Electricity Grids

AuthorEuropean Union Publications Office, 2006

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Overview: Major Fields of Research and Key Nations Involved

Electricity Grids
R&D Areas Distributed generation, electricity transmission, storage, high-temperature superconductors, other integration projects
State of Commercialisation Technology development, demonstration
Key Nations US, Japan, Canada
Expected contributions to EU energy policy targets Critical for the development of a single open electricity market across Europe
EC policy backing EU Directives
Key Member States Finland, Germany, Netherlands, Italy

The electricity industry is still reorganising in Europe. Competition is encouraged in both the wholesale and the retail sectors, and the need to interconnect the national grids of Member States is a prerequisite for the development of a single open electricity market. Removing geographical constraints on the delivery of power supplies will lead to increased competition and enhanced quality, reliability, security and safety. However, the development of a common grid across Europe will require far-reaching technological and regulatory changes.

Distributed Generation (DG) will also play a key role in the development of a common and unified European electricity market. DG is an option for reliable, cost-effective, premium power for homes and businesses: it also offers customers continuity and reliability of supply during power outages. The interconnection of DG to power grids is a challenge that will be critical to the development of unified power markets.

Research Priorities in the EC, Member States and Third Countries

Within the field of electricity grids the main research areas118 of the EC under FP6 are:

* Large-scale implementation of Distributed Energy Resources (DER)

* Energy storage technologies and systems for grid-connected applications

* Key enabling technologies.

An outstanding example for targeted coordination and collaboration in the field of grid and distributed energy generation research at the European level is the EU-DEEP project.

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With an overall cost of euros 28.9 M and an EC contribution of euros 15 M, the EU DEEP project runs from January 2004 to July 2009.

This project deserves to be highlighted because it facilitates improvements in technical standards and specifications, and promotes acceptance of DG technologies in Europe. It will also help in developing distributed generation resources and integrating them with the existing grid infrastructure.

As part of the EU DEEP Project, 39 participants (industries, banks, utilities, research and national agencies) from 15 European countries (9 Member States, 5 Accession States and Turkey) came together to promote the development of a distributed generation infrastructure in Europe. The project defines five market segments that will benefit from DER solutions, with the aim of fostering the R&D required to adapt the latter to the demands of these segments.

The key technical objectives119 of the project include:

* Constructing a European demand model, calibrated on an 80-million client profile database (in at least eight countries)

* Specifying key technology components and control approaches to enable the smooth integration of DER technologies with existing and future distribution networks

* Creating a European Competence Group (ECG) dedicated to future studies of DER technologies and market opportunities.

Another key project under development by the EC is Flexible Electricity Networks to Integrate the Expected Energy Evolution (FENIX). The objective of the project is to boost DER (Distributed Energy Resources) by maximising their contribution to the electric power system, through aggregation into Large-Scale Virtual Power Plants (LSVPP) and decentralised management.

FENIX is a euros 14 M project that was launched in October 2005 and will terminate in September 2009. It is expected to facilitate the development of a DER infrastructure and help to integrate it into the existing infrastructure.

As part of the FENIX project, 18 participants (including transmission system operators, distribution system operators, industrial manufacturers and other research agencies) from various European countries came together to conceptualise, design and demonstrate a technical architecture and commercial framework that will make DER-based systems the solution for a future cost-efficient, secure and sustainable EU electricity supply system.

The scope of the project includes:

* Analysis of the DER contribution to the electrical system, assessed in two future scenarios (Northern and Southern) with realistic DER penetration.

* Development of a layered communication and control solution that includes:

- developing Large Scale Virtual Power Plant (LSVPP) featuring the flexibility and controllability to provide different services to energy and ancillary services markets

- developing a local solution at the DER level, responsible for managing the unit in connection with the LSVPP

- developing a new generation of tools for transmission and distribution service operators, with the novel ability of managing LSVPP capacities for network operation; and the markets that will put a value on these capacities.

* Validation through two large field deployments, a domestic CHP aggregation, and a large DER in LSVPPs, integrated with global network management and markets.

