The large-scale digitalisation of the energy system, key for the delivery of a fit-for-purpose grid for net zero, is bringing with it new demands for cybersecurity, which must cover the whole value chain, from production and transmission to distribution and the consumer, including all the digital interfaces along this path.

As the number of connected resources grows – and they are rapidly with the fast-increasing uptake of distributed energy resources – so too do the number of interfaces and the number of involved parties. And with that the challenges to achieve a cyber secure system.

The EU’s new network code on cybersecurity, one of the 25 key deliverables of the energy system digitalisation action plan, is focussed primarily on the cross-border electricity flows that form a central component of the single market and was widely consulted in development.

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In its 60+ pages, it covers a breadth of topics, prefaced with a ‘General’ section covering such issues as the need for national competent authorities to carry out the tasks assigned in the regulation, cooperation between parties at national level, the important cooperation between ENTSO.E and the DSO Entity, which is at the heart of its implementation, and cooperation with ACER.

A key foundation for the network code is the establishment of a recurrent – every three years – process of cybersecurity risk assessments in the electricity sector at national and regional levels, aimed at systematically identifying the entities that perform digitalised processes with a critical or high impact in cross-border electricity flows and their cybersecurity risks, and then the necessary mitigating measures that are needed.

For that, the network code establishes a governance model that is aligned with existing mechanisms in EU legislation, such as the revised Network and Information Security Directive, with ENTSO.E and the DSO Entity required to propose the risk assessment methodologies.

‘High impact’ and ‘critical impact’

This notion of ‘high impact’ and ‘critical impact’ is fundamental and depends on the degree of impact of possible cyber attacks in an entity’s processes or operations, with those entities primarily those that have a direct impact on cross-border flows of electricity in the EU.

A second key component is the establishment of a common electricity cybersecurity framework with minimum and advanced controls respectively for ‘high impact’ and ‘critical impact’ entities.

Cybersecurity procurement and the broader supply chain are another key area, with recent cyber-attacks show that entities are increasingly becoming the target of supply chain attacks.

The TSOs are required to develop non-binding procurement recommendation for ICT products, services and processes – again differentiating whether the entity is deemed of high or critical impact.

Information flows and crisis management in the wake of a cyber attack also are crucial and the network code establishes rules around reporting and information sharing.

Finally, the regulation sets out rules for the undertaking every three years by critical impact entities – and on their request also critical service providers – of a cybersecurity exercise including one or more scenarios with cyber attacks affecting cross-border electricity flows directly or indirectly and related to the risks identified during the cybersecurity risk assessments.

The template for this is to be developed by ENTSO.E and the DSO Entity, with the involvement of ACER and ENISA.

Under the EU rules of procedure, the delegated act is subject to scrutiny by the EU co-legislators, i.e. the European Parliament and Council, each for 2 months with a possible 2-month extension.

Jonathan Spencer Jones

Specialist writer
Smart Energy International

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The loan will finance smart power grid development and expansion, facilitating the integration of renewable energy sources and new connections of clean tech assets, such as heat pumps and EVs.

The project will also boost industrialisation, economic growth and job creation in Spain, safeguarding 10,000 jobs a year in 12 autonomous communities during the implementation period. Additionally, more than 65% of the total investment will go to Spanish regions where per-capita income is below the EU average.

Of the loan, an initial €500 million ($542.7 million) tranche was signed in Madrid by EIB director general for European Union operations, Jean-Christophe Laloux, and Iberdrola finance, control and corporate development director José Sainz Armada.

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“Supporting power grid modernisation to facilitate the integration of new sources of renewable energy is among the priorities included in the EIB Climate Bank Roadmap,” said Laloux in a release.

“This new financing agreement signed with Iberdrola will accelerate Spain’s energy transition, ensure access to sustainable energy for all and contribute to the European Union’s strategic and energy independence.”

Added Armada: “This loan will enable us to speed up the decarbonisation of industry, a key process for Spanish companies.

“We will use this new EIB financing to expand smart grid development in Spain, as this is vital for facilitating the energy transition, boosting efficiency and improving the distribution network and supply quality. We will also contribute to the electrification of the economy and reducing the country’s energy dependence.”

The total investment under the smart grid project amounts to €1.44 billion ($1.6 billion), with the remaining €740 million ($803.2 million) provided by Iberdrola.

Iberdrola operates one of the largest electricity distribution systems in the world with over 1.3 million kilometres of power lines and more than 4,500 substations in Spain, the US, UK and Brazil, supplying electricity to over 35 million globally.

At the end of 2023, the company had green or sustainability-linked financing of more than €54.5 billion ($59.1 billion), including over €20.2 billion ($21.9 billion) of green bonds.

With this comes the risk that grid investments may be insufficient to deliver on the 2030 energy security and climate targets and need to be urgently addressed given the longer timescales of grid developments compared with clean technologies.

The analysis was based on the national grid development plans of 35 countries, including the EU-27, Norway, Switzerland, the UK and the Western Balkans.

Among the findings is that the grid plans of seven countries – Bulgaria, Greece, Ireland, Lithuania, Norway, Portugal, Romania – are based on lower wind and solar deployments than national targets, while those of a further six countries – Czechia, Denmark, France, Hungary, Luxembourg, Poland – are based on either lower wind or solar.

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Of these solar tends to be more affected, with its capacity underestimated by a total of 60GW across the 11 identified countries and wind by 27GW.

Conversely, in four countries – Croatia, Denmark, Finland, and the Netherlands – the plans are based on scenarios with higher capacities for wind and solar, ranging from 50% higher for Denmark to 200% higher for Finland and totalling 81GW.

Another finding is that in 19 out of 23 national grid plans examined, the deployment of solar expected under SolarPower Europe’s business-as-usual scenario is undershot by a total of 205GW by 2030, while in ten out of 31 plans wind is underestimated by a total of 17GW.

These discrepancies imply grid congestion may worsen in the short-term as grids are ill-equipped to manage the rapidly growing renewable fleet, the report states.

A third key finding is that spending on grids today in EU member states reaches approximately €63 billion ($68 billion), with an average of €28 billion per year earmarked for transmission grids and €35 billion invested in distribution grids in 2022.

This spending surpasses the European Commission’s REPowerEU estimate for annual grid investment of €58.4 billion until 2030 by at least €5 billion.

Furthermore, investment in national transmission systems will likely need to be augmented to make them ‘fit for purpose’ in those countries where the grid plans lag behind existing energy policy.

Commenting on the findings, Elisabeth Cremona, Energy & Climate Data Analyst at Ember, says there is no transition without transmission.

“We can’t afford to overlook grids. They risk holding Europe’s supercharged energy transition back if plans aren’t updated. Making sure solar and wind can actually connect to the system is as critical as the panels and turbines themselves.”

Expanding transmission grids capacity

Among other findings of the analysis is that European countries are planning to add over 25,000km of internal transmission lines between now and 2026. This corresponds to an increase of over 5% and would bring the total length to approximately 523,000km by the end of 2026.

Moreover, that accelerating network expansion is feasible is illustrated in the plans of ten TSOs. In particular, Energinet plans to expand its 7,440km grid by 3,300km by 2026, corresponding to an annual growth of 7.6% – over double the average growth since 2015.

Non-wires solutions – also known as ‘grid enhancing technologies’ in the US – in particular dynamic line rating and local flexibility also are being increasingly adopted by TSOs to increase the grid capacity as an alternative to new or upgraded infrastructure.

A further finding is the emergence of hydrogen in grid planning and the need for integrating both the demand and supply sides and coordination with the gas TSOs.

For example, strategic deployment of electrolyser plants could reduce bottlenecks in the electricity transmission grid and lower the need for grid expansion but is contingent on proximity to the existing natural gas network or planned hydrogen network.

Preparing the grid

To prepare the grid for the clean energy transition the report recommends political prioritisation of the grids, revision of regulatory frameworks to allow timely planning and investment and increased oversight and scrutiny of network plans along with enhanced reporting by TSOs on for example grid connection queues, available grid capacity and planned investments.

Placing clean power at the core of grid planning also would enable anticipatory investments.

In an exclusive interview with Stuart Thompson, President of ABB Electrification Service and Antonio Martinez Reiner, Utilities ＆ Renewables Global Leader at ABB Electrification Service, we unpack circularity as a solution and what the barriers to digital adoption are.

Watch the full video interview below.

This interview was filmed in November 2023 at Enlit Europe in Paris, France.

ABB helps customers deploy proactive, predictive maintenance using real-time data analytics to monitor and evaluate asset health, reducing downtime, total cost of ownership, extending asset lifespan and preserving finite resources.

Read ABB’s latest whitepapers on how circularity and digitalisation improve sustainability and drive new levels of operational efficiency:

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The 49MW/98MWh standalone project near Abernethy, Scotland, progressively came online from November 2023 as site sections were finalised, and was fully energised when construction was completed in early February 2024.

The Jamesfield battery system utilises 2-hour duration Tesla Megapack lithium-ion batteries, together with Tesla’s Autobidder AI software for real-time trading and control. Independent renewable energy company RES is the asset manager.

TagEnergy Chief Executive Officer Franck Woitiez said in a release that energisation of TagEnergy’s third battery energy storage facility in the UK was a testament to the momentum it has built in the UK as it speeds up the energy transition:

“This is another important marker for TagEnergy in the UK and beyond as we leverage our substantial storage expertise to help stabilise the grid and make a meaningful difference to the planet by relentlessly pursuing a renewables-led energy future.

