EN    EN EN 
EN    EN  EUROPEAN COMMISSION 
Brussels, 12.4.2011 
SEC(2011) 463 final 
  
COMMISSION STAFF WORKING DOCUMENT 1 
DEFINITION, EXPECTED SERVICES, FUNCTIONALITIES  
AND BENEFITS OF SMART GRIDS  
 
Accompanying documents to  
 
COMMUNICATION FROM THE CO MMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMI TTEE OF THE REGIONS 
  
Smart Grids: from innovation to deployment 
  
COM(2011 )
 202  FINAL  
                                                 
1 This Annex contains selected texts from the deliver ables of the European Task  Force for Smart Grids to 
provide detailed descriptions and explanations about the definition, services, functionalities and benefits of 
Smart Grids. For more information, see reports from  Expert Group 1 and 3:  
   http://ec.europa.eu/energy/gas_electricity/smartgrids/taskforce_en.htm    
EN 2   EN 1. SMART  GRIDS  CONCEPT  AND  DEFINITIONS 
A Smart Grid is an electricity network that can  cost efficiently integrate the behaviour and 
actions of all users connected to  it – generators, consumers and t hose that do both – in order to 
ensure economically efficient, sustainable power  system with low losses and high levels of 
quality and security of supply and safety. 
Though elements of smartness also exist in ma ny parts of existing grids, the difference 
between a today’s grid and a smart grid of the fu ture is mainly the grid ’s capability to handle 
more complexity than today in an effici ent and effective way. A Smart Grid employs 
innovative products and services together  with intelligent monitoring, control, 
communication, and self-healing technologies in order to: 
- Better facilitate the connection and operation of generators of  all sizes and technologies. 
- Allow consumers to play a part in optimising the operation of the system. 
- Provide consumers with greater information and options for how they use their supply. 
- Significantly reduce the environmental impact  of the whole electricity supply system. 
- Maintain or even improve the existing high levels of system re liability, quality and 
security of supply. 
- Maintain and improve the existing services efficiently. 
- Foster market integration toward s European integrated market. 
The implementation of this concept will be made  possible by the participation of all Smart 
Grid's actors, according to their specific role s and responsibilities wh ich are described in 
greater detail in the report of the Expert Group 3 of the Task Force Smart Grids. Accordingly, 
smart grid participants are categorised as follows: 
− Network operators: transmission and distribut ion system/network operators (TSOs and 
DSOs/DNOs). 
− Grid users: generators, consumers (incl uding mobile consumers), storage owners. 
− Other actors: suppliers, metering operators2, ESCOs, aggregators,  applications and 
services providers, power exchange platform operators. 
 In most EU Member States, DSOs combine several roles, includ ing network operators, 
metering operators (including data collection) and application and services providers (data 
clearing).   The public consultation process started by ER GEG identified network operators (DSOs and 
TSOs) as the prime movers for the deployment of Smart Grids. Their task is to implement the 
network infrastructure that has a central ro le which allows the flow of both energy and 
information between consumers, generators, s uppliers and all the other actors in the new 
smart grid framework. As well, respondents to the consultation agreed that DSOs (and TSOs), 
as prime movers for the deployment of smar t grids, will allow new marketplaces and 
opportunities for suppliers and energy service companies. 
 Conceptually, some Smart Grid participants provide services, based on a combination of 
functionalities, to other Smart Grid participants. 
 
                                                
 
2 Depending on the national market model, the metering operators may be distribution companies, suppliers or 
meter companies. 
EN 3   EN A Smart Grid service identifies, and can be commonly considered as, the outcome a user 
needs/will need from the electricity grid in a fully developed liberalised market; it is 
associated to one provider and to a number of  primary beneficiaries, recognising that the 
benefits will ultimately be reflected in consumer societal and environmental terms.   The achievement of service outcomes is possibl e only through Smart Grids functionalities, 
which represent elementary bricks through which services can be implemented and delivered to beneficiaries. While some Smart Grid's servi ces are identified at this stage it is expected 
that new functionalities will be  developed and may be deploye d over time. The Smart Grid's 
infrastructure shall provide enough flexibi lity for new functionalities to be deployed. 
 
