P&E EU 1

COVER NG P&E EU1 final:nov09

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GETTING INTO DEEP WATER Going offshore pays dividends for E.ON’s Michael Lewis

GREEN INTELLIGENCE How ESB is building a smart grid in Ireland

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BROKEN PROMISES Are the EU’s renewable plans all talk and no action?

LONG RANGE FORECAST Christian Egal looks at the future of wind energy

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SUSTAINABILITY

SHOWDOWN HOW CLOSE ARE WE TO LOSING THE RENEWABLE ENERGY BATTLE? PAGE 32

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ED NOTE_nov09 26/11/2009 15:45 Page 7

EDITOR’S NOTE 7

Ramping up renewables How well are we doing in our quest to generate more power from sustainable sources?

W

ith the amount of recent media coverage surrounding climate change, you’d be forgiven for thinking that the developed world is on the cusp of an environmental revolution. At first glance, this appears to be true: the member states of the European Union, for example, with their long history of concern about energy sustainability, have committed to generating 12 percent of their electricity from renewable sources by 2010 and 20 percent by 2020.

The US, once known mainly for its refusal to ratify the Kyoto protocol, has undergone a treehugging renaissance since the Obama Administration came to power, and is now looking to achieve similar goals of 10 percent by 2012 and 25 percent by 2025.

But what’s the real story behind these numbers? The dawn of the year 2010 is nearly upon us, and the EU looks likely to fall short of its 12 percent target. The European Commission’s ‘Renewable

“Renewables haven’t had the kind of sustained, predictable subsidies here in the US that Europe has had” David Levy, Director, Center for Sustainable Enterprise and Regional Competitiveness, University of Massachusetts (Page 32)

Energy Progress Report’ concluded earlier this year that this was likely to happen, “despite the legislation, recommendations, exhortations and even legal proceedings against some member states.”

This conclusion appears to be borne out by figures from Europe’s Energy Portal, which indicate that only 9.2 percent of Europe’s final energy consumption came from renewable sources in 2006, the last year for which confirmed data are available.

The US appears to be doing better, despite its slower start. According to the Energy Information Administration, renewable energy accounted for around 11.1 percent of energy produced in the United States in the first half of 2009. Of this figure, 7.4 percent came from conventional hydroelectric power, with only 4.7 percent coming from ‘new’ sources such as biomass, geothermal, solar and wind.

Utility companies on both sides of the Atlantic have been enthusiastic in joining the renewables race, with many announcing their own

“To obtain 20 percent of primary energy from renewables by 2020 requires a large investment in offshore technology” Michael Lewis, MD of Europe for Climate and Renewables, E.ON (Page 36)

plans to expand into more environmentally friendly generating sources and cut back on traditional, carbon-producing fuels.

However, the facts show that no matter how ambitious the goals, or how media-friendly the international conferences, it’s not easy to change the behaviour of individuals and organisations across an entire nation, let alone a union of countries who are often hard-pressed to agree even on less crucial matters.

What’s to be done? There are two choices – giving up, sitting back, and literally watching while the world burns. Or pressing ahead, despite the setbacks and challenges. If we truly value the future of our planet, there’s only one option we can take.

Marie Shields Editor

“We have the possibility to fundamentally change how electricity is generated, transported and consumed” Peter O’Shea, Chief Information Officer, ESB (Page 56)

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CONTENTS 11

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78 Setting the standard Inge Pierre looks at the importance of a universal standards-based market for smart grid

Coping with climate chaos Europe and the US struggle to meet their renewable energy targets

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88 Leading light Christine Lins heads up the renewables effort in Europe

Moving offshore Why getting into deep water could be a good thing for E.ON

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CONTENTS 13

Plugging in to the future

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Gearing up

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74

Richard Zambuni, Bentley Systems

EXECUTIVE INTERVIEW 52 Ralf Christian, Siemens Energy Sector 59 Bill Yeates, Sensus 86 Sunil Tahilramani, MSC Software 104 Eric Thormann, Power Climber International 110 Claus Myllerup, Lloyd’s Register ODS 121 Brad Peterson, SAMI

48 The rise of smart meters How to better manage a rollout programme according to Frank Borchardt

56 Getting smart on the Emerald Isle Peter O’Shea on building an intelligent grid in Ireland

68 United we stand Corne Meeuwis explains the need for a single European energy market

ASK THE EXPERT 46 Bastian Fischer, Oracle 54 Ramon van der Wal, Zest Utilities 60 Martin Malos, Sitronics 72 Richard Zambuni, Bentley Systems 122 Adrian Butcher, Open Text Corporation

74 Plugging in to the future Joao Torres looks at Portugal’s approach to the smart grid

SMART GRID

100 Fair weather ahead Christian Egal of EDF Energy Renewables analyses the forecast for wind energy

42 A little knowledge is a wonderful thing

RENEWABLES

82 In the mix

106 Wind power potential

Google gives consumers access to their energy usage information

RW Energy’s Kevin McCullough outlines the benefits of a mixed energy portfolio

Weighing up the 2020 renewable target, by Christian Kjaer

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CONTENTS 15

GOLD SPONSOR

INDUSTRY INSIGHT

IN THE BACK Beijing

116 Hans-Joachim Bender, Robert Bürkle GmbH

ROUNDTABLE 112 Helping companies increase their energy efficiency British Gas Business’ Kanat Emiroglu outlines the changing energy buying habits of his corporate customers

118 Energising the future The outlook for power plant construction around the world

63 Smart metering With Mark Ossel of Echelon, Simo Makkonen of Process Vision Oy and TailorMade’s Jens Björkman 95 Wind safety With EWT’s Eric Bakker, Ricardo Moro of Global Energy Services, Trevor Howes of Orga Aviation BV and Electricon’s Kim Bertelsen

124 Regional focus 126 Events 128 Photo finish

Wind power potential

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68

United we stand

Bastian Fischer, Oracle

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The Park Hotel, Bremen, Germany 2nd – 4th March 2010

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UPFRONT

THE BRIEF

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AVOIDING A NEW COLD WAR

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ith winter fast approaching, the possibility of a prolonged cold snap caused by energy shortages in Europe seems to have been narrowly averted, thanks to a lastminute agreement between Russia and Ukraine.

Last January’s dispute between the two countries over gas exports to Europe disrupted supply for two weeks and left much of the EU without energy during the coldest part of the year. The gas began flowing again once the two sides fi nally came to an uneasy agreement, but Ukraine’s continuing struggles to pay its monthly bills to Russia have been a constant source of concern ever since.

In late November, Russia and Ukraine appeared to have averted a repeat performance of last winter’s gas war after a night of talks in the

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Crimean resort city of Yalta. The agreement was sealed with smiles and handshakes between Prime Ministers Vladimir Putin and Yulia Tymoshenko.

As part of the agreement, Russia made several unexpected concessions to Ukraine, agreeing to increase transit fees paid by Russia’s state gas monopoly Gazprom by an estimated 60 percent, and to lift the tough penalties it could have imposed on Ukraine for not fulfi lling its 2009 purchasing promises.

Ukrainian purchases of Russian gas will also be pegged to market rates for the first time.

Ukraine and Russia have had regular disagreements over gas supplies for the past four winters.

Russian gas travels west to Europe through Ukraine, so any disruption in supply leaves European countries without essential power, often during the coldest winter months.

The problem has recently been the upcoming presidential polls. aggravated by fierce political dif- Following the gas accord, Putin ferences between Russia and the insisted he was not trying to influformer Soviet state of Ukraine, ence Ukraine’s elections, but did particularly surrounding President offer this praise for Tymoshenko: Viktor Yushchenko’s insistence “She’s a tough negotiator, but we’ve on bringing Ukraine into the always been able to agree.

NATO military alliance.

Despite the difficulties, The new agreewe have managed to ment could signal keep all of our comLast January’s a victory for Tymitments.” moshenko in her Before the disrupted supply battle with Yushaccord was reached, for two weeks chenko ahead of Europe had been January’s Ukrainian steeling itself for a presidential elections. new disruption, with The two are former allies member countries stocking and led Ukraine’s 2004-05 Orange up on gas reserves to avoid seasonal Revolution that unseated a pro- shortages. It had also agreed upon a Moscow leader, but they are now formal ‘early warning system’ with said to despise one another.

Russia that recognises disruption Some observers predict that in energy supplies as a permanent Putin will put Russia’s considerable threat to Europe’s energy security. weight behind Tymoshenko in her Vladimir Chizhov, Russia’s battle to succeed Yushchenko in Ambassador to the EU, said that

gas dispute

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UPFRONT

THE BRIEF

the warning system is “a network of commitments that, of course, includes prompt information of any disruptions to our energy links – be it through technical failures, natural disasters, somebody turning off the supply or diverting the energy flow.”

The implementation of an early warning system to head off potential disruptions in gas, coal, electricity and oil supplies is an overdue response to last January’s Russia-Ukraine gas war, and recognition of the fact that while prices are no longer an issue between Gazprom and Naftogaz, Ukraine’s dominant role in transiting Russian gas to Europe – along with its economic crisis and internal political squabbling – makes that country a continuing threat to Europe’s long-term energy security.

Despite the assurances from Putin and Tymoshenko, a rupture in the fragile peace between the two countries remains a distinct possibility, with Ukrainian politics likely to provide the spark in any new energy confl ict.

Naftogaz’s ability to pay its monthly gas bills in the coming winter months is an open question, but as Ukraine’s central bank has significant foreign reserves from which the government can conceivably draw upon to help the state-run fi rm pay its bill, the real question is willingness to pay rather than ability.

Ukraine’s political circus is likely to run through heating season, perhaps until March, the earliest that a new president could be inaugurated after a probable second round of voting in February; and given this likely scenario, Russian-Ukrainian gas sector relations – and, in turn, Europe’s energy security – are likely to be held hostage to this political theatre until at least then.

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NEWS IN PICTURES

Swiss Environment Minister Moritz Leuenberger and Turkish Energy Minister Taner Yildiz on their way to the opening ceremony of the International Trade Fair for Renewable Energies in Istanbul, Turkey.

A student cleans solar panels to maximise energy efficiency during the US Department of Energy Solar Decathlon in Washington, DC.

A maze of electrial wires above a street in Shanghai. China recently overtook the US as the world’s biggest emitter of CO2.

Anti-atomic energy activists take part in a rally in front of the Brandenburg Gate in Berlin, Germany.

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UPFRONT

PROFILE

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PROFILE STEVEN CHU Nobel Prize winner and experimental physicist Steven Chu was named the US Secretary of Energy on January 20, 2009. Known for his research in cooling and trapping atoms with laser light, Chu’s outstanding contribution to science won him the Nobel Prize in Physics in 1997 and hailed his importance on energy matters.

Chu’s current research projects are primarily concerned with the

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study of biological systems at the single molecule level, and are based at the Lawrence Berkeley National Laboratory, a Department of Energy-funded basic science research institution. As one of six directors, Chu has focused the laboratory’s work on issues of climate change, calling for breakthrough research in energy efficiency, solar energy and biofuels technology.

It has been his work as a vocal

advocate for greater research into renewable and nuclear energy that has brought him attention from the political field. A member of the Copenhagen Climate Council, Chu has advocated an aggressive set of policies to be endorsed by President Obama for the development of clean energy sources.

Highlighting the risks of global warming, Chu said: “It is now clear that if we continue on our current path, we run the risk of dramatic disruptive changes to our climate system in the lifetimes of our children and grandchildren.”

The development of nuclear power and coal is central to Chu’s research on clean energy sources.

He believes that through the capture of carbon dioxide emissions, coal can be refi ned to become a greener source of energy. The progression of nuclear energy to become a primary source of power is also high on Chu’s agenda. With the US containing only an estimated three percent of the world’s known oil and gas reserves, Chu advocates a nuclear programme, including a department loan programme for new reactors and developing a long-range plan for dealing with nuclear waste.

China is a great concern to the new Administration, and Chu, a Chinese-American, believes the US must take responsibility for providing China with the technology to reduce its energy usage, particularly in its construction work. The selection of Chu into the Obama Administration is certainly a smart move. As a scientist – rather than a politician, oil tycoon or corporate executive – he can act as an unbiased advisor. His experience thus far leading to his appointment can only position him as an educated selection to the US Cabinet.

26/11/09 15:41:46

UPFRONT 21 CLEANTECH COUNTRIES

RECYCLED FUEL Researchers at Sandia National Laboratories have demonstrated a prototype machine that uses energy from the sun to convert water and carbon dioxide into the molecular building blocks that make up transportation fuels. Their ‘Sunshine to Petrol’ system could ultimately prove a practical way to recycle CO2 drawn from industrial and power plants into gasoline, diesel and jet fuel, if the process can become at least twice as efficient as natural photosynthesis.

The system had only been validated in a laboratory in small batches until recently, but this autumn the researchers successfully tested a hand-built demonstration machine. Rich Diver, inventor of the device, and a Sandia researcher, said, “Th is is a fi rst-of-its-kind prototype we’re evaluating.”

The cylindrical metal machine, called the Counter-Rotating-Ring Receiver Reactor Recuperator (CR5), relies on concentrated solar heat to trigger a thermo-chemical reaction in an iron-rich composite material.

BULGARIA TO EXPAND WIND POWER CAPACITY The Bulgarian government has outlined plans to expand its wind power output enough to satisfy 13.5 percent of its energy demand by 2020. A directive from the European Union on renewable energy requires member states to expand output from renewable energy. Wind power for Bulgaria could expand from 330 MW of current capacity to 3000 MW by 2020.

“With installed capacity increasing more

than five-fold in less than two years, Bulgaria is one of the fastest growing markets for wind energy in the world,” said Christian Kjaer, Chief Executive of the European Wind Energy Association.

The association said more than 30 percent of new power generation facilities built in the EU in 2008 were wind power farms. There were 20 wind turbines installed in the region every working day last year on average.

The cleantech wave is expected to continue to grow, with some analysts estimating the market to crack US$2 trillion by 2030.

Shawn Lesser of Sustainable World Capital examined government mandates, greencollar jobs and entrepreneurial innovation as well as cultural and social drivers, to compile a list of the top 10 cleantech countries from around the world. European countries occupy the top four spots and a total of five positions on the list.

1 2 3 4 5 6 7 8 9

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Denmark Germany Sweden UK Israel Switzerland US UAE China Canada Source: cleantech.com

26/11/09 15:41:48

UPFRONT

INTERNATIONAL NEWS

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BIOFUEL HARMING WATER A new study by researchers at Rice University in Houston, Texas has found that expanded production of crops to produce biofuels could damage water resources. The research suggests that policy makers should take into account what they call the ‘water footprint’ when encouraging biofuel development.

The study, called The Water Footprint of Biofuels: A Drink or Drive Issue?, suggests that by using too much water to produce fuel, we might end up with not enough water to drink or to grow food.

According to the lead author of the study, Pedro Alvarez, Rice University Professor of Civil and Environmental Engineering, the water footprint consists of two elements: “Water shortages caused by a significant increase in fuel crop irrigation, and increased water pollution from related agro-chemical drainage and increased erosion and so on.”

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NEW SOLAR RESOURCES To help utilities rise to the challenge of adopting solar power at a large scale, the Solar Electric Power Association (SEPA) unveiled a new web portal and database last week at Solar Power International. SEPA says that its new site lets utilities explore options, fi nd resources and think strategically about how their utility peers across the country are moving forward.

The site aims to help utilities make business decisions about solar power by providing ‘intelligent navigation’ of industry reports, events, online tools and market data that can be fi ltered by technology, application and employee type, SEPA said. Highlights include the Solar Toolkit, a one-stop window into the site’s technical content.

The site also offers data and maps on the largest solar projects, as well as streaming online webinars from past SEPA events.

HITTING THE FLOOR Maldive government officials literally took a dive in October to raise awareness about climate change. President Mohammed Nasheed and members of the cabinet staged a meeting six metres under a lagoon to highlight the threat of global warming to the lowest-lying country in the world.

The meeting aimed to draw attention to fears that rising sea levels caused by polar ice cap melt could swamp this Indian Ocean archipelago within the next 100 years. The islands are currently only an average of 2.1 metres above sea level.

Nasheed had already announced plans for a fund to buy a new homeland for his people if the 1192 low-lying coral islands are submerged.

He has promised to make the Maldives, with a population of 350,000, the world’s first carbonneutral nation within a decade.

26/11/09 15:41:53

UPFRONT

INTERNATIONAL NEWS

COAL GASIFICATION In a bid to develop its clean coal technologies, India is undertaking a collaborative effort with Coal India Ltd (CIL) receiving support from its peers. CIL and GAIL (India) Ltd are working together to develop a surface coal gasification project at Talcher coalfield in Orissa for production of ammonium nitrate and urea.

GAIL had organised a study by Udhe India examining the potential of the project. It was estimated that the project would consume 5000 tons of coal a day to produce 7.76 mscmd of synthesis gas (equivalent to 3000 tons a day of ammonia) to produce 3500 tons of urea a day.

CIL is also working with ONGC for underground coal gasification projects. The two are working on the development, operation and R&D activities. The pilot site at Vastan, Gujarat, has been obtained and its design has been firmed up, and the project is expected to commence production next year.

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SOLAR FOCUS The Japanese government has launched a new programme to encourage the purchase of surplus solar electricity. Power companies will now be purchasing the surplus electricity produced by solar power generations in homes, schools and hospitals at a much higher rate.

Starting in April, the utility companies will collect a monthly sub-charge from every household and organisation to cover the rise in costs. However, critics were doubtful about this move and believe it will only weaken customer sentiment.

Th is is the latest in Japan’s attempts to make photovoltaic generation, which produces less carbon emissions than fossil fuels and demonstrates their efforts to commit to fighting global warming.

TOKYO MOTOR SHOW The 41st showcasing of innovative concepts and new production cars from the world’s major auto manufacturers took place between October 21-November 4. The effects of the recession were noticeable, with only Lotus, Caterham and Alpina making the journey from Europe. Most notable was the innovative yet cautious approach to plug-in hybrid vehicles (PHUVs).

Toyota displayed its plug-in Prius hybrid, run on lithium-ion battery technology and emitting just 42g/km of CO2 or less. However, remaining cautious of public opinion, the vehicle is due to go on a limited trial next year.

Renault, also exhibiting at the show, has stated that 20 percent of its entire production will be battery electric vehicles by 2012.

26/11/09 15:42:02

UPFRONT

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EU ENERGY MIX 2008 Coal: 29% Gas: 22% Large hydro: 16% Nuclear: 16% Wind: 8% Fuel oil: 7% PV: 1% Other: 1% Biomass: 0%

Source: EWEA

WAVE ENERGY DEVICE SWITCHED ON

The world’s largest hydro-electric wave energy device at Orkney in Scotland, UK, was switched on to the national grid on 20th November 2009. First Minister Alex Salmond said the Oyster machine marked a ‘key milestone’ in renewable energy – and announced almost UK£1 million to fund a second generation of the technology.

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MORE INVESTMENT NEEDED Capgemini’s European Energy Markets Observatory (EEMO) report states that utilities need to invest more to meet renewable energy goals. The economic downturn could prove a turning point for utilities, says the 11th edition of the report, as the sector has been put under pressure from a 3.5 percent drop in electricity consumption and a three percent decline in gas demand. To recover their footing, recommends the report, utilities need to put in place a number of measures to restore investor confidence in the short-term. In the mid-term, utilities must adapt to new EU legislation on climate and energy, and need to strive for more CO2-free generation through renewable energy and nuclear, as well as act on demand-side management by implementing new technology such as smart metering and smart grids.

Deployment of smart meters in the tertiary and residential sectors will help curb power consumption, reduce peak electricity demand and improve grid management, as well as client relationships, it explains. Utilities need to establish their vision and plan for implementing smart grids, which will enable the distribution grid to manage both centralised and decentralised generation, as well as intermittent renewable energy.

Investments in renewable energy have been hit by the economic crisis, with investment dropping to €790 Million in the second half of 2008, a 14 percent decline from the same period in 2007. The report also warns that the shift in renewable energy investment could make it a challenge for Europe to meet its goal of sourcing 20 percent of its energy from renewable energy by 2020.

Source: Renewable Energy Focus

26/11/09 15:42:06

UPFRONT

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FAST FACT In 2008, wind power delivered production equivalent to

4.2% of the EU’s electricity demand.

WIND LEADS EU POWER SECTOR 10 REASONS TO SWITCH TO SOLAR Photovoltaic (PV) power is emerging as a major power source due to its numerous environmental and economic benefits and proven reliability.

1.

Fuel is free: The sun is the only resource needed to power solar panels

2.

It produces no noise, harmful emissions or polluting gasses: Solar power creates no harmful by-products and actively contributes to reducing global warming

3.

Systems are safe and highly reliable: Providing over 80 percent of the initial power after 25 years, photovoltaic power is very reliable in the long-term

4.

Energy pay-back of a module is constantly decreasing: The time required to produce as much energy as it needs to be manufactured varies between one and a half and three years

5.

PV modules can be recycled: Therefore helping to reduce the energy needed to produce materials in the fi rst place

6.

Low maintenance: Solar modules are almost maintenancefree and offer an easy installation

7.

It brings electricity to remote rural areas: There are many applications for off-grid systems, especially in developing countries where electricity is not available

8.

It can be aesthetically integrated in buildings: Systems can cover roofs and facades to reduce the energy buildings consume

9.

It creates thousands of jobs: The sector, with average annual growth of 40 percent during the past few years, contributes to the creation of thousands of jobs in Europe

In 2008, more wind power was installed in the EU than any other electricity generating technology. Statistics released by the European Wind Energy Association (EWEA) show that 43 percent of all new electricity generating capacity built in the European Union last year was wind energy, exceeding all other technologies, including gas, coal and nuclear power.

A total of 19,651 MW of new power capacity was constructed in the EU last year. Out of this, 8484 MW (43 percent) was wind power; 6932 MW (35 percent) gas; 2495 MW (13 percent) oil; 762 (four percent) MW coal; and 473 (two percent) MW hydropower capacity.

For the fi rst time, wind energy is the leading technology in Europe. A total of 64,949 MW of installed wind energy capacity was operating in the EU by the end of 2008, 15 percent higher than in 2007.

10. It improves security: PV has the potential to play an important role in improving the security of Europe’s energy supply Source: epia.org

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UPFRONT 26

IN MY VIEW

ANDRIS PIEBALGS, EUROPEAN COMMISSIONER FOR ENERGY Europe faces unprecedented challenges in energy security, sustainability and competitiveness. These are global problems, which we cannot resolve ourselves. This will only happen in the international framework: in international commitments, such as we would like to see reached at Copenhagen on climate change; in bilateral relations, as with Russia; in regional arrangements, as in the Energy Community; and in international agreements, such as the International Partnership for Energy Efficiency Cooperation.

It is also clear that it does not make sense for individual countries to attempt to resolve these challenges on their own. That is why, in March 2007, European heads of state and government agreed unanimously that the EU should, for the fi rst time, come together to follow a comprehensive and clearly targeted energy and climate policy.

The new Renewable Energy Directive has been agreed, putting into effect the overall target of 20 percent renewable energy in the EU’s energy mix and 10 percent of renewable sources in its transport fuel by 2020 in the form of legally binding obligations on member states.

We all know that the renewables industry is creating thousands of new jobs and creating new business opportunities across Europe. We estimate that achieving the 20 percent renewables target could lead to a net increase in GDP (0.24 percent) and deliver 2.8 million new jobs in the renewables sector alone.

Energy efficiency is where local actors, and the public sector, can make a huge difference. First, we all, as public servants, owe it to our constituents, Europe’s people, to set the best example and thus demonstrate the potential for greater energy sustainability. Second, the way in which public funds are spent sends a strong message to the private sector. The investments we make can have a direct influence on the often much larger investments by private companies. Finally, it is local and regional authorities who have the necessary expertise to understand the needs and expectations of citizens.

The need for investment, both public and private, in energy infrastructure over the coming years is enormous, in the range of €2 trillion for the EU alone. I would like to emphasise here the importance of health and safety and worker training in the realisation of all such projects. The EU has taken the lead in raising the standards of employee protection throughout the continent.

And we continue to do so.

From a speech given at the EPSU Congress Brussels, 11 June 2009

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UPFRONT

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EUROPE-WIDE SMART GRID AFFORDABLE In a study published in Novemto better manage erratic supber, Greenpeace revealed that plies, there is also concern that European power transmission over-reliance on wind or solar networks could transport 90 could leave consumers short of percent of renewable energy by power when the wind does not the year 2050 at affordable sums. blow or the sun does not shine.

Greenpeace said that the cost The study compared 30 of strengthening crossyears of weather data border lines and with European There are building new inannual demand 12 hours a year terconnections curves and that high demand to create smart concluded that correlates with or super-grids there is only a low solar and wind would be small 0.4 percent – or generation if it were spread 12 hours a year over 40 years and – chance that high split between hundreds demand correlates with of millions of Europeans. low solar and wind generation.

“All together, the proposal Apart from wind and solar, it would cost around €209 billion,” also mentioned chances to exploit it said in a press release issued to geothermal and ocean energy, accompany the report's unveiland biomass. “We just need smart ing in Berlin. “Th is would in- grids to put it all together and crease the cost of every kilowatt effectively ‘keep the lights on’,” hour by 0.15 cents over 40 years, said Greenpeace. The €209 bilwhich means for a European lion sum was broken down into household less than €5 a year or €100 billion for 11 new connec40 cents a month,” it said. tions inside Europe, €90 billion Apart from the cost of for new lines to capture Sahara preparing grids for new tasks desert solar power, €16 billion for upgrades of direct-current high voltage lines between European countries and €3 billion for alternating-current ones.

Source: reuters.com

FROM THE VAULT In the Q1 2009 issue of Power & Energy, Ralph Izzo, CEO of Public Service Enterprise Group, examines the difficult state of the US utility industry in relation to the heightened federal focus on reducing greenhouse gas emissions and the recent global financial crisis.

Go to www.nextgenpe.com, click on ‘Previous issues’ in the left column, choose ‘Issue 6, February 2009’ and scroll down to ‘Cover stories’ to read about PSEG Global’s strategic efforts to face the enormous challenges created by climate change.

FAST FACT

140 million

If smart meters are installed over the next 10 years they could produce a

100 petabytes of information

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UPFRONT

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FAST FACT A full moon next to a wind energy turbine near Filsum, Germany. The country is a

leader in installed wind capacity, with 25 GW.

COMPANY INDEX Q4 2009 Companies in this issue are indexed to the first page of the article in which each is mentioned.

Alcatel-Lucent 48

Enel 48

Motorola 81

Svensk Energi-Swedenergy 78

American Wind Energy Association 32, 106

ESB 56

N-ERGIE 48

TailorMade 63, 65

Bentley Systems 10, 72, 73

E:SO Global 51

Open Text Corporation 12, 122, 123

University of Massachusetts 32

BP Solar 91

European Commission 106

Oracle 46, 47, OBC

Vestas 17

British Gas 112

EPIA 32

Orga Aviation BV 93, 95

Zest Utilities 54, 55

CASC-CWE 68

European Renewable Energy Council 32, 88

Power Climber International 104, 105

Cinterion 8

EWT 14, 93, 99

Process Vision Oy 62, 63, IBC

Conergy 41

Frost & Sullivan 127

Robert Bürkle GmbH 116, 117

Current 77

GE Healthcare 31

RW Energy 82

E.ON 36, 48

Global Energy Services 6, 93, 97

SAMI 4, 121

Echelon 63, 67

IDC 48

Sensus 2, 59

EDF Energy Renewables 100

Limpet Technology 103

Siemens Energy Sector IFC, 52

EDP 74

Lloyd’s Register ODS 110, 111

Sierra Wireless 45

Electricon 92, 93

MSC Software 86, 87

Sitronics 60, 61

EnBW 48

MSE 115

Sol Focus 109

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COVER STORY

Marie Shields investigates the efforts being made in Europe and the US to produce more power from renewable energy sources.

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urope and the United States: both Western, developed economic powerhouses, and by extension, voracious consumers of energy.

Both also chasing ambitious targets for generating a portion of this energy from renewable sources: in the US, 10 percent by 2012, rising to 25 percent by 2025; and in Europe, 12 percent by 2010 and 20 percent by 2020.

What are the differences that lie under these similarities? And more importantly, is either region making enough progress to safeguard our energy future? Below, we take a look at the unique challenges faced by each region in its struggle to reduce CO2 emissions and produce more sustainable power.

