Smart Grid Policy Support will Reduce European Carbon Emissions

by Stephanie Oehler

Carbon emissions are greenhouse gases and are often targeted for reductions in order to slow the progression of climate change. The energy sector, in particular, is seen as an area with significant potential for minimizing emissions since it is responsible for such a high percentage of society’s atmospheric carbon contribution. In Europe, a plethora of smart grid technologies has been installed and more are being designed in order to increase efficiency of electricity production and transmission. Darby et al. (2013) examined six national energy markets in the European Union (EU) in order to determine how carbon emission reductions occurred with the implementation of technologies and policies, market characteristics that were conducive to reductions, the areas with the greatest potential of achieving emission reductions, and the areas in which the new systems would be most effective. They collected a variety of quantitative and qualitative data from the German, Austrian, French, Spanish, Portuguese, and British markets in order to predict the emission reductions produced under three conditions: no smart grid implementation, smart grid technology implemented without legal or economic support for users, and smart grid technologies installed and supportive legislation and market conditions adopted.

The models revealed that reducing demand and increasing energy efficiency would result in considerable emission reductions due to the composition of energy sources. The authors concluded that the most potential for lowering emissions existed within the residential sector and policy changes and market incentives were needed in order to promote action on the part of the consumers in order to provide the required demand reductions. The results were similar across the six nations, for the most part, and slight variations were attributed to regulatory differences.

The EU and various nations around the world have set challenging goals for reducing greenhouse gas emissions, partly through increases in renewable energy sources. The authors identified three ways in which energy production and distribution technology developments have been shown to lower carbon emissions in the energy industry: through a decrease in demand, typically accompanied by increases in efficiency; through supplier manipulation of demand at peak times through price structures or flexible use agreements; and increased availability of renewable energy sources. Darby and colleagues performed the methodologies to measure the potential of smart grids for greenhouse gas reductions (SG4-GHG) study in accordance with the Digital Agenda for Europe’s European Commission Taskforce on Smart Grids to help determine the future role of smart grids in the EU. Two models, the Zephyr pan-European market model and the ancillary services model, were constructed to determine the impacts of various quantitative and qualitative functions of the smart grid, on the demand-side, supply-side, and through the interconnection of systems, on carbon emission reductions from smart grid implementation. These functionalities revealed that there were two primary sources of reductions; reductions in the volume of energy produced and decreases in the emissions per quantity of energy generated.

The authors proceeded to outline metrics that characterized the markets they examined and envisioned. In terms of demand-side driven reductions, Darby and colleagues identified four methods that consumers were able to use to modify their energy demand as enabled by smart grid technologies; overall reductions, static peak reduction, dynamic peak reduction, and continuous balancing. Additionally, applicable United States (US) and Australian data were used to fill in for the information void in EU data pertaining to multiple desired metrics. The first model used the respective national data collected for overall and peak reductions and the second model displayed the potential impacts of continuous balancing. Each model was run for three variations of 2020 scenarios: baseline, in which there is no smart grid; expected, in which there are new smart grid technologies but limited to no legislative support; and feasible, where technology and legislation continues to adopt and expand. The models required various assumptions be made, and the authors did so through extensive research in the field to produce the most accurate predictions possible.

The results of the models indicated the potential for reductions in each of the six countries examined in the study. Germany and Great Britain had the highest potential and the authors attributed this to their use of coal, a carbon-intensive energy source, in their current energy profiles. It was also noted that opportunities for savings were higher within the wholesale energy markets, as opposed to the ancillary markets. The most significant factor in emissions reductions for all countries was the lowering of carbon intensity through renewable sources and greater efficiency measures. Lower total demand was also noted as a significant factor. Ancillary markets, which store power and release it as needed, saw smaller reductions because even as renewables provided a higher share of power at certain times of the day, fossil fuels were still relied upon for the majority of the time. Overall, Darby and colleagues were confident that reductions in demand had more influential impacts on emissions than peak shifting efforts. Notably, small reductions in demand corresponded with large reductions in emissions because they reduced reliance on fossil fuel production methods. Market connections were also identified to be useful in several of the countries, particularly those producing excess renewable energy that could be sold to neighbors. Thus, the authors concluded that smart grid programs should focus on demand reduction and efficiency improvements. This will require increases in policy support for customers and market incentives for them to change their behavior in order to fully take advantage of the newest grid technologies. Darby and colleagues recommended that further research focus on the long-term impacts of smart grid technologies, grid interconnection expansion benefits, and the implementation of more pilot programs. Ultimately, smart grid technologies resulted in significant carbon emission reductions under the favorable technological and political conditions in the EU.

Darby, S., Strömbäck, J., Wilks, M., 2013. Potential carbon impacts of smart grid development in six European countries. Energy Efficiency 6, 725-739.

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