EN 4   EN  
2. HIGH  LEVEL  SERVICES  OF SMART  DISTRIBUTION  GRIDS 
Smart Grid services in  the liberalised market  
The detailed services to be provided in Smart Grid solutions will have to be agreed in 
discussion between the relevant parties. Howeve r the following represents a list of the broad 
services envisaged, showing the provider of the service and the primary beneficiaries.  
A provider of a service is a participant that is  responsible for such a service alone or in 
combination with other participants. Primary be neficiaries are participants that require or 
directly benefit from the services, recognising th at the full benefits from these services are 
shared among a much wider group of participants.  
High-level services  
 
A. Enabling the network to integrate users with new requirements  
 
Outcome: Guarantee the integration of di stributed energy resources (both large 
and small-scale stochastic renewabl e generation, heat pumps, electric 
vehicles and storage) connected  to the distri bution network. 
 
Provider: DSOs Primary beneficiaries: Generators, consum ers (including mobile consumers), storage 
owners. 
 
 
B. Enhancing efficiency in day-to-day grid operation   
 
Outcome: Optimise the operation of distribution assets and improve the efficiency of the 
network through enhanced automation, m onitoring, protection and real time 
operation. Faster fault identification/resolution will help improve continuity of 
supply levels.  
 Better understanding and management of technical and non-technical losses, 
and optimised asset maintenance activities based on detailed operational information. 
 
Provider:  DSOs, metering operators 
Primary beneficiaries: Consumer s, generators, suppliers, DSOs. 
  
C. Ensuring network security, system control and quality of supply
 
 
Outcome: Foster system security through an  intelligent and more effective control of 
distributed energy resources, ancillary  back-up reserves and other ancillary 
services. Maximise the capability of the network to manage intermittent 
generation, without adversely affec ting quality of supply parameters. 
 
Provider:  DSOs, aggregators, suppliers. 
Primary beneficiaries: Generators, consumers, aggregators, DSOs, TSOs. 
EN 5   EN  
 
D. Enabling better planning of future network investment  
 
Outcome: Collection and use of data to en able more accurate modelling of networks 
especially at LV level, also taking into account new grid users, in order to optimise infrastructure requirements and so reduce their environmental impact. Introduction of new methodologies for more ‘active’ distribution, exploiting active and reactive contro l capabilities of distributed energy 
resources. 
 
Provider:  DSOs, metering operators. Primary beneficiaries: Consumers, generators, storage owners. 
 
 
E. Improving market functioning and customer service
 
 
Outcome: Increase the performance and reliab ility of current market processes through 
improved data and data flows between market participants, and so enhance 
customer experience.  
 
Provider:  Suppliers (with applica tions and services providers), power 
exchange platform providers , DSOs, metering operators. 
Primary beneficiaries: Consumers, supp liers, applications and services providers. 
 
 
F. Enabling and encouraging stronger and more di rect involvement of consumers in their 
energy usage and management  
 
Outcome: Foster greater consumption awareness taking advantage of smart metering 
systems and improved customer informati on, in order to allow consumers to 
modify their behaviour according to price and load signals and related 
information. 
Promote the active participation of all actors to the electricity market, through 
demand response programmes and a more  effective management of the 
variable and non-programmable generati on. Obtain the consequent system 
benefits: peak reduction, reduced netw ork investments, ability to integrate 
more intermittent generation.  
  
Provider:  Suppliers (with mete ring operators and DSOs), ESCOs. 
Primary beneficiaries: Consumers, gene rators. Indeed, consumers will benefit: 
• either because these services will contribute to the 20/20/20 targets 
• or directly through improvement of qua lity of supply and other services 
 
The hypothesis made here is that company efficiency  and the benefit of the competitive market will be 
passed to consumers– at least partly - in the form of tariff or price optimisation, and is dependent on effective regulation and markets.  
 