32 www.ngpowereu.com

Current status The countries of the European Union, regarded by many as the global leaders in renewable energy development, have a long track record of environmental consciousness. The EU set its target of 12 percent of energy from renewables as long ago as 1997.

The US, by contrast, was known primarily for its refusal to ratify the Kyoto protocol under the Bush Administration. However, with the election of President Obama last year, the US government is once again a friend of the environment. The Bush government gave US$72 billion in subsidies to fossil fuels between 2002 and 2008, with renewables receiving US$29 billion in the same period. Obama and his team must now try

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to redress this imbalance, starting with the US$6 billion earmarked for renewable energy and electric transmission technologies loan guarantees in the American Recovery and Reinvestment Act. David Levy, Director of the Center for Sustainable Enterprise and Regional Competitiveness at the University of Massachusetts, Boston, and author of the blog Climate Inc., points out that while renewables have traditionally been lower on the radar in the US, Americans are also very good at pushing ahead with an idea once they latch on to it. “I think it’s true that there is some catching up going on,” he says. “There’s a huge amount of wind power that is now being installed in Texas; and California is leading in terms of really large-grid, scale solar thermal installations.

“It’s been hard to get financing. Renewables haven’t had the kind of sustained, predictable subsidies here in the US that Europe has had, and we lacked a mandatory cap-and-trade system. The European Trading System for carbon and national targets provided a clear signal for business to take renewables seriously. It has been slower here in the US.”

Despite its slower start, the US appears to have already moved ahead of the EU in terms of renewable energy consumption. According to the Energy Information Administration, renewable energy accounted for around 11.1 percent of energy produced in the United States in the first half of 2009. In Europe, meanwhile, figures from Europe’s Energy Portal indicate that 9.2 percent of Europe’s final energy consumption came from renewable sources in 2006, the last year for which confirmed data are available.

It should be noted, however, that 7.4 percent of the US total came from conventional hydroelectric power, with only 4.7 percent coming from ‘new’ sources such as biomass, geothermal, solar and wind.

As things stand, the EU may not succeed in reaching its original target of 12 percent in 2010. In an attempt to address this situation, in 2008 the European Commission released its Renewable Energy Framework Directive, with an even more ambitious target of achieving 20 percent of generation from renewables by 2020.

Christine Lins, Secretary General of the European Renewable Energy Council, believes that Europe can meet the 2020 goal: “We are on track, but we

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US WIND POWER

Wind Energy Potential’, states that in 2020 the amount of electricity that could be generated from wind power could be as much as three times greater than demand.

Germany, Denmark, Spain, Portugal and Ireland have particularly strong bases in wind power. Figures from the German Wind Energy Association show that 19,460 wind turbines, with a total capacity of 22,247 MW, were installed in the country by the end of 2007, and that 39.5 TW of wind electricity were generated during that year, equalling more than seven percent of Germany’s electricity consumption. As of 2009, its installed capacity is 25 GW. Denmark has been vying with Germany for the top spot, with 19.7 percent of electricity production and 24.1 percent of capacity in 2007.

The European Wind Energy Information Network puts the annual median growth of the European wind power market at 35 percent, with EU member countries contributing about 75 percent of the world’s wind power. The wind power market is estimated to have helped create 25,000 jobs within the EU.

“The wind power market is estimated to have helped create 25,000 jobs within the EU” The top five US states in total operating wind capacity:

1. Texas 8797 MW

4. Minnesota 1805 MW

2. Iowa 3053 MW

5. Oregon 1659 MW

3. California 2787 MW

must see some further impetus that this development will really happen. Progress so far has been made by five or six EU member states. The challenge we have ahead of us is to make sure that all 27 member states are being serious about renewables and developing them to their full potential.”

Lins’ point is that the overall figures mask a large variation between individual countries. Sweden topped the list of renewable-friendly countries at 41.3 percent according to 2006 figures, with Latvia at 31.4 percent, Finland at 28.9 percent, Austria at 25.1 percent and Portugal at 21.5 percent. At the bottom of the list, Malta generated none of its energy from renewables in 2006, with Luxembourg and the UK not doing much better, at 1 percent and 1.5 percent respectively.

Blown away Wind and solar are two main areas of focus for renewables on both sides of the Atlantic. In Europe, a report by the European Environment Agency confirmed that wind power has the potential to meet and even exceed the continent’s energy needs. The report, entitled ‘Europe’s Onshore and Offshore

34 www.ngpowereu.com

Wind energy is also starting to take off in the US, according to figures from the American Wind Energy Association, which put installed wind power capacity at the end of the third quarter of 2009 at over 31,000 MW, generating enough electricity to power the equivalent of nearly nine million homes.

The state posting the fastest growth was Arizona, which installed its first utility-scale project. Pennsylvania ranked second in growth with 29 percent, followed by Illinois with 22 percent, Wyoming with 21 percent and New Mexico with 20 percent. Texas remains firmly at the head of the pack overall, however, with 8797 MW of operating capacity.

“Wind power installations are up, and that is good news for America's economy, environment and energy security,” said AWEA CEO Denise Bode in a statement. “But manufacturing, which has the potential to employ many more Americans in good, clean energy jobs, remains uncertain. A firm, longterm national commitment to renewable energy is still needed for the US to become a wind turbine manufacturing powerhouse.”

AWEA says that since the early July announcement of rules to implement the American Recovery and Reinvestment Act, the wind industry has seen more than 1600 MW of completed projects, and more than 1700 MW of construction starts, which equates to about US$6.5 billion in new investment.

AWEA does not expect the fourth quarter of 2009 to be as strong as the fourth quarter of 2008, since the 5000 MW now under construction is nearly 38 percent lower than the 8000 MW under construction at this time last year.

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SOLAR ENERGY SYSTEMS

Photovoltaic solar power has a strong base in Europe, at least according to the European Photovoltaic Industry Association (EPIA). The asPhotovoltaic sociation recently commissioned a study on PV power in Europe, ‘SET A photovoltaic system uses solar cells to convert light into electricity.

For 2020’, from the management consultancy AT Kearney. The study It contains multiple components, including cells, mechanical and concludes that PV power can supply as much as 12 percent of Europe’s electrical connections and mountings and means of regulating and/or electricity needs by 2020, assuming appropriate policy-driven support modifying the electrical output. Because each individual cell has a low and evolution in the set-up and functioning of the electricity distribution voltage (typically 0.5V), several cells are combined into photovoltaic system. modules, which are then connected together into an array.

“The fundamentals of the PV industry are and remain strong,” said Secretary General of the EPIA Adel El Gammal at the sixth European Thermal Photovoltaic Industry Forum held in September in Hamburg. “It needs an Solar thermal technology harnesses solar energy for thermal energy ambitious policy support for the next three to nine years, until photo(heat). Solar thermal collectors are defined as low-, medium-, or voltaic power is able to compete with conventional electricity on price.” high-temperature. Low-temperature collectors are flat plates gen“The US solar energy industry grew to new heights in 2008.” So proerally used to heat swimming pools. Medium-temperature collecclaims the Solar Energy Industries Association’s report ‘2008 Year in Review’. tors are also usually flat plates, but are used for creating hot water The report points out that capacity grew by 1265 MW in 2008, up from 1159 for residential and commercial use. High-temperature collectors MW installed in 2007. “This brings the total installed capacity up by 16 perconcentrate sunlight using mirrors or lenses and are generally used cent to 9183 MW,” it goes on to say. “Capacity in both photovoltaic (PV) and for electric power production. solar water heating systems grew at record levels. And while no new concentrating solar power plants were completed in 2008, projects totalling more than 6000 MW are in the pipeline, most with signed purchase power agreements. Solar pool heating capacity grew at a slower rate than in 2007, reflecting conditions in the residential real estate market.” tion of PV panels – although he also underlines the cyclical nature of such interThe growth rate was found to be highest for grid-connected PV electric est: “Solar thermal was doing well a few years ago, but then when Luz went banksystems, with an increase of 58 percent, to a total of rupt, many people said, ‘We can’t do solar thermal.’”

792 MW. Domestic PV manufacturing capacity Israel-based Luz Partners were the original also increased by 65 percent, with preliminary estibuilders of the SEGS solar thermal plants in Renewables in Europe mates putting the total PV manufacturing capacity California. The company failed in the early 1990s EU countries with the highest at 685 MW per year as of the end of 2008. after drastic cuts in federal tax credits to the solar share of renewable consumption Solar thermal power is also growing in the thermal industry. to gross final energy consumption US. The largest solar thermal generating installation in the world – the Solar Energy Generating The way forward Sweden 41.3 % Systems (SEGS), a group of nine solar thermal The US and Europe may both be moving full power plants – is located in California’s Mojave steam ahead with wind and solar power, but there Latvia 31.4% Desert. The plants use parabolic trough solar are other areas in which they remain quite far technology along with natural gas and have a apart. The US, for example, with its long history of Finland 28.9% combined generating capacity of 354 MW. coal-fired power generation, will not easily give up Austria 25.1% On the European side, the European Solar its dependence on carbon. In Europe, where the Thermal Industry Federation conducted a study coal lobby is not as strong, carbon capture has a Portugal 21.5% “to provide the European Union and its member much weaker focus. By contrast, Europe is far Denmark 17.2% states with substantiated information on the conmore advanced in the development of wave power. tribution solar thermal can make to the 20 perIn the end, though, it doesn’t really matter Romania 17% cent renewable energy target set by the RES what the differences or similarities are, or who Estonia 16.6% Directive.” Market statistics released by the achieves their target first. What matters is that we get ESTIF show that the solar thermal market in the there, somehow. Despite all the promises and the inSlovenia 15.5% EU and Switzerland grew by more than 60 perternational political conventions, the figures show cent, to 3.3 GW of new capacity. that we are not making enough progress, on either Lithuania 14.6% Despite the positive messages put out by side of the Atlantic. Following through will be tough Source: www.energy.eu both sides of the solar energy sector, UMass’s David – this much is shown by the situation here in the EU, Levy believes the focus is shifting from PV to thermal. where not even the threat of legal action has sucHe points out that the economic crisis has prompted several countries, includceeded in galvanising certain member countries into making the necessary cuts. ing Germany and Spain, to cut back on subsidies to consumers for the installaBut we can’t back down – the future of our planet depends on it.

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MICHAEL LEWIS_16nov 26/11/2009 14:57 Page 36

THE BIG INTERVIEW Getting into deep water can be an advantage in the renewables game, as E.ON's Michael Lewis tells Natalie Brandweiner.

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.ON’s overall strategy to move towards a lower carbon generation portfolio is a relatively recent phenomenon.

Pulling together different elements, one of them being the already existing renewables business within the E.ON Group, the company is moving toward more environmentally conscious policies. New to the position of Managing Director of Europe for Climate and Renewables, Michael Lewis explains how continuing to manage the growth that was already in the portfolio, as well as managing external growths through acquisitions, was vital for the change in company strategy. “It was a major challenge of integration. Our own people who were in the E.ON Group were now moving into a new division, E.ON Climate and Renewables, and we had to make sure that all functioned properly,” he explains.

“This meant integrating the new people we brought into the group from North America, Spain and Italy, all with different histories, different cultures and nationalities – all of that had to be integrated. Then we had to create an integrated strategy for the new division and that was based on creating the right strategic focus for both different technologies and geographies.

“We focused on markets where firstly there was sufficient growth where we could invest our money, and secondly, they were attractive markets where we could get a decent return on our investment. The two major challenges were integration of people and businesses and focusing strategically on the right technologies, and both of those were huge exercises in our first six months. The final big challenge we had was bringing new centralised functions into the organisation.”

Centralisation Lewis notes that previously E.ON held renewables businesses in the UK, the Nordic countries and Germany, all of which worked independently and were procured separately. Since the inception of the Procurement department, located in Düsseldorf, all such operations are done in one location and distributed to the whole of the E.ON Group, allowing for bigger orders and providing stronger market power and better efficiency with the company’s big suppliers, such as Siemens and Vestas.

Offshore construction also became centralised. Being a major part of the company’s growth structure, there had previously been offshore projects in three different countries, each managed independently of each other. Again, Lewis notes how each project separately dealt with the same suppliers, vessels and skilled people, and so another new department was created in Düsseldorf

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MICHAEL LEWIS_16nov 26/11/2009 14:57 Page 37

MOVING OFFSHORE

MICHAEL LEWIS_16nov 26/11/2009 14:57 Page 38

to manage the company’s entire offshore portfolio.

The final department, Asset Strategy and Technical Excellence, was created in order to centralise information, as well as operations such as the SCADA system, to create a much more efficient way of ordering the company’s various data and manage its assets appropriately.

Financial crisis Fortunately, the initial implementation of these activities began in the summer of 2007, thereby avoiding the challenges of the financial crisis until later. “We had a run-in of around six months up until Christmas of 2007 where most of the integration work and the creation of the new departments took place, so we didn’t really start to feel the impact of the financial crisis until the following summer, and in particular, autumn of last year, when Lehman Brothers collapsed,” he explains. “It probably hasn’t had a major effect on E.ON Climate and Renewables in the sense that we are a business that relies on our financing from our parent company and from the balance sheet of the E.ON Group.

“That means we’ve been able to maintain our investment at very high levels; for example, up until Michael Lewis now we’ve invested €4 billion in the renewables business since 2007. We will continue to invest another €4 billion up until 2012. Those levels of investment are historically unprecedented in the E.ON Group for renewables, and in fact, looking forward over the next three years, a total of one quarter of E.ON’s investment in power generation will be portioned to renewables. To put that into context, if you go back to the summer of 2007, we had 450 megawatts of non-hydro renewables.

Today, we have 2200 megawatts.

“By the end of 2010, we’ll have 4000 megawatts, so a tenfold increase on 2007, and by 2015, we intend to have 10,000 megawatts; our investment is going ahead in spite of the financial crisis. The financial crisis has certainly impacted the timing of some investments, because the relative attractiveness of markets has changed. From our perspective, the key issue is not has it affected our ability to finance, the key issue is what impact has it had on the economics of the project. If you get falling demand for gas, falling oil prices, falling power prices, that impacts the attractiveness of the project. We’ve looked at the different markets and reappraised where we invest, but in terms of the volume of investment, that hasn’t really changed and won’t change going forward. We’re still committed to over a billion a year of investment in renewables.”

Lewis states that the economic crisis has not necessarily encouraged the company to be sharper in its decision-making, for, as he explains, “We’re always absolutely ruthless in deciding whether a project makes a return or not and whether we do it.” He notes that during the company’s initial major move into renewables, an external view became dominant that an emphasis on green energy was nothing more than a cunning marketing strategy, and that E.ON itself lacked any true belief in renewable energy. “That was never the

38 www.ngpowereu.com

case,” he asserts. “We were committed to it from the beginning and that’s been reflected in the amount of money we’ve invested.

“It isn’t a marketing ploy and that’s reflected in the fact that we only invest in projects where we can meet a commercial hurdle, which has always been the case. That hasn’t changed because there’s a financial crisis. We always look at what return can we get on a project: does it meet our hurdle rate?

Are there better alternatives where we can invest the money?”

Regardless of the rest of the industry’s activities, E.ON is committed to its work in renewables: so far it has invested €4 billion, and will invest at least €6 billion in 2010 in renewable generation plant protection projects. The company recently approved the London Array project and signed an agreement with Siemens to build a major Danish offshore wind farm for the Rødsand II wind project. E.ON regards offshore as a very important area for the future of European Union renewables targets.

Offshore projects “If you look at all the work that has been done to obtain 20 percent of primary energy from renewables by 2020 or beyond, it requires a large investment in offshore technology. If you look at where we are today, we’ve installed around 1.5 to 2 gigawatts of total offshore capacity. If we’re going to meet the target, we need to get to something like 40 to 50 gigawatts, so that’s a huge increase within a period of between 10 to 15 years. That means we’ve got to prove the technology capable of operating in the harsh marine environment and get the supply chain focused on delivering solutions so we can install them quickly and efficiently.

MICHAEL LEWIS_16nov 26/11/2009 14:57 Page 39

“So we’ve built the renewables offshore strategy, which tries to take the easier locations first. It’s a question of the physical nature of the projects, because there are varying degrees of offshore. For example, the first project, we did, Scroby Sands in the UK, is a very near shore project – three kilometers from the coast, relatively shallow water and only five metres deep. That is comparatively easy both to install and to operate because of the proximity to the shore, and also to put the foundations in place because of the relatively shallow water.

“We’re now moving into projects like Rødsand, a much bigger project than Scroby Sands, which is generating 207 megawatts as compared to 60 megawatts at Scroby Sands. Still in relatively shallow water near Denmark, about five kilometers from the shore and in 10 metre deep water, we can use the skills we learned at Scroby to build a bigger wind farm with larger turbines and a bigger capacity. We want to bring the skills we learned at Scroby in the easier offshore environment to the slightly more difficult and challenging environment at Rødsand and build a much bigger project with a larger number of foundations and different turbine types.

“We want to prove that we can do this on a large scale and not only at Rødsand in Denmark. We also have another project, 180 megawatts in the UK at Robin Rigg in the Solway Firth, again proving that we can install at a large scale but still in the relatively near shore, shallow water environment.

When we’ve mastered those projects and we’ve proved that we can install efficiently, that we can get the right vessels to the sites so that we can have a reduced cycle time and reduce the capital costs, and when we’re happy that the turbines can operate well in that environment, we then intend to move into the larger far shore, deep water projects; projects outside the 20 metre depth and 20 kilometers from shore and below.

“Those projects will be a bigger challenge both in the installation and in the operational phase, so we want to learn our trade in the so-called offshore, light projects before we move to the difficult ones. London Array, which was

recently approved, will be the largest offshore project in the world when it’s constructed. That’s 1000 megawatts, and again, just to put that into context, Scroby Sands is 60 megawatts, a much bigger proposition. It’s about learning the trade, learning how to build a project of that size and making sure we can operate it efficiently, and get the high levels of availability that we need to make it a viable economic proposition. All of our projects so far, not only are they there to create value in themselves, they’re also part of a learning curve to enable us to get to the larger offshore projects. Before we build those big potential projects, we want to make sure we can cope with the easier projects.

That’s our offshore strategy; there are still massive challenges there, but it’s absolutely critical we deliver if we’re to meet the EU targets,” says Lewis.

In order to ensure that E.ON remains a learning organisation, continuous audits throughout the projects’ timeline are being conducted: learning to understand the problems and areas for improvement. A sophisticated method of tracking has been created to improve processes and combat the challenges of health and safety incidents. Cycle time is also assessed using various metrics to compare performance both in the construction and operational phases.

E.ON’s centralised offshore construction also allows it to prevent staff attrition whilst simultaneously ensuring new staff are trained. As Lewis explains, “People are critical to this, and not just our own people who manage the projects, but the crews who work for the contractors and the vessels.”

Continuously motivating highly skilled workers is a challenge for almost every employer in every industry. In order to keep its employers happy, E.ON provides visibility within its project pipeline, having a number of projects in development as well as a number in construction, so employers can see the structure and be moved accordingly. “Younger people can learn their trade on projects with more experienced project managers, before they can in turn move on to another project in a structured way, so it’s all about continuity.”

GLOBAL RENEWABLE ENERGY OUTLOOK

Renewable electric power capacity 280 Gw

World

2008 288,000 mw

2007 240,000 mw

Key:

Developing countries

119

Wind power

Gw

Small hydropower Biomass power

96Gw

EU-27

Solar photovoltaic-grid Geothermal power

World

Top 5 renewable power capacity countries

production

Solar thermal power Tidal power Large hydropower Mw - Megawatts

14% increase

Gw - Gigawatts

China

Germany

76 Gw

34Gw

United States

40Gw

Spain

Japan

22 Gw

8Gw India

13 Gw Source: www.ren21.net/globalstatusreport

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Transmission Innovation is regarded as bringing endless benefits, in any industry, but is being ahead of the times a viable option given Europe’s transmission distribution network? Will it be able to cope with the move towards renewables?

Lewis regards the transmission debate as having two aspects, the first being how to connect these multiple projects, and the second being how to transmit the energy produced. “We’ll have to create new transmission systems to link up the sources of demand. The major challenge is offshore – we’ve got to create a completely new infrastructure network where it’s never existed before,” explains Lewis.

“The transmission network is not yet in a position where it can cope, but the good news is we have a number of years to get there, and that means we have to take a strategic approach to building a transmission network. We know where the wind resources are, we know where the offshore wind locations are. These are all set out in government policy by the crown estates; so for example, for round three where the bulk of the new capacity will be built, we know exactly where they are. If we know where the grid needs to be now, we can start thinking about where the grid needs to be strengthened in the future, and we can do that on a proactive basis to anticipate capacity coming on rather than waiting for it.

“Wind farms are much more expensive to build than the transmission network that takes the power away to customers. That means if there is going to be a slight mismatch, such as if one is built slightly before the other, it’s better to have the transmission network in place before the wind farms come along than vice versa because the one costs a lot more than the other. With sound policy and the right strategic approach, we can get there. The second issue is integrating wind into the transmission network, and this is all about intermittency.

“The good news is you don’t normally get a position where all of the wind is not blowing at the same time. You get geographical differences, whereby one part of the country might be windy or one part of Europe might be windy and another part might have zero wind, but in fact, although wind farms have a load factor of 25 to 30 percent that doesn’t mean the wind is only blowing 25 to 35 percent all of the time. That’s an annualised number. They are actually operating for a very large proportion of the time, but just not at full output, so you need to ensure that when the wind does drop and there are sudden changes in output, you have enough of what we call spinning reserve.

“We also need replacement of existing fossil capacity, which we’ll gradually fade out over the next few years as various pieces of environmental legislation come into play. So the corollary is that we need existing coal-fired capacity and gas-fired capacity to be replaced, because mostly wind does not provide a huge amount of capacity. It’s a slightly technical issue: it provides the energy to displace coal and gas but it doesn’t count very much for capacity because you can’t guarantee it’s going to be there when you might need it.

“That means you have to maintain that level of fossil capacity to provide the reserve and spinning reserve. I’ve often heard the argument made by antiwind campaign: ‘Wind’s useless, it only displaces five to 10 percent of coal.’ It only displaces that much capacity, but it displaces a lot more energy, and that means it does significantly reduce CO2 emissions, which is an important distinction,” he says.

Managing the transition period between fossil fuel reduction and the ramping up of clean coal technology is a tricky business. E.ON’s strategy is to

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increase gigawatt capacity to cope with increasing energy demand, moving to a lower carbon portfolio during the next 20 years and reducing its carbon emissions by 50 percent, making renewables a key feature of the company’s growth. E.ON is also upgrading its old fossil-fired plants to become more efficient and most importantly it is embracing new technologies, such as the possibility of developing its nuclear business in the UK and upgrading its gas-fired technology to make it even more efficient.

“Clean coal, according to at least our view, is probably not going to be commercial until after 2020, but we’re doing a lot in the meantime to help develop it. We’re doing various pilot studies; we’re building new highly efficient coal plants as a first step that are carbon capture ready. That means they have the right plant specification logistics whereby there’s room to install a carbon capture facility when the technology becomes viable. It is a tricky period, we do have a challenge, but there are clear pathways for how we can get there using existing technologies.”

“There are other components,” he adds. “The first one is policy. It’s a huge challenge to coordinate how the globe responds. It’s not enough for the UK or even Europe to win the battle; you need a global solution and that means a policy that can effectively limit carbon emissions across the world.

The means of reducing carbon emissions will be technological, but the policy has got to be in place first to make sure that those technologies can be applied.

“There is a complex interaction between policy, behaviours and technology, and we have to win the technological battle” “The other is a behavioural issue. We shouldn’t underestimate the role that changing patterns of energy use and improved energy efficiency will play in solving this problem as well, so there may be solutions looking at demand side management, looking at significantly improving the efficiency of how we use energy, and those things again will partly be driven by technology, but also partly driven by people’s behaviours as well, and what people accept as societal norms. There is a complex interaction between policy, behaviours and technology, and we have to win the technological battle. That’s a necessary but not sufficient condition.”

Lewis views the challenges as threefold: economic, technological and policy. Renewables are still more expensive than conventional generational, technology again raises the issue of cost, as well as the logistical challenges.

Although Europe has what is the clearest policy framework of any region in the world regarding its target on CO2, it doesn’t have a fully joined-up policy between its members.

“We need to tie together the infrastructure challenge in terms of the grid, the port facilities we need to build offshore and the supporting technologies of coal and gas. We need to make sure the intermittent renewables can be efficiently integrated into the grid system. E.ON is playing its role in all of those things through R&D, through to investing in major offshore projects and through to investing in the grid and in conventional fossil fuels,” concludes Lewis. n

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ENERGY EFFICIENCY

A little knowledge is a wonderful thing Jens Redmer explains how Google’s new software application will give consumers greater access to information about their power usage.

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hat has Google got to do with energy? You may well ask, but to Jens Redmer, responsible for the search engine giant’s new business development in Europe, the Middle East and Africa, the answer is simple: it revolves around the commodity that Google was built on: information.

“It’s a project that was initiated in our Google.org project group, which is the philanthropic arm of Google,” he explains. “It’s called PowerMeter, and it’s our effort to empower users to get access to information about their individual power consumption, energy consumption and energy behavior.

“We’ve found that the average consumer does not feel informed about their energy consumption. Many people don’t even know what a kilowatt hour is, let alone how that translates to a dollar figure. So we have some created some pilot agreements with a number of utility companies and device manufacturers to allow users to see a small application on their Google home page through which they can track what their home is actually using in energy.”

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Redmer cites various studies that have shown that the average user, even with only a few behavioural changes, can make substantial savings simply by being exposed to what they consume and how they consume every day. He rightly underlines that this can help conserve energy, cut down on CO2 emissions, and ultimately help achieve Google’s own goal, which is to organise the world’s information.

Which is all very well, but what’s in it for the utility companies? If greater access to information allows customers to become more energy savvy and cut down their consumption – by some estimates by between five and 15 percent, won’t this negatively impact on their business?

Redmer disagrees. “I think the main benefit for utility companies that work with us on this particular project is that they can engage much, much deeper and more frequently than they typically engage with a consumer today.

If you take an average utility, it may have a website, it may have an account system so that the average user can log into their price plan to see their billing information and their consumption online.

“The average user is very unlikely to go back to that website every day

REDMER_16nov 26/11/2009 14:59 Page 43

or even every month. With the application we’ve created being completely integrated into your Google homepage, you can expose that same user to the utility’s brand name, to the utility’s website and also to the user’s energy information every single day, and eventually multiple times a day because the average user goes to Google multiple times a day.

“If the utility also has the ability to broadcast messages right into this gadget, right in front of the eye of their individual consumer, that creates a marketing opportunity and a customer engagement opportunity that today it doesn’t have. So we can make the user happier because they’re more engaged with their energy consumption and we can take the utility back to the consumer multiple times a day.

“We believe that this is a great value to the utility. And obviously, there’s a general trend that end-users are becoming much more aware of energy consumption, CO2 emissions and all these topics that you hear in about in the media every day, and we clearly want to create our services to feed into this development.”

Partnerships In the US, Google has signed on smart meter manufacturer Itron and eight utilities to offer the PowerMeter web service for monitoring home energy use. Redmer explains that it has plans to expand the service into Europe, and recently launched its first global partnerships. “We are enaged in ongoing talks and negotiations with a large number of utilities worldwide, including in Europe,” he says. “There’s an incredible amount of interest from utilities

“There could be an immense value to utilities working with us and enabling their users to get more value from their individual energy consumption” to work with this project.”

Redmer points out that prior to these external pilots, Google had also performed some internal pilots: a few dozen Google employees were switched on to a PowerMeter application, and a smart meter was installed in each of their homes, which has occasionally led to some interesting stories: “One employee found that her base consumption had increased substantially one morning,” Redmer recounts. “She saw that on her iGoogle page in the morning when she came to the office, and she got worried.

“She didn’t know where those extra watts had come from, and she got concerned. She called her neighbour, and her neighbour opened the door and found her toaster smoldering in the kitchen. The toaster was stuck and therefore causing a lot of energy to be wasted. Her story is, ‘PowerMeter saved my apartment.’ Of course, this is not going to happen every day, hopefully. There are different anecdotes from all of these testers.”

Jens Redmer Redmer also gives the example of the smart meter in his own home, which he installed a few months ago. He discovered that his base consumption was at 500 watts, which translates to around €600 or €700 a year. After investigating, he found that the extra energy was being consumed by his hi-fi being left on.