“Our three completed projects, together with the more than 200MW of BESS under construction in the UK, is testament both to our commitment and the success of our approach.”

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The Jamesfield development became a joint venture with Harmony Energy, following TagEnergy’s acquisition of a 60% stake in the project in November 2021. Santander UK supported the green energy initiative with £12.5 million ($15.9 million) funding.

It was TagEnergy’s third investment in battery storage facilities in the UK to become operational, after Hawkers Hill Energy Park and Chapel Farm.

Those projects, together with other storage projects under construction, take TagEnergy’s secured portfolio in the UK to 320MW/640MWh.

Harmony Energy chief executive officer Peter Kavanagh added: “The completion of the Jamesfield BESS is another significant milestone for our valued partnership with TagEnergy, following the success of our other joint venture site, Chapel Farm.

“Battery energy storage systems are vital for unlocking the full potential of renewable energy in the UK. They play a pivotal role in advancing the Net Zero transition through the reduction of CO2 emissions and are crucial for securing the future stability of the UK’s energy supply and reducing dependence on foreign gas imports.”

The call follows the completion of ‘Project No Flow’ undertaken with the data collection provider Occutrace on the lifespan of non-household water meters, which found that the root cause of many non-consuming meters is the meter having surpassed its operational age and increasingly likely to fail.

In the project, supply point IDs with three or more meter reads showing no consumption were investigated, taken from a random sample of 2,000 supply point IDs.

Of these 771 meters identified as zero-consuming, almost two-thirds were found to be degraded to the extent of non-functionality.

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“Project No Flow has sought to establish hard facts and real-world evidence about meters that are not recording consumption to help the market understand the volume of potential zero consuming meters out there,” commented Claire Stanness, Metering Operations Manager at Wave and the project lead’.

“This first of its kind project has highlighted the issues that come with meters that are not recording consumption, issues that affect everyone.”

Along with the customers, who have to face the potential repercussions of inaccurate billing, retailers and wholesalers are also impacted with retailers having to correct and revise the bills and wholesalers seeing the impact inaccurate metering can have on the settlement process.

The study also found that many wholesalers do not have proactive replacement programmes in place for non-household meters, which would help to identify zero consuming meters and resolve the related issues sooner and thereby support the retailers in delivering reliable meter reads to their customers.

With accurate reads also comes the opportunity to identify any potential inefficiencies or cost savings for customers.

Wave suggests that to solve this issue a highly collaborative approach is needed, from the non-household water market operator MOSL, the regulator Ofwat, retailers, wholesalers, and their service providers, all working together towards a common goal of accurate and timely meter reads.

Wave also questions whether in the case of some properties being genuinely zero consuming because they were a flat above the shop or a secondary supply for the business, those meters should still be in the market or be disconnected.

The project report also suggests some potential areas that could form the basis for future metering committee or industry projects aimed at addressing issues inherent within the meter condition assessment space.

These include the introduction of a meter asset management programme and the replacement of broken meters with smart metering technology.

Specific market operational data quality weaknesses also could be tackled and new measures introduced for retailers identifying zero consuming assets.

At the outset of the project, MOSL data indicated that over 147,600 non-household water meters – approximately 11% – affecting over 113,270 occupied business premises across England were showing zero consumption.

Whenever I think back to 2023, one major sentiment that comes to mind is the urgent need for investment in Europe’s power grid system.

Interconnected renewables are coming online at a pace that the current grid infrastructure wasn’t built to withstand. And although the ramifications of this have started to show, investments seem to be able to bring relief.

Over the last week, this notion has been reinforced as some of Europe’s top utilities have released their financial results for the 2023 fiscal year.

The key takeaway, you ask?

Europe is finally investing heavily into its grid infrastructure with “record levels of investment” a phrase placed on repeat. The adage is sometimes followed either optimistically with “record investment plans” or more somberly with “it’s not enough.”

So, what does this tell us about the investment landscape within which grid business stands?

‘Plans’ are translating into action

Over the last week, utilities have released their financial results and laid out their investment plans for the coming years.

Germany’s 50Hertz is looking to invest €20.7 billion ($22.6 billion) in overhead power lines, on- and offshore cables, substations and other technologies, a three-quarter leapfrog compared to €4.8 billion ($5.2 billion) from the past half-decade.

E.ON is planning a €9 billion ($9.8 billion) increase to its 2024 to 2028 investment plan from €33 billion ($36 billion) to €42 billion ($46 billion), focusing on energy networks and energy infrastructure solutions.

And TenneT, which operates both in Germany and the Netherlands, is expecting to grow its investments to at least €10 billion annually.

Although very much welcomed, one tends to look towards ‘plans’ with a drizzle of scepticism. But what has been surprising is that these utilities and others are simultaneously announcing record investments in their 2023 results.

In Germany, E.ON invested €5.2 billion ($5.7 billion) in network expansion, modernisation, and digitalisation and 50Hertz invested €1.7 billion ($1.9 billion) in grid infrastructure.

TenneT invested €7.7 billion ($8.4 billion) between Germany and the Netherlands.

In the Netherlands, utilities Alliander, Stedin and Enexis each stated record levels of €1.4 billion ($1.6 billion), €1.214 billion ($1.327 billion) and €832 million ($909 million) respectively.

Penning an action plan and moving from paper to implementation are two very different challenges. It is encouraging to see this transition being made.

However, these statistics then beget a follow-up question:

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Is it enough?

In the Netherlands, it is not.

Alliander states that despite their record investments and upward plan, bottlenecks will be recurring on the power grid for at least the next decade. Even though this has been a repeated news item in recent years, it still warrants worry.

A case study to illustrate this is that of Dutch-owned TenneT, which has been mulling sale of its German operations to Germany’s Federal government for months now.

According to Handelsblatt reportage, the Federal Ministry of Economics is very interested in the German TenneT subsidiary, as the company is responsible for important north-south electricity highways.

The Netherlands, on the other hand, want to sell because they are afraid of the billions of euros in investments that will be needed over the coming decade to make the power grid fit for purpose.

Additionally, although TenneT reported healthy financial results for 2023, underlying revenues decreased for the utility by €600 million ($655 million), driven by a decline in ancillary service costs.

Said costs originate in lower market prices for costs incurred by TenneT to compensate for grid losses, maintain energy balance in the grid and pay for alternative electricity routes in case of congested or unavailable grid sections, as is the frequent case in the Netherlands.

Grid congestion and outstanding customer connection requests in the Netherlands, states TenneT, are being addressed through the National Grid Congestion Action Plan (LAN) and “unorthodox measures”, such as flexibility mechanisms, with which TenneT operates the grid at its limits.

Grid congestion has been hampering the utility not only in the Netherlands but also in Germany, where numerous bottlenecks in the grid on land cause large wind farms in the North Sea to be curtailed and redispatch limits the generation of offshore wind power.

This not only affects the amount of electricity fed into the grid, but also impacts its price development.

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What more do we need?

In its Electricity Grids and Secure Energy Transitions report, the IEA states that globally we need to add or replace 80 million kilometres of power grids. Global investments in grids, which has otherwise remained stagnant, now needs upwards of $600 million annually a year by 2030.

Additionally, citing data from 2021, the report finds that grid-related outages impacted the German economy by up to $3.6 billion, highlighting the role of the grid in minimising economic loss.

Illustrated by the cases of the Netherlands and Germany, Europe is clearly seeing its fair share of hurdles to be overcome, but positive signs can still be found if you know where to look.

Take for example the EU Grid Action Plan, which will improve access to finance for grid projects. The action plan is also expected to identify tailored financing models and increase visibility on opportunities for EU funding programmes for smart grids and distribution modernisation.

Although much more, both in terms of euros and cabled kilometres, is needed to reach a grid fit purpose, we can still be hopeful as plans are pushed into action.

How much are you investing into the grid now and do you think it will be enough to enable the energy transition? Let me know.

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

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Farrand expands on how Trilliant is supporting global utilities with their smart grid networks for a new energy future.

Watch the full video interview with Gavin Farrand below.

This interview was filmed in November 2023 at Enlit Europe in Paris, France.

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In February 2024 Cyprus’s Electricity Authority, the state-owned energy company, awarded the tender for the smart meter rollout to CyTA at a cost of €39.9 million (US$43.4 million), according to a report in the Cyprus Mail.

However, the award was challenged by one of the other two bidders, Logicom Solutions, which had put in the lowest bid at €33.6 million.

The third from New Cytech Business Solution was at €37.6 million.

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According to the Cyprus Mail report, Logicom argued that in awarding the bid, the Authority had violated essential terms of the tender.

However, the Tenders Review Authority upheld the Electricity Authority’s decision, basing its finding on reasons of public interest.

The decision is quoted as reading: “Any further delay in implementing the contract would raise the spectre of serious repercussions both for Cyprus and for EAC customers, via the loss of financing from the European Union, by no means a paltry sum…”

In presenting the case Giorgos Petrou, chairman of the board at the Electricity Authority, had suggested that delays could raise the risk of Cyprus losing funds designated in the EU’s Recovery and Resilience Facility.

For those, according to the Cyprus Mail, the deal with the meter supplier must be finalised by March 2024.

Moreover, the Electricity Authority must receive 50,000 smart meters of which 15,000 are installed by September 2024 and by June 2026 all 400,000 smart meters must be received with 250,000 installations completed.

According to an earlier Cyprus Mail report, the Electricity Authority had earmarked a total of €50 million for the smart meter replacements, of which €35 million would come from the Recovery and Resilience Facility.

