COMMISSION STAFF WORKING DOCUMENT DEFINITION, EXPECTED SERVICES, FUNCTIONALITIES  AND BENEFITS OF SMART GRIDS   Accompanying documents to  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS   Smart Grids: from innovation to deployment   COM(2011) 202  final
Date: 2011-04-12
Institutions: European Commission
Subjects: electrical energy, electricity supply, energy grid, energy supply, innovation, security of supply

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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 COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Smart Grids: from innovation to deployment 

COM(2011) 202  FINAL 

1  This  Annex  contains  selected  texts  from  the  deliverables  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   

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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 those 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  many  parts  of  existing  grids,  the  difference 
between a today’s grid and a smart grid of the future is mainly the grid’s capability to handle 
more  complexity  than  today  in  an  efficient  and  effective  way.  A  Smart  Grid  employs 
innovative  products  and 
intelligent  monitoring,  control, 
together  with 
communication, and self-healing technologies in order to: 

services 

-  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  reliability,  quality  and 

security of supply. 

-  Maintain and improve the existing services efficiently. 
-  Foster market integration towards 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  roles  and  responsibilities  which  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 distribution system/network operators (TSOs and 
DSOs/DNOs). 
Grid users: generators, consumers (including 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,  including  network  operators, 
metering  operators  (including  data  collection)  and  application  and  services  providers  (data 
clearing).  

The public consultation process started by ERGEG 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  role  which  allows  the  flow  of  both  energy  and 
information  between  consumers,  generators,  suppliers  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  smart  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. 

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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  possible  only  through  Smart  Grids  functionalities, 
which represent elementary bricks through which services can be implemented and delivered 
to  beneficiaries.  While  some  Smart  Grid's  services  are  identified  at  this  stage  it  is  expected 
that new functionalities will be developed and may be deployed over time. The Smart Grid's 
infrastructure shall provide enough flexibility for new functionalities to be deployed. 

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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. However 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  beneficiaries  are  participants  that  require  or 
directly  benefit  from  the  services,  recognising  that  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  distributed  energy  resources  (both  large 
and  small-scale  stochastic  renewable  generation,  heat  pumps,  electric 
vehicles and storage) connected to the distribution network. 

Provider: 
Primary beneficiaries:  Generators,  consumers  (including  mobile  consumers),  storage 

DSOs 

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,  monitoring,  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:  
Primary beneficiaries:  Consumers, generators, suppliers, DSOs. 

DSOs, metering operators 

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 affecting quality of supply parameters. 

Provider:  
Primary beneficiaries:  Generators, consumers, aggregators, DSOs, TSOs. 

DSOs, aggregators, suppliers. 

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D.  Enabling better planning of future network investment  

Outcome: 

Collection  and  use  of  data  to  enable  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  control  capabilities  of  distributed  energy 
resources. 

Provider:  
Primary beneficiaries:  Consumers, generators, storage owners. 

DSOs, metering operators. 

E.  Improving market functioning and customer service 

Outcome: 

Provider:  

Increase  the  performance  and  reliability  of  current  market  processes  through 
improved  data  and  data  flows  between  market  participants,  and  so  enhance 
customer experience.  

Suppliers  (with  applications  and  services  providers),  power 
exchange platform providers, DSOs, metering operators. 

Primary beneficiaries:  Consumers, suppliers, applications and services providers. 

F.  Enabling and encouraging stronger and more direct involvement of consumers in their 

energy usage and management 

Outcome: 

Foster  greater  consumption  awareness  taking  advantage  of  smart  metering 
systems  and  improved  customer  information,  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  generation.  Obtain  the  consequent  system 
benefits:  peak  reduction,  reduced  network  investments,  ability  to  integrate 
more intermittent generation.  

Provider:  

Suppliers (with metering operators and DSOs), ESCOs. 

Primary beneficiaries:  Consumers, generators. Indeed, consumers will benefit: 

•  either because these services will contribute to the 20/20/20 targets 

•  or directly through improvement of quality 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.  

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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  according  to  the  high-level 
services identified in chapter 6. In some cases these functionalities could be broken down further into 
smaller sub-functionalities. However it is preferred to adopt this level of detail in order to: 

specify a limited number of items; and 

− 
−  avoid the imposition of any specific market model with respect to other options, as a very detailed 

list could inhibit some business possibilities. 

A. 

Enabling the network to integrate 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 technical 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 connection strategies can be pursued from a total 

system perspective; 

2.  Better  use  of  the  grid  for  users  at  all  voltages/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  supply  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 schemes 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  network  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  participate/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: 

(cid:131) 
(cid:131) 
(cid:131) 

Active – reactive power capabilities. 
Dynamic response. 
Electric storage capacity in terms of energy and power. 