“My TV doesn’t have speakers, so I have to connect it to my hi-fi. I’m a lazy person, so I leave my hi-fi on after I switch off my TV. It only consumes 80 watts, but 80 watts times 24 hours times 365 days is a lot of money.

I calculated it was something between €80 and €100 that I wasted just by being lazy.

“Only this small behavioral change that doesn’t cost any life quality or any level of comfort can save me €100, and I found a couple of other things in my apartment that I could just switch off or stop doing, or start doing. I’m pretty confident that I can be well above the 15 percent energy savings that many studies show the average user can make once they’re exposed to their energy consumption.

“That’s a common denominator that we found through all the testers internally so far. It’s probably going to take a while until we find out what the external consumers from our utility partners will say, but I’m pretty sure the results will be much the same.”

The toaster was stuck, causing a lot of energy to be wasted

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Redmer points out that what makes Google the ideal platform for this type of application is its existing customer base. “If you take into account just how much reach Google has – 20 percent of the US traffic comes from an iGoogle page – that’s an enormous amount of people who use our services. If we can only get a fraction of those users on such services as energy consumption feedback, we can have a massive impact on CO2 emissions worldwide.

And that’s also part of our goal for this service.”

Technology The rapid rise of smart networking and meters has raised the question of how the utilities industry can make better use of ICT. Surely Google, of all companies, must be well-placed to help the energy sector in its technology drive.

“We are not really in the smart grid business,” Redmer points out. “We’re good at organising data and working with data. So it’s very unlikely that there will be a Google smart meter or that there will be a Google device that you can Jens Redmer on solving our global warming plug onto your living room wall. crisis using technology “What’s more likely is that there will be additional features added to ser“The technology question around utilities in this current vices like Google PowerMeter, so that you can for example communicate with environment is a lot driven by information questions and your neighbors, or compare your individual energy consumption to homes challenges. As an information service company, we believe that are of a similar size to yours. we can bring a lot of value to utilities and other players in “We can help utilities by adding value where they have to present the inthat sector. formation that is created from and measured by smart meters, by displaying “If we can empower users to gain access to more it and visualising it to the end-user. Many utilities we have information, if we can enable utilities to provide that been talking to tell us that they feel forced by reginformation to their own consumers in a better way, that’s ulatory frameworks to deploy and install even better for the world. We have already set up many those physical display devices in the end-user’s structures, a lot of the free APIs and free programming Google has home, which is a big cost factor. interfaces that we have with products worldwide, and those invested “If you could envision web sercan help to drive that field as well.” vices for those users who may not want a physical device, that’s also a pany. Our data centres are among the most efficient data centres in terms of great help for utilities because they energy consumption per computer. Those are things that we want to drive can rely on service companies that can in green energy forward, so all these investments, all these pilots, all these projects where we visualise these services. This is where we companies invest and explore new areas of green technology – directly or indirectly – also could potentially help utilities. It’s not a benefit us as a company.” binary decision, so it’s not that you display When asked what advice he would give to other companies contemplatonly through Google. The Google PowerMeter soing a similar green path, Redmer cites the fact that the company lution could be an add-on to existing display and operates with a lot of open standards. “We love open standards,” visualisation tools. There could be an immense Jens Redmer is responsible for new business development for Google’s he says. “We love to set up and create a platform that other devalue to utilities working with us and enabling efforts in Europe, the Middle East and velopers and other users can use to generate new services, to cretheir users to get more value from their individAfrica, working with Google products and engineering teams on incubation ate entirely new business models that may be reliant on some of ual energy consumption.” exploratory efforts, technology and metadata licensing, strategic our services.

PowerMeter is not Google’s only foray into partners, urgent special projects and “Take Google Maps, for example. Google Maps is a fantasthe future of energy efficiency. The company has alternative distribution for existing and new business initiatives. tic product for the end-user, but it’s also a great product for also invested US$45 million in green energy business-to-business consumers. Many business enterprises companies, including startups and concentrating mesh up data from their own databases with it. Some companies use it for solar power, capturing energy from high-altitude wind and enhanced geottheir backend systems to dispatch large fleets of cars, or to get store finders hermal systems. on their websites.

With its multiple data centres around the world, Google itself is a high “We created a platform, a model where a basic set of information and serenergy consumer. Redmer points to this fact as inspiration for the company’s vices are offered, and then other parties can add on their bits and pieces, their interest in conserving energy to save money, and in green technology, the parts of the development, to create even more compelling features and appligreen subject in general being one of the key aspects of Google’s operations. cations for their individual target user groups.” n “We want to be a green company,” he says. “We actually are a green com-

US$45 million

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ASK THE EXPERT

of the most significant is enabling customers to identify outages more quickly – smart grid soft ware uses sensors to detect outages and pinpoints this to the exact location, allowing utilities to ensure problems are resolved at every meter location. Additionally, the technology ensures utilities are made aware of the size of the actual outage; they can dispatch the correct team with the required skills to the site to fi x the problem. Furthermore, utilities are able to detect potential failures before they’ve even taken place, which means they can resolve issues before customer complaints start rolling in.

Smart grid benefits go a step further by enabling utilities to identify illegal attempts to reconnect meters or to use electricity in vacant premises. Theft s can also be detected by being able to compare flows through delivery assets with billed consumption. In addition, customers with unusually high energy usage can be identified and contacted before

By Bastian Fischer they receive a bill. Th is means utility providers can suggest techniques that might help manage consumption and use energy wisely. their customers limit their energy consumpCompanies are beginning to consider smart tion and can even help customers identify grids as a way to reduce costs and increase alternative methods of paying bills. efficiencies within their organisations and The mission of utility companies is with customers. Also, due to the widespread changing. Previously, they focused on deinterest in reducing the negative impact livering reasonably priced energy and water. energy use has on the Today, they must also environment and the Euensure sustainable energy ropean Union’s carbon use and environmental reduction commitments improvement.

Smart that require companies grids are key to helpto reduce CO2 emissions ing utilities achieve this by 20 percent by 2020, expanded mission. They the importance of smart also help customers reap grids has risen. the full benefits of techThe technology can be nology by easing costs used to drive efficiencies and delivering a more in transmission, distribuflexible, reliable and retion and consumption, sponsive electricity grid. which means utilities are Justifying its implemenable to serve customers’ tation however, requires power needs with fewer an understanding of the Bastian Fischer is Vice President and General Manager for Oracle Utilities’ Global Business generating plants, and full benefits – benefits Unit EMEA. With extensive experience in fewer transmission and that can help not only the the utilities industry, Fischer is a recognised industry executive, regularly speaking on distribution assets. customer and the utility, industry innovation and contributing to a variety of thought leadership initiatives.

Smart grids help utilbut also help society adPromoting IT as an enabler of innovation, he ities enhance their cusdress some of the world’s leads the Oracle Utilities Unit, setting the focus on strategic projects and providing tomer service offerings most pressing energy and direction to utility customers. in a number of ways. One environmental issues.

Making intelligent connections

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tilities are turning towards smart grids to help them respond to a variety of emerging customer and community needs. However, many utilities are missing out on the many benefits delivered by the smart grid, viewing it simply as a step towards measuring energy consumption and grid monitoring.

In fact, the smart grid is an information revolution that is able to deliver a multitude of benefits for every utility department and function, as well as every customer. Utilities that allow just one or two departments to control smart grid design often fi nd that their projects fail to deliver optimal return on investment.

To make the most of the smart grid and ensure projects are rolled out successfully, utilities need to have strategic executive leadership in place and involve all of their departments in the implementation process. Otherwise, they face the risk of revenue loss, less-than-optimal service delivery and long-term excessive IT costs that can be detrimental to both their business and customer relationships.

Smart grids use computer hardware and soft ware, sensors, controls, and telecommunications equipment and services to link customers to information that helps them

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SMART METERS

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ack in April 2009, European politicians voted to roll out smart and so on. Then of course you have to operate the meter. Everything from meters in every building across the continent by 2022, and set meter reading to load profiles and status information must be monitored, an 80 percent installation target for 2020. The smart meters processed and forwarded; it doesn’t make sense to run a meter that gives relay information about household electricity use and prices you a wide range of information that can’t be utilised. So, there’s a huge to consumers, who can then alter their habits to cut energy bills by investment and operation effort necessary in creating a smart mearound 50 percent. Smart meters offer the opportunity to tering system that functions correctly.” cut costs and improve energy efficiency and the deadline IDC analyst, Rick Nicholson has pointed out that is certainly achievable, so what’s the catch? the utilities industry has been talking about smart Smart There are some key operational and logistical grids and meters for some time now and admits that meters could changes that still to be addressed in the move to the discussion has recently become very much pubhelp cut energy smart metering, explains Frank Borchardt, Head of lic property. So has this public awareness changed bills by up to Smart Metering at EFR, a joint enterprise compristhe impact on the utilities industry? Borchardt being E.ON, N-ERGIE and EnBW. Having previously lieves that it has very much so. “When I entered this admitted that a smart meter rollout was much more business in 2003, providing AMR services to residenthan simply hanging meters on walls, Borchardt explains tial customers was a very strange idea. Two years later the that the first logistical challenge is all about managing the proidea had settled a bit and we had a project very much focused gramme in a smooth way, before ensuring an efficient, open and transon smart metering – although it was a different experience from marparent pathway of communication. “You need to access all customer’s ket to market. While we were preparing this in Eastern Europe, my colpremises at the same time in order to manage the program in a smooth leagues from Germany laughed at me and said that they didn’t have way – it’s a nightmare if you roll out the meters down the street and half problems with fraud or unpaid bills so why should they change the netof the customers aren’t in, because you will not have access to properties work operation.”

50%

The rise of smart meters Frank Borchardt, Head of Smart Metering at EFR, explains how to better manage a smart meter rollout programme, the true picture of costs and the tough implementation and data protection challenges involved.

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nies today, however, I can’t agree that you need real-time communication to all of your meters – what would be the purpose?” he asks. “If there was a need to access all the meters in real-time that it would be right, but you don’t want to access all the meters, you want to access your customers in real-time through a communication channel, not through the meter.”

Bordchardt goes on to explain that the ITC infrastructure needs to be used in a very different way to how utilities are using it today and goes back to his point that the company needs to be clear from the start about what it is looking achieve. “If they have considered what they want to do then they can select the perfect technology to accompany it,” he adds.

Another ITC challenge has been around the new IP networks, which currently present a reliability problem for the industry because they cannot guarantee security for utilities as they are unable to endure end-toend delays of more than 30 milliseconds. “This is actually very good quality for this business,” explains Borchardt. “If you compare five years ago to today then you can see the huge improvement in reliability and in Intelligence Today’s smart metering solutions are perfectly designed for meter the speed of communication infrastructure, and the only thing we can do data management and communication, essentially with narrow bandtoday is to keep thinking back to these improvewidth but not for demand response or demand side management. ments. We’ve also been splitting up our Borchardt believes that there is not solution. The blueprint for the denecessarily any need for the data side vices, meters, relays and switchSmart meter: Fast facts to act on demand, although there are es will stay the same for say issues on the communication side.

10-15 years if possible but the According to Berg Insight, the “The systems are perfect for data communication technology installed base of electricity management and collection and it will change as frequently as meters in Europe will grow at can be downloaded at night, for exthe telecommunications ina compound annual growth ample,” he says. “But customers dedustry, so every one to two rate of 15.6 percent between mand access to communication. years we’ll see the next genera2008 and 2013 to reach 81.2 milEach customer has got a meter and tion of technology. The only thing lion at the end of the period. The each customer must be read and we can do to mitigate this and atcompany’s latest research also found: billed individually. And there are tempt to future proof is to be customers signed up for contracts flexible and exchange the com60 million smart meters will be in place in Europe by 2012 and joining demand response or munications following the speed 35 percent of Swedish electric meters will be connected to management programmes and need of innovation in the industry.” mobile networks a fast communication infrastructure.

It is not just concerns For that reason, broadband broad62 percent of consumers planned to save on their power bills by around reliability that are issues cast channels down to the customers for consumers who remain inwearing heavier clothing are designed for fast downstream creasingly worried about data Nordic countries plan to have five to eight million electric communications and should be open protection and security. meters connected to GPRS by 2010 to the full network of customers.”

Borchardt explains that the main Peter Johnson. Vice President concern is that it becomes crystal for Utilities at Alcatel-Lucent, has recently said that many problems in clear for the utility, and anyone else who can access the data, that conutility networks arise from a rapid shift in the demand on the existing insumption patterns are recorded in a very distinguished way. “Anyone can flexible infrastructure. He believes that intelligence is needed to be input see when I wake up, when I switch on the coffee machine, when I go out in networks for real-time communications among network elements and for a walk, when I get in, when I switch on my TV,” he explains. “If anyto enable access to millions of meters. While there is no doubt that the one gets hold of this information it is simple to interpret.” utilities industry is looking to make better use of information and comSo what is the interest in different consumption patterns and munication technologies (ICT), Borchardt believes that it is key that utilanalysing the customer’s behaviour? The customer is really the only one ity companies consider what they want to achieve through the who should have any interest in this data, explains Borchardt, in order to communication. change behaviour and make cost savings. “I’m not convinced that any “It’s like the division between metering and demand response; I utility company would like to have all this detailed information – they are agree that you need much more flexible ITC infrastructure for compamaybe interested in the load cuts of the consumer, but they should ask A further two years down the line and the situation changed yet further as public discussion around energy conservation and cost reduction grew. “Today utilities are heavily driven by this public opinion and it is accepted that this is an issue for society – these companies have to position themselves alongside these issues.”

While many proponents of smart metering have pushed the cost saving advantage, Borchardt believes that although there are indeed a number of cost savings there is more likely to be a reinvestment of costs.

While automated processes have reduced outgoing spend, communication and implementing revolutionary interoperational technology has bumped costs back up. However, Borchardt believes that the shift of costs is simply a necessity: “In certain situations it could be an additional cost, but in that case if it burns money, it burns money – the only thing you can do is burn your money in the most clever way, by limiting the risk and the losses.”

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EUROPE: A pioneer of smart meters Smart meters have taken off in Europe with the installed base of smart electricity meters in the continent growing at an annual compound rate of 16.2 percent between 2008 and 2014, reaching 93.6 million homes over those six years, according to Swedish analyst firm Berg Insight.

And based on this level of uptake, Europe is

on track to reach its target of 80 percent of households with smart meters by 2020. So far, Sweden has become the first country in the world to achieve a 100 percent penetration for smart meters, driven by the country’s decision to make them mandatory from July 2009.

Italy has also been regarded as a pioneer in smart metering. Indeed, in the early 2000s Enel, the country’s biggest utility, started installing smart meters in most households so that it could clamp down on theft and cut off non-payers remotely. Between 2000-2005 it connected over 27 million customers with integrated bi-directional communications, advanced power measurement and management capabilities, an integrated, softwarecontrollable disconnect switch, and an all solid-state design. They communicate over low voltage power lines using standards-based power line technology from Echelon Corporation to data concentrators at which point they communicate via IP to Enel's enterprise servers.

Sources: Climatelab.org; telephonyonline.com

the consumer if they want this information and then it’s the duty of the utility company to provide a secure connection to the customer and shield it against any abuse. I don’t believe that there is any need to use a public communications channel, it’s much better to use the infrastructure that is already in place for the metering systems – technology like narrow band PLC, for example.”

The issue first and foremost is how to protect the data from abuse, says Borchardt. “The internet is secure for internet banking and the security mechanisms are extremely efficient, but it does cost money if you would like to introduce such security mechanisms for millions of meters, even simply shielding the communication on a power line that no-one

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has access to. This is the perfect way to secure the data today. Tomorrow, maybe there will different, and better, ways to sure it, but first of all you must be aware of who wants this data and the best way to provide the information to the recipient.”

With smart metering the first step to a smart grid, Borchardt believes the next step will be providing the consumer with the tools to analyse himself and shift some load to improve his home, control appliances and react to incentives. “We need ways and tools for interaction and that is based on the information you generate from the meter, and beyond that provide the customer with tools to work with this information,” he concludes.

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EXECUTIVE INTERVIEW

Gearing up for the future Ralf Christian of Siemens Energy Sector explains how he is leading the push to meet the challenges of flexible electrical distribution systems.

Can you give a brief background on Siemens’ interest and activities in the smart grid?

Ralf Christian. Siemens is the only company that can offer everything from generation, through all the grid elements for transport and distribution, to smart consumption. Siemens sees the increasing share of decentralised and renewable energy as a growing challenge for the electrical grid. In order to master these challenges, the grid and its consumers must become more flexible and interactive.

Therefore, we need to transform today’s grid into an intelligent network that allows bi-directional communication between electricity suppliers and consumers, and fosters sustainability by providing incentives for the efficient use of green energy.

What is needed is an end-to-end infrastructure starting with generation over transmission and distribution to smart consumption. Siemens’ integrated smart grid portfolio addresses the whole electricity chain from generation until consumption with innovative, smart products.

What areas of the smart grid are of particular interest to Siemens?

RC. Today’s power grids are already at their limit.

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Enormous challenges are facing Europe’s grids if they are to meet the climate protection targets – 30 percent less CO2 and 20 percent more renewable energy sources in the grid by the year 2020 – and guarantee a reliable and sustainable energy supply at the same time. Upgrades and investments in traction networks and distribution networks are an absolute must if a sustainable energy system is to be achieved.

Power grids operating near capacity today are coming up against their limits. These were not originally designed for the integration of renewable energies with fluctuating power infeed.

Blackouts, such as were experienced in Europe in November 2006 and in the US in August 2003, show just how vulnerable our power grids are.

The smart grid is one attempt to revitalise grids which are at their limit and to make them blackout-proof.

The Siemens approach to the smart grid centres around a new energy grid design with innovative management structures. Today’s static grid operation must become a ‘living’ infrastructure.

This means flexible, transparent and fast multiway communication between all the players in the

electricity market. It must be implemented all the way along the energy conversion chain, from electricity generation through to the consumer.

The basic requirement: integrated communication standards and new grid intelligence. We want to be the outright number one on the smart grid market in the field of grid intelligence.

What technologies has Siemens developed for the smart grid and what makes these unique?

RC. Smart grids involve the entire electricity production, distribution and power consumption chain. We work closely with our customers to address their individual challenges with tailored solutions that incorporate the highest quality, reliability, sustainability and efficiency.

Our advanced energy management systems, for example, can be used as the brain of control centres for the transmission grid. Smart substation automation and protection systems can be used as the backbone for a secure transmission grid operation. Our asset management systems and condition monitoring devices are promising tools to optimise the OpEx and CapEx spendings of the utility.

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Furthermore, our intelligent distribution management systems are the counterpart to the energy management systems in the distribution grid. In countries where outages are a frequent problem, the outage management system is an important component of distribution management systems. We provide distribution automation and protection systems; whereas automated operation and remote control is state of the art for the transmission grid, mass deployment of distribution automation is just recently becoming more frequent.

Virtual power plants – a centrally controlled set of small distributed power generation systems – are part of our smart grid solution portfolio, as well as micro grids. These are still in their infancy, but we are already working on suitable solutions because there must be optimum grid management between generator and consumer in small communities without grid access.

Here, there is no backup from a large grid to compensate for grid fluctuations. For our customers, we develop smart metering solutions, too – our automated metering and information system (AMIS) integrates the metering infrastructure with distribution automation. This includes meter data management, a software tool aggregating the meter data. It is a key component for realising additional functionalities like the use of metering data for outage management.

Smart meter integration and enablement allows utilities to optimise their business processes.

In addition, Siemens also offers billing and customer care applications, which are key elements in the area of customer relationship management for all market roles: meter reading companies, energy suppliers and distributors. Smart building – energy efficient buildings (clusters) that manage dynamically their energy consumption, generation and storage facilities and are enabled to react on price signals from the grid – are also part of Siemens’ smart grid portfolio, along with power electronics, which is among the ‘actuators’ in power grid. Systems like HVDC and FACTS enable actual control of the power flow.

Where are some of the utilities/projects in which Siemens smart grid technologies are deployed?

RC. There is, for example, a virtual power plant project we started together with the German utility RWE. Within that project, we gain practical experience with virtual power plants from exist-

ing, big decentralised power producers in an interconnected supply area.

Another example is a pilot project for realtime measurement and power system dynamics caused by wind energy generation in the network of the German utility E.ON. Our AMIS solution, currently being implemented for the Swiss utility Arbon Energie AG, focuses on merging the core tasks of metering and distribution network automation. AMIS provides functions for implementing a smart grid among other features.

Another project is a so called decentralised energy market place, called E-DEMA, a German smart grid pilot and research project from the Federal Ministry of Economics and Technology

folio, we are the only company worldwide that is capable of offering solutions for all sectors of the power supply market. Our solutions feature the necessary interoperability and standardisation capability and allow integration of demand and generation side.

Where is Siemens focusing its R&D efforts on smart grid technologies?

RC. We operate the world’s largest research and development network in the field of electric power engineering. Our R&D locations on grid intelligence are in the US, Germany, Switzerland, Great Britain, Austria, China, India, Brazil and Serbia. Major investments in

“We already have an extensive portfolio for smart grids”

in cooperation with several German companies to establish a smart grid IT infrastructure.

What does Siemens see as the main challenges in rolling out smart grid, and how may these be overcome?

RC. With a view to meeting the challenges connected with the setup and expansion of a smart grid, our product range already includes intelligent solutions for reliable energy grids offering environmental sustainability and economic efficiency.

For decades now, our core business has been concerned with making power grids more intelligent and consumers more energy efficient. We are the market leader in the field of power automation, the control technology for power grids, and already possess the relevant expertise. We have been offering intelligent power automation solutions for decades and have gained in-depth knowledge about the complex correlations of grid operation.

We utilise the latest technologies to ensure environmental soundness and energy efficiency in facilities. Thanks to our comprehensive port-

research and development, coupled with acquisitions and partnerships, have allowed us to strengthen our position in relation to important smart grid technologies.

For grid intelligence, Siemens is the world market leader in control systems for power grids – one of the main pillars of a smart grid. These products and solutions include programmable grid controls, such as protection, control and communication systems; technical systems for grid automation, such as electronic data transmission and processing; intelligent operations support; or simulation systems or the key components required for power grids, such as switching substations and current transformers.

Worldwide, we are one of the few companies with the requisite know-how and technology that are capable of offering one-stop solutions.

Ralf Christian is CEO of the Power Distribution Division within the Siemens Energy Sector. Prior to this, he was the Head of the High Voltage Division of Siemens’ Power Transmission and Distribution in Erlangen, Germany.

Christian studied Industrial Engineering at the University of Karlsruhe, Germany.

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ASK THE EXPERT

Revolution or evolution?

Ramon van der Wal examines the future of smart grid.

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ccording to Wikipedia, a smart grid delivers electricity from suppliers to consumers using digital technology to control appliances at consumers’ homes to save energy, reduce cost and increase reliability and transparency. Many governments are promoting a modernised electricity network such as this as a way of addressing energy independence, global warming and emergency resilience issues.

Increasingly, energy companies are adopting the smart grid theme and new product development is booming. The question we need to ask ourselves is do we believe smart grids will achieve the goals we set ourselves? Those goals being to reduce energy consumption (including impact on global warming), increase grid reliability (emergency resilience) and reduce energy dependency.

Several field tests show that it is possible to merge a diversity of techniques in such a way that also count on a green focus that has never been energy consumption can be reduced, where a greater, both for the customer and the industry. greater understanding of the grid usage is accomTherefore, one could conclude that all the ingreplished, thus allowing grid operators to optimise dients are in place to successfully transform curtheir grids, which should lead to increased grid rerent ‘dumb’ grids into smart grids in due time. liability at minimum costs. By Why would a customer reducing energy consumption, want to take part in this? one can argue that energy deWhat’s his incentive and will a pendency will also be reduced. customer be able to fully make From this point of view, smart use of the possibilities? In our grids will help in achieving the opinion, these questions aren’t goals we have set ourselves. asked loudly enough. We see Currently the focus of the transformation to smart smart grids is for the most part grids not as an evolution solely technology based. We foresee a based on new techniques, but greater amount of decentralised as a revolution based on the inenergy production, and smart volvement of customers in metering will give us the means their own energy production Ramon van der Wal is Managing to properly monitor energy and the way they put this proConsultant at Zest Utilities, with usage (customer-based) and duction to more efficient use. over 10 years of experience in the Dutch energy market. He was distribution grid usage. Smart Because of the complexity, cusinvolved in the liberalisation of the Dutch energy market and the techniques make it possible to tomers will not fulfil their new incorporation of smart metering hook up appliances to smart tasks as efficiently as possible. into a new market model. Prior to Zest Utilities, he was Senior meters and make us aware of Help is needed.

Business Consultant at Eneco.

Van der Wal specialised in and allow us to take control of This is where suppliers Environmental Business our energy consumption. come into play. They will need Economics at the Vrije Universiteit, Amsterdam.

Besides the technology, we can to transform into advisory

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“Many governments are promoting a modernised electricity network as a way of addressing energy independence”

companies, helping their customers make optimal use of the available technologies. These companies will need to change the way they look at a customer and what they need to offer the customers.

This will revolutionise the way customers, energy suppliers, new energy service companies and grid operators need to interact. Even though the technology seems to be able to help in achieving our goals, we believe we won’t come close if we don’t focus on the way of involving the customer as an integral part of the smart grid. The changes the energy market and its customers need to make are huge, but the benefits will be even greater. n

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SMART GRID

GETTING SMART ON THE EMERALD ISLE Marie Shields gets the low-down on ESB’s drive to implement intelligent technologies in pursuit of its ambitious sustainability strategy.

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reland’s Electricity Supply Board (ESB) launched a bold new strategy in March of 2008 to become carbon net neutral by 2035. Plans are now coming together to deliver on that strategy, including investment in renewable generation and the implementation of smart technologies to develop an intelligent grid, coupled with a drive to win the hearts and minds of all ESB staff in pursuit of the sustainability objective.

One of the key challenges is to implement a smart electricity network – indeed ESB’s website pulls no punches on this score: “Electricity networks are a vital part of our overall economic development, and are in-

creasingly key to the delivery of EU and national sustainability targets,” it declares. “To achieve those targets, radical change is needed in the design, operation and embedded intelligence of electricity networks.”

Th is is a large undertaking, but as CIO Peter O’Shea explains, the company already had a good base from which to start. “We have invested in a number of different facilities over the years,” he says. “For example, we have a significant investment in SCADA systems already. Some consider SCADA to be a precursor to a smart network, while to others it’s part of it, depending upon where on the evolution of control systems an individual utility is.

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“We’ve also made an investment in an outage management system, which together with SCADA, provides our eyes and ears on the network and what’s actually happening on it. We’ve invested in some sensing devices on the network; so we’re somewhere down the line.”

O’Shea does point out that the difficulty with measuring progress in developing a smart network is the variety of definitions that exist around the concept. “It’s a subjective question to an extent – you talk to 10 different people about smart networks, and you get 10 different views of what it is.”

To help address this issue, ESB Networks is developing a roadmap for smart networks based on their own five ring model.

Jerry O’Sullivan, Sustainability and Systems Manager in ESB Networks, explains, “The five ring model integrates renewable generation, smart networks, smart meters, connected home and distributed generation and electric vehicles into a clear strategic vision.”

The project relies on the successful joining of the competencies in metrology and network operational technology with IT and telecommunications technologies. While all major EU countries are considering these issues, Ireland and ESB would appear to be further ahead than most. “Under the auspices of the industry regulator CER, we are partway through a smart meter pilot program,” says O’Shea. “We have installed around 9000 meters nationwide in the last nine months.”

There are actually two trials running – one on the technology, to test the meter itself and the various currently available communication technologies to bring the information back from the meter. “In addition around 6000, consumers with smart

ESB aims to make all its production net carbon zero by 2035

O’Sullivan explains the particular national characteristics with which the strategy must deal: “Ireland has set a target for over 40 percent penetration of renewable generation, which is by its nature intermittent.

Coupled with Ireland being an island system, this poses unique challenges when compared with the rest of Western Europe, where there is a larger, integrated system that more closely resembles that in the US. “Curiously, the Irish system has close on 200,000 km of transmission and distribution networks, which is almost four times the European average per capita – this is due to its dispersed population and provides its own challenges in the development of smart network strategies.”

O’Shea comments that, “These issues are part of the smart network.

It’s all about applying IT and telecommunications intelligence to observe these complications, understand them better and work out how the network, the system operator and the consumers will respond in these different cases.”