The same report also indicated that the 400,000 smart meters would correspond to about two-thirds of the metered base, with some customers staying with their traditional meters for cost or practical reasons, such as the elderly who felt that they could not effectively be served with them.

This is not the first time the rollout has been delayed. In April 2022 the bid was awarded to New Cytech but was challenged by Ningbo.

Opening the discussion, organised by the Future Energy Leaders of the World Energy Council (WEC) in the Netherlands, Rene Peters, Business Director Gas Technology at Dutch technology organisation TNO and Board Member of WEC Netherlands, pointed to the importance of the North Sea and the Netherlands’ role within it for the energy transition as it expects to grow its offshore wind to around 20GW in the next few years from less than 5GW currently.

“That’s the electricity part and it’s relatively simple as there is already an electricity market,” he said.

“But now hydrogen is coming and that’s different as there is no hydrogen infrastructure or market yet and we need to build a full value chain,” he continued, noting that it is also an area where the Netherlands can be a frontrunner with an existing gas infrastructure than can be retrofitted for hydrogen use – up to 85% it is believed.

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“We’ve started doing that, actually taking the lead and I think we are one of the few countries in the world with a gas infrastructure becoming available for new functions like hydrogen,” he commented, saying that while that refers to the onshore infrastructure, the offshore infrastructure could similarly be available for hydrogen transport.

“It’s a huge investment we need to make and we also will need the new technology for offshore production of hydrogen.”

The Netherlands’ advantage

Maria van der Hoeven, Special advisor on energy literacy at the WEC and a former executive director of the IEA, reiterated that the Netherlands with its gas infrastructure has an advantage compared to other countries.

But three areas need to be addressed, she said – the planning around the transitioning of the existing pipelines with the need to continue to supply gas, the need to move away from the ‘colouring’ issues of hydrogen with a certification based on origin and the development of the marketplace.

“Why not see to it that there is a marketplace in the Netherlands? The demand is going to change as there are companies that want to have hydrogen to decarbonise their operations. If one is starting on the supply side one also needs to start at the same time to build enthusiasm for the demand side.”

An example cited of such an uptaker is Thyssenkrupp in Germany, which is being incentivised to ‘green’ its steel production if its stated target is met and its loss if not.

Skills and labour

Another challenge alongside the need for investment is that for skills and in particular attracting young people into the sector, with currently only about 1 in 10 of the Dutch workforce believed to be working in the ‘green sector’.

Aniek Moonen, co-chair of the Board of Trustees of the NGO ‘Women Engage for a Common Future’, said she was excited by the prospect of being able to attract more young to the sector as she had observed many examples of young people going into businesses and asking critical questions about sustainability.

“We have seen cases of young people going into businesses that have used sustainability to promote themselves but leaving shortly afterwards because they don’t actually live up to those statements. I think this is a driver for change and companies can say they are being sustainable but they need to ask if they are actually doing it.”

On the wider issue of general labour shortages, she said that while attracting talent from outside and encouraging more people to work full-time might help at best to a limited extent, more important is to consider the demand side of labour.

“It’s about what sectors we want to have in the future and then to boost jobs in those sectors. There may be certain sectors that need to be rethought that are performing inefficiently and need subsidies.”

The concept is controversial but it’s a discussion that is needed, she stressed, pointing to the “creative destruction” of industries as something of all times.

“It always happens and sometimes we just have to let that frame of destruction happen.”

Originally published on enlit.world

These can be organised in two clusters in which concrete business cases/good practices should be developed, namely:

• investment, access to capital and the regulatory framework, including the need to enhance grid resilience, and
• build-out prerequisites including supply chain, staffing, permitting, etc.

Actions and concrete recommendations can then be generated for tackling by the next European Commission, which commences on 1 November 2024.

In a letter from the three organisations to the EC Executive VP for the Green Deal Maroš Šefčovič following their participation in a dialogue on Green Deal infrastructure, they reiterate the core role of DSOs in delivering on its objectives with most of the renewables being connected to the distribution grids and the increasing electrification of heating and mobility.

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Key messages they state include the need to accelerate investment by mobilising private sector capital for energy and improving funding opportunities for DSOs at the national and EU levels and in particular enabling anticipatory investments with a forward-looking energy regulatory framework and tariff regime.

Permitting procedures must be further simplified, especially for grid capacity additions and upgrades, and initiatives to tackle the supply chain challenge are called for, including greater cooperation between grid operators and manufacturers.

The focus on resilient grids also must be reinforced to guarantee the security of supply at times of increasing (cyber)security threats and extreme weather conditions.

Against this, general principles suggested for the future are:

• Ensure national implementation of the European provisions to provide grids with suitable conditions for the delivery of the Green Deal objectives.
• Introduce ‘grids mainstreaming’ to ensure that grid expansion is not lagging behind, but that their needs are considered in every new and revised energy and climate act.
• Ensure regulatory consistency by promoting widespread consistency in acts that help DSOs achieve their objectives.
• Build a successful EU Alliance for the Green Deal Infrastructure to prepare the infrastructure for 2050 climate neutrality.
• Combine all of the above into a strategic technical roadmap for the future that has the support of all stakeholders.

Given the short time horizon until the next European Commission and the need for two more dialogues to be organised by the time of the EC’s June election, fast action is needed, the organisations state in the letter.

With this short-term horizon, the focus should be on these most pressing topics and after each dialogue guiding principles and recommendations should be issued on the contents for each cluster that can be implemented within a timeframe and mechanisms for reporting established.

They also comment that the dialogues should involve all levels, European and national and should be complementary to other often more technical initiatives.

Announced alongside the Group’s full-year results, E.ON plans to boost its four-year investment plan from €33 billion ($36 billion) to €42 billion ($46 billion), focusing on energy networks and energy infrastructure solutions.

“Across Europe, there are massive expansion plans for renewable energy facilities that will need to be connected to networks,” said E.ON chief financial officer Marc Spieker in a release.

“Millions of heat pumps, residential electricity storage systems, and charging stations will need to be installed as well. That’s why we’re investing even more and even faster in our power grid infrastructure, which is set to continuously grow by an average of ten percent annually through 2028.”

Within the plan, €34 billion ($37 billion) will go towards E.ON’s energy network business, given a suitable regulatory environment. More than €25 billion ($27.3 billion) – 70% – of network investments will be made in Germany.

Approximately €5 billion ($5.5 billion) will be devoted to energy infrastructure solutions, E.ON’s growth business which provides solutions for industries, cities, and municipalities.

Other areas for investment include digitalisation projects, the rollout of smart meters and intelligent e-mobility charging solutions.

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Said CEO Leonhard Birnbaum during a press conference: “We again defied challenging circumstances in the financial year 2023. And we again delivered very good results that exceeded our expectations.

“This result is proof … that we increasingly benefit from our consistent strategic focus on energy networks and sustainable energy infrastructure and customer solutions.

E.ON investment: 2023 results

The Group significantly accelerated its investments in the financial year 2023, bringing it a total of €6.4 billion ($7 billion), a one-third increase from the year prior.

Specifically, the Group invested €5.2 billion ($5.7 billion) in network expansion, modernisation, and digitalisation and €1.1 billion ($1.2 billion) into customer solutions, of which approximately €700 million ($765 million) went toward its energy infrastructure solutions.

Energy networks delivered the largest share of Group earnings from 2023 with a €1.2 billion ($1.3 billion) year-over-year increase. Higher investments in E.ON’s growing network infrastructure were a key driver, ensuring increased connection rates for renewables, heat pumps and charging infrastructure.

In 2023, E.ON added more than half a million new connections to its distribution networks. Alongside higher investments, the recovery of the energy market environment had a positive impact on the network business. This led to a significant reduction in costs for redispatch in Germany.

Added Spieker: “E.ON looks back on a strong financial year 2023, in which we grew in almost all European markets. The outlook for the years ahead is very promising as well.

“Our network business is a growth business that is in the focus of attention for policymakers, the public and investors. Our energy networks are system-critical for the energy transition, and we’ve again proven that we can successfully and cost-efficiently expand them.”

In 2023, Tennet invested €7.7 billion ($8.4 billion), split between its operating areas in the Netherlands at €2.9 billion ($3.2 billion) and Germany at €4.8 billion ($5.2 billion). According to the TSO in its fiscal results for last year, this represents a sharp increase in investments due to on- and offshore grid expansion.

The TSO is now saying it will continue to increase its annual investments, while also mulling the sale of its German operations to state-owned investment and development bank KfW, on behalf of the state.

According to reportage in the German Handelsblatt, the state sale has been in negotiation between the federal and Dutch governments for months.

The TSO belongs to the Dutch state, although a large part of its grid operations are located in Germany and run by a TenneT-owned subsidiary, also named TenneT. The state negotiations concern the sale of said subsidiary.

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Flailing grid capacity

Although TenneT reports healthy financial results of €1.8 billion ($2 billion) in earnings before income and tax, up 50.2% year-over-year, over the course of 2023 underlying revenues decreased by €600 million ($655 million) to €9.2 billion ($10 billion), driven by a decline in ancillary service costs.

These costs come from lower market prices for costs incurred by TenneT to compensate for grid losses, maintain the energy balance in the grid and pay for alternative electricity routes in case of congested or unavailable grid sections.

In the Netherlands specifically, the power grid has continued to reach capacity, despite record investments from its operators last year. According to Alliander, traffic jams will recur on the Dutch electricity network for at least another 10 years.

