What are the main challenges in the smart energy sector? - interview with Willem Strabbing, ESMIG Managing Director

This interview was conducted by Synergy for their "Talk Community Interviews" series and is available here.


What are the main challenges that you see in the Smart Energy Sector?

We see that there are 3 main challenges, from the Smart Energy solutions point of view, that are basically connected to each other and related to the scope of ESMIG:

The first challenge concerns the introduction of demand side flexibility in the European energy market, because with the introduction of sustainable generation, demand has to follow generation, while in the earlier days it was the other way around. With dynamic sources that depend on the wind or the sun, also consumption needs to become more dynamic. This implies changes in regulation, new technologies that have to come along and also new market players, like aggregators, that aggregate the flexibility in order to have a substantial offer on the market.  

Something connected to that first challenge is the roll out of smart meters. These meters are essential in the road towards flexible demand because they can measure according Time of Use and provide detailed consumption information to consumers. The third Energy Package already indicated that there should be smart meters installed in Europe and the target was a coverage of 80% of European households in 2020, but we all know that this target will not be achieved. Of 27 member states only 17 have positively chosen a full roll out in their country, so how do we help the other countries in their discussion regarding Smart Meters? What exactly is the issue there and how can we assist these countries in overcoming any barriers (economic, technical or political)? 

Finally, if you have a smart meter, how are the consumer benefits being realised, such as energy savings? In a liberalised and unbundled market, where the DSO is responsible for rolling out smart meters and the retail / commercial side of the market is responsible for offering services – these activities should go hand in hand, but we see that it not always does. So despite of the rolling out of smart meters, the consumer is not able to enjoy the full benefits. A study we were involved in a few years ago showed the results of the direct feedback and the savings that could be reached were substantial, even above expectations. 

How are you working on overcoming these challenges?

In the first place, we are a European association, so we do a lot of work in Brussels. As an example, we are active in the Smart Grid taskforce of the European Commission, that is looking at issues around introduction of smart grids as a whole, with a special focus on demand side flexibility. The taskforce has several expert groups and we are active in the groups that deal with Interoperability, Privacy and Security and Regulatory issues for the introduction of demand side flexibility. This year we would definitely like to spend more time in the 3rd group on practical experiences with the introduction of demand side flexibility through workshops.

On the other hand, even though we are an European association, we are now spending more and more time on national issues and discussing national barriers for the introduction of smart meters and realising consumer benefits. Directives and guidelines can be made in Brussels, but the implementation is on national level and the situation is different in every country. So we are involved more and more in those national discussions and try to support national authorities in order to come to an acceptable and efficient solution.  

Looking at the Smart Energy Sector, what do you expect will change in the future and what technologies will drive this change?

There will be several changes, with the introduction of a new retail market. And that is also where the European Commission is focussing on in its “Clean Energy Package”. Especially on the commercial side, the nature of companies that are selling energy is changing from just selling energy to selling energy services and that requires a different business model.  

The introduction of demand side flexibility also needs new technologies to be installed at the consumer side, to control smart appliances for example. The technology has to offer both the grid operators (for network management) and the retailers (for offering flexible consumption) the opportunity to control demand.

What can we expect from ESMIG at European Utility Week 2017 that reflects these changes and drivers?

We are going to continue with what we started in the last two years in our pavilion, on the exhibition floor: an Interoperability demonstration of demand side flexibility. What we try to do there is a demonstration of technology that is used by both grid operators (through the smart meter infrastructure) and suppliers or retailers (through their own channels) and show how they can make use of flexibility on the consumer side. This year we will show more of the technology on the consumer side, what functionalities are available to control smart appliances, what smart appliances are already available.

Our demonstration is also about interoperability, we want to demonstrate the combination of the newest IoT technologies and Machine to Machine (M2M) standards, where the telecom sector is very much focusing on, and the traditional standards and data models from the utility side. 

Besides that demonstration, we will moderate a session in the strategic program on “Building Customer Partnership” and our members will provide several presentations on key topics.