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.

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. 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

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

As consumers would be more likely to install renewable sources of energy (e.g. solar panels) in a smart grid system, democratising energy distribution pushes decarbonisation even further. Additionally, consumers have a greater, more active influence on the amount of renewable energy in Europe's energy mix.

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

Clean Energy Package

• http://europa.eu/rapid/press-release_MEMO-16-3986_en.htm
• http://europa.eu/rapid/press-release_MEMO-16-3961_en.htm
• https://ec.europa.eu/commission/priorities/energy-union-and-climate_en

In its energy and gas directives in 2009, the EU set fundamental rules for an internal energy market, revising and expanding another directive from 2003.
In its energy efficiency directive from 2012 it was decided to shift to a more energy efficient future for the EU's Energy Union and the directive to deploy infrastructure for alternative fuels was introduced in 2014.

2012 was also the year when European Commission prepared for the roll-out of smart meters. They followed up with a recommendation for the data protection of deployed smart meters as well as smart grids in general.

In preparation for the upcoming legal measures regarding smart grids and technology connected to it, the European Commission released a communication document in 2011, presenting various challenges connected to smart grids, such as funding of smart grid projects, technical standers across the continent, data protection, a regulatory framework, a competitive and open retail market and the continued support for technology and systems behind a smart grid system. That was followed up by a similar document in 2012. This time the European Commission outlined the benefits of an open, integrated and flexible energy market and how to get the most out of the internal energy market. How public intervention could have fundamental influence on the energy market was brought up for the first time in 2013 by the European Commission.

In the middle of 2014, the Directorate General on Energy released a report on benchmarking results of smart metering deployment, naming the usage of available standards and the right set of functionalities to ensure interoperability and guarantee data protection, the need for a specific data privacy and security framework and getting the consumer on board as the key lessons learned from pilot programmes.

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.
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”.

Third Energy Package

Links for further Research

• https://blog.p2pfoundation.net/energy-as-a-common-good/2017/02/22
• http://energyandcarbon.com/digitalisation-energy-implications/
• http://www.ceer.eu/portal/page/portal/EER_HOME/EER_PUBLICATIONS/CEER_PAPERS/Electricity/Tab3/0C9D9B1CD9645A0EE050A8C03C2F585D

References

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