In June 2023, the Dutch state provided €1.6 billion ($1.7 billion) to TenneT to cover the funding requirements of its Dutch operations.

Additionally, states TenneT, as there is no certainty of the German sale materialising in the short term, the Dutch state has also provided a bridge loan facility of €25 billion ($27.3 billion) in 2024, safeguarding TenneT’s planned investments in both countries for 2024 and 2025.

According to Handelsblatt, Tennet CFO Arina Freitag promised a sale within the next 12 months.

Said Freitag in a statement: “To achieve a futureproof energy system for a competitive and climate neutral economy halfway through this century, we must sustain investment momentum. Balancing economic efficiency, sustainability and a high level of grid availability expected by our end-customers in the Netherlands and Germany requires a massive grid expansion.

“For TenneT this adds up to an investment programme of as much as €160 billion ($174.8 billion) and requires a consistent energy policy and solution-orientation from all parties involved.”

The blueprint, which has been prepared by the Interoperability Network for the Energy Transition (int:net), is aimed to guide on transitioning the existing energy sector data infrastructures towards data space solutions and to define a general data space architecture that can enable an initial set of real-world business use cases.

In particular, the architecture is aimed at interconnecting the existing data infrastructures with federated data spaces, in which multiple datasets are mapped.

The concept of data spaces has been gathering momentum in various domains for sharing of data between multiple participants and the establishment of a common energy data space is one of the key actions set out in the EU’s energy sector digitalisation action plan.

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Foundational aspects that must be considered pertain to security and privacy, data quality and integrity and governance, while other aspects that need to be taken into account include the business model related to data exchange, legal and operational details and the technology, with a primary objective to ensure interoperability both internally and with other data spaces.

The blueprint document states that at the highest level, the CEEDS is foreseen as the common framework that federates different data spaces implemented at national, sub-national or international levels and allows the participation of single users.

Business use cases

The five representative business use cases, in which specific exchanges of data from diverse sources must occur among the involved actors, were defined as:

• Use case #1 – Collective self-consumption and optimised sharing for energy communities
• Use case #2 – Residential home energy management integrating distributed energy resources (DER) flexibility aggregation
• Use case #3 – TSO-DSO coordination for flexibility
• Use case #4 – Electromobility: services roaming, load forecasting and schedule planning
• Use case #5 – Renewables O&M optimisation and grid integration.

Based on these the proposed model corresponds to the creation of the energy data space as the combination of multiple ‘distributed data ecosystems’, i.e. the existing legacy data platforms, with an overarching layer defined as the ‘federated data space’ where the data is indexed and made discoverable and providing a ‘marketplace’ for sharing and possibly trading of data and data services.

Data space connector

The different data space participants are connected through a software component known as the ‘data space connector’, which realises the interconnection and data exchange.

This data space connector should be incorporated into the pre-existing platforms to enable identification, data harmonisation and brokerage towards data spaces, which can be useful for integrating data from different sources or for allowing multiple applications to access the same data without having to duplicate it in multiple places.

Moreover, in this model, the data space connector also enables the exchange of energy data and execution of services both among the existing legacy platforms and through the federated layer.

The document notes that to fully achieve the deployment of the CEEDS, starting from the federation of projects’ data space instances, detailed interoperability measures are necessary including technical interoperability, semantic interoperability and governance interoperability.

The document states that the presented blueprint underscores the critical need to adopt data space solutions within the energy domain, marking a pivotal moment for the transformation of the industry.

“The fundamental pillars of data spaces not only foster the active engagement of key stakeholders across the energy value chain but also promise mutual benefits, ranging from monetary compensations to an elevated quality of services.

“At this scope, the establishment of clear rules, policies and regulatory adaptations is a linchpin in facilitating fair data exchange, paving the way for an open market that fosters the participation of new actors, including data and service providers, as well as data consumers.”

The int:net initiative managed by the Fraunhofer FIT is an EU Horizon Europe-supported project to bring together stakeholders from across the European energy sector to jointly work on developing, testing and deploying interoperable energy services.

Key parties are the projects in the ‘energy data spaces cluster’, i.e. Omega-X, EDDIE, Enershare, Synergies and DATA CELLAR, whose findings have fed into the blueprint, while further inputs should come from the newly launched HEDGE-IoT, ODEON and TwinEU projects.

In the meantime, the blueprint will continue to be updated with version 2 due to be released in June 2024.

According to the Commission in a release, the network code will be an important step to improve the cyber resilience of critical EU energy infrastructure and services.

The delegated act follows a consultation process with relevant stakeholders, including contributions from ENTSO-E, EU DSO Entity and ACER, as well as a four-week period for public feedback at the end of 2023.

It will support a high, common level of cybersecurity for cross-border electricity flows in Europe.

EU network code for cybersecurity

The EU network code aims to establish a recurrent process of cybersecurity risk assessments in the electricity sector.

These assessments are aimed at systematically identifying entities that perform digitalised processes with a critical or high impact in cross-border electricity flows, their cybersecurity risks and then the necessary mitigating measures that are needed.

To do so, the network code establishes a governance model that uses and is aligned with existing mechanisms established in horizontal EU legislation, notably the revised Network and Information Security Directive (NIS2).

This is the case, for example, for the reporting of cyberattacks and vulnerabilities using the established Computer Security Incident Response Teams (CSIRTs), or coordination with the CyCLONe network in case of large-scale cybersecurity incidents and crises.

The new rules will promote a common baseline while respecting existing practices and investments as much as possible, states the Commission.

The model is hoped to be able to develop, follow and regularly review the methodologies of different stakeholders, considering the current mandates of different bodies in both the cybersecurity and electricity regulatory systems.

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Although there is already a comprehensive overall legal framework for cybersecurity, the energy sector presents areas in need of renewed attention, including:

• Real-time requirements

Energy systems need to react at a speed that removes the need of standard security measures, such as authentication of a command, or verification of a digital signature, due to the delay these measures impose.

• Cascading effects

Electricity grids and gas pipelines, states the Commission, are strongly interconnected across Europe and beyond the EU. An outage in one country might trigger blackouts or shortages of supply in other areas and countries.

• Combined legacy systems with new technologies

Many elements of the energy system were designed and built before cybersecurity considerations came into play. This legacy now needs to interact with the most recent state-of-the-art equipment for automation and control, such as smart meters or connected appliances and IoT-connected devices, without being exposed to cyber-threats.

Foreseen under the Electricity Regulation (EU) 2019/943 (Article 59) and in the 2022 EU Action Plan to digitalise the energy system, the delegated act is now subject to scrutiny by the EU co-legislators.

With the announcement from the Commission, the dossier now passes to the Council and European Parliament to scrutinise the text over a period of up to four months for objection.

The rules will enter into force once this period is over.

50Hertz, a Berlin-based system operator, announced their investment intention in response to the increasing amount of renewables coming online, resulting in increased demand for transmission capacity.

During a press conference, the operator said they integrated more renewables last year into the electricity than ever before. A total of 72% of electricity consumption across its grid area, they added, was met by renewables – the highest level ever – and now more transmission lines need to be reinforced or built to relieve grid congestion.

“50Hertz is entering a new phase in its corporate history. Its focus is shifting from planning and permitting to investment, construction and delivery. And we are making good progress in these areas”, said Stefan Kapferer, CEO of 50Hertz, at the TSO’s annual press conference in Berlin.

“We are preparing ourselves for the enormous efforts that will be needed well into the 2040s to make our transmission grid fit to meet the German and European climate protection targets. Faster grid extension and acceptance of the energy transition can only be achieved with greater cost efficiency.”

Commenting on the financial structure of the planned investment, Marco Nix, the utility’s chief financial and investment officer, said “Listed bonds remain the backbone of our capital structure.

“Around 60% of these relate to debt financing, like the two green bonds which amount to €1.5 billion ($1.6 billion), which we were recently able to successfully issue on the market. For the long-term success of the company, a solid development of equity and net result are also necessary.”

In 2023, 50Hertz invested €1.7 billion ($1.9 billion) in grid infrastructure and achieved an annual result of €220 million ($240 million) with equity strengthened by over 10% with shareholder support.

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Transmission buildout

Germany’s network development plan lays out transmission capacity needs, including 4,800km of new lines and reinforcement of 2,500km across the country.

50Hertz specifically, whose grid area covers the eastern German states as well as Berlin and Hamburg, has completed around one fourth of development measures for the onshore transmission grid, amounting to more than 800km of lines. Another 560km are currently being built.

This year, the company will also complete other important construction projects and commission a number of lines, including the Nordring Berlin project; the offshore grid connection for the Baltic Eagle wind farm (Ostwind 2); and the Uckermark Line, an important regional north-south connection between the Baltic Sea and the larger Berlin area.

In terms of offshore development, the plotting work for the Ostwind 3 project, which will connect the 300 MW Windanker wind farm to the mainland, has begun.

2024 also sees the company undertake preparatory work on line crossing under roads and railroad lines, including the SuedOstLink extra-high-voltage direct current transmission line between the Wolmirstedt and Isar substations near Landshut in Bavaria.

In future, 50Hertz’s on- and offshore grid is expected to grow by around 4,000km, provided that all projects included in the 2037/2045 Grid Development Plan were confirmed by the Federal Network Agency are included in the Federal Requirements Plan Act.

The new consultancy service draws on the energisation of more than 50 commercial grid connections and can work in any region of Great Britain.