Building blocks According to O’Shea, one of the biggest building blocks for smart networks is smart meters. In Ireland, installing a system of smart meters means replacing mechanical meters with computerized devices for each of the country’s two million electricity consumers. He describes the vision of having each of these smart meters with two communication channels: one back up to the electricity system to the system control room, and a second channel back into the home to provide information on the status of the electricity devices there.

“The overall vision is, from a system perspective, to create a real-time information link between the customer, their appliances and the power stations and wind farms that generate electricity,” O’Shea explains. “This link can be extended into the home, even into areas like controlling the charging of electric vehicles.

“The information coming through the smart meter will empower the customer through giving them a full understanding of how they’re consuming electricity, and enable them to better control the energy consumption of their appliances, using information broadcast from the smart meter into the home. The meter will also have to interact with electric vehicles.”

Electric vehicle infrastructure to be built In late October, ESB Chief Executive Padraig McManus, on behalf of Europe’s electricity companies, presented EU Transport Commissioner Antonio Tajani with a declaration designed to pave the way for the widespread introduction of electric vehicles.

Europe’s electricity companies have come together to standardise the apparatus necessary for the recharging of electric vehicles across Europe. Cooperation between the utilities is seen as vital for the rapid introduction of electric vehicles across the continent, allowing motorists in every country to use the same charging system.

ESB is to build the infrastructure required in Ireland for electric vehicles.

Chief executives of the major electricity companies have been discussing how the industry at large can decarbonise power generation. Decarbonised electricity could then be used to fuel the transport sector, which is responsible for a large percentage of CO2 emissions.

The signatories to the declaration confirmed their determination to cooperate with the various stakeholders towards the development and application of industry pre-standards, until standards have been set by the official standards bodies ISO/IEC. Presenting the declaration on behalf of the electricity companies, McManus said that the transport sector is currently responsible for 23 percent of total EU carbon dioxide emissions, according to figures in the European Commission’s Second Strategic Energy Review.

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meters are part of what we call the customer behaviour trials,” he says.

“We’ve chosen them using random statistical selection across the country. The people who have those meters will be offered different fi nancial incentives during 2010, and the trial will then look to measure whether their behaviour changes on the back of the fi nancial incentives.”

ESB expects the trial to show which incentives are better, and also whether giving incentives changes behaviour to an extent that the ben-

ator and the consumer to better control what they’re doing; and if we can implement electric vehicles and have the smart network overseeing that; then we have the possibility to fundamentally change how electricity is generated, transported and consumed. We would see that as a visionary change in how utilities will operate.”

Peter O’Shea is Chief Information Officer for the Electricity Supply Board (ESB), with its head office in Dublin, Ireland.

Jerry O’Sullivan is Sustainability and Systems Manager for ESB Networks.

“Replacing petrol and diesel with electric vehicles at point of consumption is our vision for the future” efits can be quantified either by a reduction in carbon output through lower demand, or by reducing overall operating costs for the electricity system because you’ve shifted demand from one period to another.

The trial should allow full quantification of the fi nancial benefits of a full smart metering scheme. “One of the key characteristics of the pilot is the involvement of the many stakeholders in it under the leadership of national government and CER, which augurs well for its success,” O’Shea underlines.

ESB, however, does not underestimate the challenge it faces in rolling out a state-of-the-art smart metering solution for all its customers in what is still an immature technology, where standards have yet to be developed. Significant challenges also exist around the communications infrastructure, given the population distribution in Ireland.

Building on the good work done to date in the pilots will be key.

One of the next steps will be the adaption by the electricity industry in Ireland, under the governance of the CER, of the national functional requirements for the overall smart metering solution.

Sustainable core In terms of ESB’s future plans, O’Shea cites the sustainability agenda that is core to all the company is currently doing. He explains the sustainability strategy as having three core elements: firstly to get its carbon emissions down to net zero by 2035, which requires significant re-engineering of our generation fleet – replacing existing fossil fuels with renewables and clean fossil technology.

Second on the list is a range of technology-based investments to fundamentally change how electricity is produced, transported and consumed in Ireland. Chief amongst these are the implementation of smart networks, smart meters and electric vehicles. Thirdly, the company aims to win the hearts and minds of all in ESB in order to change their behaviours.

O’Shea feels there is a long way to go, but a very solid start has been made. “Once that is achieved,” he says, “electricity will be the fuel of choice, because at the point of consumption there is no carbon equation if your production is net carbon zero; of course, this is even further amplified with the advent of electric vehicles.

“If we can implement smart networks to transport electricity in a smarter way; if we can implement smart meters to allow the system oper-

Evolving Smart Networks Model Energy flow Information flow

Renewables & Clean Generation

Smart Network

Smart Metering

Connected Home

Distributed Generation & Electric Vehicles

Electricity infastructure IT architecture

Evolving smart networks model – the five rings

Evolution of the ESB 1901 - Hydro-electric power first discussed 1903 - Power station built at the Pigeon House for Dublin Corporation’s Electricity Department 1915 - Investigation into the generation of electricity from the Shannon 1918 - More discussions on hydro-electric power 1922 - Foundation of the Irish state 1925 - Electric power station at Ardnacrusha, Co. Clare approved 1927 - Electricity Supply Board established 1937 - Liffey scheme approved 1968 - Turlough Hill construction began 1980s - Aghada Power station in Cork began producing electricity 1987 - Moneypoint generating station commissioned by ESB

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EXECUTIVE INTERVIEW

Leveraging the best technology Bill Yeates tells Power & Energy why AMI systems are essential to the development of the smart grid.

Sensus is often called the technology innovator for smart grid and AMI initiatives. Why is that?

Bill Yeates. Sensus has a foundation of experience and success from which to lead utilities into the smart grid and AMI era. We have led the North American metering industry for decades with a demonstrated performance and a proven track record in reliable products and advancements that keeps pace with emerging technologies. We also have the most installed smart grid applications in the world, with four million endpoints and 188 deployments for electric, gas and water, and more than 200 customers just in North America.

What are the key tools a successful utility needs in a smart grid era?

BY. A successful utility will have an AMI system as its smart grid foundation. The Sensus AMI system, FlexNet, moves operations beyond meter reading and into demand response,

“A successful utility will have an AMI system as its smart grid foundation”

home area networking and distribution automation, which allows all devices on the network to communicate. A successful utility will turn to FlexNet to leverage the best available technology in systems operations and integration, program, customer relationship and installation services management, and deployment strategies. Doing so will create a more reliable grid and optimise energy efficiency, operations and maintenance.

North America is leveraging FlexNet for the smart grid, but what is the environment in Europe?

BY. The smart grid is not yet a major factor in Europe, but with a focus on conservation, the smart grid gets more attention every day. Fundamental value propositions vary from country to county, with focus ranging from in-home display of energy usage to carbon footprint reduction, to

managing solar energy. European utilities will need the features and bandwidth that comes with FlexNet in order to achieve an end-to-end smart grid system.

How is Sensus preparing for a European customer?

BY. We view our role in Europe as identical to our role in North America – to deliver on our technology innovator reputation.

We are ready to match FlexNet’s reliability, flexibility and minimal infrastructure with Europe’s greater focus on resource conservation for utilities as their core business driver. Our European partnering entities already own spectrum and towers and have experience in wireless network deployment and management. We are modifying our wireless radio technology to meet European standards, and we are creating standard developer kits so that manufacturers with a wide range of equipment needs can interface with the network. This approach will create competition while driving innovation.

How will Sensus be positioned once the smart grid is a common fixture in the global utility industry?

BY. The future is today, as far as Sensus is concerned. We can provide solutions, directly or through our ecosystem of industry partners, for any utility around the world. One immediate solution is FlexNet’s open standard. We’re compatible with any gas meter and with any modern water meter. Our goal is to give our customers the technology that allows them to help their consumers have consistent easy access to information regarding energy usage.

FlexNet will also open doors around the globe for consumer education. If we show people how to lower their energy consumption, whether their motivation is to protect the environment or save money, then they will do it voluntarily. Timeof-use pricing will eventually be mandated by governments, and tools like the Sensus FlexServer will help with that education.

It will be clear that Sensus supplies solutions to unique market needs around the world in an efficient manner. We don’t take our reputation as being the global technology innovator lightly. We work every day to offer progressive solutions and reliable products that allow utilities to operate successfully on the smart grid.

Bill Yeates is Executive Vice President of Conservation Solutions for Sensus. He joined the company in July 2008 to manage advanced metering infrastructure (AMI) and advanced meter reading (AMR) technology solutions for electricity, water and gas, and electricity meter worldwide. He holds a BS in Electrical Engineering and an MBA from Louisiana Technical University.

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ASK THE EXPERT

In with the new Martin Malos explains how new technologies can help utilities improve their core business.

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here are multiple factors slowing down investments on smart metering projects around the world.

Upgrading existing infrastructure towards smart metering and smart grids requires huge investments on the meter and communication network level. Generally, utility companies are conservative and risk-sensitive businesses that are used to operating in slow developing markets with low risks and virtually no competition.

What is needed for this initial investment is to see a clear picture of the benefits to gain from this innovation. A lot of attention in the past was paid to the technical parameters of AMM/AMI but without explaining how utility companies can use these new technologies in order to improve their core business.

It is a simpler thing to evaluate the technical performance of pilot projects, as they are metering projects managed primarily by technologically oriented metering departments, such as hardware. Solution vendors of smart metering systems are even now mostly oriented towards metering itself, moving from their traditional area of offl ine metering into smart metering, but still focused on the meters and communication rather than on complex, customer-oriented solutions.

From an economic point of view, benefits in this case mean a necessary cost reduction or revenue increase.

Costs are generated though all the company by primary and secondary (supporting) business processes; while revenue is only generated on the company outputs at the end of the primary processes – through customers. Therefore, some cost reduction can be achieved anywhere in the company wherever technology can be used to do old things in a new way – more efficiently.

Integration of new technology can bring new benefits in new areas. Revenue increases can only be achieved if new services and products for the customers are introduced – doing new things. Generally speaking, the quickest benefit, and requiring virtually no changes in the company, is reducing the costs of manual meter reads through the implementation of automated meter reading (AMR). Further integration deeper into other processes with changes in the distribution area can optimise distribution network investments, reduce power outages

and power quality issues. Most companies implementing smart metering have not surpassed this stage.

The experience from the telecommunication business, where similar innovations happened in the 1990s, showed that real changes must be done regarding customer integration, such as introducing new products, new services and finding new markets. The customers must be the center of attention, not least of all because they are responsible for the ROI necessary to cover CAPEX. But this is not an easy task, as virtually all legacy processes and systems have to be updated.

As most utility distribution is regulated, there are important tasks ahead for governments and market regulators. Most of the costs of innovation have to be paid by grid operators, while all the other market players not necessarily providing capital or other support share the benefits. New market rules have to be set defi ning the new requirements and prices for the information and services provided by distributors to other market players.

Utility companies are not used to making large changes and there are very few ICT vendors who can bring to the table the necessary experience, know-how and best practices to ICT solutions. Much can be learned from past changes in the telecommunications business.

The utility providers need to go for larger and often riskier projects that focus not only on technical parameters, such as costs, but those that also involve the revenue side and customer integration.

“Revenue increases can only be achieved if new services and products for the customers are introduced”

For more information, visit www.sitronics.com

Martin Malos is the Sales Manager of utilities development in Sitronics Telecom Solutions, helping its customers gain more advantage from smart metering solutions. He has been involved since the early phases, taking part in the solution design and product and project management for the initial pilot projects and in pre-sales.

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ROUNDTABLE

The benefits of the grid Power & Energy speaks to three industry experts about the technologies needed for a streamlined metering system.

THE PANEL

Jens Björkman is CEO of TailorMade, and has been for the past seven years.

During the past 13 years, Björkman has had many different roles on both the commercial and technical side of the telecom and utility software business.

Björkman also serves on several boards.

Simo Makkonen is Managing Director of Process Vision Oy. Makkonen worked for Pöyry, an international consulting company, before co-founding Process Vision Oy. As Managing Director for the last 16 years, he has expanded the company to take a leading position in the energy data management business.

Mark Ossel is Vice President of Energy and Utility at Echelon and is developing the energy and utility market for the company in Western Europe. Ossel is also a board member and treasurer of the Energy Services Network Association and the international Networked Energy Services usergroup, and is active in international standardisation efforts.

What is your definition of smart metering? How does it fit into the overall concept of the smart grid?

Simo Makkonen. We see smart metering as a concept for implementing infrastructure, systems and processes to enhance current end-customer services and to provide new services and tools for end customers to increase their energy consumption awareness, thus helping them in implementing energy saving activities. Smart metering also will offer utilities better understanding on their energy grid status and usage, as well as the possibility to remotely control end customers’ energy usage, providing tools for enhanced network maintenance and use, and to peak load savings.

We see smart metering as not only a technical, hardware-related issue but also as a whole concept and its targets needing understanding. By having this view it would be possible to make feasible decisions on possible implementations and needed solutions. In addition, smart metering is also closely related to the other smart discussions such as smart buildings, smart homes and also smart grid, where we are talking on the same targets and possibly also partly on the same infrastructure and solutions.

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Jens Björkman. From a billing point of view, smart metering really takes the industry to an online mode. It provides opportunities for new products to enter the market and enables the possibility of remotely controlling consumption and load-management. Regarding smart grid, in comparison with the telco market the smart grid would typically allow two-way communications for direct triggered provisioning of the devices, such as the meter. In this sense, all smart grids would in the future only involve meters and networks that enable direct provisioning of the meters.

For example, to enable provisioning based on account status for a prepaid business model.

“To really grasp the opportunities of the new infrastructure, utility companies should create a new blueprint based on the new processes” Jens Björkman

Mark Ossel. Smart metering is too loosely defined, allowing essentially dumb communicating meters to claim the mantle of a smart meter. The correct definition of smart metering is that it is a ‘system’ for delivering dramatic improvements in utility operations, reliability and customer service by offering detailed usage information, demand metering, detailed power quality data, outage information, integrated disconnect switch, integrated customer premise interface and flexible billing options. Smart metering systems serve as the key informationgathering source and foundation for a smart grid that helps utilities better manage their operations, and customers better manage their energy consumption.

Smart metering is an essential part of the smart grid itself and leverages the grid. Any other sort of smart metering rides on top of the grid, introducing risk, increasing complexity and adding cost. The essential thing about defining smart metering is that it’s not just about the meter, it’s really about the grid.

What benefits do smart meters provide to both consumers and utility companies?

MO. The consumer, and society in general, will benefit from smart meters and the smart grid, since they provide a way to achieve a decrease in energy usage by raising consumer awareness of the cost and impact of electronic devices in our homes and offices, and the real ‘cost’ of electricity. The combination of heightened awareness, an ability to track and manage use, and incentives, will give consumers a sense of energy empowerment that they have never before experienced, and this will be huge.

By using smart meters by our definition, the distribution grid owner (DGO) will have the ability to get more information from the low voltage network about both the consumer’s energy use and the grid itself. The best of the smart meters, those that provide grid intelligence like power quality data, power factor, THD, frequencies and other measurements, will give DGOs better insight into the grid. A true smart grid will be able to respond to local and system-wide inputs, have much more information about broader system problems, and more importantly, be able to react to or resolve problems as they occur.

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JB. For consumers, smart metering can increase the awareness of consumption levels. For a utility company, it brings completely new possibilities for product packaging, which could actually be used to lower the risk within the retail business. It also means that utility companies can create new valueadded services for consumers to increase awareness and lower their consumption and costs, which in the long run benefits both parties.

SM. Concrete benefit to consumers would be billing based on real-metered energy usage compared to the estimate and correction-based approach. In addition, other utility process-related meter data reading, like moving or changing suppliers, should become more straightforward when up-to-date meter data is available – making these processes easier for consumers. In addition, when consumers get more detailed timely data from their energy usage their energy awareness increases, creating a good basis for implementing possible energy saving activities.

Utilities would be able to enhance their existing services and create new services to end customers, making it possible to increase customer loyalty and attract new customers. Having detailed, close to real-time information on customers’ energy usage, associated with the possibility of controlling customers’ energy supply remotely, would provide utilities with tools for peak saving.

They can gain savings in energy procurement costs and have better control over possible additional infrastructure investments.

“We see smart metering as not only a technical, hardware-related issue but also as a whole concept, and its targets needing understanding” Simo Makkonen

What types of tools and solutions can utility providers use to streamline their automated metering processes?

JB. Within the IT domain it is time to kill the old CIS monolith systems. There are several best of breed solutions in the market for MDMS, billing and CRM, which from our point of view are the three main functions of the old CIS. It is important for the utility companies not to get stuck in their old business processes or try to adjust the old processes and systems to fit with the new business with smart meters and smart grids. To really grasp the opportunities of the new infrastructure, utility companies should create a new blueprint based on the new processes. The most important change that the new systems/solutions must be able to manage is the continuous near real-time flow of meter values through the MDMS and billing systems, as well as the very high data volumes.

It is also very important to be able to act upon the analysis made and change/create new products and pricing models. The number of products offered to the market will increase dramatically because of the data available for customer segmentation as well as the increased competitive landscape.

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MO. First of all, a utility should look for a proven system, and not for just meters or parts of a system. Many utilities have a very meter-centric view of the world, and that’s ok, because before smart metering came along, that’s all that was available. However, today they and their customers are far better served by looking for a system consisting of meters, communication infrastructure and device management. Utilities need a system that fits their architecture independent of communication layers, current available or used technologies, and has the flexibility and interoperability necessary to provide new

“Smart metering is an essential foundation for a sustainable future, achieved by smart grids, people and government policy” Mark Ossel

services or meet new market demands in the future without rebuilding or re-metering.

One thing to avoid is the trap that meter interoperability is a requirement to make the smart grid work. It is not. A specific, meter-level interoperability standard limits innovation and promotes point solutions that are inherently less capable than system solutions to metering. Defining interoperability only at the meter with a single technical standard will only raise costs for utilities and decrease the benefits to their consumers.

SM. During the smart metering implementation project, depending on the selected implementation approach, utilities would need tools and solutions to control the implementation process – installation, logistics, testing and asset management – and update their related systems with necessary changes according to the meter installation progress. This would set new requirements to the existing IT system solutions and applications, especially concerning the capacity to handle large amounts of data and transactions. Therefore, prior to meter installation projects, it is necessary to analyse existing information systems and applications, and make possible necessary adjustments to the IT landscape to implement new smart metering capable solutions. These are designed and proven to cope with mass meter rollout and other smart metering processes. An example of smart metering proven solutions is the Process Vision GENERIS product that covers all the key systems and applications from meter data management and asset management to energy data management, billing and end customer extranet online service portals.

How do you see smart metering developing in the future?

SM. Currently, smart metering pilot projects are running in several countries to evaluate possible technical solutions. In addition, the European Union’s 2020 target for end-customer metering has been the driver in several countries to set national deadlines for implementing enhanced metering for consumers. Common to all these cases has been technical focus. New

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metering solutions have been implemented from technical viewpoints without clear understanding or vision on the new services to be implemented on top of the new infrastructure. It seems that some of the implemented new metering infrastructures are not ‘smart enough’ to enable new services and there will be a need for further infrastructure investments and upgrade projects in the near future.

We see that in the near future, the focus will change from technical implementation issues to the new services and solutions the smart infrastructure should enable.

JB. The frequency of collecting meter values is likely to increase with new system capabilities. Remote control for load management is another future option. Also the meter values of water, heating and cooling will increase, which is a precondition for the future deregulation of these markets. From a billing perspective, this will increase the possibilities to create value-added services with information about consumption cost (not only kwh) and notifications to increase awareness.

MO. Smart metering will be able to support initiating an automated demand response system within all households, which can optimise energy usage and cost for the consumer. It will be the starting point for home automation and will change the marketing and product offerings of energy retailers and trigger real grid management within DNOs. Smart metering is an essential foundation for a sustainable future, achieved by smart grids, people and government policy. Smart decisionmakers will not make purchasing decisions just to comply with European directives for the sake of compliance or in isolation from the real goal of a truly smart grid. These will rather be based on a desire to build a grander, smarter grid to better their business, empower and benefit their customers, and ultimately upon a belief that the right decisions will contribute to an improved future for the world.

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TRANSMISSION

UNITED WE STAND Corne Meeuwis explains why a single market is needed to develop Europe’s energy industry for a greener future.

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he Capacity Allocation Service Company for the Central WestEuropean Electricity market (CASC-CWE) is a creation of actions following the memorandum of understanding (MoU) between the ministry’s regulators, transmission systems operators (TSO), power exchanges and representatives of the market participants with Belgium, France, Germany, Luxembourg and the Netherlands. Corne Meeuwis is the CEO, the man leading the initiative, and the responsibility for uniting the various regulators proved to be his first challenge upon assuming the role.

He explains that ensuring that each member has the same end solution in mind involved a multitude of discussions are listening to what was expected by each member also required a vast amount of patience. Meeuwis

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notes that there are big differences between the wishes of power exchanges, and those of market participants, and also between the requirements from regulators and national governments, and aligning all of these various interests was no easy feat.

“Once you do achieve that, the next phase is setting up a company like this and introducing all the practical solutions, as well as aligning all the wishes, desires and requirements and trying to sort it out,” he explains. “And that is not always easy to do because everybody has their own position and also each country has its own laws and regulations. Getting all the regulators together to agree on the auction rules for example, is quite a big challenge and to be quite honest we still are in that process today.”

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Talks of a single European energy market began long before. The European Union initiated the drive towards a universalised system with TSOs looking at how well they could facilitate this. Relied upon for solving the problems regarding European Energy, the TSOs began their discussions 10 years ago, but attempting to develop the entire market at once is unattainable – there are just too many issues to solve.

Slowly, they progressed to a state of cooperation. Meeuwis explains that initially, there were all manner of bilateral agreements between countries, resulting in the discussion of a common market in the central west European region in 2006. Prior to this three different auction offices were in operation; one national law with one IT system seemed the most viable option.

It was at this time that the MoU emerged. “There you saw the wishes of power exchanges and market participants moving toward market coupling as a system. Everything came together in this MoU and was signed in June 2007; it was a natural process where all the discussions of the past seven years came together to this one document that was undersigned by everybody.

“Unfortunately, as you often see, everybody was very positive and hopeful and in the belief that we could achieve all these goals in a very short time.

So the timelines set in this MoU, to say the least, were a bit over-ambitious but I can assure everybody that all parties are working really hard to establish the goals set there. Unfortunately with some delay in respect to timing but we are on the way forward,” says Meeuwis.

Although still only in the start-up stage, liquidity and competition in each of the markets is expected to increase. “What you see is that the participants for example trading today on the Dutch/German border are not the same as that are trading on the German/French border or on the French/Belgium border.

“If you have one auction system, all participants can automatically access all the auctions on all borders, so where today you have perhaps 20 or 30 participants per auction office, in the new system we will automatically have around 80 participants who can easily access them across borders and do their trades there. That will increase some competition as it’s made more easy for a market party to say, ‘Well, there can be an interesting deal on a border where

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I usually never trade because it’s too much of a burden to register at this other auction office. Now I can do it and you know what, I place a bid to see what comes of it and if I can I will do my trades there.’

“Another advantage is that the task will be now be designated by the TSOs as being the sole platform to publish all information regarding cross-border trades in the region. Today a market party or a large industrial customer has to go to all the individual platforms, view their website information and then try and combine this. In the new setup there will be one website with all the information involved, so what is going on it becomes more transparent.

It’s also easier to check for the market parties and that medically increases, in my opinion, liquidity and possibilities for parties to do their trades. And because of that, you stimulate competition and for the rest we can do little more. It’s now up to the market parties to make it work.”

TSOs remain neutral – there is no competition between market parties or energy traders – they have the capacity available so that it makes no difference which party uses that capacity. The only stipulation, for them is to ensure that the capacity is used. The only question asked of the TSOs is how much availability of capacity they should have, a question that has been dominant for some time.

Meeuwis also notes another stipulation of the MoU that TSOs are now expected to cooperate more, which is already happening. “Jointly calculating the future on the same basis with the same information and hopefully with the same kind of IT tool,” he explains.

“Today they all use different systems and more or less now by default, but there is no discussion between the TSOs. In the future there will be one simple system to calculate and if everything goes okay, the outcome should be equal and hopefully that will increase the available capacities for traders.

“The TSOs today get quite a significant income from auctioning these capacities and this money is used in different ways: for some countries the money is used to reinforce the grid and especially on interconnectors. That should automatically lead to a situation where you have sufficient interconnector capacity but actually the result would no longer be an income from auctioning transmission capacity. In other countries the money is used to lower the grid tariffs but the effect is the same because the moment a TSO lowers its tariffs with this income, if they need to do an investment in cross-border capacity, they spend more money and then the tariff should go up.

“So it doesn’t make a huge change, except financially. For accounting it is quite a change because in the first situation the money’s actually more or less outside the books of the TSOs as it’s a separate pot used to do the investment. Also, in the other situation it’s part of the profit and loss account of these TSOs and that can create some discussions with market priorities but also with regulators on how the money is spent exactly and whether or not it is used to create additional profits for this TSO. That’s to the future. That will probably be a situation where the income for TSOs coming from these explicit auctions will drop significantly, due to the fact that additional lines are built.

“If you have one auction system, all participants can automatically access all the auctions on all borders”

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“Also, due to the introduction of market coupling, that will level out price differences between countries and then there will be a new situation created where TSOs can no longer rely on an additional income – they will have to look for other resources for their investments. So that could be quite a challenge because then you have to go to your regulator and have to defend, for example, the fact that you have to increase your tariffs with a certain percentage in order to build a new power line. Where today that regulator can say, ‘Okay, but simply use the auction revenues, and there is no additional burden to the end users.’ So that will make a change for the TSO,” he explains.

The operations of the TSOs provide key lessons for other countries that are looking to make similar steps in the future. He notes the importance for other countries to adopt a single energy market, and predicts the likely creation of one organisation covering the whole of Europe. Currently the central east region – Germany, Poland, Czech Republic, Slovenia and Austria – are in the process of setting up an auction office like CASC. The

new overhead power line in Europe is estimated to take a realisation time of 10 to 15 years.

“If things are going to change significantly, you already have to start investing now in the grid to be ready but nobody can tell you what the world will look like at that time,” says Meeuwis. “Are we going to focus strongly on building wind farms in the windy areas of Europe and then connect them to the hydro power plants of Switzerland and Norway to have storage there? Is there going to be an electric connection with the northern part of Africa so that we can have solar cells there? Is that the master plan that has to be realised in 20 years from now? If the answer is yes, we have to start investing today.

“Politicians, regulators and also customers will have to be aware that TSOs will have to spend billions of euros today for a situation that we predict will be there in 20 years but which we cannot guarantee. So you have a high risk on stranded costs and that discussion is really tough, and what you see is politicians hesitating to put their money where their mouth is –

“If there is no common vision on how to go forward, you can never achieve the end goal that there is one common European network/market to run”

central south regions are also in the midst of discussions for all those countries connected to Italy to be united, but Meeuwis remains hopeful that if the number of auction offices can be cut to two or three, then one is also a possibility.

“When it comes to the work that’s done by power exchanges there are multiple power exchanges dealing with the day’s markets and also focusing on intra-day activities, such as how they relate to one another. There is a relationship between all this and perhaps in the future, but then I talk even further away in the future. There will be simply one organisation dealing for the whole of Europe with these kind of issues and doing it all based on one platform and then you would really have one common market.”

Another driving force for the industry, IDC analyst Ret Nicholson follows on Meeuwis’ comments, asserting that smart metering has long been an issue within the utilities industry. It is only recently that it has become public knowledge, and this is what has changed the way the industry responds.

Meeuwis notes that the public is becoming increasingly aware of the benefits of renewables and the need to progress into a carbon-free generation; particularly their interest is in the smart meter and of the windmills that need to be built in Europe.

The challenges facing the industry are in knowing how to manage public opinion, as well as predicting what the world will look like in 20 years.

More so, the investments are needed now for those projects – building a

it’s tough for them, especially today with the economic crisis. Well nobody wants to say, ‘Well, okay, we allow you to spend €30 billion to create this super grid in Europe.’

He explains that even for a tenant to build their own grid they would need an investment along the lines of €3 billion, which alone doesn’t include the necessary investments for the super grid and everything related to that.

“If you compare that to the current asset base of this TSO, it almost doubles based on the investments that they are now doing. It has a massive impact and it will have this impact on all TSOs in Europe. Are you prepared to pay twice as much for the high voltage grids compared to what you do today in order to prepare for this new situation that might occur in 20 years from now? That’s a tough question to answer.

