% Demonstration 3,150 M investment 73% Demonstration Predominance of national projects Smart Grid Projects Outlook ses.jrc.ec.europa.eu

10 Horizon 2020 ( ) three pillars: Excellent science: Individual grants for frontier research, collaborative research on future and emerging technologies, training actions, research infrastructure Industrial leadership (ICT, Materials, SME's): Innovative developments on key enabling technologies; Efficient solutions to the technical challenges; Allowing European industry to remain globally competitive Societal challenges: Innovative multi-disciplinary objective-driven technology solutions; Health & wellbeing, food & bioeconomy, energy, transport, climate & resource efficiency, secure & inclusive societies Energy challenge: 6B ( ) The main RD&D financing instrument at European level

11 Horizon 2020 implementation Covering the full innovation chain from research to market uptake SET Plan as the basis for Energy Research & Innovation Energy efficiency across the energy system Low-carbon energy sources Integration in real environments: smart cities and communities Europe-wide initiatives, coordination with national programmes, with other policies Structural and cohesion funds for energy & smart specialisation. Connecting Europe Facility to complete missing links in energy infrastructure International cooperation

12 Smart grids cater for EU-wide benefits A systemic approach to step into the future with the customer in mind Smart grid technologies bring: more efficiency 90% RES connected to grids no compromise in security and reliability Climate and energy objectives Security of supply Smart technologies allow: efficient, safe grid operation Iocal resources integration supply diversification reduced dependence from foreign imports Consumers can: become prosumers or two ways-partners enjoy real decisional power exploit smart technologies for their benefit Real internal energy market* Growth and jobs New grid technologies: spur innovation data management ignites new services keep grid costs in check contributes to lower energy costs for all customers * Real internal energy market means keeping the customer in focus 12

Europe is different RES strongest driver, unbundling and retail competition Competitiveness Security of supply A lowcarbon economy by 2050 Climate / Environment Strong European drivers EU

Total investment needs in the electricity and gas sector 2010-2020: over 1 trillion EURO Power generation ~ 500 bn Transmission and distribution ~ 600 bn Unbundling and Retail competition

13 Europe is different RES strongest driver, unbundling and retail competition Competitiveness Security of supply A lowcarbon economy by 2050 Climate / Environment Strong European drivers EU 2020, 2030, 2050 objectives Market deregulation and integration European market design is different Retail market competition Unbundling Generation/Supply <> Distribution Huge investment needs Total investment needs in the electricity and gas sector : over 1 trillion EURO Power generation ~ 500 bn Transmission and distribution ~ 600 bn Unbundling and Retail competition Greening Smartening RES ~ bn Source: EC Communication on Energy Infrastructure priorities for 2020 and beyond, based on PRIMES calculations Distribution ~ 400 bn Transmission ~ 200 bn

main barriers : - Suitable value allocation and market set-up for flexibility services -

14 Main barriers unclear roles DSOs NEED TO USE FLEXIBILITY SERVICES FROM CONSUMERS AND GENERATORS Maintaining grid stability while keeping network costs down must still face two main barriers : - Suitable value allocation and market set-up for flexibility services - Unbundling requirements prevent DSOs from entering into any commercial agreements with grid users. 14

15 Main barriers - Investment PUBLIC SUPPORT CAN REDUCE CONSUMER COSTS AND MAXIMISE BENEFITS Costs for consumers can be reduced by directing public funding at large-scale projects and roll-outs. Benefits of smart systems for society and grid operators can be increased by consumer awareness, acceptance and engagement. Governments can play an important role here. The setting up of national, European cyber security platforms for information sharing will support the secure operation of our future grids. 15

DSOs largest investors after Universities and research centres: DSOs 320 million private

16 DSOs investing in smart grid projects Altogether 3.15 billion spent on smart grid projects DSOs largest investors after Universities and research centres: DSOs 320 million private investment ( 710 M total) TSOs under 100 million private (about 170 M total) Universities /research institutes 470 million ( 950 M total) Source: JRC Smart Grid Projects Outlook 2014

plans To promote better synergy To guarantee interoperability, As well as to develop: Standards and Protocols Research

17 We are facing unprecedented energy challenges. Many research challenges are in front of us, hence there is a need: To harmonize the different roadmaps and implementation plans To promote better synergy To guarantee interoperability, As well as to develop: Standards and Protocols Research Infrastructures Viable system solutions, Conclusions We are ready to increase our collaborative effort making our expertise and resources available towards the common EU goals. The proposed approach is:

Smart Grids development in Europe

Smart Grids development in Europe EU Science Global Challenges Global Collaboration European Parliament 5 March 2013, Brussels Per-Olof Granström, Secretary General, EDSO for Smart Grids EDSO for Smart