With decarbonisation of the economy essential to meeting net zero targets, the country’s demand for electricity is forecast by National Grid to more than double by 2050.

Key infrastructure such as food manufacturing plants, electric transport hubs, residential and commercial construction and renewable energy projects that require a grid connection are often frustrated by complex and lengthy processes.

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For example, Ofgem data suggests over 40% of all applications for a grid connection for low-carbon energy schemes comprising over 120GW of clean power have been offered connection dates of 2030 or beyond, while around 20% would have to wait around 10 years.

Stewart Dawson, CEO of Vattenfall IDNO, says that the new Grid Connection Consultancy intends to provide an end-to-end solution for businesses.

“At Vattenfall IDNO, we recognise the urgency of achieving net zero goals and that many businesses find it challenging to manage the intricate process of securing grid connections. By offering a fully managed grid connections service, we aim to alleviate the burden for businesses that can’t manage this process themselves and accelerate the transition to a sustainable future.”

Historically, developers were obliged to connect via the DNO that controls the region in which the project is being built.

However, to introduce competition to help drive down costs, Ofgem has allowed independent DNOs to develop, operate and maintain local electricity distribution networks anywhere in Great Britain.

The Grid Connections Consultancy team includes electrical engineers, project managers, grid specialists and legal, regulatory and policy advisors.

Services offered by Vattenfall IDNO include power capacity and design requirement assessments, grid capacity reservation and negotiations with multiple landowners.

In addition, Vattenfall IDNO will carry out compliance audits for businesses looking to connect and can oversee on-site works.

To free up funds for those businesses, Vattenfall IDNO also offers a fee to adopt the new electricity network which can be re-invested by the developer.

The 44 projects, selected from 53 that were submitted for round three of the fund, will be led by energy network companies in partnership with innovators and partner organisations.

Priority challenges for eligibility included:

• Whole system planning and utilisation of networks, to facilitate faster and cheaper network transformation and asset rollout;
• Novel technical, process and market approaches to deliver an equitable and secure net zero power system;
• Unlocking energy system flexibility to accelerate the electrification of heat;
• Enabling power-to-gas (P2G) to provide system flexibility and energy network optimisation.

Project delivery

The SIF, funded by energy regulator Ofgem and delivered by Innovate UK, aims to find potential ideas for energy network challenges and identify those with the greatest promise as quickly as possible.

With their selection into the funding programme, the 44 projects will now enter their initial discovery phase. If successful, they will help customers and the wider electricity sector accelerate their net zero plans, build network resilience, access lower costs and streamline maintenance activities.

In a release, UK Research and Innovation (UKRI), which directs research and innovation funding in the UK, lists examples of selected network and flexibility projects:

Equiflex

Led by SP Energy Networks, Equiflex aims to promote equal access to flexibility markets, ensuring a just transition to net zero.

Equiflex project partners, Frazer-Nash Consulting Ltd, Energy Action Scotland and East Ayrshire Council, are looking at the design of flexibility options targeted at specific groups, such as less engaged and more vulnerable consumers.

They are also looking at the development of a toolkit to help stakeholders, such as local authorities, to evaluate which flexibility options might be best for their local context.

B-Linepack+

The B-Linepack+ project, led by National Gas, is exploring the feasibility of using geological solutions as intermediate scale storage.

The national gas transmission system can pack additional gas into the lines, known as linepacking. However, the amount of energy able to be stored by linepacking will decrease as we move toward decarbonisation of the networks with the use of hydrogen.

The project works with partners from the University of Edinburgh, Gravitricity Ltd, Southern Gas Networks, Revolutionary Engineering & Digital Design Ltd and Energy Reform Ltd.

It is looking at how lined rock shafts, engineered rock caverns and underground silos could provide purpose-built storage to supplement linepack capacity and provide system flexibility. This will enable supply and demand to be managed more effectively for consumers.

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UKPN flexibility projects

Additionally, UK Power Networks listed three projects selected for funding, including:

• Electric Thames: exploring the viability of electric-powered boats on the River Thames, and the possibility of boat power feeding the electricity grid to increase energy flexibility and reduce peak electricity demand
• KnowMyFlex: a proposal to create energy flexibility certificates, similar to energy performance certificate (or EPC) ratings, to show the existing and future flexibility potential of homes and buildings, helping customers engage with flexibility to reduce their bills
• WASH: an advanced study into the ways heat can be efficiently captured from wastewater and used to help district heat networks decarbonise

Luca Grella, head of innovation at UK Power Networks, said: “We’ve made remarkable strides during our first year with the SIF programme and are excited to be heading into a second with a new wave of projects which have exciting potential to make a real impact on both our communities and the way we work.

“This funding is allowing us to continue building strong bonds with some of the brightest minds in the sector. Our project collaborators play a key role in helping us deliver tangible benefits for our customers, and we can’t wait to reap the rewards of these partnerships.”

Launched in 2021, the UK‘s SIF fund is expected to invest £450 million ($577 million) by 2026.

The project, implemented as part of Enea Operator’s activities to modernise the energy infrastructure and introduce new solutions to improve the quality and security of supply, is aimed to contribute to improving the management of the distribution network.

Its basis is the use of proprietary deep learning algorithms from Polish software developer Affexy, with a focus on the most relevant data enabling continuous improvements that can improve the precision of forecasts and their adaptation to dynamically changing network conditions.

The project is predicated on the need to better adapt the grid to the changing conditions of the electricity market with growing renewable energies and for example new energy efficiency regulations.

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It is focused on three areas, of which the main one is the data analysis to enable understanding of the load on the network and identification of factors that affect the variability of that load.

Prior to that is the processing of the acquired data so that it can be efficiently analysed by the advanced AI models.

In the final step, a report and recommendations will be made with the conclusions from the analysis and suggestion of actions to optimise the data collection process and the quality of the forecasts.

Enea Operator anticipates that benefits will include a better understanding of the network load and the patterns that drive it – aspects that are critical for effective network management.

The project also introduces and pilots the advanced AI techniques, thereby testing the effectiveness of the algorithms in real-world conditions.

With the results and experience obtained, Enea Operator anticipates the implementation of a full-scale system.

Alongside this project, Enea Operator has concluded a PLN1 billion ($255 million) investment loan agreement with the European Investment Bank for distribution works.

These are to include the modernisation and construction of almost 8,000km of medium and low voltage grids, installation of 2.4 million smart meters, connections of 140,000 new customers, upgrading transformers by 633MVA and the connection of 4.3GW of new renewable generation capacity.

In a release, NatPower Group CEO Fabrizio Zago said the announcement marks the largest programme for the development of battery energy storage systems in the UK.

With a capacity of over 60GWh, the programme is expected to make up 15 to 20% of the UK’s battery energy storage system needs by 2024.

Specifically, NatPower UK – which is owned by Luxembourg-based global developer NatPower Group – has planned large-scale, nationwide development of battery energy storage systems.

Rollout will start with three ‘GigaParks’ to be licensed by later this year and another 10 by 2025.

Alongside the upcoming battery pipeline, the company announced the allocation of over £600 million ($770.6 million) towards developing substations to help speed up connections to the power grid.

Added to this are plans to develop large-scale solar and wind energy infrastructure, which will be announced with more detail by NatPower UK later this year.

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Commented Zago: “Today we present the largest programme for the development of battery energy storage systems, over 60GWh in the UK, and we are ready to collaborate with institutions and players in the sector to make the energy production system increasingly efficient”.

The more renewable energy fed into the distribution network from renewable sources, the more batteries are needed to store for use when there are peaks in energy consumption or when renewable sources are not available.

Said Stefano DM Sommadossi, CEO of NatPower UK: “To resolve the constraints that are slowing down investments in renewable energy, we will make investments in the energy distribution network, upgrading the substations for at least 15-20% of the new requirement.

“By investing in substations early on and focusing on energy storage systems, we will facilitate the next phase of the clean energy transition, thereby reducing the cost of energy for consumers.”

Added Sommadossi: “When it comes to resources, skills, policies, and investment, the UK is unrivalled and companies like NatpPower will help achieve the goal the country has set for itself.

Modernising the energy grid is a complex, large-scale endeavour, ranging from distributed energy resource management to grid digitisation, smart metering to the rise of prosumers, and much more.

Grid modernisation

In the coming decades, energy needs are forecast to increase as the global population continues to rise and as countries develop and their economies grow. During this transformation, accelerating the availability of clean, renewable energy is critical to meet this growing demand while addressing climate concerns.

As the world looks to a net zero future, technological advancements in electrification are helping address challenges associated with scaling renewables and enabling them to become viable alternatives to traditional fossil fuel sources of energy.

Furthermore, as the grid evolves, the distribution, storage and management of electrical energy are changing. There is a shift from centralised power stations to distributed renewable energy- characterised by smaller and widely spread power generators, usually coupled with energy storage capacity, which feed into the distribution grid. Decentralisation results in bidirectional energy flows, where end consumers become prosumers, necessitating the evolution of new energy markets. Done right, decentralisation can promote energy resilience and reduce transmission losses.

From a technology perspective, this distributed nature of energy assets like cars, homes, and manufacturing sites is giving rise to the Intelligent Edge where analogue sensing meets digitalisation. Simply put, we need intelligence at all the critical nodes: across every energy consumption, production, distribution, and reserve modality.

Watch the full video interview with Patrick Morgan below.

