Andrianos Tesas – The electricity market, p2p energy and smart grids in Greece |
The proceedings of the last decade around the electric power market in Greece demonstrate a tendency of differentiation after a period of monopolistic stability and progressive expansion of electric power throughout the Greek territory that lasted almost half a century. The request for “clean” electricity combined with the potentiality offered by p2p energy presents highly attractive prospects, however the multifaceted challenges are still there, argues Andrianos Tesas.
Figure Ι
The relatively recent concern for climate change in combination with the course of the oil prices, have brought out a discourse for so called “peer to peer” (p2p) production and distribution of electric power. P2P electricity refers to a reasoning that is very similar to file-sharing on the Internet. The final consumers become small producers of electricity, with the use of wind turbines, solar panels, geothermal energy or other Renewable Energy Sources (RES). Therefore, they may receive electric power from the established national network if or when needed, but are also able to sell their surplus power (see figure ΙΙ) to the national power grid. The p2p production and distribution of electricity could offer advantages not only in terms of energy efficiency such as the co-generation and optimization of local resources but also, because it would transform passive users into active participants of the energy system, with re-selling one’s own power as a good incentive for not wasting it.
Figure ΙΙ
Obviously, the proposals for the development of p2p energy pay special attention to information technology (IT) and among others include:
- The rationale of universal coverage that is proposed by the findings of CRISP project (Distributed Intelligence in Critical Infrastructures for Sustainable Power) and includes the automated demand-supply response.
- The counterpart is the case of decentralized grid that involves communication among the various producers for the regulation of offer and demand through the internet.
- A very popular case is the one of the low voltage micro–grids that includes the production of electricity and heat at a local or household level, and the capability of storage in accumulators whilst there is a single interconnection with the central power grid.
In Greece the thermoelectric stations of electricity generation which are based on lignite prevail and the hydroelectric ones follow. The electric system is divided into the National Interconnected System and the Insular System. The Greek electricity market (See fig. IIΙ) is already formally liberalized and apart from the Public Power Corporation S.A. (which however accounts for more than the 95% of electricity generation), the production and sale of electricity by third parties is allowed. The law provides the obligation of all electricity producers, including the RES, to be connected to the central grid and to sell there the electricity they produce, and not directly to consumers. Thus, bilateral contracts/ understandings among producers or between producers and suppliers, without the intermediation of the central Energy Transactions System, are excluded.
Figure ΙΙΙ
Small Combined Heat and Power “with high efficiency” production units (up to 50.000 MWh/year) are allowed and they can sell up to 20% of their production at a fixed price. On the other hand, a small fee is imposed (to support RES) on the total quantity of electricity that these units generate.
It is worth mentioning that the Law 3468/2006 created incentives for the production of electricity by private households in small photovoltaic stations, that include the abrogation of the obligation to get a license for the production, installation and operation of generators with power up to 150KWh. The generated electricity from solar power is then sold to the Hellenic Transmission System Operator S.A. (or to the PPC S.A. to the non interconnected islands) through the PPC S.A. network, while the participation of self-producers is encouraged.
Greece has received criticism for its lack of regulation as regards the real-time balancing of the electricity market. A hot topic issue at the World Forum on Energy Regulation recently held in Athens revolved around the installation of the ’smart’ meters as a first step towards the creation of the so-called ’smart’ grids that result in a real-time response of electricity supply to the market demands.
The proceedings of the last decade around the electric power market in Greece demonstrate a tendency of differentiation after a period of monopolistic stability and progressive expansion of electric power throughout the Greek territory that lasted almost half a century. The request for “clean” electricity combined with the potentiality offered by p2p energy presents highly attractive prospects, however the multifaceted challenges are still there.
Let’s take, for example, the highly probable case of the adoption of smart meters. Several countries worldwide have adopted the installation of those meters universally, as it is the case of Italy with the dominant company of production and supply of electricity, Enel SpA. The smart meters provide the possibility of differentiated charge – higher during peak hours and lower during the rest – whereas the illegal use of electricity (e.g. by illegal constructions) is easily located. However, there are several objections by those who see a clear profit only for the companies that sell electricity to the consumers instead of the consumers themselves.