“Moving towards a common platform is essential. If there is no common vision amongst TSOs on how to go forward, you can never achieve the end goal that there is one common European network/market to run. There is a new organisation set up by the European TSOs for electricity and within this TSOs are trying to come to common positions so that they can match the requirements of the commission in order to achieve this one European energy market. In my opinion, it’s simply a prerequisite to come to this one market.”

Corne Meeuwis is the CEO of CASC-CWE.

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ASK THE EXPERT

st

21 century substation design Richard Zambuni explains the need for substation re-design to support the grid.

T

here have been so many innovations in the engineering software that supports power generation, and transmission and distribution that energy utilities have been able to become far more efficient in how they manage the lifecycle of this complex and valuable infrastructure.

However, one class of energy utility infrastructure has lagged behind, and that is substations. Substations are important to energy utilities because as you will read below, there are lots of them, and in developed economies a substantial proportion of them are reaching the end of their useful operating life – in the US this is estimated to be 40 percent of all substations. In developing economies, the demand for new electric transmission and distribution infrastructure means that thousands of new substations are being designed and built. For these reasons alone, it is time for mould-breaking innovation in the way that substations are designed and engineered. Substations need to take a front seat in the changes and improvements in efficiency planned by energy utility engineering team managers.

“It is time for a new paradigm in substation design” Substations are coming to the fore of the smart grid. We have reached a point where substations are being replaced or built from scratch, but those aren’t the only vectors for change. There is a lot of talk about the smart grid and what this means for energy utilities. One thing is for sure, and that is that substations will be critical in achieving the kind of intelligent infrastructure that the smart grid demands. Transformers will be fitted or retro-fitted with intelligent electronic devices that will constantly monitor performance and allow the substation to be operated optimally. And in a grid that has to be monitored actively from the point of power generation to the point of service, one thing we can be sure of is that there will be no smart grid without smart infrastructure data. To a large extent, this already exists for much of the power generation and transmission and distribution infrastructure, but for substations it barely exists at all.

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The status quo In many utilities, the majority of the substation engineering documentation is not even in intelligent digital form. It’s in standard CAD, or drawings organised in books. In other cases, some of the engineering documentation is maintained in a digital format, but it is split down the middle between the electrical design for protection and control systems and the physical design of the substation. This means that workflows are problematic because data is in silos, and even creating accurate bills of material can be onerous because the process is mostly manual and therefore subject to error. This is unsurprising because until now, there has been no engineering tool for substation design that can unify the electrical and physical design environments.

It is time for a new paradigm in substation design. It was precisely this state of affairs that led to Bentley developing Bentley Substation V8i. This is the first and only product to allow engineers to execute both the electrical systems and the physical design in a single environment. The net outcome is that substations can be designed 30 percent faster, bills of materials can be produced more than 60 percent faster, and the information model can be used to support the substation across its lifecycle from design, construction, energising, to operation and ultimately decommissioning.

Bentley’s solution for substations includes interoperable products for site/civil design, structural analysis and detailing for steel and concrete structures, and document conversion and image management. This is a solution that is being adopted now by forward-looking utilities around the world, including Iberdrola Engineering and Construction, a major Canadian utility, and others. This solution is not only useful for energy utility owner-operators, but also for EPCs and rail owner-operators that design and manage substation infrastructure. Substations will no longer be the neglected class of infrastructure for utilities; they will be designed and operated using 21st century technology.

Richard Zambuni is the Global Marketing Director of Bentley Systems. He has spent all of his career in marketing and the last 15 years in hi-tech marketing, living and working in the US and Europe. Zambuni has covered a broad range of technology, from network hardware to telecommunications inventory and provisioning software, to geospatial and infrastructure engineering software.

For more information, please visit www.bentley.com/substationPE

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INSIDE STORY

Plugging in to the future Rapid shifts in demand, soaring energy costs and the need for greater operational efďŹ ciency are placing huge pressures on existing utility networks. Joao Torres looks at whether Portugal’s approach to the smart grid provides the blueprint for a brighter future.

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he energy and utility industry has been talking about the development of the smart grid for years – from the early days of smart metering through to today’s vision of the intelligent utility. But now, thanks to a rising acknowledgement of the importance of energy efficiency and the need to modify our power consumption behaviours, the discussion has moved very much into the public domain. And according to Joao Torres, President and CEO of Portuguese energy giant EDP, this has only increased pressure on the industry to respond.

“We feel the pressure, for sure,” he says. “We have been working on improving organisational efficiency and quality of service for a number of years, and for the last 10-15 years we have been working under strong regulatory guidelines as well, so pressure is nothing new; however, we now feel we need to build a new utility, using technology to go forward with more automation in the grid. Consumers want to know how they use their energy, so it’s time to look to implement smart grids as a priority.”

Of course, it’s not easy, and Torres concedes that there are a number of challenges still to be addressed. “We have some work on standardisation to do, and we need to discover who will provide the investment,” he says. “We feel that the distribution system operator (DSO) can lead the movement, but there are a number of other stakeholders that can also realise significant benefits from this, and so we need to communicate this better. We need to explain exactly what smart grids are, the benefits as well as the costs, in such a way that we can get everyone looking at the challenges to generate a common vision.”

Portugal is one of Europe’s leading practitioners of smart grid thinking, and EDP has led the way with its innovative InovGrid project. Instead of resisting change, the electrical distribution operator chose to anticipate the inevitable technological revolution in smart grids – which will be widespread in European Union countries over the next few years – and embrace the concept. InovGrid promises to reduce clients’ electrical bills by about 20 percent and, even with the lost revenue potential taken into account, Torres believes the net result will be positive because it will ultimately allow a significant decrease in network maintenance costs, as well as reduce technical and commercial losses.

The rollout is still at a relatively early stage but is progressing rapidly – the utility expects to have 200,000 smart meters installed by the end of 2010 – and Torres believes the benefits will be wide-ranging. The project addresses three key issues, the first being micro-generation. The Portuguese government has pushed forward a big programme of micro-generation in recent years, and while EDP has been at the forefront of this movement to date – over 2000 micro-generators have come onto the network in the last year alone – Torres feels that in the future the only way to increase the micro-generation capacity is through the implementation of smart grids. “Smart grid equipment, automation and information and communication technologies can provide the control you need to be able to manage that micro-generation at the local level,” he says. “That’s a significant issue for us, so this is the first question we want to solve with InovGrid.”

The next issue surrounds automation of the grid. “This is the main advantage of the smart grid,” he says. “We need to know what’s happening in the grid. We need to increase the quality of service, so we need to be able to solve the problems we have faster. We need to know how the equipment is

performing, not least because we have a problem with an aging infrastructure and in order to make better investment decisions we need better information about where to invest – this transformer or that substation or this line or that interrupter.”

The third issue is that of smart metering – and not just using metering to better collect usage readings. “It’s using smart metering in such a way that we can give more power to the consumer,” explains Torres. “And in this instance, power means information – information about pricing, about usage, about efficiency. Of course, there are some other benefits too; if the regulation can design a new rule for the market, the supplier can make a new model of tariffs for weekends or nights or for daytime consumption. There are also benefits to us as a provider of the grid with costs of our own – smart meters mean we have no readings to do. We have some control of our grid in a way. We can decide better how we work on it. So there are a number of benefits.”

Torres feels there are a number of stakeholders that could take advantage of the smart grid paradigm, from the DSO to energy suppliers to consumers.

In addition, he sees the implementation of the smart grid having a beneficial impact on the economy in general – an invaluable stimulus given the current climate. “I think it could have a noticeable economic effect because it creates new actors,” he says. “It creates new ways of working and there is some activity in the economy that this concept of smart grids can help promote.”

“With the right level of standardisation we can build a common platform by working together”

And while challenges exist around getting the public and private sectors to work together effectively, Torres feels the early signs are positive. “So far we’ve worked with the government every step of the way, and they’ve been very positive about this initiative,” he says. “We are also speaking with our regulator and are currently in the field testing the technology pilot in small towns and in rural environments. By the beginning of next year, we hope to roll that out to a further 50,000 consumers.” EDP’s management team expects that if all goes according to plan, the whole country will be benefiting from this new technology by 2014 – six years ahead of the deadline announced by Brussels recently under its European SmartGrids Technology Platform initiative that aims to have all electrical networks operating under this model by 2020.

“I think that all DSOs must be prepared to run this way,” he confirms.

“However, we need standardisation of processes and technologies; with the right level of standardisation we can build a common platform by working together. We have contacts with a lot of DSOs in Europe and I think we are going well in this regard. Even at the level of the European Commission in Brussels we are making some good progress, as they recognise that the smart grid is an important strategy. So it’s time to stand together to build a common vision and work on that with the European Commission and the regulators.”

Indeed, Brussels sees the development of the smart grid as fundamental to the future development of a globally competitive Europe, and the concept of the intelligent utility is emblematic of the faith the EU is placing in the

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InovGrid power of information and communication technologies. Putting intelligence into networks for real-time communications among network elements, while at the same time accessing millions of meters, is key to the industry’s development. “It’s a big challenge, but the only way to improve is to increase the use of ICT,” asserts Torres. “That is the main question: how to increase to the right level of ICT, to deal with rising volumes of information, to decide which information is really important. We need to organise our information better, and organise the company in a different way because with the increase in technology we are now generating a lot more information. We must choose the right information to decide the investment, to make operational decisions, to answer questions from consumers, from regulators, from government institutions. So in fact ICT will be critical for our company and for all DSOs alike.”

Even so, Torres concludes with a reminder that technology is only as good as the people who use it, and that the human side to the smart grid transformation cannot be forgotten in the rush to embrace new solutions and technological advances. “We always talk about technology, but people are still the most important part in this,” he says. “The staffing demographic has changed a lot during the last few years as technology has become more ubiquitous. I think the sector is now seen as much more sexy; it’s not so traditional, and I feel that young people are looking at EDP in a different light. They want to work with us because smart grids offer a different approach to the future. I receive a lot of proposals from young engineers that want to work with InovGrid because they understand it’s different. It’s a new utility, as I said.

This is good because we need different people for the future.

“But we need to bridge the transition from the older employees, because they have a lot of knowledge about the industry that is incredibly valuable,” he continues. “We can’t let them leave the industry without preparing properly for it. They have an important role to play in building the future and transferring information to the younger generation of workers.

“You’re talking about creating a whole new business model, and I think inevitably there will be some resistance to change,” he explains, adding that the battle for hearts and minds is often one of the most challenging parts of any large technology rollout. “There is always reticence when you try to change anything. For instance, we are now working with a new workforce management tool and have more than 2000 of our technicians working with it, but training and communicating the value and the importance of changing the ways of working is a challenge. We also need to prepare our managers

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EDP believes the energy paradigm of the future will be based on renewable energies and on the efficient use of distribution networks that will have smart search management mechanisms built in. Consumers will be more informed and participative being that they can also play a role as energy producers (through micro-generation).

In each consumer/producer’s house, there will be a socalled Energy Box, the true brain of the domestic management of electricity. Other than being a two-way telemetry system – measuring the energy that is consumed and the energy that is introduced through micro-generation – this system will allow the consumer to have a more effective participation in domestic energy consumption. For instance, the consumer will be able to subscribe to new tariffs (benefiting from plans with advantageous price plans at certain hours of the day or week, or even benefiting from the subscription of prepaid packages). This is a useful option for a second house, for instance.

The Energy Box will work as a local network that provides web services, house automation and that facilitates the intelligent management of consumption (system demand control) of electrical equipment. Through remote telemetry, the suppliers will measure the energy correctly and provide information to users throughout the day.

to work with remote teams. So it’s a different company to the one it was years ago, and we need to explain and communicate that.”

As such, Torres believes maintaining and improving internal communication is fundamental to the future success of the firm. “It’s not easy, but when I look to the past and what we have achieved over that time – the changes we have implemented during the last 20-25 years – I remain extremely positive about the future,” he says. “Aligning the right technologies and skills is key, and I have a lot of confidence in the ability of our people to deal with that. As long as we continue to invest in our people, we can solve the technical challenges for sure.”

Joao Torres is President and CEO of EDP.

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FEATURE INTERVIEW

Setting the standard Inge Pierre talks to Power & Energy about the importance of a universal standards-based market for the success of the European smart grid.

I

nge Pierre has an interesting philosophy: “Money doesn’t make the world go ’round, standards do.” As Head of European Affairs at Svensk Energi-Swedenergy, reasserting the importance of standards is his priority, especially overcoming the problem of standards being considered ‘boring’. There is often no understanding that they can be something good, he stresses, even if they provide benefits to the wider public; he cites the example of universal plug appliances across European countries, and the convenience this offers. However, he is fully aware of the difficulty of conveying the importance of standards.

“For the industry there are all kind of benefits you can provide and smart metering is one of them,” he explains. “With standards, you don’t install different appliances in different countries or even worse, differ-

ent appliances with different features in the same countries. They all work together because after all, when you expand it with more and more equipment, if they cannot work together in the system, that’s not good for the business.”

The traditional model of an integrated, state owned, monopoly power generation and transmission planning is completely disappearing. The challenge now is to ensure security of supply; Pierre’s belief is that given the liberalised market, security of supply comes more or less naturally.

“The first step towards having security of supply is to have a liberalised market and let the market work. That’s the number one priority.

“I deal with gas supply; we have had some gas crisies and the commissioner is anxious to get emergency plans for the whole of Europe. You can have plans showing what you should do in an emergency situation, but if you have a market that works, that’s the best way to get security of

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supply. You must also let all kind of options live side by side. You should not rule out any kind of energy sources.”

Fluidity of options, having a market that works and the right pricing is the combination that Pierre believes will ensure companies invest in different technologies and increase the security of supply. In certain areas of Europe, the market is very liberalised and works incredibly well, in other areas this is not the case. Pierre supports the European Commission’s desire for a Europe-wide liberalised market, but acknowledges that an instantaneous universal system is hugely unlikely. Instead, the commission is looking to introduce regional markets – understanding the developments needed to sustain regional markets before a single system.

“That’s the way to go, and we see that development when it comes to electricity,” he explains. “We see the same when it comes to gas as well – you start with regional markets. If you look at gas in the Iberian Peninsula, the market is being coordinated, so Portugal and Spain will have a common gas market within one year, hopefully.”

So how do standards bodies cope with the tough economic times?

Does that put more pressure on them to get it right or on the industry bodies to adopt standards more quickly?

Pierre explains that it is the tough times that force companies to adopt fast solutions. “You want things to happen quick, and you want also to make sure that the investments you make now are not outdated rather soon, so you have to look for stable solutions. If you have standards involved, that gives some more stability, hopefully, if it’s done correctly, but even here you have to know that people have different views of the role of standards, absolutely. Some countries think that they should develop their own procedures, their own practices and not have a standard.

Some other countries are more interested in standards, so it varies quite a lot from country to country,” he says.

The same is true of energy sources, Europe can’t choose one single energy source – it’s just not viable – so getting the mix right and communicating the reasons for that mix is essential. Succesful management of the transition period whilst green technologies may still be another five years away is critical. Knowing the energy industry solutions and developing them takes time, explains Pierre.

“It’s difficult to be patient, but people have to be. If we look at the sea cells technology, we have this task to build demonstration plants.

The commission would like us to build 12 demonstration plants by 2015.

Hopefully that will be managed and some pilot plants are already being built or already in operation, such as the Schwarze Pumpe that Vattenfall has built, but it’s going to take time to develop the technology, and that’s what we have to communicate – it’s not a quick fi x.

“It won’t be around next year. We might have some demonstration plants by 2015, but commercially, it won’t be ready until 2020 or 2025.

Look at windmills: we started in Sweden to begin some demonstration plants in the beginning of the 1980s, and it’s been during the last five to 10 years that this technology has really taken off; the first planning for demonstration plants took place 30 years ago,” he explains.

Th is is only one of Svensk Energi-Swedenergy’s carbon-reducing strategies. As well as its windmill operations, the company also has a project with General Electric for 2050; Pierre explains that it is a project that demonstrates how an almost total carbon-free electricity production system could be ready by this time.

“Of course we would see major improvements much before that, such as the sea cells technology, which might be commercially available by 2025, and we would see a gradually improved situation all the time, but unfortunately it takes quite a long time. We will have to realise that, and what we have to realise also is that unless the economic situation changes dramatically, the power plants we built five years ago will still be in operation 30 years down the road.

“Normally you use a power plant for 30 or 40 years, then you can make some gradual improvements during its lifetime. We have to respect that it takes quite a long time, but the effort has been there for some time, and if you look at the development of the electricity production, we have reduced emissions quite a lot in the past 20 years. Look at the UK: we

“The first step towards having security of supply is to have a liberalised market and let the market work”

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have a seen a major change from coal-fi red to gas-fi red power plantss and already that has reduced CO2 emissions down to half, sulphur and oxide more so.

“Sometimes in the debate you’ll get the feeling that suddenly the world has woken up and now we are talking about sea cells technology and environmental issues. I have to remind people that we have talked about that for quite a long time and a lot of actions have been taken already in the past. Perhaps not in the kind of dramatic way that regular people in the street notice it, but if you’re in the business, you would know that we have changed a lot already, going back 15, even 20 years.

“Public awareness adds in a way, so it’s easier for people to become aware of the changes. Of course you’re always, as all businesses, looking for the most profitable way to produce electricity. That’s the way we all have to act to try to reduce cost and find the best solution,” says Pierre.

Public awareness is not the only challenge. Europe’s transmission and distribution network may not be able to cope with next generation micro-generators or be able to link renewable sources from point of generation to point of use. Pierre notes that there are many reasons

for improving the network, liberalisation of the electricity market being one of them. “To have one European market means that we need more interconnections, that’s for sure,” he explains.

“If you look at the past when countries more or less fi xed their own supply of electricity by themselves, the need for interconnections was not that great. Now we are seeing the need for them, especially with the addition of renewable sources because you need to have more interconnections. You need to have a stronger network because sometimes the wind blows and sometimes it doesn’t, and still the demand for electricity remains the same.

“People don’t turn off their lights because it’s not a windy day – people want to have their lights on all the time, so that increases pressure to have a network that can cope with this variation of the production that we have not seen in the past. Adding to this we have the changing demand because of plug-in hybrids that would change the pattern as well, so we see a much bigger need to improve the networks.

“We have some work going on already with plug-in hybrids: Vattenfall signed an agreement with Volvo some weeks ago to develop plug-in hybrids. Vattenfall is not going to get into the development of cars, but development of the contacts – the plugs –so you have the standards for that for the whole of Europe, hopefully the whole world.

“It’s not only the plugs that need development, it’s also the billing system. If you take your car and go from Sweden through Denmark into Germany, you must be able to plug in, first of all, but then also to get charged for the electricity that you load into your car. We take it for granted that you can go through Europe and fi ll your car up with gasoline and use your credit card. We have to have the same system for electrical cars.”

Pierre believes that moving towards a common platform is essential.

He acknowledges the differing countries and their various views, noting the benefits of having more similar equipment or standards so that even if the equipment is different, they can still cope. However, creating a universal structure will provide big challenges for all involved – companies can’t operate on their own; government intervention is also needed. Private enterprises are going to need government funding, standards and regulations.

“One challenge is that you make the general public – the consumers – aware of the possibilities and potential for smart grids, because otherwise we could have a situation where these smart meters measure the amount of electricity that you consume and your bill is a little bit better than the previous bills because it’s accurate consumption or the estimated consumption. But for the normal consumer, they receive the bill and perhaps understand it a little bit better than in the past, but just pay it and that’s that. You must have some incentives for the consumers to use the potential of this smart grid; different rates for day and night can encourage people to make these peak savings. In most cases, you don’t really have those incentives, and that’s the challenge, to make the consumers aware of the possibilities and the potential of smart grid.”

“To have one European market means that we need more interconnections”

Inge Pierre is Head of European Affairs at Svensk Energi-Swedenergy.

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GREEN ENERGY

IN THE MIX Springboarding from the Radlinger Group, RW Energy has upped the renewables game. COO Kevin McCullough explains the industry’s need for a mixed energy portfolio to actualise carbon-emitting targets.

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or a long time, RW Energy’s (RWE) growth in the renewables market was limited entirely to the UK, the business model was matured and honed over several years, but it wasn’t until certain changes were introduced within the company’s executive board in Germany that trends were shifted. Predominantly the company had been what Kevin McCullough explains as, “A very carbon-heavy player within the energy sector,” but in order to stay on top, the company quickly recognised the changing times and the need to move away from its traditional carbon-based technologies.

“The decision was taken with the introduction of our new group Chief Executive, Juergen Grossman, to up the game in renewables,” says McCullough. “We had a very solid base on which to build that from RWE npower renewables in the UK and the role has been to try and extend that throughout Europe, and to build it slightly differently from jurisdiction to jurisdiction. The business we have in Spain is a different business model to the one we have in Italy, Poland and the UK, but it was important to take that experience and knowhow and grow it.”

The company wasted no time in moving quickly. RWE and Westphalia-Lippe Agricultural Association signed a cooperation agreement for biogas, and a deal was struck with REpower Systems on a framework agreement on the supply of 250 offshore wind energy units for the Nordsee 1 project. McCullough notes that fast innovation is the key to success in such implementations. “If you are going to stick to what you’ve always done, you’ll stay doing what you’ve always done. That market will decrease because others will eat away at it; because we were a little later than most of our competitors in getting into large volume renewables, we had to make some fairly bold moves quickly,” he says.

“A typical example was the formation of a strong partnership agreement with one of the major wind turbine manufacturers globally– we secured a contract with REpower Systems for up to 250 five- or six-megawatt turbines that we could deploy in a range of offshore projects around Europe. Once all of the 250 turbines are procured and paid for, the value of that project is in excess of US$2 billion.

“We commit to that contract with terms and conditions that we can live with so that we can be flexible when projects come to fruition. We can apply those turbines into those projects and therefore move quickly, and that gives us a very real market advantage, as well as giving us a credible voice with the many politicians that we speak to in an individual country jurisdiction. It’s one thing to say that you’re going to develop large-scale, offshore wind in particular, but a gigawatt of offshore is likely

to cost in excess of €2.5 to €3 billion, so it’s not for the fainthearted. You have to show that you are really committed and have the means to back that commitment up. Those framework agreements and getting them ready in place quickly is fundamentally important,” he says.

Offshore projects McCullough adds that there have only been minimalist lifestyle changes towards energy, and current policies of low carbon and low price are highly ambitious: renewables involve typically expensive technologies and skimming on the cost involved will see the continuation of energy sourced from fossil fuels. He notes how onshore wind is now beginning to fi nd parity with gas and coal turbine plants, whereas offshore wind still remains in a different league.

“It’s at least 50 percent more expensive than onshore wind in pure capital of cost because of the amount of infrastructure that sits beneath the waves, but then when you look at the life of an asset 50 to 150 kilometers from shore, it’s a square area the geographical size of the city of London. To maintain that over 20 years’ lifespan is significantly different from simply driving to a turbine in a field or in a valley that you can gain access to, so we’re beginning to learn the full lifecycle cost. If we want a

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low carbon economy we all must ultimately fi nd a means for society to pay for this low carbon economy. It will be a combination of the types that we have to charge but balanced in a way that we have support for those schemes not yet directly competitive, such as offshore wind, so we can encourage them to be brought on, and therefore we have a balance to our portfolio.”

RWE is participating in the British Offshore Wind Accelerator Initiative, launched by the Carbon Trust, and is one of the original utilities to begin building commercially viable, offshore wind farms. In 2003, the company built North Hoyle, which has continued to operate since then and is regarded as the best performing offshore wind farm in British waters. According to McCullough, the company’s technical availability is at around 90 percent, making it significantly more advanced than that of RWE’s competition and proving its expertise – to the Carbon Trust and Offshore Wind Accelerator Program – to develop innovative new products.

Combining innovative products with cost reductions is highly important. The company is currently developing ways to lower production prices and make the supply chain in the manufacturing pro-

cess more efficient, for both its onshore and offshore activities. Working alongside the Carbon Trust, RWE is developing how electricity is to be taken from those wind farms and deployed into the national grid, simultaneously learning how these operations can be made cheaper.

However, the company has not been secretive of its fi ndings, opting to share the developments with the industry rather than remaining precious of the intellectual property that has been created. “We have to be a little sensitive on some of the information regarding the commerciality of any particular project, but it’s in our interest to share information about how we maintain our assets, how we benchmark our assets – how do we know that we’re actually the best in something that we do without sharing that information? We’re very active about sharing the basic concepts of good practice, such as health and safety initiatives and maintenance philosophy,” explains McCullough.

“If we and all our competitors did that in complete isolation then UK, PLC and EU players would take a lot longer to see the benefits due to the parochial nature that that would support. We don’t believe in that, we want to open our doors. The North Hoyle project is a classic example of this: most of the round one offshore wind projects have had

“When you look at things like carbon capture and storage with sequestration, they have the potential to be very viable, but only on a project by project basis”

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full public visibility, partly because they were initially funded by a capital grant. For the fi rst early years of their life we had to be very transparent with that learning experience, and that’s a philosophy that we should try to extend where we can, so that as we go further offshore and develop bigger projects, we share that information, allowing the sector to benefit.

Ultimately, that benefits us. We can build more wind, hydro and biomass projects and for less money. That is in my interest, and it ultimately will be in the consumers’ interest.”

Energy mix Consumer interest is fast catching onto the global emphasis of green energy, and understanding how to provide a mix of energy types and getting that mix right for its consumers is an issue facing nearly all utilities worldwide.

McCullough discusses how the company is administering these choices and points to the example of the large combustion plant directive in the UK, which is placing pressure on the energy gap – the capacity of generation ability and the level of demand at any one time.

“We have the Magnox fleets shutting down now,” he explains. “The AGR’s will follow, and at any point in time today we have investment decisions to make to replace some of those assets that will be affected by schemes like that. We have to do it in a way with the best knowledge that we have available at any given time, but we try to spread the risk so that we’re not putting all of our eggs in one basket.

“We see real strength in playing as an energy generator portfolio as opposed to a single party player. With the technology that’s available today, I don’t believe in a world that is 100 percent renewable backed, nor do I believe in a world that’s 100 percent nuclear, coal or anything else.

When you look at things like carbon capture and storage with sequestration they have the potential to be very viable projects, but only on a project-by-project basis.

“Not only does that take very high efficiency coal plants close to 50 thermal efficiency, but by adopting the technology to strip out the carbon dioxide, it reduces our thermal efficiency closer to 30 again. Then you also have the sustainability issue of taking that CO2 and transporting it vast distances, with all of the steel pipe work, infrastructure and compression plants, and storing it for somewhere between 30 and 100 years. However, with the climate change dilemma you have to ask whether a wholesale basis for every coal plant is sustainable, so the answer is not completely CCS; it’s not completely nuclear. It has to be a selection of these technologies so that we can make the best of everything we have available and stop trying to fi nd this silver bullet that frankly, in my experience of 25 years in the energy sector, doesn’t exist,” he says.

Whether Europe’s transmission and distribution network is strong enough to cope with the rise of micro-generators and the transmission of renewable energy from point of generation to point of use remains to be seen. McCullough believes the network to be sufficient to cope with a large penetration of renewable energy, and not only that but also to successfully distribute energy. Smaller scale energy is made in a more distributed nature via combined heat, power plants and generation, be it micro, domestic or small business scale. He notes the example of Germany, which has historically been a centre of large points of generations, similar to that in the UK. They already have 23,000 megawatts of wind installed, and although there are numerous complaints from the system grid operators regarding managing the base load environments, McCullough does not see the difficulty as impossible.

“It means that we have to actually adapt to how we think about a new form of rules as to how we regulate and manage the grid,” he explains.

“When you look at 23,000 megawatts installed in Germany and look at the very significant percentage of penetration that is in the market, then look at markets like the UK that are down in the single digit percents and very low numbers at that, there’s a vast amount of room to go at before we really run into problems. Will we run into problems? We might, but let’s actually make the progress towards that hurdle rather than starting and stopping before we get there. We can’t continue doing nothing.”

2010 will see the extension of carbon-reducing emission targets, not only in utility companies but almost every other industry, but will this communication of energy politics, together with healthy performance in that scheme, actually be a competitive advantage to the utilities?

“The aviation industry and the automotive industry are already using their carbon footprint or their sustainability impact very cleverly to competitive advantage,” says McCullough. He sees no reason as to why this could not be practically applied in a smaller environment and on a much smaller scale. “Clearly, if you have multiples of messages being given by individual businesses, then you have the potential to confuse or even create an apathy amongst the customer base where the message is repeated, so often it becomes diluted and we’re already beginning to see something like climate change fatigue.