The project aims to achieve the following key results:

* Reduced central generating capacity

* Increased utilisation of transmission and distribution network capacity

* Enhanced system security

* Reduced overall costs and CO2

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In FP7, research on electricity grids will be covered within the framework of Smart Energy Networks, focusing on the research and demonstration needs for integration of DG and RES with the electricity grid in Europe.

The research will:

* Attempt to remove all obstacles for the development of DG and RES.

* Ensure smooth functioning of the European electricity market, addressing the issues of security, reliability and quality of supply.

* Provide appropriate knowledge for technical solutions and regulatory approaches.

With the support of an existing FP5 + FP6 research cluster (IRED - Integration of Renewable Energies and Distributed Generation), an Electricity Networks of the Future initiative is being established. Its initial scope aims at increasing the efficiency, safety and reliability of European electricity transmission and distribution systems, and removing obstacles to the large-scale integration of distributed and renewable energy sources in line with the proposed priority for Smart Energy Networks in FP7.

The development of intelligent grids that can control the power flows between the central grid and the DG is also likely to be researched further in coming years.

Within Europe, the key nations researching grid issues and the integration of RES and DG with the grid are Finland, Germany, Italy and the Netherlands. However, a substantial portion of research on grid issues is combined with research on renewable technologies and distributed generation technologies such as fuel cells. Grid integration is a typical component of the research into these technologies. Therefore, it is very difficult to segregate the research in this area from the research in the field of renewables and distributed generation and to provide accurate funding figures for grid technology.

Germany is the most active member state in grid research. It is actively researching issues related to transmission and grid stability as a result of its strong focus on wind power.

The Nordic nations focus their research on renewable interconnection aspects and it is expected that the UK will also be increasingly dynamic in this field.

Finland is probably the only European country that has a separate national programme for distributed energy systems called "DENSY"120. The programme runs from 2003 until the end of 2007 and focuses on systems integration and the commercial services of distributed generation121.

The US Department of Energy's programme on integration focuses on the following key areas122:

* Prevention

* Detection

* Response

* Modernisation

* Non-technology areas that are critical for the development of the market

A few key research initiatives should be highlighted in the US:

* GridWise123/124 aims to integrate the energy infrastructure, processes, devices, information and markets into a collaborative arrangement that allows energy to be generated, distributed and consumed more efficiently. New technologies will be woven into the system wherever they provide higher-value alternatives to traditional infrastructure.

* EPRI's Intelligrid is a private-public partnership that fosters the effective integration of systems that can lead to a variety of improved power system operations and consumer service functions.

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The industry contribution to Intelligrid in 2000-2004 was euros 12.6 M. The project is noteworthy because it facilitates improvements in the electrical power system by upgrading and modernising the system.

The Intelligrid project aims to create an intelligent infrastructure by addressing several functional gaps in the system. The critical action items identified are:

* Create a communications infrastructure/open architecture interface.

* Develop fast and accurate computational methods to model and analyse the electric infrastructure.

* Characterise the security, quality, reliability and availability (SQRA) requirements of the infrastructure.

* Develop and implement cost-effective technologies to support automation, real-time monitoring, and control of the power delivery system.

* Enable distributed energy resources to play a role in energy markets.

* Develop effective forecasting tools for supply, load and market data.

* Create high-value cost-effective products and services to help consumers and companies control, optimise and direct energy use in an environmentally acceptable way.

The key deliverables of the project include functional requirements and applications for fast simulation and modelling tools, and design of a two-way consumer portal.

The project aims to achieve millions of dollars in savings per utility over the long term. The monetary benefits of an advanced power delivery system are estimated at up to euros 672 billion/year on an industry-wide basis. System-wide solutions are expected to enhance reliability and provide monetary benefits of euros 26.9 billion/year across the industry. Implementation of open architecture specifications will reduce capital investment requirements and save tens of millions of dollars per utility across the industry.

This programme is also expected to permit new scoping studies and technology assessments in the fields of energy storage, intelligent agents/sensors, advanced fault location and detection, and energy efficiency.

