Building a more resilient energy system in Europe
Energy demand in Europe is expected to grow over the next few years as populations increase, with the demand for electric vehicles (EVs), heat pumps and other power-hungry appliances. Add to this the rise in AI, driving data centre use, and we start to see a significant shift in energy market dynamics.
According to McKinsey, this growth in data centre demand will be one of the "primary near-term growth drivers for power demand in Europe", with data centres accounting for about 5% of total European power consumption by the end of this decade (from around 2% today).
We're already witnessing this increase to some extent here in Europe. We saw (and in my case, experienced) the recent power outages in Spain and Portugal, affecting large areas and impacting infrastructure like transport and traffic systems, mobile networks, health services and businesses.
There was talk initially of a cyberattack, but the outage was caused by a power surge that the grid was simply unable to handle. The issue was down to the Spanish power grid operator when "the system did not have sufficient dynamic voltage control capacity" according to Spain's energy minister. Electricity grids in Europe are kept at 50 Hertz frequency in order to maintain stability, and even a slight deviation can lead to damage.
This raises the question about where we can start to make an impact. We certainly need smarter infrastructure. We know that's been going on for some years and we are getting there.
The role of standards
There should be standards, this is not a new concept. But I believe that customer-owned equipment and resources should stay under the control of the customer. It's challenging to balance regulating customer-owned equipment with keeping customers engaged. Flexibility for the customer is important, but it should offer value for them. Standards need to be pliable enough to enable this.
The OpenADR Alliance has been working with a number of organisations in Europe and the UK in this area, including the Department of Energy Security and Net Zero (DESNZ), which has been working on the PAS 1878 and 1879 standards. These standards cover end-to-end regulations for energy-smart appliances, focusing on communication between distribution utilities and customer endpoints, such as gateways or Consumer Energy Managers (CEMs).
As we continue to support these efforts with OpenADR, looking at security, stability and interoperability, this will be key to targeting heat pumps, water heaters, EV chargers and other energy-smart appliances. It's expected to be implemented in a couple of years. The Energy Networks Association (ENA) in the UK, has also started work on a flex market mechanism.
The idea is to standardise interactions between DSOs and energy aggregators, including large consumers, and significant solar installations. More details will be released later this year.
The Netherlands has been struggling with grid congestion for years. Even residential building projects have been halted due to power shortages.
They have taken steps to address this, building virtual power plants (VPPs) in the Amsterdam Harbour area. The Johan Cruijff Arena, home to AFC Ajax, uses a large-scale energy storage system from repurposed EV batteries, powered by solar panels and wind. It helps the stadium be more sustainable by storing energy generated by its 4,200 solar panels, which can then be used to power the stadium for events, reducing reliance on the grid. More recently, utilities there have partnered with several charge point operators to make grid-aware charging a reality.
E.ON's subsidiary in Sweden has been exploring flexibility with customers through its SWITCH flexibility platform, recently adding standards support. SWITCH consists of a marketplace where trading is handled, including a decision support tool that helps the DSO plan, trade and monitor the market, and a flexibility service provider tool. It's also used to monitor and notify customers with non-firm connection agreements when they need to reduce their load.
Meanwhile, Smart Energy Europe (smarten), which provides policy intelligence and creates reports to lobby regulators, the EU and many others, calls for standardised data formats, dynamic tariffs and portability, similar to the ideas being considered by the UK's DESNZ.
Inspiration from the US
Looking to the US market for inspiration, we only need to look back to the energy crisis more than 20 years ago when California suffered a series of rolling blackouts.
These led to emergency measures being introduced by the California Energy Commission (CEC) who established a standardised way of communicating with customer equipment. These key principles remain relevant today. The customer owns the equipment, and direct control is limited unless necessary, by rather using informational and motivational messages.
A few years later, the CEC worked with utilities to create the first version of OpenADR, the foundation of what we have today. At the same time, the ZigBee Alliance created the Smart Energy Profile that later became Smart Energy Profile 2.0, now known as IEEE 2030.5, a standard for communications directly to energy devices.
Initially excited about the Smart Energy Profile protocol and Zigbee devices, utilities thought they could control all appliances in the house, from HVAC to a refrigerator. But then realised that controlling every customer device might not be a good idea.
As local control systems and OpenADR evolved over the next few years, it became clear that informing and motivating customers was beneficial – but not controlling them. Customers could be kept at a distance while still managing systems.
Programmes have evolved becoming more sophisticated
Southern California Edison's (SCE) Charge Ready program is one example, which requires public chargers and charging networks in their territory to receive grid management messages. These messages typically regulate capacity and power consumption over OpenADR. SCE simplified the program by providing an interface for developers to connect to their server and control power consumption in specific areas. This approach focuses on managing the load in a network rather than individual EV chargers and now runs with several similar programs.
Pacific Gas and Electric (PG&E), a pioneer in automated demand response programs, is now experimenting with dynamic pricing. While Ford and other car makers offer services to customers and utilities, controlling vehicle charging through the vehicle's telemetry. This flexibility is transferred to OEMs to manage charging times, providing benefits for customers, such as lower charging rates.
These programs and initiatives are well-received in their own markets – and offer opportunities for other regions.
In summary, policies are important for interoperability and to protect assets, but they have to be agile, able to adapt to avoid long-term asset loss. Customer integration is crucial for transparent communication and future stability, even if it doesn't necessarily reduce energy costs.
Over the past 20 years or so, customers have become hands-off. They need a 'set-it-and-forget-it' approach to equipment knowing it works and that they're contributing to a greener grid.
Using standards instead of proprietary APIs can significantly reduce costs and protect both sides from stranded assets and vendor logins.