“The aviation industry and the automotive industry are already using their carbon footprint or their sustainability impact very cleverly to competitive advantage”

Kevin McCullough is COO of RW Energy.

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“People struggle to know how to react to it. Businesses are selling themselves now, trying to differentiate themselves, to be better at managing that aspect of their business than their next competitor, but already there’s the critical path that always follows the euphoric, ‘Yeah, we get it.

We get it. Let’s do something about it,’ and then apathy sets in, and we have this green wash.

“Communication’s absolutely key. Again, take the heralded new nuclear building in the UK that the country absolutely needs, and look at the legacy that nuclear suffered. Nuclear was born out of the Cold War, it was effectively built for weapons grade plutonium with heat as a huge byproduct that some clever people thought we can build energy from. And of course more clever uses of that nuclear technology became civil nuclear reactors. But when they were built, the whole paradigm of why they were put there was completely different from those reactors that we’re actually thinking about building today, which are designed to be decommissioned, designed for very long asset lives, designed for a commercial environment, as opposed to being retrofitted, and emerged over a very clumsy period of time. Yet the legacy of the PR effect has been enormous and is still there, so getting that message right in terms of communication is fundamentally important, and whilst we’ve learned that lesson, we still meet pockets of resistance.

“We always will. We’ll always have the NIMBY’s and BANANA’s – the ‘not in my backyards’ and the ‘build absolutely nothing anywhere near anything’ brigade – and unfortunately if we all had a nation full of BANANA’s where would we be? So we need to be a little bit more forward thinking than that,” he says.

The solution to this problem is education. Consumers need to be continually educated, as do the utilities that serve them, for as McCullough explains, “Our consumers are our lifeblood and you ignore your consumer at your absolute peril. We’re living in an age now where the consumer has never been as informed as they are today, everything from the internet to the ability to actually swap a supplier when the needs of that supply service agreement are not met. No longer do we have captive audiences, and that’s a good thing, especially for competition. It’s a good thing for keeping our service practices sharp – most of the time we get that right in the utility sector. Sure, we’re still seen as the big, bad utility guys, but it is a transition period, and the winners will be the ones who can really turn that model around and link with the consumer so that it becomes a partnership and a relationship.”

However, he is not oblivious to the difficulties in the current regulated environment. RWE’s domestic consumers are only compelled to retain their relationship with the utility for 28 days, during which time the company must help to encourage money saving on energy bills and establish a consumer desire to continue the relationship into the long term.

The relationship between the utility and the consumer is tentative, and long-term status is built with trust, which in McCullough’s view is done by providing “excellent customer service, which is what we strive for.”

So how exactly is Europe to move forward on renewables in a cohesive manner and what is the importance of a common policy? McCullough notes the commonality already seen throughout continental Europe, due to the region’s very close connectivity. “We have some connectivity by the channel links into France and the like, but it’s a more crucial issue in continental Europe than it is in the UK. There is already a lot of common

thinking about system loads and demand flows. There has to be because of the interconnectivity of those grids. You are seeing an increasing amount of discussion, via the EU Commission, to harmonise the way we think about energy flows and services, and that clearly enters the wires business, and the transmission and distribution network operators.

“We’re not currently near a tipping point; it’s more tight in areas like onshore Germany where you have quite a mixed portfolio already and in order to actually go to the next stage there, you need to go offshore and do something else. Other countries, including the UK, have headroom to utilise the grid infrastructure that we currently have. Do we have to reinvent or rethink the rules to do that? Yes, we do.

“We have to be more innovative, but we can still do much more than we’re doing at the moment with the limitations of the transmission and distribution systems that we have, so we’re a long way from being at a tipping point where you have to think more radically. Again, if you waited for every single answer before you did anything, mankind wouldn’t progress. We have our part to play in this, we need to take steps along the road, and we can do it. We’ve got a lot of headroom, and we’ve got some clever people around that can actually help us work out the next stage of solutions as we take steps.”

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EXECUTIVE INTERVIEW

ened due to the limited yearly production rates of the turbines.

A blueprint for innovation Sunil Tahilramani explains how an increased focus on design is streamlining the wind turbine industry.

What are the pressures currently facing the energy sector that are driving design and simulation requirements?

Sunil Tahilramani. Today, globally there is an increased focus on the impact of energy consumption on the environment. This focus, along with the fluctuations in the price of crude oil and natural gas, has increased investments in the development and implementation of clean, renewable energy technologies such as solar and wind energies.

Worldwide there has been a rapid growth in wind turbine installations, which has been fuelled by government incentives, such as tax credits for clean energy initiatives. In just the US alone, wind power provided 42 percent (8500 MW) of all new generating capacity added in 2008, up from around two percent in 2004. Solid future growth has been forecast for the renewable wind energy industry.

The increasing pace of growth has put pressure on turbine designers and manufacturers to come up with innovative and reliable designs. Wind turbine designers are moving towards larger rotor diameter and blades to get very high output per turbine and avoid component failures, to increase efficiency and reduce downtime.

Components like the gearbox have been known for high failure rate defaulting in five10 years or even less. Turbines are designed for a lifetime of at least 20 years or 120,000 operating hours, during which they must reliably withstand a wide variety of stresses and

environmental conditions. There is a need to innovate and reduce the amount of physical tests, which are not only time-consuming and expensive due to their trial and error approach, but are possible only in a very limited way due to the size of wind turbines. As a result, numerical simulation is becoming a mission critical process.

More research and development is taking place around alternative energy initiatives.

What effect does this have on energy companies? How does an increased focus on design/simulation positively affect manufacturers in this sector?

ST. With increased research and development around alternative energy initiatives, energy manufacturers are trying to reduce ownership cost and provide reliability to their customers.

In the case of wind energy, with the increasing size of the turbine, it must sustain dynamic forces caused by the turbulence and maintain structural integrity under high loads. Customers are investigating offshore sites, which pose the added challenge of operating under extreme conditions while maintaining design life of up to 20 years.

With an increased focus on simulation, manufacturers can overcome the numerous challenges related to the creation of ever more powerful systems. Companies can tackle the engineering challenges by performing design iterations virtually with high accuracy and reduce the cost of prototypes, which is height-

How does software that can simulate complex mechanical systems help companies to meet and overcome these challenges?

ST. With software, such as the ones provided

by MSC Software, that can simulate complex mechanical systems, designers can perform a full wind turbine study, including the effects of control systems. Real-life behaviour of components and assemblies such as rotor blades, bearings, gearboxes and power trains can be accurately understood by subjecting them to different loads and boundary conditions in a virtual environment.

Structural analysis for towers, nacelle, hub, foundation and other elements helps understand the capability to sustain variable thrust forces and ability to maintain structural integrity.

Companies can accurately perform the aerodynamic loads calculation and predict the life of the individual components and the system through fatigue prediction for ground as well as offshore structures.

How do you see the sector developing in the future – which advances in design/simulation will become increasingly signiďŹ cant to the industry?

ST. The renewable energy industry is in a growth phase, with continuing investments and we will continue to see more innovations through an increased focus on research and development.

For example, in terms of gearbox, we are likely to see the movement from a traditional threestage gearbox to direct-drive technology with integrated gearbox and generator and advanced gear designs. There will be a heightened interaction between disciplines such as structures and dynamics, and performance, safety and reliability of products will greatly influenced by the interactions between these disciplines.

In terms of simulation, we will see leveraging solutions that offer interactive analysis for coupled engineering physics such as motionstructures, systems and controls; multi-physics, such as electromagnetic; and more. „ Sunil Tahilramani is Product and Industry Marketing Manager at MSC Software. Prior to this position, he worked in roles of pre-sales, technical support and consulting. His background includes a Masters degree in Mechanical Engineering with an emphasis on Multibody Dynamics and FEA. He is currently pursuing his MBA at the University of Michigan.

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RENEWABLES

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LEADING LIGHT Marie Shields talks to Christine Lins about the progress Europe has made towards reaching its renewable energy goals.

A

ccording to Christine Lins, Secretary General of the European Renewable Energy Council (EREC), Europe is already well on its way to achieving the ambitious goal of having 20 percent of its energy generated by renewable sources by 2020. “We have exceeded 10 percent of renewable energy in final energy consumption within the European Union,” she says. “We are on track, and we believe that with the Renewable Energy Framework Directive, which was adopted in May 2009 but was only recently published, we will see further impetus that this development will happen.

“Much of the development in renewables at the moment is coming from certain countries, such as Germany, Spain, Denmark, France, Italy and Sweden. However, there is a lot of potential in the other member states and we attach a lot of hope to the national renewable energy action plans that countries have to submit to the European Commission by June 2010.

“This is one of the major outlines in the renewables directive, that countries by June next year have to come up with strategies outlining how they foresee reaching their binding national renewable energy targets. These action plans will provide the stability and framework for making sure that the objectives are achieved.”

The aggressive pursuit of a renewable energy policy can have other benefits apart from the obvious environmental ones: job creation, for example. Lins points out that Germany, which has had a strong record of promoting renewables for a number of years, is benefiting not only in terms of energy share from renewables but also in terms of new employment opportunities.

“There are around 450,000 people employed in the renewable industry sector in Europe,” she says. “Out of these, probably 285,000 are employed in Germany. This shows that the renewables industry is a factor for growth and sustainable development.

“We also see more and more big companies from various industries investing in renewables, because in the long-term their operating costs are lower and more predictable than those of conventional fuels.

Together with energy efficiency, investment in renewables is something we also see when analysing different businesses.”

domestic and distributed micro-generation, and to promote an improvement in energy efficiency through the implementation of a novel ICT solution into local smart power grids.

“Very clearly, the rapid deployment of renewables will require some changes in power grid infrastructures,” Lins explains. “Decentralised generation needs to be taken up, and this means not only looking into the most feasible technical solutions, but also looking at non-technical barriers, because we know that often the lack of information about distributed generation is one of the main reasons utilities can still be resistant to adopting these technologies.

“There is another project in decentralised generation, called MASSIG, in which we elaborate marketing concepts and technological approaches on how to best sell electricity generation by distributed generation in the power range of up to several hundred kilowatts.The focus is on renewables and small co-generation in these projects.”

When it comes to environmental sustainability, EREC isn’t afraid to put its money where its mouth is. Its Brussels headquarters building, Renewable Energy House, is a showcase for the latest smart energy technologies. The council has completely refurbished the 140-year-old building and has equipped it with a series of energy efficiency and renewable energy measures.

“One hundred percent of our heating and cooling comes from renewables,” Lins points out proudly. “A large part of the electricity is generated onsite through photovoltaics and the rest is bought as green electricity from the grid. This is an example which, in the framework of the New4Old project, we are trying to duplicate all around Europe in both the private and public sectors.

Everyone is welcome to come and have a look at how these technologies were integrated into the building.”

“More long term, a very high percentage of 80-100 percent renewable energy share in final energy consumption can be envisaged”

Getting smart Along with renewables, another main factor in the energy efficiency/environmental sustainability equation is modernising electricity grids to make them more ‘intelligent’. To this end, EREC runs a project called the Thematic Network on ICT solutions, which aims to foster and promote the large-scale integration of

Challenging times Lins believes there is a lot at stake in the European power sector. “We are confronted with the fact that much of the current power generation capacity needs to be refurbished in the next few years. We need to get these decisions right, and the way we take them now will influence our attitude towards energy for the next 10-20 years.

“Renewables are the fastest growing new installed power generation capacity. More than half of the newly installed capacity in 2008 was renewables, with 57 percent from wind, photovoltaics and hydro together, followed by natural gas.

“It is going to be a challenge to increase the percentage of renewables in the electricity grid. There we will need to collaborate closely with utilities,

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New4Old The New4Old project is committed to significantly contribute to renewable energy sources and the rational use of energy market penetration through a two-fold approach: • The creation of a network of renewable energy houses (REH), which will serve as focal points for the sustainable energy policy discussion in EU member states and contribute to the commercialisation of renewable energy source (RES) and rational use of energy (RUE) equipments.

• Capacity building among architects and planners through guidelines and training activities in the field of building integration of renewable energy and energy efficiency into historic buildings.

“This is something that we think is absolutely feasible,” Lins says. “We will do everything to make this happen. And I think we can go far beyond. We are currently starting the discussion in Europe about the perspective of 2050. More longterm, there is communication coming out of the European Commission that a very high percentage of 80-100 percent renewable energy share in final energy consumption can be envisaged.

“We expect a rapid increase in turnover figures. At the moment, the European renewable energy industry has an annual turnover of about €45 billion. We expect this to grow exponentially, and coupled with this will be the creation of a significant number of jobs. We have around 450,000 people working in the sector today; this figure is estimated to rise to two million by 2020. The sector offers good prospects for sustainable economic development, and the desired sustainable recovery of the economy, which we all need.”

Christine Lins is Secretary General of the European Renewable Energy Council.

Inspired by the success of the REH in Brussels, it is the intention of this project to lay the ground for the creation of publicly accessible REH projects, which will serve as a base for further stimulation of the market replication of RES and RUE technologies in the respective countries.

Project MASSIG Market Access for Smaller Size Intelligent Electricity Generation Objective To develop and evaluate alternative marketing concepts for electricity from small and medium-sized distributed generation/RES-E.

GSOs and so forth. Another challenge is to make sure that renewables are properly used in houses on a large scale basis, so that the buildings of tomorrow on the one hand respect energy efficiency standards to a maximum, and Philosophy on the other hand meet a large percentage of their energy needs from renewThe system of our electrical energy supply is changing: while able energy sources. in the past electricity has been provided by large centralised “It is also key that the renewables directive is properly implemented and power plants using conventional energy resources, more and that we put in place ambitious national renewable energy action plans. All this more environmentally friendly and renewable is something that we are quite intensively working on. technologies like wind power or photovoltaics There are also other important aspects; for example, the are contributing to our energy mix. training of installers for renewable energy installations is The liberalisation of the energy markets in crucial, so that the installations are of high quality and Europe and the unbundling of the former generate the desired output.” integral power companies offers the chance for Of course, Europe is not alone in its drive towards people work in the smaller investors and market players to engage greater energy efficiency and sustainability – the US, not European renewable in power production. One condition for this, traditionally known for its forward-thinking energy polienergy sector today however, is that these investments bring a cies, is also forging ahead, thanks to the renewed interest reasonable income for the owners. generated by the election of a more environment-orient-

450,000

ed government.

The consensus seems to be that while the European renewable energy industry is ahead of its American counterpart, the US could make up this disparity in a relatively short time – a view with which Lins concurs: “The Americans are catching up, because there is now a lot of political ambition, and we all know that if things start moving in the US they move rather quickly. It’s going to be a challenge for the European industry to keep up, but we see this as a very positive competition.”

New developments In terms of the future, Lins points to the binding commitment given by the 27 heads of state that by 2020, 20 percent – or one-fifth – of Europe’s final energy consumption will be generated by renewable energy. EREC’s aim is that this 20 percent renewable energy will result in 33-40 percent of electricity coming from renewables by 2020, to about 25 percent renewable share in heating and cooling, and then 10 percent renewables in transport, most of this coming from biofuels.

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Benefits Guidelines, action plans and decision-making tools for owners/investors of smaller DG/RES-E for entering big electricity markets.

Partners • Badenova WÄRMEPLUS GmbH & Co. KG, Germany • EMD, Denmark • The University of Manchester, Great Britain • European Renewable Energy Council, Belgium • Technical University of Lodz, Poland • Energy Economics Group, Vienna University of Technology, Austria

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ROUNDTABLE

Keeping our wind energy secure

Power & Energy talks to four industry experts about the challenges of safety for onshore and offshore wind farms. With EWT’s Eric Bakker, Ricardo Moro of Global Energy Services, Trevor Howes of Orga Aviation BV and Electricon’s Kim Bertelsen.

How can wind farms be protected against lightning and direct strikes?

Kim Bertelsen. Each individual wind turbine in a wind farm has to have an integrated lightning protection system, which can efficiently intercept the direct lightning strike. Th is lightning protection system should conform to the IEC61400-24 standard including air termination systems, down conduction and earthing systems. All systems and subsystems in the protection chain must be tested and verified to prove sufficient protection.

Damages to structural parts, such as blades and main bearing as well as power and control equipment, must be limited. The entire route of the lightning current should be determined by the engineers – and not be just coincidental. A lightning protection system should not only protect against the direct effect of lightning, but also the indirect effect protection should be thought into the design in the early stages.

Special focus must be on systems that have an influence on turbine control and are installed in zones where the lightning impact is high. This is especially true in wind sensors, blade sensors and pitch-systems, which must have increased protection installed. The lifetime of all protection measures must be considered since replacement and repair will always

be costly. Regular maintenance is necessary, but components with a long lifetime should be preferred.

Trevor Howes. As our obstacle light systems are one of the very few products that are mounted outside and on top of the nacelle, these are amongst the first products to be exposed to the effects of lightning discharges. After conducting extensive tests on simulation apparatus, and confirmed through the experience of having thousands of obstacle light systems operating worldwide, we have designed our products to ensure that the direct and residual effects of lightning discharges are safely managed outside the obstacle lights rather than passing to the electrical ground through the obstacle light system, which will often cause critical failure.

This does require that the obstacle light systems are properly bonded to a primary ground path during installation – without that it’s impossible to be sure that the obstacle light system is not going to be damaged, which, if that happens, leaves the wind turbine without the required air safety marking warnings.

Special focus must be on systems that have an influence on turbine control Kim Bertelsen

Eric Bakker. Lightning still is one of the most common reasons for the catastrophic failure of a wind turbine. Since it is impossible to avoid light-

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ning striking the turbine, well-designed protection is a necessity for wind turbines. The lightning protection systems have improved significantly and EWT offers both an active and a passive system for its customers. The passive system consists of several lightning receptors and a metal tip on each turbine blade, which will guide over-voltage and currents adequately to the ground in case of a lightning strike, minimising damage to humans and equipment. In addition to this, the control system of the wind turbine and vulnerable electronic parts are well protected in order to avoid damage, but also to make sure that essential signals will not be disturbed.

The active system predicts and detects lightning in the vicinity of the wind park, a technique currently used at airports and golf courses. The wind park will be switched off when lightning has been detected within a set range. In this way, further damage to the turbine and its environment will be prevented in those rare cases that a lightning strike couldn’t be defused by the passive system. This system is primarily used at sites where wind turbines are colocated with very sensitive installations like refineries.

“Lightning still is one of the most common reasons for the catastrophic failure of a wind turbine” Eric Bakker Ricardo Moro. Wind turbines have three lightning protection systems, one in each blade. It consists of a metal piece in the blade tip, which is connected to a cable that extends from that metal piece to the ground in order to conduct the electrical discharge as safely as possible. The substation is protected by a lightning rod more or less as any conventional building. Apart from this, all electrical components, mainly the transformers, are designed and manufactured with an isolation level, which is part of the product specification.

What are the differing challenges between onshore and offshore wind farm safety?

RM. The main challenges in offshore wind farm safety are those related to accessibility – there is no 100 percent safe way to access a wind turbine. The usual way is to carry technicians on a boat from the coast to the turbine. Depending on the distance and the sea conditions, this trip can lead to tiredness and sickness. When the boat is close to the turbine, there is a risk in the manoeuvre of transferring those from the boat to the turbine. This operation can only be done when currents and wave levels allow for it – less than two metre waves.

Many efforts are taking place in order to develop safer access methods, but an optimum solution has not been found yet. When the sea is rough and boat access is impossible, a helicopter can be used to transfer the technicians from the coast to the turbine. In this case, the helicopter unloads the tech upon a platform situated on top of the nacelle. There is an obvious risk factor in this operation. This leads to higher demands with respect to training – first aid, personal survival techniques, fire prevention, fire fighting and helicopter rescue – and PPE – survival suit, locator beacons.

KB. The main difference is that an offshore wind farm has limited and costly accessibility. In case of a minor failure to an electrical component – possibly

THE PANEL Trevor Howes is General Business Manager at Orga Aviation BV, responsible for Orga Aviation’s activities as a leading provider of obstacle marking systems worldwide. He has 30 years’ experience of advanced technology manufacturing companies, with previous R&D, manufacturing and commercial roles in the lithium battery and photovoltaic industries before joining Orga 15 years ago.

Eric Bakker has been CEO of EWT since April 2009, joining the company from BP Alternative Energy where he was President of Wind Power Europe, Middle East and Africa. At BP he has been responsible for the development of over 700 MW of wind energy and two M&A transactions leading to one of the largest wind development portfolios in the US.

Ricardo Moro is Chief Executive Officer at Global Energy Services, an independent services provider to the energy sector and world leader in the wind market, with 4400 employees active in Europe, North America and North Africa. He is an industrial engineer and has over 20 years’ experience in the renewable energy sector, both in manufacturing and in service activities.

Kim Bertelsen is the owner of Electricon and a lightning protection expert. He has worked with lightning protection and system reliability for more than 16 years, the last 10 years in the wind turbine industry.

Bertelsen is participating in the Danish National Committee of the IEC and has a seat in the International IEC PT 24 group responsible for wind turbine lightning protection.

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destroyed by lightning or over-voltages – the consequential repair costs and downtime losses will be way out of proportion compared to the cost of an efficient and innovative protection solution.

The lightning strike density – number of lightning flashes – is dependent on local weather conditions. There are areas in the world where the turbine will experience several hundred direct strikes during its lifetime.

It is not a matter of ‘if’ but ‘how many times’ the wind turbine is affected by lightning. The safety of personnel staying in the offshore wind turbine during a thunderstorm must be considered. For onshore sites, the normal procedure is to leave the wind turbine, but when working offshore such fast evacuation is not an option. A safe location inside the turbine must be defined, where service personnel can stay until the thunderstorm warning is over.

the gearbox, will therefore lead to a significant reduction of downtime and operational costs. Other advantages of this technology are higher yields and improved manufacturability, which all contribute to best-in-class cost per kWh levels. As one of the few wind turbine manufacturers in the world, EWT has an extensive track record with this direct drive technology and is applying it in all its turbine models (750 kW, 900 kW and most recently its 2 MW).

sary visual marking of the wind farm to any air traffic that may be operating in the vicinity, often low flying emergency services. Without these, the pilots are deprived of their visual cue and at nighttime are essentially flying blind. As Orga has been supplying obstaclemarking systems to the offshore oil and gas industries worldwide for more than 30 years, we have brought experience, knowledge and expertise into our product designs. The probability that access to the obstacle light system is restricted by weather conditions and access costs means that we need to design obstacle light systems with high availability times and work closely with our customers to ensure correct installation so that the air safety marking systems withstand the operating conditions encountered in offshore environments.

RM. It is part of the OEM activity to improve designs for higher reliability, by the right selection of materials and the best product design. Computerbased design and simulation is the basic tool in this stage. Test procedures and test rigs are developed to ensure the quality of the components, such as blades, gearboxes and generators. With respect to testing the whole turbine, prototypes are installed in the field and closely supervised in order to detect any significant problem. Ideally, prototypes are tested for a significant period of time prior to start up of serial production.

There are two types of maintenance technologies. Predictive maintenance is one – there is a range of monitoring techniques that show whether a turbine is working in proper conditions, mainly vibration and temperature monitoring, but also noise or extensometry techniques. Each turbine has its own signature and whenever any of the parameters go out of range, it indicates that a component needs to be replaced or adjusted.

Preventive maintenance is another – the turbine manuals describe the kind of routine controls and maintenance actions that are required.

By properly following such indications, the maintenance company can minimise downtime due to unexpected failures. With the proper statistical tools, it is possible to optimise the frequency and scope of those maintenance actions.

EB. In offshore parks, the safety situation is much more challenging due to waves, rougher weather conditions and limited accessibility of the turbines. Even though the industry has made tremendous progress on safety, the track record is still significantly poorer than the incident levels acceptable in the oil and gas industry. The offshore wind industry should therefore tap into the expertise of sub-contractors, many from the oil and gas industry, to improve the safety record of the industry.

However, significant improvements can also be made on safety in onshore wind. Keeping the pressure on is key for the reputation of the industry. Within EWT, for example, project managers are incentivised to deliver projects without safety incidents, and strict procedures are in place to help prevent those.

KB. By using modern technology in air termination and surge protection – and especially by using new methods in test and verification – it can be ensured that the turbine remains operational during and after a direct lightning strike to the wind turbine structure. Surges and over-voltages, due to lightning strikes or internal switching, are the most common source of isolation breakdown in electrical machines and systems. Such influences can be limited by using modern technology.

There is an increasing demand to use standard ‘off the shelf’ industrial equipment, but such equipment is normally not designed to withstand the electromagnetic environments in a wind turbine application. Special requirements and environmental zoning must be defined to secure adequate equipment immunity against radiated and conducted disturbances.

How can technologies ensure turbine reliability and keep costs low?

EB. Turbine technology is key to long-term reliability and wind park economics. Gearboxes are especially critical in this respect. Research (DEWI) shows that 30 percent of the downtime of a wind turbine is due to issues with gearboxes. Also in terms of costs over the lifetime of the turbine, an additional 10 percent of the original capex needs to be budgeted to overhaul gearboxes. Applying direct drive technology, which eliminates

TH.As turbine heights increase, the potential risk of such structures to air traffic also rises. Already today’s larger turbines are penetrating the 150 m low flying air space where the taller broadcast towers were previously the only remote structures encountered by pilots. As a result of the increased hazard presented by wind farms deploying large numbers of these turbines, national and international civil aviation regulations may mandate the use of high intensity obstacle light systems. Recent developments in

TH. For us the issue of safety relates to the ongoing reliable operation of the obstacle light systems. These systems are used to provide the neces-

“It is part of the OEM activity to improve designs for higher reliability” Ricardo Moro

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technology mean that we are now developing high intensity obstacle light systems with long life solid state LED light sources to provide reliable and low maintenance systems with high availability, rather than incorporating the xenon strobe light sources that have been the only choice until now.

These type of developments show how a specialist company, such as Orga Aviation, can support the wind industry by developing products with high product reliability for increased safety, and with lower maintenance requirements whilst meeting the more demanding regulatory requirements, resulting from the use of larger turbines.

How is wind energy expanding and what is needed to cope with the increasing demand?

TH. As larger numbers of turbines are installed, and as these turbines are increasing in height, the visual impact of the turbines, and specifically of the safety marking obstacle light systems, often becomes an issue in the community impact assessment. The regulations governing the type and intensity of obstacle lights required are based on those needed under worstcase visual flying conditions, and differ from country to country. To help solve some of the apparent conflict between adequate safety marking and visual impact, the time is already here when an industry-led interaction with the civil aviation regulatory community is overdue. Consideration of how to incorporate the possibilities today’s technology brings to enable us to operate the obstacle light systems at settings that are applicable to the ambient flying conditions, and even with consideration of the detection of air traffic in the vicinity of the wind farm, would help to overcome many perceived objections.

“As larger numbers of turbines are installed the visual impact often becomes an issue”

RM. Europe tends to reduce growth. There will be an increasing number of re-powering projects in wind farms that were constructed 10-15 years ago, which consist of replacing old turbines with new ones that provide much higher output. The US, China and India are the new high growth markets. The development of the US market is conditioned to the successful implementation of Obama’s plan for renewables.

Favourable legislation is needed. In order to develop wind energy generation, laws and regulations must be passed that incentivise investment in this kind of plant and permit the construction of wind farms in certain areas. Credit availability is also important. The current lack of credit available is reducing the number of projects under development. Not only small investors but also main utilities are slowing down their wind new projects.

In some regions, a more robust grid is necessary in order to evacuate the additional energy coming from new wind farms. This kind of investment normally requires a long administrative process, which delays the development of new wind energy plants. Finally, wind predictability is key in order to facilitate integration into the overall electrical system. Contrary to other generation systems, it is difficult to make short-term predictions about the energy production that a wind farm will generate. Predictability is a requisite by the electrical authority of each country in order to properly plan the energy generation mix at any time.

EB. The number of installed wind turbines is rising rapidly, driven by societal pressure to cut down greenhouse gas emissions and reduce energy dependency.

The challenge will be to integrate those large numbers of turbines in the existing infrastructure, since many of the transmission networks are congested. One way to cope with this is to connect turbines to the weaker distribution networks. To do so, turbine power characteristics need to support those networks. The full capacity synchronous generator from the EWT DirectWind turbine has those characteristics and can therefore be integrated relatively well in weak grids. Obviously, national governments need to come up with a well-coordinated plan to upgrade the national grids as well, but that will take several years.