Data is the lifeblood of this new technology world. To create and capture value, technology developers like ADI must interact in new ways throughout the ecosystem. Our focus is to learn and co-create, as we develop complete subsystems at the Intelligent Edge with our partners. As we grow, we are bringing in new expertise, in areas that stretch beyond the typical approaches into areas like artificial intelligence, data science, virtualisation, battery chemistry, and more. Plus, we are advancing our IP strategy to include systems and standardisation to drive the industry. In taking a holistic view of Intelligence at the Edge and in designing with the total cost of ownership in mind, we are enabling the Intelligent Edge to stretch into the key area for value creation and growth.

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There is no time to waste and with the signs of climate change all around us, a combination of innovative technology and legislation is helping us to electrify and ensure a brighter and healthier future for us all. At ADI, we look forward to engaging with the full electrification ecosystem to help realise its decarbonisation potential.

Regardless of complexities, ADI solutions aim to simplify the paradigm into Energy Conversion, Energy Management, and Energy Storage. It is our unique position in the ecosystem, across the industrial, energy, automotive and consumer markets, which provides us with a macro-to-micro perspective into the challenges and opportunities.  

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According to Alliander, traffic jams will recur on the Dutch electricity network for at least another 10 years.

Alliander, Enexis and Stedin, three distribution system operators in the Netherlands, each stated in their Q4 results record levels of investments into the power grid system in attempts to accommodate demand growth.

Alliander invested more than €1.4 billion ($1.6 billion) in 2023 on 2,207 transformers, 2,518km of new medium-voltage and low-voltage cables and 304km (2022: 255km) of gas pipelines.

Enexis spent €1.214 billion ($1.327 billion) on its grid, an increase of 18% from the year prior, installing approximately 1,350km of electricity cables and more stations.

Stedin invested €832 million ($909 million) in the expansion and maintenance of their grids, €120 million ($131 million) more (by over 17%) than the previous year, on 892km of power cables and 266 new transformer substations.

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A call to action

In 2023, states Alliander, it became clear how dire the situation is on the Netherlands‘ electricity grid; the network is under great pressure and has reached capacity multiple times during peak demand periods.

The company cites significant growth in clean tech assets, such as heat pumps, solar panels and e-boilers, as well as the electrification of business processes and installation of charging points for passenger transport and electric trucks, all of which continued in 2023.

This, alongside sustainable construction initiatives – making new and existing homes more sustainable by relying on clean technologies – will add heavy demand to the power grid.

Alliander also cites a shortage of technical staff, lengthy procedures, insufficient available space in the public environment and a lack of system choices that hinder further scaling up; to accelerate further where possible, stricter choices are needed.

Stedin, on the other end, calls on consumers, businesses and governments to jointly reduce the pressure on the power grid and make optimal use of renewable energy sources.

Said Koen Bogers, CEO of Stedin: “Stedin does everything within its capacity to expand the power grid…But that won’t be enough. Particularly in the evening peak, between 16:00 and 21:00, and on sunny spring and summer days, the grid is bursting at the seams.

“This is becoming a growing social problem. We ask consumers and businesses to adjust their behaviour and consider when they need a lot of electricity. For consumers, Stedin is launching an awareness campaign for this in March.

“After all, the moment you use power has become an important consideration. If we change our behaviour, grid operators can free up more capacity, which can then be used to connect businesses on the waiting list, as well as new-build homes and schools.”

In their statement, Enexis added that, despite the surges in demand and subsequent bottlenecks, Dutch businesses can still make use of the grid via flex contracts, interest in which has been increasing.

Through the contract, willing companies shift their production processes to the night, share electricity with a neighbouring company or instal batteries to make their business case possible.

Said Enexis CEO Rutger van der Leeuw: “We are also learning more about this every day and are developing new types of contracts to give customers a perspective for solutions.”

With opinions ranging from AI to electrification and renewables, as well as plays made by non-traditional entrants, this edition of Smart Energy’s Power Playbook lays down how experts analyse the evolving energy market.

Digital adaptation

According to Brad Johnson, director of solution management for tech company Bentley, a key talking point has been blending in automation, from AI – the core focus during the DISTRIBUTECH conference – to machine learning and augmented reality.

“One of the trends we’ve noticed professionals talking about is how to blend all these technologies into utility practices in a way that’s approachable for professionals.”

To do so, he adds, human assistance will be crucial as a “first step into automation. Rather than just pushing the button and trusting the output will match, it means keeping close supervision on the technology.

“AI and ML technologies will offer that ability to peer into the process, provide supervision and remove barriers to adoption.”

Hitachi Energy’s Steven Kunsman and Tanya Wright also highlighted this push into the digital environment.

Wright, a vice president of marketing and communications, comments on Hitachi’s moves to “transform itself as a global conglomerate and become more digital, because they see that the world is transforming and changing and moving toward digitalisation across all industries, including energy.”

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Referencing combined capabilities from Hitachi Energy, Hitachi Ventara (an IT services management company) and GlobalLogic (a digital engineering company acquired by Hitachi in 2021), the two reps comment that digital transformation has been a key thought in the mind of companies looking to grow.

Says Kunsman, head of global product management: “There’s competition and companies are looking to answer the question of (how to) position themselves…Utilities will be going through a huge transformation with their operational technology, including substations, where digitalisation and connectivity will lead this change.

“Increasing levels of renewables penetration and distributed energy resource (DER) plants are connecting to grids that traditionally were not designed for DER interconnection.

“For these changes, companies need to review their portfolio and solutions offering to identify gaps and develop strategies to either fill those gaps through various acquisitions or develop those capabilities within the organisation.”

Kunsman adds: “The biggest trend right now is the transition to clean energy and deployment of EV infrastructure. And from that perspective, every utility will have a role in this major transformation to be able to support this type of change in the marketplace.”

Electrification and the EV era

Kunsman’s commentary on digitalisation and EV interest came as no surprise. Utilities have increasingly recognised the increasing urgency of consumption management on the power grid as a high priority.

However, says Garret Fitzgerald of the Smart Electric Power Alliance (SEPA), although its importance is clear, this clarity is a recent phenomenon.

Fitzgerald, a senior director of research and industry strategy for transport and electrification, says that its importance only came onto the table over the last four to five years:

“I’ve been in this market for about 15 years and 10 years ago I started talking to utilities and advising them on the upcoming load growth from EVs and the subsequent planning that will be needed. But for five of those 10 years, most utilities said ‘It’s not a big deal. If they come, we’ll manage it.’”

Citing European policymaking and mandates for vehicle electrification, Fitzgerald says that signals are now being sent to OEMs to “invest billions and billions of dollars in battery manufacturing and EV lines.

“With all of that coming together at a global scale, utilities are recognising that the EV wave is here.

“When you see some of the sales figures for EVs – 25% in California and 10%, across the US – we see that it’s real.

“The biggest trend I’ve seen is that transition from three or four years ago of utilities being unsure of the EV transition to now acknowledging the need for load planning from their uptake and what this means for the distribution system and what it will require of regulators.”

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Renewable integration and non-traditional players

Of course, it is not only EVs that represent a significant load management challenge.

According to S&P Global analysis, clean energy technology investments in 2024 will rise by 10%-20% compared with 2023, with renewables continuing to take the lion’s share. This uptake was repeatedly cited as a key market focus.

“There is a much greater interest in integration of renewables than in the past and it’s growing all the time,” commented Phil Beecher, president and CEO of Wi-SUN Alliance, a California-based consortium of global corporations in the smart utility, smart city and IoT markets.

“Storage and EV charging continue to be areas of interest … However, we’re seeing huge growth in renewable activity in emerging countries, such as India and Latin America, where it seems to be taken very seriously.”

Echoing Beecher’s sentiments was Bryan Sacks, global CTO and solution leader for energy, environment and utilities at IBM, a tech company focusing on hybrid cloud and AI solutions.

“What I’m finding really interesting is non-traditional entrants into the energy market – for example, traditional oil and gas players – who are starting to invest heavily into technologies, such as batteries, EV charging stations and renewable generation.

“For example, we’ve started to see companies like Walmart, which has massive roof space for solar, looking at deploying this type of technology.”

According to Sacks, it is also worth watching how the energy market will evolve to take advantage of these new entrants.

“What impact is that going to have on the traditional energy regulated components of the marketplace that don’t necessarily have the same flexibility?

“The evolving interplay between the regulated market and other growth markets, as well as how utilities invest in non-regulated areas to take advantage of those spaces, will become fascinating to watch.”

Were you at DISTRIBUTECH International? What were your key takeaways and what are some of the most interesting trends you’ve seen emerging?

Let me know.

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on Linkedin

Both engineers became interested in electronics around the age of 14. When Magda’s brother, four years her senior, took up mechanical engineering, she thought it would be a good career option for her too, especially as it would allow her to use mathematics.

Meanwhile, a 14-year-old Manjula started playing with free coding language programmes and quickly became hooked. Her curiosity led her to develop a love of coding and to become the first person in her family to attend university.  

Magda switched from being a teaching assistant to her first engineering job. Meanwhile, Manjula was recruited at university. Interestingly, most of her peers went into IT roles and earned more in their early years than Manjula. Bravely, she decided to tread the lesser-known and, at the time, lesser-paid path of electronic engineering due to her childhood passion, which is now in demand and equally well paid.

Women make up 16.5% of all engineers, compared to 10.5% reported in 2010, so there is still some ground to make up. Both engineers stressed the importance of introducing engineering early on. Magda stated that “science and maths are important at an early age as well as showing girls successful female engineers to encourage them to consider engineering as a career.”

