Setting the standard

Inge Pierre tells Power & Energy of the importance of a universal standards-based market and its importance for the success of smart grid.

“The first step towards having security of supply is to have a liberalized market and let the market work”
-Inge Pierre

"Money doesn't make the world go 'round, standards do" - that's Inge Pierre's philosophy. As Head of European Affairs at Svensk Energi-Swedenergy, reasserting the importance of standards is his priority, especially the reoccurrence of the problem of standards often being considered as 'boring'. There is no understanding that they can be something good, even if they provide benefits to the wider public; he cites the example of universal plug appliances across European countries, and the convenience that is enjoyed. 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, different 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 perhaps of integrated state owned, monopoly power generation and transmission planning is completely disappearing. The challenges now are to ensure security of supply; Pierre's belief is that given the liberalized market, security of supply comes more or less naturally. "When we work with your electric, the first step towards having security of supply is to have a liberalized market and let the market work. That's the number one priority.

"I deal with gas supply; we have had some gas crisis' 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 at if you have a market that works, that's the best way to get security of 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 liberalized and works incredibly well, in other areas this is not the case. Pierre supports the European Commission's desire for a Europe-wide liberalized 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 coordinating, 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 the standards bodies to get it right or on the industry bodies to more quickly adopt standards quicker? 

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, 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. Managing successfully 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 fix.

"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.

This 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 would change 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 improvement during their 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 have a seen a major change from coal-fired power plants to gas-fired power plants and already that has reduced CO2 emissions down to half, sulfur 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, but 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 ago.

"Public awareness adds in a way so it's easier for people to become aware of the changes but you still have to remember that we don't run to make a profit, and 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 there are many reasons for improving the network, liberalization 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 in the past when countries more or less fixed their own supply of electricity by themselves, the need for interconnections was not that big. Now we are seeing the need for them, especially with the edition 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 of electricity remains normal.

"People don't turn off their lights because it's not a windy day - people want to have their lights on even if it's not a windy day, so that puts more pressure to have a network that can cope with this variation of the production that we have not seen in the past so much. 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 fill your car up with gasoline and use your credit card. We have to have the same system for electrical cars.

Pierre believes Moving towards a common platform is essential. He acknowledges that 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, 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 urge people to have these peak savings. In most cases, you don't really have those incentives, and that's the challenge, to get the consumers aware of the possibilities and the potential of smart grid.

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