Trevor Howes

KB. Wind turbines are constantly increasing in size and complexity.

The wind turbines are counted on as power plants in the overall power production planning. If a sudden small interruption occurs it cannot be tolerated that the turbine is disconnected – leaving the grid on its own.

The modern wind turbine has to stay connected also during a thunderstorm – and this can no longer be claimed as force majeur. It is decided that these machines should be running out there and this demands the same approach to lightning protection as well that given to conventional onshore power plants.

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RENEWABLES

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hen EDF Energy and EDF Energy Nouvelles announced their partnership to form EDF Energy Renewables in June 2008 it underlined a growing consensus that the industry needs to get serious about developing alternative power sources.

Furthermore, the new company’s establishment in the UK reflects the country’s massive potential as a generator of wind energy. As an island nation, the surrounding seas offer access to one of the most abundant supplies of reliable wind anywhere in the world. When we meet up with CEO Christian Egal in EDF’s central London office, the UK’s suitability is something he is extremely keen to stress. “Renewable energy is growing everywhere in the world. But in this country the mix is different,” he says. “Wind energy has had huge growth for five years, but what is specific to the UK is that Great Britain is an island so we can take advantage of this location with all the renewable energy linked to the sea.

Offshore wind is defi nitely the main renewables potential in the UK, as well as wave and tidal energies, which are as well very promising. But those are still at the latest development phase.”

Plans for UK wind energy can only be described as ambitious. There is currently about 8GW of installed or planned capacity in place. The UK government’s strategic energy assessment recently reported that British seas could eventually supply a further 25GW of power, enough to serve the needs of all the country’s homes. But while there exist tremendous possibilities, actually realising them will require a great degree of effort.

“It’s a huge challenge,” Egal agrees. “Nobody has ever built a wind farm

100 kilometres off the coast in the North Sea. It will be difficult but what is absolutely fantastic in this business is that everybody is very confident in the capability of the supply chain and the players to deliver.” Obviously, the costs associated with such a huge project present difficulties of their own. Installing turbines that far off the coast, even in the comparatively shallow North Sea, is a far more logistically trying

“Renewable energy is growing everywhere in the world. But in this country the mix is different” operation than sitting them onshore. Farm sites are picked for their exposure to wind, which means they must be built in often very difficult conditions. Building offshore takes twice as long and costs twice as much as a similar project on land. But according to Egal, the UK Crown Estate’s plans are helping to mitigate this problem by targeting huge capacity. Th is encourages all the major players to get involved and creates significant economies of scale. “If you were to put one turbine in the North Sea, it would never happen,” Egal says. “If you want to put 500 or 1000 wind turbines there, that is much more achievable.”

Building the wind farms is far from being the only challenge. Getting the power they generate to where it is needed also requires some new thinking. “One of the other challenges is the grid,” Egal continues. “How to connect it has to be a large-scale approach rather than an individual approach for a single wind farm. Maybe in the long-term perspective it

Fair weather ahead Christian Egal, CEO of EDF Energy Renewables, tells Huw Thomas that the forecast for wind energy is extremely good.

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will be a European approach because if we build a wind farm for the UK in the North Sea, it could also be connected to Sweden or Denmark.

Maybe we’ll see in the next decades a power grid all over Europe, based on offshore wind farms located all over the seas?” Th is vision of an integrated European power infrastructure is one that crops up regularly in talks with those in the industry. Given the speed and efficiency that normally characterises major pan-European projects, you would be forgiven for thinking such a future remains a long way off. While Egal concedes that it remains a huge undertaking, his confidence that it is achievable is infectious. As far as he is concerned, renewable energy, and specifically wind, is an idea whose time has come. “Its very exciting,” he says. “Wind energy is the most dynamic industry all over the world, even in this very tricky period it is still growing.”

Counting the cost While there is no argument that Europe desperately needs new sources of power if it is to remain successful, critics of renewable energy contend that it is simply not cost effective without massive government subsidies. So can renewables ever offer value for money?

“It’s a complex approach,” Egal admits. “Renewable energy all across the world is still supported by public subsidy. The schemes that the countries select are different. The Renewables Obligation Certification (ROC) mechanism is specific in the UK, but in every country there are mechanisms that make renewable investment possible. Because of the current energy market there is no possibility to make a renewable asset profitable. We are not far away, not at all. For example, last year, when the market price was not particularly high, it was at the level where it was much higher than the cost of renewable energy. But to make the operator decide on the investment they need a certain level of visibility on the long-term. So all renewable energies are, lets say, incentivised by public schemes, which make the investment possible. The principle of renewable energy is that it starts from public, government willingness, worldwide European and country willingness to do it, and each country provides to the operators the appropriate scheme to make it happen. So is the mechanism proposed to the operator in the UK enough to be profitable? Yes. If it was no, there wouldn’t be any capacity, so it is profitable. Of course, there are some projects that are more profitable than others, and it’s down to a professional approach to make the difference.”

While this makes a certain amount of sense, it doesn’t answer the question of whether renewable energy will ever be able to stand on its own two feet. The current system allows the power companies to stay in the black, but only on the back of government and consumer support.

Will renewable energy ever be able to compete on a level playing field?

“I would say yes,” replies Egal. “The ROC mechanism is providing some additional revenues to renewable energy up to a certain level of achievement. If the global target is reached, the ROC mechanism will stop.

Currently the principle target is to achieve nine percent of power from renewables. The actual value is four percent. So the ROC mechanism is there to incentivise the utilities to deliver some renewable energy up to a certain level of achievement and when the end target is reached, the public support will stop. It’s logical.”

It is only natural that renewable energy is initially going to cost more than traditional sources of power. While coal and gas have a massive

installed base, wind and the like are effectively starting from scratch. If we are serious about our commitment to getting more and more of our energy from renewable sources, these short-term costs are something that we will just have to bear. In any case, as traditional sources such as oil and gas start to dwindle and become harder to access, the market may make renewable energy considerably more competitive.

Unfortunately the current economic climate is particularly unfriendly. Sources of funding are tight and in many areas there seems little appetite for any investment that isn’t going to quickly bring big returns.

Nonetheless, Egal is clear that EDF Energy Renewables remains on track to hit its targets. “It does have some impact, but more on the short-term period,” he says. “We have to deliver a gigawatt by 2012, so we have to be

For those about to ROC For now the Renewables Obligation Certificate (ROC) remains the key incentive for supplies to provide more power from renewable sources. Implemented by the UK energy regulator Ofgem, the system sets annual targets for companies penalising those who fail to hit them and rewarding those who do. Implemented in 2002, the initial target was to achieve a three percent proportion of energy from renewable sources. By 2012, this figure should reach 10.4 percent, with a further annual rise of one percent for the following five years. The system is currently undergoing examination in the wake of a public consultation and its future shape is yet to be decided.

very attentive to the whole capability to invest in this wind farm in this difficult period. If we speak about the next phase to deliver even by 2015 or 2020, it’s another story. That will require a huge amount of money, but we can hope that it will be after the crisis that we are facing now. I am not saying it will be easy, it will be billions and billions of euros to invest in these facilities. As you know EDF as a whole has some other projects as well, so it is challenging.”

Further alternatives Though EDF Energy Renewables’ principal focus is on wind power, due to its comparative maturity and the UK’s geographical suitability, it is also exploring other potential avenues. “We are looking at wave and tidal technologies, which are not as mature as wind energy, even offshore,” says Egal. “We rely on the R&D department within EDF, we are looking at wave technologies as well. We are very attentive and we are following feedback on this work. Our business is to invest in modern technologies with good profitability, so it could happen in the next two or three years.”

Solar power also remains in contention. Though the UK isn’t known for its warm weather, solar energy’s success in the not particularly sunny Germany demonstrates that, as technology improves and becomes less expensive, it does have a part to play in Europe’s renewable future.

But from a UK perspective, it is wind that is going to provide the big gains. Wind is one of the most well-established renewable energy sources and has developed rapidly over the past few decades. “Wind technologies are improving every year,” Egal confi rms. “It is amazing because we

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A mighty wind Turbine technology has come a long way in a comparatively short time. Today’s biggest models are more than five times as big and 25 time more powerful than their earliest ancestors.

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have now some that are 160 meters in diameter that generate 6MW. If you look at a wind turbine only 20 years ago, they were only 15 or so metres in diameter and generated only 50KW. Who would’ve imagined 10 years ago that we could build and install some 6MW wind turbine?

As an example, EDF Energy Nouvelles, part of EDF Energy Group, has stakes with other partners in a wind farm of 30MW capacity with just six wind turbines. It is based 30 kilometres offshore and each wind turbine has a rotor diameter of 126 meters.”

And the technology is still developing. Egal tells us about projects working towards turbines able to produce 10MW and turbines based on floating platforms that can exploit the wind in deep-sea locations.

With the huge capacity of today’s turbines it is not technology that is holding the more widespread adoption of wind power back. Rather it is outside factors that limit its large-scale implementation. The aforementioned issues with the grid are a major stumbling block, the lack of high power transmission lines making it extremely difficult to get energy from the remote areas where it is generated to the urban centres where it is most needed. Additionally, the UK planning process can throw plenty of obstacles in the path of speedy expansion. “To develop wind energy is really a very long-track with a lot of hurdles and particularly in this country,” Egal confi rms. “The planning system is very long-track, but I think it more or less always happens. And if we have an ambitious target, within a certain amount of time, you have to take into account certain difficulties. But I would rather have a slow plan-

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ning process where you generally get permission rather than a quick one where you do not.”

On the whole though, Egal seems optimistic about the potential for wind and other renewable energy, both in the UK and across the world.

“When we look at the overall capacity we have 120,000MW installed all over the world,” he says. “Last year, for example, we installed more wind energy than gas or coal. Wind energy has developed more in European countries and the US than in developing countries, but if you look at the possibility of wind farms in China for example, there is no limit.”

That is not to say we should expect to see a major uptake of renewable energy in the developing world all that soon. Egal sees it as a responsibility of those in more affluent nations to keep working on the problem until it can become affordable for everybody. “I think the fair approach has been taken by the European countries but renewables remain more expensive than coal, gas and so on,” he says. “European countries and the US are paying to make these technologies as profitable as the other technologies in the near future. Can we really ask the developing counties to pay for these technologies? I don’t think so, and I think we recognise that and that we have to pay this premium. Climate change, which is the basis of these developments, has given us huge responsibilities across Europe, so I think it is a very fair approach for us to pay for the first stages of the development and allow others to take advantage of these developments when it is more financially viable. In terms of the possibility to implement wind energy in these countries, it could happen very quickly. It’s just about timing.”

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EXECUTIVE INTERVIEW

Meeting personnel challenges Eric Thormann explains how turbine technicians represent the industry’s future.

Why is finding and keeping good technicians such a challenge?

Eric Thormann. The wind energy industry installed nearly 20 GW in new capacity in 2007, representing a nearly US$40 billion global industry. New capacity additions will exceed 25 GW this year, with that number expected to nearly double over the next 10 years. Driving this growth is investment by the world’s leading utilities and energy companies, including Iberdrola, EDF, E.ON, Vattenfall, BP and others as they strive to diversify their portfolios, respond to public policy and address climate concerns. This growth has been a boon to ailing industrial sectors in Europe and North America, but especially to the local rural economies where wind projects are located. Among the wider range of economic impacts generated by the wind industry, various studies have shown that every 100 MW installed creates, after construction, five to10 long-term plant jobs and twice as many non-plant jobs.

“There is a conscious effort on safety during erection as well as during maintenance of the turbines” These ‘green collar’ jobs include trained turbine technicians, utility and transmission services, and various subcontractors to ensure the ongoing operation and maintenance (O&M) of the utility-scale wind plants that represent the industry’s future. Work includes performing inspection, preventative maintenance and repair on the internals, blades, hubs and towers of today’s turbines. Turbine availability and energy output is fundamentally linked to technicians working safely and productively at elevation.

Eric Thormann joined SafeWorks in January 2008 as Managing Director of Power Climber International. Thormann was most recently VP, After Sales Services for Trane Europe. He also held management roles with Carrier, Volvo and Union Carbide. He holds a Masters in Business Administration from the University of Hartford, in Connecticut, US.

Wind plant O&M service providers face growing challenges as turbines have grown larger in recent years, now reaching up to 160 m tall, which include increased employee attrition and mounting employee healthcare costs associated with repetitive manual climbing fatigue.

What is the cost of technician attrition?

ET. Turbine technicians receive over 200 hours of training and cost up to $20,000 to replace when all hiring, training and contingency costs are tallied.

Annual technician attrition ranges from 25 to 33 percent industry-wide, with certain locales approaching 50 percent. Take the case of the US, where projections call for over 15,000 turbine technicians by 2020. Replacement costs alone could reach US$70 million at current attrition rates.

How can you maximise technician retention?

ET. The mission of Power Climber Wind is to help manage O&M costs and maximise profitability of wind assets. By providing a range of powered access solutions for work processes both inside and outside wind turbines for more than 10 years, Power Climber Wind helps improve the safety and productivity of wind turbine maintenance personnel. The benefits are lower attrition, lower health costs and fewer climbing and fatigue related injuries, as well as reduced exposure to falls or stoppages.

What does Power Climber bring in terms of safety?

ET. The key words of the wind power industry are safety, reliability and performances. There is a conscious effort on safety during erection as well as during the maintenance of the turbines. Access to the sites is highly regulated. Safety training and personal protection equipment is mandatory.

Power Climber is a key contributor to the safety mix.

Our access solutions, SHERPA service lifts and IBEX climb assist system, as well as solutions for blade and tower access, enable wind turbine maintenance and repair service teams to perform their tasks with increased productivity and safety. The taller the tower, the more critical the need to access the nacelle safely and rapidly, and the more Power Climber access solutions provide answers for that need. n

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RENEWABLE ENERGY

WIND POWER POTENTIAL Will European Union wind power reach the tough renewable targets it has been set for 2020? Christian Kjaer, CEO of the European Wind Energy Association, tells Huw Thomas why and how it just could.

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he European Union has set a binding target of 20 percent of its energy supply to come from wind and other renewable sources by 2020.

In order to achieve this 20 percent energy target, more than one-third of the European electrical demand would have to come from renewables, with wind power expected to deliver 12-14 percent. So how realistic is this target? Christian Kjaer, Chief Executive of the European Wind Energy Association (EWEA) believes that this is possible. “To reach the targets set out by the European union we would have to increase total wind power capacity in Europe by 9.5 gigawatts per year over the next 12 years. Given that we increased wind power capacity by 8.5 gigawatts last year, it’s not an ambitious aspiration,” he explains. It is quite clear that wind energy will take the lion’s share of the energy target that the European Union has set, but the target also calls for hydro resources and biomass to be fully utilised. “I would say it’s certainly achievable to reach 20 percent renewables although whether we meet the projections for biomass remains to be seen. It’s all down to how effectively the members are going to implement renewables – that’s the big question mark,” adds Kjaer.

While it is widely believed that the development of wind energy across Europe is limited by existing power infrastructure Kjaer believes that this is not a hugely limiting factor in regard to the physical grid. “We do have some restrictions if we look at certain regions of Europe. There are regions in Spain where you get 40-50 percent of the electricity coming from wind, so there are certainly limitations on how much you can expand there unless you do something with the internal infrastructure of the grid itself,” he explains.

Challenges Challenges do remain in terms of how the grid is operated. Kjaer believes that it is vital to start putting together plans that allow investors to invest in new infrastructure, as projects take an extended amount of time to get on track. “We certainly need to change operations and look at the way we operate our grid if we want to meet the 2020 renewable target. There is no question that the biggest challenge over the next 10 years is grid infrastructure. The grid is already a limiting factor because of course we don’t have electricity in-

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frastructure offshore. We need to start planning to prevent this becoming a challenge in the future,” says Kjaer. “In short there are limitations, certainly offshore with the lack of grid, but we need to stop and put in place measures that concentrate on companies investing and building in the sector. There are some institutional problems with this, such as a lack of funding, but we simply haven’t invested enough in our infrastructure for decades now and that needs to change if we want to make a dramatic change in the way we get our energy in the future.”

While offshore wind is more expensive due to the sky-high costs of foundations and the grid that needs to be built offshore, it will always provide a larger wind resource. Kjaer hopes that as more economies of scale are introduced to the system and that wind turbines are mass-produced, offshore will be recognised for the stronger resource that it is. “The offshore market in Europe is more or less at the level that we were in 1992 and 1993 onshore, so we haven’t even come close to reaping the benefits and getting the cost reductions down in the same way as onshore in the last 20 years,” he says. “In order to do that we need economies of scale and that’s why it’s so important that you have some companies that are focusing very heavily on this, including in the UK, Germany and Norway, as well as France. But again offshore infrastructure is a much more imminent issue to solve compared to onshore because there aren’t any grids.”

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12,000

120,000

10,000

100,000

8,000

80,000

6,000

60,000

4,000

40,000

2,000

20,000

0

“We simply haven’t invested enough in our infrastructure for decades now and that needs to change if we want to make a dramatic change in the way we get our energy in the future”

2000 2002

2004

2006

2008 2010 2020 2030

CUMULATIVE

OFFSHORE WIND MARKET DEVELOPMENT IN THE EU UP TO 2008 AND EWEA’S SCENARIOS UP TO 2030 (MW)

ANNUAL

Kjaer goes on to explain that the benefit of improving offshore grids is that it is possible to build interconnections between countries that means it would be possible to improve the electricity and tracing of electricity over the borders of Europe, giving consumers the cheapest electricity possible. By planning infrastructure investment it will benefit in terms of maximising the exchange between various member states as well as putting the infrastructure where there are offshore wind resources or weight power resources and improve the functioning of the internal electricity market while meeting targets for renewables. “What we do in terms of offshore infrastructure is extremely important, and here we are in need of faster action than onshore in terms of new infrastructure. We need to figure out structures that allow us to make smart plans in how we build electricity infrastructure offshore at a bilateral or regional country level. It’s very much a similar challenge that we’re standing in front of as when we were building the oil and gas infrastructure. We would like for that planning to be a bit more international in nature, and a bit more coordinated among individual European countries than we saw with oil and gas because it makes sense in terms of electricity markets.”

There is no doubt that grid infrastructure is going to be the most important issue to work on in the next decade, along with the development of the power market and a much higher degree of interconnection between the European member states. While it will be possible to learn something from

0

Cumulative installation Cumulative installation (Ref. scenario)

Annual installation Annual installation (Ref. scenario)

OPERATIONAL OFFSHORE WIND FARMS United Kingdom Belgium

the onshore infrastructure for increasing offshore wind farms, particularly around grid development, Kjaer believes that from an infrastructure perspective we in Europe have never much cared about what happens on the other side of the border, which means it may well be harder to do so this time around. “Don’t repeat what we’ve done onshore because there needs to be cooperation in terms of infrastructure planning,” advises Kjaer. “Let’s not repeat the nationalistic approach that we have taken on for the last 100 years of onshore when we planned grids. Instead it’s even more important that we cooperate as the benefits of offshore are that much higher.”

Denmark

Finland Germany Ireland Netherlands

Power generation As Europe looks to expand both onshore and offshore wind generation capacity it becomes clear that wind alone cannot be responsible for all of our power generation because of the variable nature of wind power. So how exact a proportion of European energy can be realistically generated by wind? Kjaer believes it depends on how big an integrated power system it is possible to construct, so the amount of wind energy put into the system at a European level depends on how integrated the European grid system turns out to be. Of course the bigger the geographical area, the more firm power is generated from wind energy so there is a huge benefit in the geographical dispersion of wind energy. However, in order to get that geographical dispersion it means

Sweden

United Kingdom

39%

590,80 MW

Denmark Netherlands

28% 17%

409,15 MW 246,80 MW

Sweden Belgium

9% 2%

133,30 MW 30,00 MW

Ireland Finland

1% 2%

25,20 MW 24,00 MW

Germany TOTAL

1%

12,00 MW 1,471,33 MW

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WIND BENEFITS

mass, wind, large hydro, small hydro or geothermal, but it requires a complete change in our way of thinking about operating systems and requires that we start utilising that.”

Indeed, Kjaer believes that there are no technical barriers to wind energy producing 25-40 percent of Europe’s electricity. He highlights Denmark as having plans to use wind power alone to generate 50 percent of its electricity by 2020, and of course if that’s possible in a small geographical area like Denmark why shouldn’t it be possible Europe wide. “In reality there are no technical barriers to having half of Europe’s electricity supplied by wind energy, but that will be beyond 2020, when we expect to be on target and see between 14 and 19 percent of our energy coming from here. By 2030 I see wind energy will provide at least a quarter of our electricity and I think there’s still quite a long way to go in terms of increasing wind energies,” explains Kjaer.

Progress

Some of the many benefits associated with wind power include: Economic growth and job creation: In 2008, the value of wind turbines installed in Europe was €11 billion. In 2020, the annual market for wind energy in the EU is expected to reach €17 billion. About 160,000 people in the EU were in wind energy-related employment in 2008. The wind industry could create up to 368,000 new jobs in the EU from 2000 to 2020.

Cleaning up the environment: Europe’s 65 gigawatts (GW) of wind power installed by the end of 2008 will annually avoid 108 million tones of CO2 – the equivalent of taking over 50 million cars off the road, This also translates into an annual CO2 cost of about €2.4 billion.

Energy independence: Europe now imports more than half its energy, a figure that is expected to climb to 70 percent in the next 20 to 30 years. The European wind industry’s installed capacity of 65 GW is enough to provide power for the equivalent of 35 million average EU households. Wind energy allowed EU nations to avoid paying fuel costs of €5.4 billions last year.

that the grid has to have the same sort of dimensions, which is why interconnections are so valuable because a more interconnected grid means that variability becomes irrelevant. “This is why we believe that the infrastructure is so important, and it’s not only about integrating wind energy but also about improving competition in the electricity market.”

Kjaer goes on to say that while no-one is suggesting that wind energy should provide 100 percent of all European Union power, if it is well integrated and utilised it could have a large segment of the electricity market. “If we used the enormous hydro resources that we have in Norway or Sweden for example, which complements wind energy extremely well, I have no doubt that we can have a system based on 100 percent renewable electricity, be it bio-

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In terms of moving forward, Kjaer explains that the key projects currently underway in the European wind energy space are extremely interesting and that the sector is learning a great deal from these developments. He also points to Eastern Europe as an interesting area, with Romania, Bulgaria and Poland in particular getting serious about renewable energy. “The speed at which the conditions have been put in place to attract investors in great,” says Kjaer. “It’s interesting to see how these countries have approached the whole debate about the renewables directive, putting in place measures in terms of grid access and payment frameworks.”

So how does Kjaer envisage the wind energy space progressing in the future as Europe reaches its 2020 deadline? “It’s a truly interesting time,” replies Kjaer, “because we have come from a past in which we actually didn’t need more new electricity generating capacity. We actually had excess capacity until a few years ago, which is no longer the case because we are shutting down old power plants and have to build new ones. What the European Commission is saying is that between now and 2020 we have to build approximately 350,000 megawatts of new electricity generating capacity, which is equal to 50 percent of all capacity that’s currently running in the European Union.”

Kjaer explains that the interesting element over the next 12 years will be seeing where that capacity will come from – where wind will be in relation to its main competitors in terms of new electricity generating capacity. “If we look at investments over the last 10 years, Europe has really been investing in wind power and gas, and I think it will be really interesting to see how wind energy compares in terms of cost with building a new gas fired power plant,” he says. Kjaer sees three elements that are very much in wind energy’s favour.

Firstly is that it is quicker to build a wind farm than a new coal or gas fired power plant. Second is the fact that from 2013 coal and gas power plants will have to pay for every ton of CO2 that is emitted. And third is that with a coal or gas fired plant it is vital to take into account future fuel prices in order to understand the cost of operations. “One of the main benefits of wind power is that the cost of carbon and fuel prices will be zero over the next 20 years of operation, whereas you can’t guarantee that for coal and gas fired plants, you just don’t know what fuel and carbon prices will be.

“The competition over the next 12 years will be who gets to build those 350,000 megawatts that we need in the European Union and it will be between coal, gas and wind energy and with the current outlook for fuel prices, wind energy looks like an increasingly attractive investment.” n

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EXECUTIVE INTERVIEW

When green goes global Claus Myllerup analyses the challenges facing energy producers in an increasingly energy hungry world.

What’s changed in the power and energy industry in terms of renewable energy sources?

Claus Myllerup. A lot of things have changed, but one of the most important aspects is the scale of production. The technology concerning renewable energy is still a fairly young technology if you compare it to say the oil and gas industry. Twenty years of development is not a long time, and even less when you consider the rapid changes in market structure that have happened over the last few years.

Some countries have great experience with wind power, but others have gone directly from small scale production to major energy conglomerates setting up entire wind and solar farms.

tions. Technologically this means that the road from idea to construction is much shorter and there is less time to correct the inevitable teething troubles. This calls for a lot of troubleshooting later on. Economically, the new market structure means that there are huge sums of money invested in these products, both from a supplier point of view and an energy producer point of view. This is a good thing. This means that both suppliers and producers have highly skilled technicians working together to perfect this new technology. But it also means that there is so much at stake for both parties when a piece of machinery breaks down, it may be impossible to work out a solution without an independent technical expert assessment.

How is mass-scale production of renewable energy a technical challenge?

CM. Let’s use the wind power industry as an example. A wind turbine is an extremely complex piece of machinery. Getting the full return on investment from it means understanding its individual elements, but the truly crucial part is understanding how these parts operate together. The energy produced by a wind turbine is less stable than that produced by a regular power plant. When it transfers to the grid, the grid reacts by sending small torque fluctuations back into the wind turbine, which affects the shaft speed at the generator and consequently the power output, and so on.

These are the factors that influence the operability of a single turbine; add to that the factors of setting up 50 of them, as is the case with the new wind farms. Here you also have to consider the variations in load; some turbines may experience more load than others due to their positions. And wind turbines are being considered for very arduous locations with complex sea bed challenges or extreme weather conditions.

Where do we go from here?

CM. I think it’s important to remember that despite the technical challenges, mass production of renewable energy is in fact taking innovation to a whole new level. We are seeing amazing progress in renewable energy solutions that would otherwise have taken decades to reach. New challenges require new skills, and the change in market structure has strengthened the collaboration between universities and companies in terms of research.

We also see an increased exchange of knowledge and experience between industries and across disciplines.

There is a strong political focus on decreasing the impact energy consumption has on our planet. At the same time, we have a responsibility to expand the accessibility of energy to give emerging economies a chance to develop their industries and institutions. The only way of combining these two goals is through continuous technological and economical investment in renewable energy solutions. n

And how does this affect the market structure?

CM. The increase in demand has naturally led to an increase in supply, with new manufacturers pushing the competition for quick and efficient solu-

Claus M. Myllerup is Managing Director of Lloyd’s Register ODS, technical investigation and analysis. With 20 years of experience, Myllerup has served as Chairman for the American Society of Mechanical Engineers’ International Gas Turbine Institute Conference and is an external lecturer at the Technical University of Denmark. He has a PhD in mechanical engineering.

“We are seeing amazing progress in renewable energy solutions that would otherwise have taken decades to reach”

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CORPORATE ENERGY

HELPING COMPANIES

INCREASE THEIR ENERGY EFFICIENCY Kanat Emiroglu, recently appointed Managing Director of British Gas Business, tells Power & Energy how volatile market conditions have transformed the way European companies buy energy.

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In your previous role you were Director of the SME division at British Gas Business. Was this role good preparation for the role of Managing Director?

Kanat Emiroglu. Small and medium-sized enterprises are a big part of British Gas business; they’re two thirds of our customers and more than half of our revenue and profits. So in terms of business dynamics I was very familiar with the business and its strategic, operational issues.

But on the other side it’s a little bit different when the buck stops with you. There’s more senior management interaction and maybe a little bit more political awareness is needed. So there are quite a few new things coming to the agenda.

How will you be working with business customers to help them increase their energy efficiency?

KE. We have six vision statements. The most important one is that we provide complete energy solutions. What we mean by that is an underlying belief that five or 10 years from now nobody in the business world is going to buy energy only as a commodity because it’s such a volatile expensive commodity that influences businesses’ competitive advantage in their own markets. It’s going to have to be managed.

We know from our own data that companies that use energy solutions and actually think about energy efficiency over time and with a little bit of profitable investment can reduce their energy bills by 30 percent, through some behavioural changes and some small investment.