R&D in the field of grid technology and integration of renewables and DG in Japan125 focuses on:

* Development of new power supply network projects - addressing issues such as development of intelligent networks and multi-quality supply systems that provide different-quality power in line with consumer needs.

* Development of PV high-density connection projects - one such project, in operation since 2003, involves the connection of 600 residential PV systems to a distribution line with various battery storage, local control and central control facilities.

* Development of integration demonstration projects - involving power supply demonstration in local communities by integrating various DG resources. One recent project in this field is the demonstration project at Aichi EXPO 2005.

The demonstration project at the Aichi EXPO Japanese pavilion126 was noteworthy as a large-scale demonstration project.

The EXPO 2005 Aichi, Japan venue acted as the site for a demonstration test on a globally unprecedented scale for a distributed energy system that utilises state-of-the-art alternative energy technology.

The power was supplied from a combination of photovoltaic power generation cells (solar power), fuel cells and Sodium-sulfur (NaS) batteries. The fuel cells were powered by items such as fermented methane gas generated from organic restaurant waste, etc. at the venue, as well as by gases produced through high-temperature gasification of wood and plastic waste from the construction and operation of the EXPO site. The power system supplied all the energy consumed at the Japanese Nagakute Pavilion and the NEDO Pavilion. NaS batteries were used to store and discharge electricity in order to regulate the fluctuations in the electricity generated by solar power and to store excess electricity generated by the fuel cells. The system was controlled by a micro-grid energy control system (distributed power supply management), regulating these fluctuations and the gases of differing origins, and providing stable power to the pavilions.

It is expected that future trends in grid research in Japan will increasingly cover technologies such as secondary batteries and power electronics devices for use in networking DGs and levelling flows to and from the grid.

Research on grid integration in Canada127 focuses on the following key aspects:

* Development of DER grid interconnection codes and standards.

* Adoption of product standards and certification rules to ensure safe interconnection with the grid.

* Addressing issues of DG penetration and technical constraints in grid integration.

These include grid stability and control, DG power quality, protection and reliability case studies, a power system aggregation model, and application and field validation testing.

* Providing technical and regulatory support for grid integration. The priority areas include a cost-benefit study of DG integration within the electricity network, addressing net-metering and reverse-metering issues with the meter regulatory agency, time-of-day pricing that include peak-shaving value, and developing standard interconnection procedures and contracts.

* Developing communication systems for DG monitoring, metering, dispatch and control.

The grid-related RTD portfolios of the US, Japan and Canada by and large cover the same aspects as the European portfolio. The key areas of research are the integration of RES and CHP technologies with the power grid and the development of technologies for a more advanced and a more integrated power grid. An interesting specificity in the Japanese portfolio is the recognition of multi-quality supply systems as one key area of research, meaning that Japan is working closely with independent micro-grid companies on research that will permit tailoring and differentiation of types, quality, and price of service to customers.

Research on grid integration tends to be focused on the technologies being developed in the different countries.

For instance, Japan puts the emphasis on supporting research on integration of PV DER, fuel cells and energy storage such as NaS batteries, a technology pioneered by NGK Insulators Ltd of Nagoya, Japan, and the Japanese utility TEPCO (Tokyo Electric Power Company)128. The US places relative emphasis on technologies that support superconductors129, transmission reliability and distribution R&D. Funding in these areas supports development of high-temperature superconducting (HTS) power applications, HTS power transmission cable and HTS power transformers typically developed by the Southwire Company of Carrollton, Georgia, and the American? Superconductor Corporation (AMSC), which is developing a distributed superconducting magnetic energy storage system (D-SMES130) for utility applications. It is interesting to note that Japan used to have strong superconducting power application projects, but these have been almost completely terminated as Japanese power companies failed to support the next generation project. Sumitomo Electric is now introducing the output product in the US.

Funding for Grid Technologies Research
European Commission-Funded Research

The European Commission131 has funded 15 projects to date as part of FP6 research into grid technologies. The total cost of the projects is euros 84.8 M, of which the EC contribution is euros 50.4 M.