 
EN 6   EN 3. FUNCTIONALITIES  OF SMART  DISTRIBUTION  GRIDS 
As described in chapter 3, the delivery of Smart Grid services requires specific network 
functionalities. This chapter lists a series of functionalities grouped accord ing to the high-level 
services identified in chapter 6. In some cases these f unctionalities could be br oken down further into 
smaller sub-functionalities. However it is preferre d to adopt this level of detail in order to: 
 
− specify a limited number of items; and 
− avoid the imposition of any specific market model w ith respect to other options, as a very detailed 
list could inhibit some business possibilities. 
 
A. Enabling the network to integr ate users with new requirements  
 
1. Facilitate connections at all voltages/locations3 for all existing and future devices with Smart 
Grid solutions through the availability of tec hnical data and additional grid information to: 
o simplify and reduce the cost of the connection process subject to maintaining network 
integrity/safety; 
o facilitate an ‘open platform’ approach – close to ‘plug & play’; 
o make connection options transparent; 
o facilitate connection of new load types, particularly EV; 
o ensure that the most efficient DER connec tion strategies can be pursued from a total 
system perspective; 
2. Better use of the grid for users at all voltag es/locations, including in particular renewable 
generators. 
3. Registers of the technical capabilities 4 of connected users/devices with an improved network 
control system, to be used for network purposes (ancillary services). 
4. Updated performance data on continuity of supp ly and voltage quality to inform connected 
users and prospective users. 
 
 
B. Enhancing efficiency in day-to-day grid operation   
 
5. Improved automated fault identification and optimal  grid reconfiguration after faults reducing 
outage times: 
o using dynamic protection and automation sch emes with additional information where 
distributed generation is present; 
o strengthening Distribution Management Systems of distribution grids. 
6. Enhanced monitoring and control of power flows and voltages. 
7. Enhanced monitoring and observability of ne twork components down to low voltage levels, 
potentially using the smart metering infrastructure. 
8. Improved monitoring of network assets in order to  enhance efficiency in day-to-day network 
operation and maintenance (proactive, condition based, operation history based maintenance). 
                                                 
3 Technical constraints permitting and according to the price signal. 
4 Network users/devices, in order to actively particip ate/be managed in network’s operations and energy 
management, must be characterised by adequate technical capabilities. Considering the active control and demand-response of Distributed Energy Resources (i.e. generators, controllable loads and storage) some of 
the most relevant technical capabilities that  have to be taken into account are: 
 Active – reactive power capabilities. 
 Dynamic response. 
 Electric storage capacity in terms of energy and power. 
For example, referring to the renewable generators pa rticipation in the network voltage regulation or power 
flows control, the generator reactive power capability  curve and the other capabilities aforementioned, are 
technical constraints that have to be managed.
 
EN 7   EN 9. Identification of technical and non technical losses through power flow analysis, network 
balances calculation and smart metering information. 
10. Frequent information on actual active/reactiv e injections/withdrawals by generation and 
flexible consumption to system operator. 
  
C. Ensuring network security, system control and quality of supply
 
 
11. Solutions to allow grid users and aggregators to  participate in an ancillary services market to 
enhance network operation. 
12. Improved operation schemes for voltage/current c ontrol taking into account ancillary services. 
13. Solutions to allow intermittent  generation sources to contribute to system security through 
automation and control. 
14. System security assessment and management of remedies, including actions against terrorist 
attacks, cyber threats, actions during emerge ncies, exceptional weather events and force 
majeure events. 
15. Improved monitoring of safety particularly  in public areas during network operations5. 
16. Solutions for demand response for system secu rity purposes in required response times. 
 
