Building the Smart Grid in Europe
Year: 2011

One of the keys to reducing greenhouse emissions and reining in climate change will be the overhaul of the infrastructure that carries energy to consumers. What have become known as smart grid technologies are absolutely necessary to this effort, both to reduce the need for conventional baseload electricity generation and to allow for the integration of renewable energy sources into the supply stream. Europe is poised to play a key role in the development and deployment of intelligent energy grid technologies, in a move to power a new era of cleaner and more efficient energy. Next generation smart grid technologies range from meters that give consumers control over their energy consumption to sensors that improve load balancing and new storage technologies that enable intermittent and dispersed renewable energy sources, such as solar arrays around the Mediterranean and offshore wind power from the North Sea, to be integrated into electricity networks. The current EU push to bring these technologies to market more quickly is part of the region's drive for a low carbon economy. But technological leaders in these areas will also have a powerful economic advantage intelligent grid systems represent a multibillion dollar market going forward, with the early movers certain to gobble up the biggest chunk. Although Europe already operates some of the world's most advanced electricity networks, the EU effort still faces plenty of technological, regulatory, and market challenges. Nor is the EU alone in its efforts to tap new opportunities in the nascent global smart grid market. China is moving fast, perhaps the fastest of all. And the United States is active, too, although critics argue it could and should be doing much more. One of President Obama's proposed eight innovation hubs focused on the eight biggest energy problems facing the United States and the world will work on smart grids. However, the plan faces obstacles, the largest of which is Congress. Worried about every dime the U.S. spends these days, the legislature has been reluctant to appropriate the full $25 million for each center. The EU has responded to the challenge and the competition with an array of initiatives. Key among them is the 2020 Strategic Energies Technology (SET) Plan, which supports European energy and climate policies through technology innovation. Within the scope of this program, the European Commission, the executive arm of the European Union, has launched a 2 billion [euro] $2.7 billion) European Electricity Grid Initiative with the goal to enable 50 percent of the region's networks to operate as smart grids by 2018. And the EU already has a 2022 deadline for the full rollout of smart meters across member states. The number of installed smart electricity meters in Europe is expected to increase from 45.2 million at the end of 2010 to 111.4 million by the end of 2015, according to Berg Insight. Small smart grid pilots are already under way in Austria, Germany, France, Italy, and the United Kingdom. In one project, GE is working with German utility RWE and the University of Stuttgart to develop components for advanced energy storage on the smart grid of the future. Many of the technologies needed to make electricity grids more flexible and capable of two way communications already exist, including low cost sensors to measure network performance and low cost communications to route that information to consumers, utilities, and distributors. But research is still needed in many other areas, including intelligent controls and advanced security systems. A core challenge in building smarter grids is how to graft advanced information, communication, control, and security systems onto aging transmission networks so that data can be reliably and securely harvested to show in real time where energy is being used, where it is still needed, and where it can be generated quickly. This information is vital for improving efficiency and integrating rising volumes of renewable energies, such as wind and solar, into the existing electricity infrastructure.