Note: At the time of writing this report, detailed information relating to only five projects was available, hence the analysis in this chapter relates to just these projects.

The main emphasis in FP6 (until the third call of proposals) is on the development of distributed generation technologies. Nearly 72% of total EC funding for grid technologies focuses on this field, and one project (EU-DEEP) is receiving the bulk of the funding (euros15 M). One project each is also being funded in FP6 (up to the third call) in the fields of electricity storage and the integration of renewable energy.

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Research Funded at EU Country Level

A substantial proportion of research on grid issues is combined with research on renewable technologies and distributed generation technologies, such as fuel cells. Grid integration is a typical component of research into these technologies, therefore it is very difficult to segregate research done in this area from research in the field of renewables and distributed generation.

Within Europe, the key nations researching grid issues and the integration of RES and DG with the grid are Finland, Germany, Italy and the Netherlands.

France: EDF is actively researching issues related to electricity grids and interconnection of DG resources with the grid. It has an R&D budget of around euros 40 M in this area.

Finland: DENSY is a five-year (2003-2007) programme designed to promote distributed energy systems. The total budget is estimated to reach euros 50 M, of which euros 21 M is funded by Tekes, the National Technology Agency of Finland.

The Union of the Electricity Industry (Eurelectric) also researches the harmonisation of grid-related issues in Europe.

It is felt that specific funding for grid-related issues is required at both national and European level to allow the development of technologies that facilitate integration with a common grid.

Research Funded at Third Country Level

In the US, the total amount of funding for the EERE programme on electricity delivery and energy reliability technologies was euros 100.8 M132 in 2005. The bulk of the funding (over 45%) was for research into high-temperature semiconductor R&D, followed by transmission reliability R&D (about 13%) and electricity restructuring R&D (about 16%). About 5% of funding was devoted to each of the topics of electricity distribution and transformation, energy storage, and initiatives such as Gridwise and Gridworks. The remaining funding was allocated to such issues as programme direction and construction. The budget requested for 2006 is euros 80.6 M.

In Japan, most of the Government's R&D funding flows through the funding agency, NEDO (New Energy and Industrial Technology Organisation). The overall funding for grid technologies by NEDO during 2004 was about euros 105.6 M. The bulk of the funding (about 90%) was allocated to projects related to grid integration of renewables and other DG technologies. NEDO has three big projects in this technology area:

* Demonstration Project of Regional Power Grids with Various New Energies (2003-2007); FY2004 project budget accounted for euros 45.8 M.

* Demonstration Project on Grid Interconnection of Clustered Photovoltaic Power Generation Systems (2002-FY2006); FY2004 project budget was euros 42.8 M.

* Wind Power Stabilisation Technology Development Project (2003-2007); FY2004 project budget was euros 6.9 M.

The remaining 10% of funding goes to the technology aspects of the power grids. The aim of the Demonstrative Project on New Power Network Systems (2004-07)" (FY2004 project budget: euros 10.1 M) is to develop technology to meet consumers' power quality needs, using decentralised new energy power sources and determining the effectiveness of the system through verification tests.

One of the key characteristics of the Japanese grid research portfolio is that it is more focused on integration of PV and fuel cells with the grid rather than wind power which tends to be one of the key focus areas in Europe and the US.

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Evaluation and Conclusions

Note: At the time of writing this report, detailed information relating to only five EC-funded projects was available, hence the following analysis relates to just those projects.

Technology Focus

EC-funded research in the field of grid technologies focuses essentially on the development of distributed energy resources and the grid integration of renewables and other DG resources. Nearly 75% of the EC's contribution in FP6 is concentrated on these issues, with the remaining budget dedicated to development of storage technologies. There has also been research in the field of transmission and superconductors in FP5, but these areas have not received any funding under FP6 (up to the third call).

By comparison, US research is focused much more on the development of power grids and on developing technologies for grid automation and improving the reliability of the grids. There is also research for the development of distributed energy resources, but this is separate from grid research. There is also research on grid integration of distributed generation technologies, but that research is mostly combined with research into the relevant DG technology.