 
D. Better planning of future network investment  
 
17. Better models of DG, storage, flexible loads (including EV), and the ancillary services 
provided by them for an improvement of infrastructure planning. 
18. Improved asset management and replacement strategies by information on actual/forecasted 
network utilization. 
19. Additional information on supply quality and c onsumption made available by smart metering 
infrastructure to support network investment planning. 
  E. Improving market functioning and customer service
 
 
20. Solutions for participation of all connected  generators in the electricity market. 
21. Solutions for participation of VPPs in the electri city market, including access to the register of 
technical capabilities of connected users/devices. 
22. Solutions for consumer participa tion in the electricity market, allowing market participants to 
offer: 
o time of use energy pricing, dynamic energy pricing and critical peak pricing; 
o demand response / load control programmes; 
23. Grid solutions for EV recharging: 
o open platform grid infrastructure for EV recharge purposes accessible to all market 
players and customers. 
o smart control of the recharging process th rough load management functionalities of 
EV . 
24. Improved industry systems for settlement, syst em balance, scheduling and forecasting and 
customer switching. 
25. Grid support to intelligent home/facilities au tomation and smart devices by consumers. 
26. Individual advance notice to grids users for planned interruptions. 
27. Customer level reporting in event of interruptions (during, and after event). 
  
                                                 
5 e.g.: control of access to the equipment, detection of fault on overhead networks, prot ection of the contents of 
the buildings. 
EN 8   EN F. Enabling and encouraging stronger and more direct involvement of consumers in their 
energy usage and management  
 
28. Sufficient frequency of meter readings, measure ment granularity for consumption /injection 
metering data (e.g. interval metering, active and reactive power, etc). 
29. Remote management of meters. 
30. Consumption/injection data a nd price signals via the meter,  via a portal or other ways 
including home displays, as best su ited to consumers and generators. 
31. Improved provision of energy usage information, including levels of green energy available at 
relevant time intervals and supply contract carbon footprint. 
32. Improved information on energy sources. 
33. Individual continuity of supply and voltage qua lity indicators via meter, via portal or other 
ways including home displays. 
EN 9   EN  
Benefit 
  
Potential key performance indicators6 
 
(1) Increased sustainability Quantified reduction of carbon emissions  
Environmental impact of electricity grid infrastructure 
Quantified reduction of accidents and risk  associated to ge neration technologies 
(during mining, production,  installations, etc.)  
(2) Adequate capacity of 
transmission and distribution 
grids for “collecting” and 
bringing electricity to the 
consumers Hosting capacity for distributed ener gy resources in distribution grids 
Allowable maximum injection of power wi thout congestion risks in transmission 
networks 
Energy not withdrawn from renewable sources due to congestion and/or security risks  
An optimized use of capital and assets 
(3) Adequate grid connection and 
access for all kind of grid users Benefit (3) could be partly assessed by: 
- first connection charges for generato rs, consumers and those that do both 
- grid tariffs for generators, consumers and those that do both 
- methods adopted to calc ulate charges and tariffs 
- time to connect a new user 
- optimization of new equipment desi gn resulting in best cost/benefit 
- faster speed of successful innovation against clear standards 
(4) Satisfactory levels of security and quality of supply Ratio of reliably available generation capacity and peak demand 
Share of electrical energy pr oduced by renewable sources 
Measured satisfaction of grid users with the “grid” services they receive 
Power system stability 
Duration and frequency of in terruptions per customer 
Voltage quality performance of electricit y grids (e.g. voltage dips, voltage and 
frequency deviations) 
(5) Enhanced efficiency and 
better service in electricity supply 
and grid operation Level of losses in transmission and in dist ribution networks (absolute or percentage)7. 
Storage induces losses too, but also act ive flow control increases losses.  
Ratio between minimum and maximum elect ricity demand within a defined time 
period (e.g. one day, one week)8 
Percentage utilisation (i.e. average loading) of electricity grid elements 
Demand side participation in electricity markets and in energy efficiency measures 
Availability of network components (related to planned and unplanned maintenance) 
and its impact on network performances 
Actual availability of network capacity with respect to its standard value (e.g. net transfer capacity in transmission grids, DER hosting capacity in distribution grids) 
(6) Effective support of trans-
national electricity markets by 
load-flow control to alleviate 
loop-flows and increased 
interconnection capacities Ratio between interconnection capacity of  one country/region and its electricity 
demand 
Exploitation of interconnection capacities  (ratio between mono-directional energy 
transfers and net transfer capacity), particul arly related to maximis ation of capacities 
according to the Regulation of electricity cross-border exchanges and the congestion 
management guidelines 
Congestion rents across interconnections 
(7) Coordinated grid development 
through common European, 
regional and local grid planning to optimize transmission grid 
infrastructure Benefit (7) could be partly assessed by: 
- impact of congestion on outcomes and prices of national/regional markets 
- societal benefit/cost ratio of a proposed infrastructure investment 
- overall welfare increase, i.e. running alwa ys the cheapest gene rators to supply the 
actual demand) Æ this is also an indicator for the benefit (6) above 
- Time for licensing/authorisation of a ne w electricity transmission infrastructure. 
- Time for construction (i.e. after authorisation) of a new electricity transmission 
infrastructure. 
(8) Enhanced consumer 
awareness and participation in the 
market by new players - Demand side participation in electricity markets and in energy efficiency measures 
- Percentage of consumers on (opt-in) time-o f-use / critical peak / real time dynamic 
pricing 
- Measured modifications of el ectricity consumpti on patterns after new (opt-in) pricing 
schemes. 
                                                 
