ENERGISE was a research project launched to analyse smart grid communication infrastructure together with the different parties on distribution system operators (DSO), telecommunications and the governmental side. The main focus was on identifying the different decision-making...
ENERGISE was a research project launched to analyse smart grid communication infrastructure together with the different parties on distribution system operators (DSO), telecommunications and the governmental side. The main focus was on identifying the different decision-making factors which determine if a dedicated or shared communication infrastructure should be deployed.
ENERGISE survey and analyses
By gathering information from industry and regulatory stakeholders as well as by using results from relevant studies and reports, ENERGISE has established important insight into the motivations and rationale of DSOs’ and telecommunication companies’ decisions concerning the issue of implementing ICT infrastructure. On the one hand, the roles and responsibilities of DSOs, e.g. regarding security requirements or downtime regulations, play a major role as well as rules and regulations in the energy sector. Especially the regulation of distribution grids and the question how smart grid investments are treated is of outstanding importance. On the other hand, the telecommunication sector and its specific characteristics, e.g. regarding mobile deep indoor coverage, in different countries are a decisive parameter when it comes to the investment in smart grids.
To collect information and engage the relevant stakeholders the project conducted a survey at the end of the first project year. The analysis of 294 fully answered questionnaires shows that the survey aggregates viewpoints from various stakeholders beyond the two main target groups (DSOs and communications providers), including researchers, transmission system operators (TSO), equipment manufacturers and companies engaged in energy generation/trading/resale. The results from the survey mark an important milestone in completing the picture of strategic assessment on co-operation by the stakeholders by analysing drivers and barriers for co-operation across the ecosystem.
The results illustrate that co-operation between the sectors is more likely to be expected in the future since the benefits and synergies will most probably surpass the existing hurdles. It is also very significant that the barriers for co-operation mentioned by the respondents are not of technical nature but emerge from legal and regulatory insecurity and strategic commercial considerations.
ENERGISE toolkit summary
Since the beginning of the project, the goal was to provide an expert toolkit which can be used in deciding whether to expand the ICT infrastructure in a dedicated or shared form.
The toolkit consists of two major parts: the decision tool and other relevant project outcomes. The decision tool is a comprehensive compilation of existing and feasible solutions for cross-sector co-operation. The database consists of 47 cases from 17 European countries. For each of the cases information on the country’s market environment, company characteristics, and a description of the smart grid application, and the decision outcome have been listed in a structured way. In total, five areas of co-operation in smart grid applications and related relevant areas were identified in the project: smart metering, network operation, infrastructure sharing, joint deployment, and the development of new products and services. On top of this information, detailed cross-case analysis for drivers of co-operation was executed and included in the toolkit.
In addition, the toolkit represents a central information hub of the main findings gathered during the two years project including all published reports and the survey results. It aims at market players finding themselves faced with the decision to rely on dedicated or shared telecommunication infrastructures for implementing smart grid solutions, and can furthermore present an orientation and evidence base for policy makers.
Key conclusions and recommendations
A range of barriers to co-operation between the sectors was identified in the project’s outcome:
1. Firstly, the lack of trust and mutual understanding between energy and telecommunications providers poses a significant hurdle.
2. In addition, unclear regulatory frameworks and standards that deviate greatly from sector to sector further hinder co-operation. Hence, insufficient exchange and co-operation between national regulation authorities (NRA) from both sectors are perceived to be a barrier for more collaboration.
3. Furthermore, the asymmetric valuation of commercial services, strategic lock-in effects, an unclear common understanding of what is a critical application and what are the minimum communication requirements also hamper cross sector co-operation.
The future importance of communications infrastructure for electricity grids will rise tremendously together with an increasing interdependency between infrastructures and the involved sectors. This development is very well recognised by the involved companies leading to the perception that infrastructure synergies in the respective other sectors are essential.
Hence, several success factors for co-operation between energy and telecommunications providers could be identified by the ENERGISE project:
1. If the partners seek to build on existing assets then there needs to be geospatial congruence, i.e. the coverage of the telecommunications provider needs to match the connectivity needs of the energy provider.
2. Throughout the smart grid applications analysed by ENERGISE, collaboration appears to be most successful if the partners are of similar size. This seems to prevent power and information asymmetries and helps building trust among the partners.
3. Application cases with a clear perspective to reduce costs significantly, speed up the implementation of new smart grid solutions or provide access to a new knowledge pool in the ENERGISE database are the ones that came to full co-operation the quickest. In cases that developed more slowly, business rationales first had to be discovered and argued internally.
There are substantial strategic hurdles to overcome in order to enforce co-operation between communications providers and DSOs as there are various asymmetries among them. Nevertheless, the main reason for co-operation among the energy and communications sector consists in the assumed advantages with regards to faster implementation of smart grids.
Overall, the project’s outcome indicates that the energy market is about to transform at significant speed. The blurring of the sectors and the convergence of different types of infrastructure will continue as new technologies and business models emerge.
This leads to a significant challenge for the regulation and the effected companies. Speed and agility is needed on all sides while many adjoining topics need to be considered as well, e.g. cyber security, data ownership, spectrum allocation, and 5G.
Since many participants in the project reflected the wish for more exchange between the various stakeholders it is important to maintain an exchange among the key actors. The only feasible way to reduce the barriers is to foster the exchange of information and viewpoints. Only a growing understanding of the other sector will enable a mutual approach and utilisation of highly needed synergies.
More info: http://project-energise.eu/.