Network Operator Business Drivers Creating need for Innovation, Technology Development and Deployment

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1 Network Operator Business Drivers Creating need for Innovation, Technology Development and Deployment Dr. Joachim Schneider, Board Member of RWE Energy CIRED 2009 Prague, 8th of June, 2009

2 The world of a grid operator is turning smart e-energy Market Place SmartMeter Production Virtual Power Plant MUC SmartGrids Trading Transmission and Distribution of Electricity, Gas, Heat Transit SmartHome MUC = Multi Utility Communication ICT = Information- and Communicationtechnology ICT Consumption Storage e-mobility

3 To become smart, the grid operator has to deal with several challenges with deep impact on his business Challenges for DSO Activity Objective Demography Structural Change Consumption Decentralized Energy Injection Age Structure Regulator Grid Deployment New Technology Regulatory Scope Data-/Energymanagement Specific grid concepts to handle the different demands using modern and innovative technology and developments under attractive financial constraints

4 Especially the increasing decentralized energy injection creates local issues Example: Decentralized Energy Injektion MW > Local phenomenon because of different grades of primary energy ressources > Primary energy ressources like wind are far away from the load centres MW p Origin: Pfalzwerke and juwi 2007 > Volatile injection causes punctual and temporary bottlenecks in the grid > Production is not correlated with the load Technical problems like voltage level, reactive power or capacity shortages have to be solved

5 The changing consumer s behaviour caused by ICT beats conventional grid planning and operation Wind Today 10 kv 10 kv Wind Tomorrow 10 kv 10 kv Electritity Gas ICT > Consumption depends on the price for electricity > Synchronism of consumption increases because of ICT 0,4 kv 0,4 kv > More and more power electronics are installed PV PV HP > Gas is compensated by electricity via heat pumps HP µchp > Electrical cars build a big part of the load demand PV µchp PV G4V Technical problems like voltage quality, missing short circuit power and capacity shortages have to be solved

6 Regulatory constraints avert necessary investments in development and deployment > The grid can deal with today s demands Conventional assets are available to handle the technical problems so far. > Future developments according to the consumer s behaviour or the enormous increase of decentralized energy injection will create a necessity of investment not only in the transmission but also in the distribution system. > In general, investments in strengthening the grid using innovative assets are more expensive than using conventional ones. > The pressure of using innovative assets is forced by government, speaking about the ICT, or asset producer, building only innovative assets in the future. > The preparation for the future grid needs research and development. But: The established incentive regulation systems in most of the european countries avert this investments because their aim is to lower the grid fees. Investments in innovative technologies are not accepted as non-influencable costs.

7 R&D has to be intensified to let SmartGrids become true The following issues have to be solved: 1. What are the demands of energy supplying in the years 2030+? 2. Which technical problems will occure according to the demand? 3. What kind of existing tools can be used as solutions? 4. Which technical problems cannot be solved by existing tools? 5. Which grid concept fits best to which demand? 6. Which regulatory constraints have to be established to support the idea of SmartGrids?

8 RWE is already involved in innovative key projects > In SmartMeter we are fixing innovative meters in Mülheim / Ruhr > In SmartHome we are controlling heating systems via mobile phones together with Nokia > In SmartGrids we are building up an innovative grid for people near Collogne > In VirtualPowerPlant we are connecting hydro power and wind turbines via the Siemens DEMS (Decentralized Energy Management System) > In e-mobility we are installing 500 charging poles in Berlin in co-operation with Daimler s Smart > In e-energy we are establishing a market place for energy and data funded by our government