Japan mostly focuses on grid integration of renewable energy and distributed generation technologies.

Grid research by the EC suffers from the duplication of research in areas such as grid integration which is also covered when researching different DG technologies. Attempts should be made to reduce this duplication of research: there should be separate research on this topic, rather than merging it with other technologies, in order to ensure the development of different "plug and play" technologies that will permit easy integration of DG technologies with the power grid. Also, there is not so clear a focus in FP6 on research into new technologies for grid automation as there is in the US. The EC must ensure that there is sufficient research to develop new and more efficient and reliable grid technologies.


It is difficult to compare funding for grid and associated technologies across the US, Europe and Japan since funding of grid-related research is included in funding for the different DG technologies.

It is generally felt that in Europe there should be some specific funding for grid-related issues, especially grid integration, rather than merging it with the funding for different DG technologies. This will ensure that the topic enjoys due consideration and that research is better structured and coordinated to ensure that there are no gaps or duplications in the research portfolio. Also, an increase in funding for the development of transmission, storage and other grid technologies would help to develop a reliable and modern grid network across Europe. Energy storage is one area where Europe needs to invest more to be able to compete with the US and Japan.

Research and Technology Development

It is recognised that grid technology research needs to be developed further, in line with the development of different DG technologies. There should be more collaboration both within Europe and with other key nations to develop the technology further. Occasions like the First International Conference on the Integration of Renewable Energy Sources and Distributed Energy Resources contribute to knowledge sharing and the development of collaborative research: such events can also help increase overall interest in grid technologies, and this would hopefully lead to more specific funding for grid technology (i.e. funding separate from the funding within the renewable technologies and other DG technologies), both at the national as well as the European level. Developing market regulations and harmonisation of rules is another area where more collaborative research is needed at the European and international levels in the development of large integrated grids.

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The European Technology Platforms initiative is a positive step towards promoting more collaborative research at the European level. One of the challenges will be to ensure that there is no conflict of interest between the different stakeholders involved in this initiative: there could for example be a divergence of interests between companies working on existing technologies and those developing new ones. The interests of all the different stakeholders have to be balanced: political organisations, old technology companies, new technology companies and all the other stakeholders will need to be brought together to develop the technology further.

Europe has science and technology agreements with countries such as the US and Japan, but not much collaborative research has resulted from these agreements. The main reason for this is that the structure of the grid is different in each country - this reduces the chances of developing joint targets and initiatives for collaborative research. However, the need to develop collaborative research with third countries is evident in some common issues such as the development of grid technologies and safety codes as well as standards for grid integration.


[118] - For further details of EC-funded research on grid technologies, please refer to Annex IX. 1

[119] - For details of the expected results from EU-DEEP, please refer to Annex IX.2

[120] - TEKES 2003: DENSY - Distributed energy systems 2003-2007

[121] - For more information on the DENSY programme, please refer to Annex IX.3

[122] - For further details of the US DoE's research on grid technologies, please refer to Annex IX.4

[123] - http://gridwise.org/

[124] - For further information on GridWise, please refer to Annex IX.5

[125] - AIST 2004: Japanese Activities on the Integration of Renewable and Distributed Energy Sources

[126] - http://www-1.expo2005.or.jp/ml/en/23/

[127] - Natural Resources Canada 2004: Canadian Program on Decentralised Energy Production

[128] - Sodium Sulphur Batteries, Advanced Energy Storage Technologies (Technical Insights), Frost and Sullivan, June 2004

[129] - Superconducting Magnetic Energy Storage, Advanced Energy Storage Technologies (Technical Insights), Frost and Sullivan, June 2004

[130] - Emerging Energy Storage Technology markets, B125, Frost and Sullivan, 2003

[131] - For further details of EC funding for grid technologies, please refer to Annex IX.6

[132] - "Priorities in the Department of Energy Budget for Fiscal Year 2006", US. House of Representatives, Committee on Science, Subcommittee on Energy, Hearing Chapter, April 27, 2005

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