Fortum's view on smart grids
Smart grids and competitive, liberalised and integrated energy markets will be key enablers for the implementation of the EU energy policy. The smart grid concept is more than a technology; it is also about new market models, regulation and increased activity on the customer side. It can be seen as the final step in liberalization of the end-customer market by bringing all the benefits of the dynamic and competitive wholesale market also to retail customers. In order to guarantee necessary investments in the development of new grid technologies and in the implementation of smart grids, a proper regulatory framework is needed.
Fortum is of the opinion that:
• Efficient network regulation is an important vehicle for driving European development towards a highly modernized grid, thus benefiting European customers as a whole. The regulatory framework should create necessary incentives for operators to develop and implement smart grids where it is economically viable.
• Although electricity distribution is still subject to national regulation, there should be efficient coordination between countries operating in the same regional wholesale electricity market on regulatory framework and standards concerning e.g. tariffs and consumer protection aspects in order to support the development of cross-border retail market and to avoid market distortions.
• A clear EU-level policy, including common standards for smart grids and smart metering, are needed to ensure interoperability across the network and across countries.
• Technological innovation is of utmost importance both in terms of reaching the ambitious energy and climate policy targets and improving European competitiveness. Whereas energy production should not be based on long-term public financing, it is important to allocate necessary funding for research and development of new energy technologies such as smart grids.
• Public support for research and development of smart grids and ICT systems that enable businesses to utilize innovative service arrangements to improve their efficiency and enhance their services to customers, including large-scale demonstration projects, is therefore needed. The European Commission should secure the necessary financing for the implementation of the SET-Plan's (EU Strategic Energy Technology Plan) Smart Grid Initiative (EEGI = European Electricity Grid Initiative) and Smart Cities Initiative in the forthcoming EU Research and Framework Programme (FP8).
• Supporting the transition process from R&D over demonstration to full deployment of smart solutions should be one of the future tasks for national regulators.
• All major stakeholders should be involved in smart grid projects in order to define a concept for a smart grid system that fulfils simultaneously the requirements of end customers, society and industry and to ensure that Europe’s electricity networks develop in a way that enhances Europe’s competitive position without compromising environmental objectives or the commitment to sustainability.
• Consumer protection aspects, especially legitimate concerns relating to the protection of personal data and privacy in the implementation of smart meters and smart grids, need to be tackled properly in order to guarantee public acceptance of these technologies. Clear European wide rules as regards data to be collected, data storage and use of data etc. are needed.
• Energy market models for European-wide energy markets should support open retail and wholesale business in the EU with limited restrictions in transmission capacity, thereby enabling open interfaces for all actors in the electricity business