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Business leaders call for more to be done to implement green skills programmes

Manjula has already been introducing her daughter to engineering toys to spark her imagination. She continues, “We need to break the stereotype that boys and girls play with different toys now. My 9-year-old daughter loves the coding game and circuit board that I’ve given her.”

When it comes to career role models, Manjula cites a senior manager during her time at GE. She recalls how she was “the only woman at leadership level in her company who had her career and children” and inspired Manjula to believe that she could have it all too.

Magda hasn’t encountered a senior female in an electronics engineer role but hopes that future generations will turn the tide. However, she also found role models in Professors Alison Noble and Eleanor Stride, whom she encountered during her time doing her PhD at Oxford University. Magda admires their success in academia and the startups that they’ve since launched.

While an interest in engineering is one part of encouraging more women into engineering, Magda and Manjula cited that there were particular skills and attributes needed to succeed. Magda stated that being confident in one’s ability and attention to detail were valued. “It’s crucial to double-check everything and understand how every decision you make as an engineer may impact the overall product. For example, you may put in a component that consumes too much power and sucks the device battery. With engineering, the devil is in the details.” Thirdly, she speaks of getting on top of technical advances. 

Manjula agrees. The tech industry is so fast-paced that programmes become obsolete straightaway. “Software that I worked with last year will not exist in a couple of years. It changes rapidly and so upskill, upskill, upskill is my advice. There are so many available sources for upskilling such as Udemy and YouTube – you don’t even need to register at a formal institution anymore.” 

Looking back at their time in the industry, and if they would do things differently, Magda speaks of her PhD stating that when she returned to hardware engineering, she had to take on a junior position but does not regret her experience gained in the biomedical world. Manjula had to take a career break due to a move to Paris.

She was very aware that it would be difficult to re-enter the professional world if her break took too long, and so after a year, she put her efforts into securing a job in France while juggling the demands of her family. As it transpired, it would be another seven years and a move to the UK, a returner-friendly job market, that led to her landing her present job with Versinetic. “Had I known I would land a great job again in seven years, I would have not felt so much guilt and concern about my prospects and enjoyed Paris more.”

Manjula says that there is still a stereotype in India where in a previous role, managers were reticent to give women important projects or hire them into demanding roles as they felt their focus may be on their families currently or in the future rather than their work. Positively, Magda has not encountered these obstacles or stereotypes at work because of her gender. 

Manjula believes that while these perceptions still exist, they are shifting and improving now. “At one point, women had to choose career or family,” she says. Covid has helped with career flexibility that women, often still the main caregivers in a family, need. “They can now consult, and work more flexible hours in engineering than previously,” she continues. 

From her own experience in the UK Manjula now sees a place where females that take career breaks and return to work are now accepted and welcomed back. To this end, she is always very upfront about her seven-year CV gap, wanting to demonstrate to her peers that taking a break is nothing to be ashamed of. She advises anyone in the same position re-entering work to “never give up, keep forging ahead – get a mentor and upskill if you need to; but above all, believe in yourself.”

For young women considering a career in software engineering, Manjula says “It’s a deeply demanding job and it keeps you on your toes. Every day is different, one day nothing makes sense and the next day, it all falls into place. If you are prepared for the challenges, then go for it!” 

Magda advises “not pigeonholing yourself and having the mindset of always learning new things. This way you can pivot and change as your career prospects and circumstances change. As an electronics engineer, I can work with C and Python language test scripts. I know enough to use them to do it myself and not have to ask someone else to do it. This has diversified my daily work.”

Manjula says, “I love that the impossible is at my fingertips, I can create anything with engineering. We can imagine and programme everything to do what we want. It’s extraordinary how a simple microprocessor can do so many things – the possibilities fascinate me and keep me going.”

Magda concludes that “engineering is the profession that builds daily life, from food appliances,  communications and complex medical devices like pacemakers that help people to live. Every device relies on engineering – I’m excited to be a part of that.”

Originally published on powerengineeringint.com

In 2023 the installed base of smart gas meters amounted to 55.9 million units and at a CAGR of 6.8% is projected to reach 77.6 million units by 2028, Berg Insight’s data indicates.

The annual shipment volumes amounted to 4.8 million units in 2023 and are expected to be around 5 to 5.8 million throughout the period.

The UK, Italy and Belgium were the most active markets, together accounting for the majority of the smart gas meter shipments during the year.

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While the rollouts in Italy, France and the Netherlands are largely completed, the UK market is ramping up yearly installations to reach a peak of around 3.3 million units per year during 2024–2025.

Belgium and Ireland also are expected to contribute with significant shipment volumes in the coming years. The Spanish market is expected to reach yearly shipment volumes of 1 million units by the end of the forecast period.

Smart gas meter networking

Berg Insight highlights how the smart gas meters deployed in Europe have been networked somewhat differently from the smart electricity meters.

A common model observed in the UK, the Netherlands and Belgium is to utilise a local wireless or wired interface to transmit gas data via the customer’s smart electricity meter.

A mix of 169MHz RF and 2G/3G cellular communications has been the primary model for the largest projects in which smart gas meters have been deployed independently of smart electricity meters, such as in Italy and France.

However, with the more ready availability of new types of LPWA technologies a shift in favour of these has begun.

Italy, for example, was the first to initiate large-scale adoption of NB-IoT as a primary smart meter connectivity choice and in 2023 the installed base of gas meters with NB-IoT connectivity in that country reached more than 2.5 million.

Berg Insight anticipates that by the end of the forecast period NB-IoT/LTE-M will become the go-to connectivity option for smart gas meters in several European markets, reaching an installed base of around 13.2 million units and accounting for as much as 60% of the annual shipment volumes.

The analyst also highlights the anticipated increase in the use of hydrogen in the European gas supply, with pilots underway in the UK and Italy with metering devices capable of measuring blend of hydrogen and natural gas or pure hydrogen and that interest in hydrogen meters is likely to increase as the technology matures.

According to Eurelectric, EVs are booming in Europe. Sales grew by 25% in 2023, with EVs accounting for more than one in five new cars sold. Infrastructure is keeping up, with fast chargers being 10 times more powerful than just five years ago.

However, as per the report How do we solve the challenges of data interoperability in e-mobility, a key challenge stopping e-mobility from reaching its full potential is that of EV charging to grid integration.

Commenting in a release, Serge Colle, EY’s global energy & resources leader, said: “E-mobility is about more than just the technological switch away from combustion engines.

“It’s about connecting the worlds of transport, energy and the built environment. This, however, depends on data interoperability and information sharing and getting there is a challenge. Overcoming this will help improve the overall EV experience and unlock value for ecosystem players.”

Specifically, the report highlights two significant challenges: connecting charging infrastructure to the power grid and smart grid integration.

Connecting charging infrastructure

According to the report, charging infrastructure networks need to be scaled quickly but are hindered by delays in handling network connection requests. Inefficient processing and lack of transparency about available grid capacity mean connection queues are getting longer.

The report cites evidence from a 2023 report by the Council of European Energy Regulators, demonstrating regional disparities across Europe’s highways in time needed for connection request approvals.

For example, it can vary from five months in Spain to 20 months in Portugal, 14 in France and 13 in the Netherlands. In response, adds the report, to help identify and prioritise charging locations, CPOs are calling for:

• Better coordination and tracking of connection requests;
• Heat maps at the distribution level, to understand capacity constraints by illustrating levels of grid congestion in different areas;
• Transparency over connection costs;
• A central point of contact;
• A streamlined process across municipal bureaus and departments to negotiate and speed up installation.

In addition, states the report, industry participants want national road maps that help them decide where best to site and develop charging infrastructure, especially for public transport and commercial fleets.

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Lack of smart grid integration

According to the report, there are currently not enough private EV charging points integrated into smart ecosystems. As a result, EVs are charging at their maximum rate; stopping only when the battery is full.

Alternatively, the report cites the capability of smart EV charging to establish communications and a flow of data between the charger, the vehicle, the CPO and the energy provider.

Instead of simply charging until the battery is full, smart EV charging would allow CPOs to optimise the time and duration of charge and adjust energy consumption.

Smart energy management, an extension of smart charging, would also allow energy consumption to be optimised, based on grid constraints and other factors, enabling CPOs otherwise bogged by high levels of EV charging demand to determine the best and cheapest time to charge.

For private or fleet charging, adds the report, it opens capabilities such as demand-side flexibility, which allows CPOs and other service providers to manage site-level limitations to energy capacity.

Said providers can then reduce or vary charging capacity at individual charge points at times of localised grid congestion, or integrate power from onsite solar panels or batteries to increase availability.

Going beyond smart grid integration, adds the report, V2G capabilities will allow EVs to receive signals to push stored electricity from the EV battery to the grid for local balancing and frequency regulation purposes.

Vehicle-to-home (V2H) is a further extension, using bidirectional charging to transfer the energy stored in the EV battery to the home and vice versa. Although not widely feasible today, standards or platforms will help to better manage EV charging and future increased load.

According to the report, data interoperability will be key for battling the above challenges, promoting collaboration and information sharing between stakeholders to enable services and facilities that support EV rollout, such as charging station optimisation, intelligent grid integration and optimised charging experiences.

Are we able to calculate a model of the electricity grid of the future using the software of today?

The question was posed by Professor Dirk Van Hartem of Belgian university KU Leuven. And his answer was ‘no’.

However, he stressed that inaction was not an option: “Because we don’t know exactly how the future will look like, does not mean we should not start working on it today.