In New Zealand, for example, the Parliament recently issued a study which criticized the lack of true “intelligence” in smart meters, at least according to the consumers’ interest. More specifically, the meters in question failed to interact with the operation of “smart” domestic devices and domestic networks, helping thus to reduce – as they ought to – the electricity consumption. Additionally, the study proposed on the one hand that smart meters give consumers the opportunity to switch provider for the safeguard of fair competition (just as in the case of portability of numbers of mobile phones) and on the other hand that in the differentiated charge legislation can safeguard the fair charge of consumers based on costs and not solely on the profits of providers.
The promotion of smart grids, where smart meters constitute a first step, presents a string of technological dilemmas like e.g., the use of either wired or wireless media of communication among the meters, the ability of these meters to support the production of electricity by households through micro-grids’ connectivity and the security of the data transmitted interactively.
Thus, the standardization of devices and of the methods of communication of the consumers, producers and consumers–producers with the main distribution center, plays a particularly important part. A typical example of the importance given to the development of smart grids by the US (United States of America) administration is the 13th Title (sec. 1301) of the relatively recent Energy Independence and Security Act – 2007, that aims specifically to safeguard the interoperability of smart grids. It’s worth mentioning, however, that this Act eventually failed to reduce the tax reliefs enjoyed by oil companies.
On the other hand, there are a number of factors that – naturally – affect the capability of p2p energy from further development. Apart from the expected reaction of the traditional electricity players that perceive the p2p production as a threat (Datamonitor, 2009), the financial factor clearly constitutes a very important parameter, especially when negative growth is present in many countries and controversy surrounds financing policies worldwide. Currently, p2p energy is not straightly cheaper when compared to conventional electricity, a fact that is deterring not only consumers but also policy makers from adopting it. Moreover, the future sustainability of the technology used in p2p energy production has a clear impact on a present decision to invest assets. The sustainability of p2p energy and the reduction of the real pecuniary costs of adoption by households are crucial for the financially safe transition to a society of consumers – producers.
For the policy-makers, apart from the financial factor, the rest of the external effects of p2p energy also acquire great importance. One may, for example, take the employment and training. On one hand, there is an opportunity to increase employment at national level given that the production of relevant technologies takes place domestically; on the other hand, training of human resources on these new technologies poses a challenge. Another example may be the long-term impact on public revenues, given the reduction of income derived from the Value Added Tax (VAT) on electricity consumption, in the case of larger penetration of p2p energy.
In Greece, where transition of the monopolistic electricity market to real competition finds itself at an initial stage, political volition – taking into account patterns on the international scene – is able to shape the proper environment for optimum usage of the new available technologies in electricity (production, distribution and consumption) benefitting the actors/ players involved and with the ultimate goal to reduce the burden on environment.
These decisions, either by introducing smart meters as a first step towards the adoption of smart grids, or through the central promotion of autonomous p2p energy networks (e.g. in the islands) or even both of them, as well as any push for alternative methods of production and distribution of electrical power, should be taken based on scientific criteria documented on the most accurate studies available and taking into account the interests of all concerned parties. Besides, the new trend in electricity favors interactive communication, whereas the new technologies allow public consultation at low cost. Any regulations that are to be adopted have to ensure both the sufficiency of electricity and that the pockets of the majority of the consumers – citizens of this country are not at risk, in order to do the trick.
References and Reading
- Datamonitor a (2009) Electricity in Europe – Industry Profile, October 2009, Ref. Code 0201-0663.
- Datamonitor b (2009) The UK’s latest proposal for a FIT system is ambitious, but misguided, 28 of April 2009, Expert View.
- J. Ikäheimo, K. Purchala, E. Fuchs, R. Drozdowski (2008) Management tools for Distributed Energy Resources integration into energy markets, 3rd International Conference on Integration of Renewable and Distributed Energy Resources, December 10-12th, 2008.
- S.Kärkkäinen (2004) Local Trading Strategies, First International Conference on the Integration of Renewable Energy Sources and Distributed Energy Resources, December 1 – 3 /2004, Brussels.
- P. Koponen, (2004) Integration of metering with DER management? Metering Europe, 29.09.2004”.
- Office of the National Coordinator for Smart Grid Interoperability (2009) NIST Framework and Roadmap for Smart Grid Interoperability Standards, Release 1.0 (Draft), National Institute of Standards and Technology, U.S. Department of Commerce, Washington.
- Parliamentary Commissioner for the Environment (2009) Smart electricity meters: How households and the environment can benefit, Wellington, New Zealand.
Relevant websites
- http://www.worldforumiv.info/
Special issue: p2p energy
Tags:
Andrianos Tesas, energy, Greece, p2p