We can give plenty of advice on energy saving stuff such as how to use their heater, their freezer, their lighting and what to do about peak time. But advice is cheap. So what else can they do? There are a lot of new technologies in the energy solutions area that allow companies to track and monitor their energy usage. If companies get smarter they can, if they have multiple sites across the country, learn which site are the most energy efficient and compare that to the worst ones.

How have volatile energy prices and government regulation affected companies?

KE. For almost a generation, since the mid-1970s, energy has been relatively flat priced, and in general low priced, and so not a volatile commodity. This was partly because the UK was surrounded by energy sources in terms of oil and gas. The North Sea finds helped them; and the market here was relatively stable, which is why a lot of companies didn’t spend time on this issue as a cost item. Either it was predictable or it was small.

But that has changed – since 2004 we have been an importing country. For gas, we depend on quite far away places and so the price is highly volatile. You can pick two gas prices in the UK that are 10 times different on a daily basis, so companies need to manage their energy much better.

The second aspect affecting companies is regulation. Both governments and the public have become much more aware of what the use of excessive energy does to our climate and to our energy security. There’s a plethora of regulations, trading schemes and penalties or incentives that businesses need to be aware of. If they operate in a vacuum and just ignore the energy area, especially if they are energy intensive, they could be hurt.

A recent survey by British Gas found that 54 percent of companies admit to delaying paying energy bills because of the economic downturn. How big a problem is this?

KE. Th is is a big problem in the industry: we’re writing off a huge amount of money that is not paid to us as a debt charge in our accounts. We’re trying to reduce that, because for us that’s money taken out of our existing customers, so issue number one is that it’s costly. Issue number two is that people who do pay their bills pay them a bit later. So in addition to the recession we have a credit crunch, which means that liquidity is lower and that causes us to use more capital. We will eventually get that money but we do need to use more capital and the amount we use in today’s markets is charged at higher rates.

We have introduced something called SAVE (Small business Advice and Value Expertise) because we thought that instead of robotically collecting debt from SMEs we would listen to them and understand what cash flow problems they are facing and develop whatever we can to alleviate those problems to fi nd win/win solutions.

Th is also involves giving advice on energy consumption reduction and giving out energy saver packs to inspire them to use less energy.

There’s an online assessment tool called energy savings report, which goes into the specifics of that business and makes recommendations. We give legal advice and access to lawyers for SMEs that are not aware of some of their rights. There is a government program called the Prompt Payment Initiative that helps SMEs get paid by their own suppliers. Finally, we write payment plans: instead of insisting that somebody pays 100 percent of the money on day zero, we try to spread it over time for businesses with reasonable credit ratings, so that we don’t have to squeeze them too much.

“Both governments and the public have become much more aware of what the use of excessive energy does to our climate and to our energy security” How much money is British Gas Business losing through non-payment of energy bills?

KE. Th is would be competitive information so I can’t give you the number, but it’s quite high. It’s high enough to be one of the top three things in my management team’s agenda throughout the year – it’s always in the top three. Th is is especially the case for SMEs, and less of an issue in the corporate world where credit ratings are more followed and bills are paid much quicker. In the SME space we see quite a lot of write-offs.

How does the service you provide to large corporate companies compare to that provided to SME customers?

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KE. If you measure by sites, we have 900,000 SMEs and 150,000 corporate sites. Each SME has 1.2 sites. Corporates have roughly 10 to 15 sites.

Some of them have 5-10,000 sites with us. Some have only two or three so it’s quite a wide portfolio and we serve them quite differently as a result.

If you are a residential customer who calls British Gas you get put through to a call centre where a random customer service agent will answer the call. In the SME sector you have an account manager, so when you call it will be your account manager you deal with. He picks up the call 50 percent of the time otherwise its one of his nine team colleagues. In the corporate world you go up one level again and you are served by hubs.

These are not just groups of customer service agents in a team but also other multi-disciplinary agents sitting with the customer service agents, including a debt expert, a billing expert, a technology expert and an energy solutions expert. The object being that we want to get to 100 percent fi rst time resolution for corporate clients. In the SME world we’re talking to a business owner, an entrepreneur. They have much less time, they value their time more in terms of pounds per hour, they ask professional questions and we need to train our people up to that standard. In the corporate world you are usually talking to a buyer whose job it is to buy energy so again it goes up by one notch.

How competitive is the UK energy market currently and how challenging is it to retain customers in this environment?

KE. In the corporate world you have to bid for customers almost every year now. There used to be two or three year deals but because of the capital allocation and difficult trading environment around energy, most companies are now offering just one year deals and we have reduced our terms also on average from two to probably around 1.6. So every year there’s a bidding for that. It’s quite competitive.

In the SME market also, prices for business energy change every day depending on what the market curve does. Last year, which was an especially volatile year for energy, the wholesale curve went up or down on average by four percent every week. A weekly price change is much higher than our margins, so you have to get pricing absolutely right. And the competition is to the last percentage point.

It’s also important for companies to know when to buy the energy. If you were buying it, for instance, in the summer of 2008 when the prices had reached peak levels and you signed a two or three year contract, then you would be using energy at a quite expensive time. It’s unfortunate to have bought at that peak.

What are the biggest challenges you will be tackling in the year ahead?

KE. It is a challenge to deal with the volatility and the debt in this environment. But I wouldn’t call it unmanageable. I think the challenge for me is more to continue to grow our business, British Gas Business is a very successful part of Centrica, our parent company. It has the highest employer engagement results and it has grown its customer satisfaction every year for the last four years. It has grown its revenues and its profits and the number of sites has grown.

British Gas Business has also made successful acquisitions and integrated them. One thing that I personally want to crack is achieving excellence in serving multisites: for customers like a big supermarket chain, to be able to serve them in a way they couldn’t imagine before in energy. We have already better customer satisfaction in multi-sites and we’re getting even more specialised in other areas and getting the right technologies.

How do you serve companies with multi-sites currently?

KE. Imagine yourself as the Kanat Emiroglu is Managing Director of buyer of energy in a company British Gas Business. like Boots or McDonalds. We come to you and we say we are going to install smart meters in your 5000 sites across the UK. And that will also include sub-meters that measure different parts of your store using different parts of energy. Th ree months on we can show you charts showing which of your 5000 sites use energy the most efficiently.

Secondly, we can show you some insights into how you do heating, freezing or lighting in energy use versus competitors in your industry.

Th irdly, we can show you peak versus base usage and that can really influence the way you use energy. And fourthly, we can talk about clusters you have where you could produce your own energy such as micro CHP systems. Our aim is to become 21st century energy sellers.

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INDUSTRY INSIGHT

By Hans-Joachim Bender

TRENDS IN SOLAR MODULE PRODUCTION

I

n 2005, Robert Bürkle’s research and development team began to examine the lamination process and the materials used in solar module production. The company was aware that a multi-opening lamination line would be the way to go for high-volume solar module production, in order to meet the high capacity requirements and the need for reduced production cost per module.

Bürkle had the experience and know-how necessary to build a highvolume multi-opening lamination line for solar module encapsulation due to its experience in building multi-opening lamination lines for other industries. In 2007, after two years of research and development, the company presented the Ypsator at the photovoltaic show in Milan.

With this lamination line, high volume production can be realised on a small footprint. Its multi-opening lamination systems can be adjusted to customers’ capacity requirements by changing the number of

openings. Using steel heating platens in combination with thermal oil heating systems, Bürkle lamination lines ensure a homogeneous temperature distribution over the entire useful lamination area. Depending on their size, two, three or four solar modules can be laminated per opening, or up to 40 modules per cycle can be processed with a 10-opening Ypsator line.

Lamination lines Bürkle has supplied and commissioned 20 multi-opening lamination lines since the market launch at the end of 2007. This corresponds to the capacity of more than 80 traditional single-opening laminators.

In addition to the Ypsator multi-opening lamination line, Bürkle also offers the e.a.sy-Lam single-opening lamination line for module encapsulation. Since the beginning of 2008, nearly 20 lines have been supplied to solar module manufacturers. Bürkle has supplied laminating lines for crystalline cell solar modules and thin fi lm (glass-glass) solar modules to module manufacturers in Europe, North America and Asia.

New processes The company has also developed the 3-Step Process, which revolutionised the lamination process. It permits a higher production capacity with considerably reduced cycle times, as well as the production of new materials due to the high flexibility of the concept and the selection of parameters.

The 3-Step Process is available for crystalline solar cell modules as well as thin fi lm (glass-glass) solar modules. For crystalline solar modules, two vacuum laminators are arranged after each other, followed by a cooling unit. For glass-glass thin fi lm solar modules, the fi rst step is a vacuum laminator followed by a hydraulic hot press and a cooling press.

In the hydraulic hot press, the glass-glass modules are heated under pressure from both sides. In the cooling press, the modules are cooled down under pressure from both sides.

Due to the uniform heating and cooling from both sides, the internal stress of the laminated modules is reduced, which minimizes glass breakage. The symmetric heating in the second step provides laminated solar modules with uniform and high gel-content. The modules can be immediately processed, due to the uniform temperature of the solar module after cooling.

Additional products

Hans-Joachim Bender is Managing Director, Managing Partner and Speaker of the Management Board for Robert Bürkle GmbH, Freudenstadt. Bender studied mechanical engineering and was Factory Manager of Degussa (now called Evonik) and Managing Director of Badische Maschinenfabrik Durlach GmbH (BMD) before coming to Bürkle. In October 2009 he was awarded the enterprise medal of Baden-Württemberg.

The German manufacturer has enlarged its production portfolio and offers transport and handling equipment and intermediate storage units/buffer racks, as well as complete lines for the so-called back-end of the module production for thin-fi lm technology. Th is comprises crucial components from its own development and production, such as foil uncoiling and foil lay-up, pairing and the automatic setting of junction boxes – just to name a few components.

For more information, please visit www.buerkle-gmbh.com

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POWER GENERATION P&Eeu1:4August

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CONSTRUCTION

The outlook for power plant construction in a range of energy sectors. By Stacey Sheppard ith the high level of media prominence given to the United Nations Climate Change Conference, all eyes are now firmly focused on energy policy. The need to balance the security of our energy future with the growing need for more efficient, sustainable and environmentally friendly energy sources has never been greater.

A more diverse energy supply – one consisting of fossil fuels, as well as biofuels, wind, solar and nuclear – has been heralded as the answer to both energy security and environmental issues. But whatever energy path we decide to follow, the fact remains that demand will soon outstrip supply. We need to make the most of traditional fossil fuels while investing in cutting edge research to develop sustainable sources. Another priority is the need to reduce our dependence on foreign sources of energy, such as imported oil.

One way to achieve this is to build new nuclear plants. Although new nuclear is the subject of some controversy due to lingering concerns about the dis-

W

posal of radioactive waste, many governments are pushing ahead regardless.

In November, the British government approved 10 new sites for nuclear power stations in England and Wales, calling nuclear power a “proven and reliable” energy source that will help the UK reduce its carbon emissions and become more energy-independent. Only a year after the government lifted a moratorium on the building of new nuclear plants, Energy Secretary Ed Miliband called nuclear one of the “trinity” of future fuel options, along with renewables and clean coal.

The new construction may be essential to replace Britain’s aging nuclear infrastructure, with some existing stations needing to be decommissioned as early as 2030, leading to concerns about potential energy shortages.

Construction is due to start in 2012 on two new nuclear reactors at Sizewell on the Suffolk coast. Following the acquisition of British Energy, French power giant EDF Energy plans to build to reactors generating 1600 MW, which together with another plant in Somerset, could supply 13 percent of the country's electricity.

The region’s business leaders are keen to ensure that local companies benefit from the employment and other opportunities offered by the multibillion-pound development. Work on the existing Sizewell B power station, which was commissioned and built between 1987 and 1995, involved 2000 suppliers, half of which were from East Anglia.

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NUCLEAR POWER PLANTS IN EUROPE

from the new administration are enhancing the downward trend in generating plant development costs, uncovering opportunities in some fuel sources and sounding alarm IN OPERATION UNDER CONSTRUCTION Country Number Net capacity Number Net capacity bells for others.

MWe MWe According to the Energy Information Administration’s (EIA) Annual Energy Outlook 2009, Belgium 7 5824 electricity demand is set to increase by 26 percent from Bulgaria 2 1906 2 1906 2007 to 2030, or by an average of 1.0 percent per year.

Czech Repuplic 6 3634 Estimates also show that coal will continue to provide the Finland 4 2696 1 1600 largest share of energy for US electricity generation, with France 59 63,260 1 1600 only a modest decrease from 49 percent in 2007 to 47 perGermany 17 20,470 cent in 2030. As of June 2009, 36 new coal plants are perHungary 4 1859 mitted, under construction or near construction in the Lithuania 1 1185 US, with 47 more announced.

Netherlands 1 482 Concerns about greenhouse gas emissions are predictRomania 2 1300 ed to have little effect on construction of new capacity fuTotal 103 102,616 4 5,106 elled by natural gas, the generation of which is set to increase to 21 percent in 2027, before dropping to 20 percent in 2030 – about the same level as in 2007.

EIA’s outlook also sees the generation from nuclear power in the US increasing by 13 percent from 2007 to 2030, as additional units and upgrades at existing units will increase overall capacity and generation. The nuclear share of total generation will decrease, however, from 19 percent in 2007 to 18 percent in 2030.

Renewable generation on the other hand is predicted to increase by more than 100 percent from 2007 to 2030, by which time it will account for 14 percent of total generation.

As electricity demand grows and 30 GW of existing capacity is retired, 259 GW of new generating capacity will be needed between 2007 and 2030. If we are to believe EIA’s predictions then the majority of this new capacity will be in the form of renewable generation and coal-fired power plants.

However, it is difficult to attach too much weight to these predictions, The UK is not the only European country to see new nuclear construcparticularly regarding the development of new coal-fired power plants. A retion. As of September 2009 there is a total of 196 nuclear power plant units cent report by the National Energy Technology Laboratory (NETL) entitled with an installed electric net capacity of 169,711 MW in operation in Europe Tracking New Coal-Fired Power Plants, states that experience has shown that and 17 units with 14,710 MW were under construction in six countries. In public announcements of new coal-fired power plant developments do not 2008, France held the top position in terms of electricity generated by nuclear provide an accurate representation of actual new operating power plants. It is energy, with a share of 76.2 percent, followed by Lithuania with 72.9 percent, not unusual for projects that have been announced to then be cancelled bethe Slovakian Republic with 54.4 percent, Belgium with 53.8 percent and fore or during the permitting stage.

Sweden with 42 percent.

Figures from NETL state that actual plant capacity, commissioned since Coal power generation is also on the increase in Europe. In 2008, Italy’s 2000, has been far less than new capacity announced; the year 2002 report of major electricity producer, Enel, announced that it would convert its massive announcements reflected a schedule of over 36,000 MW to be installed by power plant from oil to coal and increase the percentage of its power gener2007, whereas only 4500MW (12 percent) were achieved. ated by coal to 50 percent. Italy’s total reliance on coal is predicted to rise from According to the Earth Policy Institute, since the beginning of 2007, 95 14 percent to 33 percent over the next five years. European countries are exproposed coal-fired power plants have been cancelled or postponed in the pected to put into operation about 50 coal-fired plants over the same period, United States – 59 in 2007, 24 in 2008, and at least 12 in the first three months which are expected to be in use for the next five decades. of 2009. This covers nearly half of the 200 or so US coal-fired power plants New directions that have been proposed for construction since 2000.

Across the ocean, the North American power sector also finds itself at a There are many reasons why delays and cancellations occur. Firstly the crossroads. The impact of the financial recession and a vastly greener agenda cost of building a new power plant is astronomical. According to Cambridge

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Energy Research Associates (CERA) the costs of building new power plants have more than doubled since 2000. The latest IHS CERA Power Capital Costs Index (PCCI) shows that the cost of new power plant construction in North America has risen 130 percent from 2000 to 2008. During this period, cost increases could be partly explained by rising prices for commodities such as steel, nickel and copper, as well as supply issues and longer delivery times.

Issues arose due to the lack of skilled engineers in the workforce as older workers retired and were not replaced. This resulted in shortages in plant design teams and delays to scheduled construction. This further increased the likelihood of cancellations, which are more prevalent as prospects of fulfilling all projects in the queue become impractical.

“Western Europe generates about 22 percent of the total world demand for hydroelectricity�

The NETL points out that delays and cancellations have also been attributed to regulatory uncertainty regarding climate change. There are hopes that the Copenhagen Climate Change Conference in December will help clear up some concerns surrounding environmental regulations, but this is by no means certain. Since the US went into recession, the cost of developing power plants has declined somewhat, so many of the obstacles that stood in the way of new construction have now been, creating new opportunities for increases in capacity.

Renewables Consumption of hydroelectricity and other renewable energy sources combined is expected to be between 37 and 47 quadrillion BTU in 2010.

Renewable energy sources are projected to account for nine percent of the total world energy consumption in 2010. Hydroelectricity, while remaining a minor factor in terms of world energy consumption, is important regionally.

The consumption of renewables in the US is expected to grow more slowly than the rest of the world, at two percent per year over the period 1990-2010, with most of this growth coming from renewable sources other than hydroelectricity.

In Canada, nearly two-thirds of the homes in the province of Quebec are run entirely on electricity, most of which is supplied by hydropower.

The provincial utility, Hydro Quebec, is the sec-

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ond largest provider of electricity in Canada, with a generating capacity of 27 GW. Western Europe generates about 22 percent of the total world demand for hydroelectricity, although most practical hydroelectric resources have already been exploited there, and little further development is expected. France, Norway and Sweden account for more than half of the total hydroelectricity consumption in the region. Demand for renewable energy in Western Europe is expected to grow to 7.6 quadrillion BTU by 2015, an increase of more than 1.8 percent per year.

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EXECUTIVE INTERVIEW

The power game Brad Peterson explains how new behaviours create an effective performance culture.

What are the asset management challenges facing companies within the utilities sector today?

Brad Peterson. The biggest drivers of change are redeveloping our distribution grid, the public demand and legislation supporting green energy, and the inevitable inflation of the US dollar. Once we come out of the economic downturn, our generating capacity and grid performance will once again take centre stage. Grid failures will have the public agitating for network stability and flexibility. Carbon credit trading will change the face of energy consumption within the next 10 years. Some of our heaviest electricity consuming industries will move offshore as countries not participating in the accord will take up the price of conforming to carbon reduction. This in turn will take us to a point of reality; whether keeping our job base is more important than the concerns over nuclear safety and nuclear waste storage.

We will continue to see a move towards innovation in energy, spurred by the decline of the US dollar due to our excess spending and fiscal irresponsibility. It is likely that gasoline will be US$10-20 per gallon and energy efficiency will become a serious matter for homes, business, industry and transportation as liquid fuels rise in price. Being prepared for changes in price, fuel, taxation and regulation will be the ultimate challenge. Energy leadership often foresees new trends, but turning the ship to face the new waves is one culture change too far.

How can SAMI help utilities face future dislocations?

BP. SAMI is in the business of changing the performance culture of organisations. We bring a set of very specialised tools to create plans for the future, engage the workforce to design and implement the changes, and to measure the results, all within a two-year window. Our Ascend program encompasses a unique model, process and tools that embed the behavioural change necessary to guarantee consistent and sustainable success. We understand what’s necessary to bring the best possible results within an organisation; the right practices, behaviours and managing system. Our methods work 100 percent of the time.

By utilising our unique Ascend model, process and tools and our unmatched depth of experience, the result is consistent and sustainable success.

What makes SAMI’s methods and models different from other firms?

BP. SAMI has had a development pattern that’s very different than other firms.

I come from a background of hard sciences and behavioural psychology, so our building blocks include a deep knowledge of what practices work on an every-

day basis and how to capture human nature for changing the work culture.

SAMI’s methodology has been time tested and utilised in many industries, always achieving the results promised.

How do you see the area of asset management developing in the energy sector in the future?

BP. The greatest challenge to power companies in the future will be change and flexibility, as well as a dramatically inflated dollar, great restrictions and costs associated with fossil fuels and CO2 taxes and disruption in demand as energy costs drive all segments towards conservation. Massive investments in transmission infrastructure, likely without adequate regulatory guarantees of recovery and loss of base load due to green energy sources and required cycling, will also create challenges.

The winners will be those companies that can adapt – changing direction and skills in years rather than decades. They will be the companies who understand that behaviours drive a culture. By empowering their workforce with methods to improve their work lives, they can adapt to their new culture faster than the competition. The winners will not only need to change, but to do so at a faster pace. Flexibility will be the new mantra.

S. Bradley Peterson is SAMI’s founder. He keynotes conferences on asset management around the globe and is sought after as a speaker and advisor to companies looking to improve results. Peterson is a visionary whose combination of industry expertise and behavioural psychology enables clients to achieve a performance culture.

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ASK THE EXPERT

Archiving in the new ‘smart’ world of utilities Answering critical questions for the smart metering challenge.

By Adrian Butcher

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f there’s one word that’s creating a ‘buzz’ of excitement and challenge in utilities throughout the developed world, it’s ‘smart’, the next transformational step for two core components of the utilities business model – the grid and metering.

Smart metering and the smart grid are both recognised as having profound implications for the industry, in terms of energy efficiency, customer service (marketing and customer acquisition) and cross-border energy management and trading – these topics are widely and imaginatively discussed throughout the industry.

What seems less discussed is the topic of what to do with the sheer volume of data generated, how to place it in the hands of all who need it and how to manage the exponential change in the volumes of historic data. At Open Text, we see some critical questions emerging and believe electronic archiving will provide some of the key answers – and crucially, that the history of our experience demonstrates that.

So, to those questions.

How can we cost-effectively maintain records for the hugely expanded level or scale of meter readings? Where end customers are involved, how and in what media will we choose to present metering data? If on the web, how can we assure performant, controlled access to relevant data in a customer service, or self-service, environment? We must also maintain such records to support the broader relationship with the customer and make them accessible in the broader customer information context. If we provide such access to customers, how can we assure security of data, and of systems? And if all this means investing in new systems, do we still have the cost burden of legacy systems, for the historic data they hold?

Let’s see how an enterprise archive might address such questions. Firstly, scale is one of the ‘specialist subjects’ of the electronic archive, with proven capability to handle truly huge data volumes. It can also do so ‘intelligently’, optimising the balance between performance of access and storage costs, according to your business policies, but without discrete day-to-day activity by your organisation.

Secondly, it’s possible to ‘render’ data from pure data sources in customer and employee-friendly formats. Some utilities have already made this capability their strategy for ebilling, with reduced costs and better customer service. So for

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them, the presentation of meter reading information may represent extended leverage of an existing platform, not a completely new environment.

Of course, in a customer service environment, such data needs to be accessed rapidly, yet securely. So thirdly, by placing information in the archive, access permission can be carefully controlled and access is made to the archive, not to the metering systems that feed it – ensuring electronic security for the metering environment. Customers and customer advisors see exactly the same information, so discussions about it are easier.

Fourthly, where customer meter readings are concerned, they may need to be made available in the broader customer context of bills, enquiries (through whatever channel) and special package contracts – even complaints.

“Smart metering and the smart grid are both recognised as having profound implications for the industry” Finally, the archive can be used to hold and make accessible data from legacy systems, delivering cost savings by allowing such systems to be decommissioned.

Smart metering represents a bold step into the future.

For utilities, which must manage risks as intensively as assets, it may be comforting that utility companies across Europe have been using Open Text archiving for years, for e-billing, SAP data archiving, customer relationship management, legacy systems decommissioning and more – supporting multi-channel customer relations in particular. So for our existing customers, smart metering may present opportunities to further leverage existing data.

We believe the smart new world of utilities will come not just to benefit from electronic archiving but to depend upon it, and we look forward to ever more dialogue with likeminded managers in this transforming industry. n Adrian Butcher is Director, Value Engineering, EMEA for Open Text Corporation. With management experience in a broad range of industries and processes, including many of relevance to utilities, Butcher leads a function dedicated to helping customers explore, discover and quantify the business value of Open Text solutions in supporting core business processes, reducing cost and supporting corporate compliance obligations.

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REGIONAL FOCUS 124

German efficiency A champion of greener, cleaner fuel – Germany is the leader in Europe’s renewable race.

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ocated in Central Europe, Germany holds 82 million inhabitants and is the largest populated state within the European Union. A country known for its environmental consciousness, it is committed to the Kyoto protocol and other green treaties to support low emission standards, recycling and the use of renewable energy. The government strongly endorses such environmental principles with a large number of emission reducing initiatives, and as a result, the overall emissions of the country are falling.

Since 1990, Germany has reduced its greenhouse gas emissions by almost 20 percent, and has nearly achieved the targets outlined in the Kyoto protocol of a 21 percent reduction by 2012. The country claimed second place in the global Climate Change Performance Index in 2008, which it has done through an increase in energy and resource efficiency, whilst simultaneously developing renewable energies and raw material; making green both the supply and demand requirements upon energy in the state.

However, fossil fuels still remain the backbone of its energy infrastructure; petroleum takes a 36 percent share in the overall energy intake, followed closely by natural gas and coal. Nuclear power is gradually being phased out following a ‘nuclear consensus’ between the government and electric utilities in 2002.

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Green focus Germany has pledged that almost a third of its energy will come from green sources by 2020. At a press conference in Berlin on February 12, 2009, Matthias Machnig, a senior official in Germany’s Environment Ministry, advised that the state will generate 30 percent of energy from renewables, maintaining its position as head of the EU in renewable sources.

This new target places it on schedule for reaching its longterm aim of supplying half of its energy demand with wind, sun and other sources of natural energy by 2050.

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REGIONAL FOCUS 125 Green city guide: Freiburg im Breisgau A stronghold for the German Green Party, Freiburg has been implementing and extending carbon-reducing initiatives since the early 1970s.

Cycle lanes have been established, the city’s train network improved and the entire city centre turned into a pedestrian zone. In 1991, a flat-rate Regional Environment Card was launched, offering unlimited use of public transport in the city.

Freiburg is mostly recognised as being Germany’s ‘Solar City’, following its heavy investments in renewables. Currently, almost five percent of the city’s electricity comes from sustainable energy sources.

German energy statistics Coal production 28,018,000 tons Electric power consumption 579,979,000,000 kWh Nuclear electricity generation 162.3 terawatt-hours Oil imports 2,600,000 barrels per day Freiburg, Germany

Stats taken from http://www.nationmaster.com/country/gm-germany/ene-energy

Green city guide: Berlin The capital city, Berlin boasts a population of 3.4 million, and as the centre of the Berlin-Brandenburg metropolitan area, is leading the way with green initiatives. When travelling through the city, cars must meet strict emission standards, which are proposed to become even more stringent in 2010. Only cars displaying green badges will be permitted in these central areas. Berlin’s public transport system, Berliner Verkehrsbetriebe, or BVG as it’s known, is highly efficient.

For a green stay when in Berlin, head to Martim Hotel Berlin and Maritim Prorate Hotel. The Maritim Hotel chain has extensive policies focusing on the environment and energy conservation, ensuring all heating to be done on energy friendly natural gas or district heating. In certain places, the hotels produce their own energy via thermal power stations or solar collectors.

The seat of the German Parliament, the Bundestag, is located in Berlin. A synthesis of pre-and postwar architecture, the historic dome most recently went green, and now runs completely on renewable energy from wind, water and solar sources.

Berliner Verkehrsbetriebe (BVG)

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INTERNATIONAL EVENTS 126 A round-up of international conferences and events in the energy sector.

Las Vegas

Prague

Sofia

Beijing

World Future Energy Summit

PV Power Plants 2010

Jan. 18 – Jan. 21, 2010 Abu Dhabi, United Arab Emirates

Jan. 25 – Jan. 26, 2010 Prague, Czech Republic

www.worldfutureenergysummit.com

www.solarpraxis.de

Solar Power Generation USA

ENERGY INDABA 2010

Jan. 20 – Jan. 21, 2010 Las Vegas, US

Feb. 24 – Feb. 26, 2010 Sandton, South Africa

www.neforum.cn

www.energyafricaexpo.com

4th China New Energy International Forum & Expo

6th International Congress on Energy Efficiency and Renewable Energy Sources for South East Europe

Jan. 20 – Jan. 22, 2010 Beijing, China www.neforum.cn

Apr. 14 – Apr. 16, 2010 Sofia, Bulgaria www.viaexpo.com

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PHOTO FINISH 128

The ďŹ rst racing car made out of carrots, soy, potatoes and jute at the Valencia Street Circuit in Valencia, Spain.

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