For  example,  referring  to  the  renewable  generators  participation  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. 

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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/reactive  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 control 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  emergencies,  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 security 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 consumption 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 electricity market, including access to the register of 

technical capabilities of connected users/devices. 

22. Solutions for consumer participation in the electricity market, allowing market participants to 

offer: 
o 
o  demand response / load control programmes; 

time of use energy pricing, dynamic energy pricing and critical peak pricing; 

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  through  load  management  functionalities  of 

EV. 

24. Improved  industry  systems  for  settlement,  system  balance,  scheduling  and  forecasting  and 

customer switching. 

25. Grid support to intelligent home/facilities automation 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, protection of the contents of 

the buildings. 

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F. 

Enabling and encouraging stronger and more direct involvement of consumers in their 
energy usage and management 

28. Sufficient  frequency  of  meter  readings,  measurement  granularity  for  consumption  /injection 

metering data (e.g. interval metering, active and reactive power, etc). 

29. Remote management of meters. 
30. Consumption/injection  data  and  price  signals  via  the  meter,  via  a  portal  or  other  ways 

including home displays, as best suited 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  quality  indicators  via  meter,  via  portal  or  other 

ways including home displays. 

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Benefit 

Potential key performance indicators6 

(1) Increased sustainability 

(2) Adequate capacity of 
transmission and distribution 
grids for “collecting” and 
bringing electricity to the 
consumers 
(3) Adequate grid connection and 
access for all kind of grid users 

(4) Satisfactory levels of security 
and quality of supply 

(5) Enhanced efficiency and 
better service in electricity supply 
and grid operation 

(6) Effective support of trans-
national electricity markets by 
load-flow control to alleviate 
loop-flows and increased 
interconnection capacities 

(7) Coordinated grid development 
through common European, 
regional and local grid planning 
to optimize transmission grid 
infrastructure 

(8) Enhanced consumer 
awareness and participation in the 
market by new players 

Quantified reduction of carbon emissions  
Environmental impact of electricity grid infrastructure 
Quantified reduction of accidents and risk associated to generation technologies 
(during mining, production, installations, etc.)  
Hosting capacity for distributed energy resources in distribution grids 
Allowable maximum injection of power without 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 
Benefit (3) could be partly assessed by: 

- first connection charges for generators, consumers and those that do both 

- grid tariffs for generators, consumers and those that do both 
- methods adopted to calculate charges and tariffs 
- time to connect a new user 
- optimization of new equipment design resulting in best cost/benefit 
- faster speed of successful innovation against clear standards 
Ratio of reliably available generation capacity and peak demand 
Share of electrical energy produced by renewable sources 
Measured satisfaction of grid users with the “grid” services they receive 
Power system stability 
Duration and frequency of interruptions per customer 
Voltage quality performance of electricity grids (e.g. voltage dips, voltage and 
frequency deviations) 
Level of losses in transmission and in distribution networks (absolute or percentage)7. 
Storage induces losses too, but also active flow control increases losses.  
Ratio between minimum and maximum electricity 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) 
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), particularly related to maximisation of capacities 
according to the Regulation of electricity cross-border exchanges and the congestion 
management guidelines 
Congestion rents across interconnections 
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 always the cheapest generators to supply the 
actual demand) (cid:198) this is also an indicator for the benefit (6) above 
- Time for licensing/authorisation of a new electricity transmission infrastructure. 
- Time for construction (i.e. after authorisation) of a new electricity transmission 
infrastructure. 
- Demand side participation in electricity markets and in energy efficiency measures 
- Percentage of consumers on (opt-in) time-of-use / critical peak / real time dynamic 
pricing 
- Measured modifications of electricity consumption 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 losses 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 difference in the indicator should be taken into account due e.g. to electrical 

heating and weather conditions, shares of industrial and domestic loads. 

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Benefit 

Potential key performance indicators6 

(9) Enable consumers to make 
informed decisions related to 
their energy to meet the EU 
Energy Efficiency targets  

(10) Create a market mechanism 
for new energy services such as 
energy efficiency or energy 
consulting for customers 

(11)Consumer bills are either 
reduced or upward pressure on 
them is mitigated 

- 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 connected to lower voltage levels to ancillary 
services 
- 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 the energy prices and consumer behaviour 
- ‘Simple’ and/or automated changes to consumers’ 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 authorisation, requirements and charges 
- Effective consumer complaint handling and redress. This includes clear lines of 
responsibility should things go wrong 
-  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 tangible benefits to consumers or society in 
a progressive way 
- Market design is compatible with the way the consumers use the grid  

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