“Today the technology is not perfect… but we can make a start.”

Van Hartem was speaking at a conference organised by currENT, the European association of grid technology companies.

Called A Grid to Decarbonise Europe, the conference spotlighted work undertaken by currENT, KU Leuven, superconductor company Supernode, and the University of Strathclyde in Scotland, to model a potential blueprint for Europe’s electricity grid.

CurrENT secretary-general Layla Sawyer told the conference in Brussels that in terms of grid innovation: “Up to now, we have been inching forward. That’s not going to cut it. We need to look at the technology gaps.”

That ‘gap’ is more of a chasm now, and Sawyer’s collaborators were keen to stress the magnitude of the problem.

“This is a gargantuan challenge,” said Supernode chief executive John Fitzgerald. “The grid has been developing very slowly and incrementally.”

He highlighted some ironies of the grid. “Europe’s power system runs incredibly well… but it runs on carbon. And we have a climate crisis.”

When things go right with the grid – namely, when it operates as it should – he said “nothing happens. If things go wrong, we are the villains.”

He said grid operators were “the watchers on the wall” and they “need our help to keep the lights on”.

That help, he said, needs to come in the shape of a new grid, a DC overlay grid on top of an AC network.

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“A DC grid is the best contender to solve our problems,” added Prof Van Hartem, who wondered if “we should have one TSO to rule them all”?

He said meshed HVDC grids “are the only realistic option” to build a “new backbone grid”.

He outlined how building this grid would come within timelines: multi-terminal connections between now and 2030; offshore energy hubs fired up between 2030 and 2035; meshed offshore grids and first deep island reinforcement between 2035 and 2045; and EU-wide interconnection from 2045 onwards.

However, he said this work should not be held to ransom by current EU targets. “We hope that by 2050 we will have a decarbonised Europe. But if it’s 2060 – that’s okay.”

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Enabling a mass uptake of electric vehicles is “one of the critical litmus tests” for the energy transition in Europe, according to Kristian Ruby, secretary-general of electricity association Eurelectric.

And he has demanded an inclusive approach to solving the problem that he dubbed “the European way”.

“Let’s not do it the winner-takes-all US way. Let’s create a vibrant market around the customer. Let’s make it work with infrastructure, data and interoperability. This is about people’s everyday lives. It’s on us to solve. Let’s do it; let’s do it right; and let’s do it the European way.”

Ruby was speaking at Eurelectric’s EVision conference in Brussels, which presented a where-are-we now picture of emobility in Europe and delivered a where-we-want-to-go blueprint for the future.

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The current state-of-play picture was upbeat: Eurelectric says electric vehicle sales in Europe are “booming” and it expects EV to overtake traditional vehicles by 2030.

A new report by Eurelectric and consultancy EY highlights this strong growth but warns that maintaining – and increasing – momentum depends greatly on “a more interconnected ecosystem where data can be freely exchanged among emobility players to ensure strategic infrastructure planning, cost savings, flexibility and improved charging”.

Ruby said: “To accelerate EV uptake in Europe, all players across the value chain need to work together with open, interoperable and secure data to create a smooth, seamless experience for the customer.”

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Also vital for the customer – certainly in the mind of the customer themselves – is the initial cost of an EV. Serge Colle, Global Energy & Resources Leader at EY, said: “The reality is that cars just need to be cheaper. If we want the electric vehicle transition to go faster, then it must be better and cheaper for the customer.”

But – and it’s a big ‘but’ – Colle highlighted that according to EY data of predicted battery electric vehicle sales between now and 2030, only 17% will come with a under-30,000-euros price tag, which is classed as the so-called ‘economy’ vehicles.

The call for cheaper EVs was pushed by Georges Gilkinet, Belgium’s Deputy Prime Minister and the country’s Minister for Mobility, but this provoked an immediate backlash from the next speaker at the conference, Renault chief executive Luca De Meo.

He said expecting carmakers to initiate a sudden drop in prices was “an illusion only policymakers have. They talk about reducing and reducing. We are not a charity. You have to accept that you have to factor in profitability [for the carmakers].”

De Meo said it that the cost involved around lithium in an electric vehicle was more than the cost of the whole power train in a traditional vehicle.

He also highlighted the huge energy costs around EV production: to make an electric vehicle uses five times the energy which that car will use in its first year.

And that electricity needs to be ‘green’, he stressed. “We have to build gigafactories. We will become a high-electricity user.

“We have to get more decarbonised energy [into the production process] otherwise we are going to have a handicap.”

The report, prepared with EY, points to the complexity of the e-mobility ecosystem with increasing EV adoption with multiple parties including drivers and players from the charging station and energy systems and the web of relationships between them.

Underlying all of these is data and the need for data exchange not only to assure the day-to-day driver experience but also to enable the integration of EVs into the broader energy system, of which ultimately they must be an integral part.

For the driver, some key issues are charge point accessibility and payments and roaming on a seamless basis.

For the energy sector challenges include the timely connection of charging infrastructure to the grid and the grid integration of the EVs both to avoid congestion on the one hand and to draw on the battery storage potential for flexibility on the other.

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To enable these standards and communication, protocols are essential for each interaction, while any use of data also invokes sharing, privacy and cybersecurity requirements.

e-mobility activities

The report states that data interoperability promotes collaboration and information sharing between stakeholders to enable services and facilities that support EV rollout.

For example, charging station optimisation can be achieved with strategically sited stations that provide EV users with easy access and convenience and thereby reduce range anxiety, enhance the driver experience and encourage wider adoption.

Seamless integration of EV charging with the energy grid enables energy optimisation and grid services, such as frequency regulation and voltage support.

With interoperability between data systems, drivers can benefit from real-time information on charging station availability, pricing and compatibility with their vehicles, they can initiate charging sessions remotely, manage payments and track their charging history via an app.

Industry opportunities

The report suggests that while electric vehicle uptake is advancing towards mainstream adoption, to maintain momentum and keep drivers onside, every interaction must be configured around the customer journey.

“From purchase or lease, through EV usage and management, to end-of-life decommissioning, we must deliver a hassle-free and green driver experience.”

The right structural and regulatory mechanisms need to be in place across each of the relevant areas.

Moreover, by getting the mechanics of data interoperability right, connections will form across conventional demarcation lines with players exploring new commercial opportunities, crossing into adjacent services and competing to win over the customer and capture value.

For example, automotive companies, such as Tesla, Volkswagen and Volvo are already crossing over into energy provision, battery services and solar solutions, while energy companies are building out charging infrastructure and e-mobility services.

Greater cross-over and innovation can be expected as the customer journey is redesigned and commercial lines are redrawn, suggests the report.

Building blocks for success

The report offers five building blocks considered for success in the e-mobility space, irrespective of industry segment.

These are:

• ‘Control tower’ to provide visibility and understanding across the commercial landscape.
• Customer proposition defined using segmentation and analytics to inform the product and service delivery.
• Dataspace acting as a centralised hub for curating, integrating and managing data from diverse sources.
• Data privacy and legal, commercial and regulatory diligence around areas such as customer consent and data sharing.
• Trust and cybersecurity taking into account the multiple connection points and extending to supply chains.

The report concludes by stating that progress is being made, but there’s a long road ahead.

“E-mobility is gaining pace in Europe. To accelerate EVs’ uptake in Europe all players across the value chain need to work together with open, interoperable and secure data to create a smooth, seamless experience for the customer,” comments Eurelectric Secretary General, Kristian Ruby.

The 30 millionth meter was connected to the network at midday on March 1 by E.ON.

With the average daily connection rate approaching 16,000, the number of connections is growing apace and corresponds to over 18 million homes, or about 70% of all homes now being connected.

“Reaching 30 million connected smart meters in over 18 million homes is another landmark milestone in pursuit of our purpose to make Britain more connected so we can all lead smarter, greener lives,” says Angus Flett, CEO of the DCC.

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Gill Baker, Director of Smart Field Connections at E.ON, says the company is delighted at having fitted the 30 millionth smart meter.

“[We] are equally proud to have fitted more than five million others before this one and are pleased to be part of this exciting milestone for Great Britain’s energy system.”

The smart meter network is considered a critical part of the nation’s energy infrastructure and an important platform for digitalising the power grid, enabling real-time data delivery to customers, network operators and suppliers.

With its use, the DCC estimates current CO2 savings at 1.125Mt/year.

DCC work programme

To advance its use, a range of initiatives are currently underway by the DCC, of which a key one is the migration of the more than 15 million first-generation SMETS1 smart meters to the network.

As of November 2023 (the last data available), almost 11.6 million SMETS1 meters were connected to the network.

Closely related is the central switching service, which is aimed to reduce the supplier switching to five working days and subsequently to 24 hours.

In particular, the ‘Enduring change of supplier’ (ECoS) programme is aimed at enhancing the security of a switch, with the essential component the replacement of a key on the smart meter. The migration from the previous programme to the ECoS is currently underway and due for completion in Q2 2024.

The third major initiative is the rollout of dual band communications hubs, which are intended to enable the smart meters to communicate in buildings such as apartment blocks or with thick walls where communication is not possible with the single band hubs – about 25% of British households.

These hubs use the 2.4GHz frequency of the single band hubs as well as a HAN frequency of 868MHz and are expected to open up the benefits of smart meters to these households.

Further updates on Britain’s smart meter rollout are expected with the release of the government’s annual review for 2023, which is included with the March release of the quarterly update.