Category:Heidelberg:REGI

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Energy as a commons? With paradigms new markets and opportunities arising with digitalising in the energy sector and democratising means of production and distribution, how can regulation be designed in such a way that energy systems these markets are equitable and ensure participation across society?

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The Committee on Regional development in Heidelberg will focus on the power shift from centralised to decentralised distribution systems. With EU citizens' growing awareness of environmental issues, new technological developments and smart power grids on the horizon, a shift towards a distributed system that includes consumers and turns them into co-producers is a possible future for Europe's energy union. There are many challenges that have to be met before such a transfer can take place: The liberalisation of the energy market is still not fully implemented and few investments are in place to fund distributed systems. Moreover, the data recorded through power grids raises questions concerning data storage and protection and there is currently no strategy on who would regulate a European-wide power grid and how. Finally, many citizens seem to be “energy illiterate”, lacking the necessary knowledge to participate in a new decentralised system. To overcome these obstacles and ensure a bright future for distributed systems in the energy union is what REGI will cover in committee work and resolution.

The Past: Distributing energy the traditional way

While energy production reliant on coal and other fossil fuels got less over the last 20 years and the percentage of renewables in the EU's energy mix is steadily increasing, the long-awaited energy revolution has yet to arrive and the EU's amount of energy production is decreasing as a whole.^[1]

Energy distribution systems are traditionally centralised and one-directional: A power plant of any kind generates the energy that is then transmitted. Distribution systems then proceed to, as their name would suggest, distribute the energy to the consumers.^[2] Nowadays electricity also tends to take over other forms of energy as well, as shown by the rising popularity of electric cars. This may accelerate the ever-growing demand for energy even further. On the infrastructure side of things, the ageing energy infrastructure of most Member States should also be taken into consideration. This stands in stark contrast with many modern energy-related technologies such as smart grids, renewable energy sources as well as energy trading systems.

With decreasing EU energy production but increasing demand and consumption, geopolitical issues such as the EU-Russia tensions that have significant influence on fossil fuel imports into the European Union gain relevance.

The Present: Obstacles to be addressed

The economic dimension

As of now, almost all of the energy distribution is done withing centralised systems. Investments into the technology of smart grids have been relatively low and are coming from governmental resources only. Furthermore, the energy market rules would have to be newly defined and the roles of Distribution System Operators (DSOs) and Transmission System Operators (TSOs) would change fundamentally.

Energy markets are often unpredictable and uncontrollable, which is why the question whether affordable energy prices for consumers can be assured has been raised. Apart from that, only large infrastructure programmes have been funded at the moment.

The societal dimension

In the current system, the user is a passive consumer, always dependent on utility companies and ignorant of how the energy system works. Costs ultimately outweigh the benefits as of now and the liberalisation of the energy market is still ongoing. On the question whether a European-wide power grid should also be regulated on a European level, opinions are divided. On top of that, it is still uncertain how consumers are going to be motivated to become co-producers of energy, how the required knowledge about grid possibilities is spread as well as how the public can become involved in large-scale projects.

The technological dimension

Data protection is a hot topic when talking about the possibilities and opportunities of smart grids. The recording of consumers' energy usage data creates a new data risk and opens the door for exploitation if no preemptive measures are taken. Cyber attacks disabling the grid could have dramatic consequences, questioning the reliability of the grid. With the introduction of smart grids huge sums of data would need to be stored.

The Future: Smart grids - an outlook to what is possible

The economic dimension

In theory, the efficiency of energy usage would heavily increase in a smart grid-based system, as energy would be used more efficiently and energy overflow could be avoided. The flexibility of the power grid would therefore be increased, as information on the energy use of residentials enables its efficiency.

The societal dimension

Through the introduction of smart grids, consumers turn into co-producers of energy as they actively participate in the energy grid. As outlined in the section above, this is only possible through an increase in energy literacy of citizens connected to the smart power grid. Subsequently, the decentralisation of energy through the means of smart power grids is only possible through the empowerment of the citizens connected to it.

The technological dimension

both electricity and information are exchanged
ensuring interoperability in smart power grids
reporting energy usage to increase efficiency
are microgrids a possibility?

In a smart grid system, both electricity and information are exchanged, which is why interoperability within smart power grids has to be ensured. The reporting of energy usage would increase the efficiency of energy distribution. The European Commission has come forward with various possible systems for managing the data recorded in a smart grid. This includes delegating the responsibility of market facilitation to DSOs, introducing third party market facilitators and an independent central hub as well as solving the problem through Data Access Point Managers.

Furthermore, the technology microgrids should be kept in mind, as they could counteract possible security risks for the grids and manage the power grid at a regional and local level.

The environmental dimension

pushing decarbonisation
Consumers more likely to install renewable sources of energy (e.g. solar panels)
consumers have a greater influence on the amount of renewable energy used in Europe

The Actors: Who is involved

EU Commission & DG on Energy
Member States’ energy ministries and distribution systems
Connecting Europe Facility
EU citizens as “prosumers”

Measures in Place: What has been done

Questions to be answered: What are sources of knowledge EU citizens to look into at the moment? What are microgrids and how do they work?

Clean Energy Package

SET-Plan

The European Strategic Energy Technology Plan (SET-Plan) aims to accelerate the development and deployment of low-carbon technologies. It seeks to improve new technologies and bring down costs by coordinating national research efforts and helping to finance projects.

TEN-E

The Trans-European Energy Networks (TEN-E) – are programmes set up by the EU for the implementation of the European Single Market. The Trans-European Networks aim at "linking island, landlocked and peripheral regions with the central regions of the community”.

A final outlook

Links for further Research

References

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[1] ttp://ec.europa.eu/energy/sites/ener/files/documents/2014_energy_market_en.pdf

[2] ttp://www.edsoforsmartgrids.eu/home/why-smart-grids/

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