6 Some of these indicators are already used  today in different EU Member States. 
7 In case of comparison, the level of lo sses should be corrected by structural  parameters (e.g. by the presence of 
distributed generation in distribution grids and its production pattern). Moreover a possibly conflicting 
character of e.g. aiming at higher network elements ’ utilization (loading) vs. higher losses, should be 
considered accordingly. 
8 In case of comparison, a structural di fference in the indicator should be take n into account due e.g. to electrical 
heating and weather conditions, shares of industrial and domestic loads. 
EN 10   EN  
Benefit 
  
Potential key performance indicators6 
 
- Percentage of users available to behave as interruptible load. 
- Percentage of load demand participating in market-like schemes for demand 
flexibility. 
- Percentage participation of users connect ed to lower voltage levels to ancillary 
services 
(9) Enable consumers to make informed decisions related to 
their energy to meet the EU 
Energy Efficiency targets  
 - Base to peak load ratio 
 Relation between power demand and market price for electricity 
- Consumers can comprehend their actual energy consumption and receive, understand 
and act on free information they need / ask for 
- Consumers are able to access their historic energy consumption information for free 
in a format that enables them to make like for like comparisons with deals available on 
the market. 
- Ability to participate in relevant energy market to purchase and/or sell electricity  
- Coherent link is established between th e energy prices and consumer behaviour 
(10) Create a market mechanism 
for new energy services such as 
energy efficiency or energy 
consulting for customers - ‘Simple’ and/or automated changes to c onsumers’ energy consumption in reply to 
demand/response signals, are enabled 
- Data ownership is clearly defined and data processes in place to allow for service 
providers to be active with customer consent 
- Physical grid related data are available in an accessible form  
- Transparency of physical connection au thorisation, requirements and charges 
- Effective consumer complaint handling and redress. This includes clear lines of responsibility should things go wrong 
(11)Consumer bills are either 
reduced or upward pressure on 
them is mitigated - Transparent, robust processes to assess whether the benefits  of implementation 
exceed the costs in each area where roll-out is considered are in place, and a 
commitment to act on the findings is ensured by all involved parties 
- Regulatory mechanisms exist, that ensure that these benefits are appropriately 
reflected in consumer bills and do not simply result in windfall profits for the industry 
- New smart tariffs (energy prices) deliver tang ible benefits to consumers or society in 
a progressive way 
- Market design is compatible with the way the consumers use the grid