The financial and sustainable benefits of ‘smart grids’

Pascal Bleeker and Alexander Schoenfeldt of Locamation explain how technology can meet regulations and prevent stranded costs

  • Thursday, April 4th, 2013

London lit up at night.

As energy requirements become more pressing, the need for a more efficient system via which to control electricity is being worked on by a number of companies. Smart grids act as a more flexible and customisable control system for how electricity is used, as well as offering both price and security benefits.

Netherlands-based Locamation has been developing its own set of smart grid solutions that are highly adaptable to changing circumstances. The New Economy spoke to the firm’s Chief Operating Officer, Pascal Bleeker, and its Director of Sales and Marketing, Alexander Schoenfeldt, about how the industry is developing and what the company is able to offer utility firms in the drive towards greater efficiencies.

Maintaining high standards
Bleeker says it is its extensive experience in the industry that enables it to match the needs of its customers: “[We] have 30 years experience of automating industrial and electrical systems with real-time information and communication technology. This know-how can be found in all our products and solutions. Our ambition is continuing to turn new innovative ideas into available and proven solutions for the smart grid world.”

The company places considerable emphasis on providing a secure and stable solution for its clients, which are primarily utility companies, and it is continually testing the strength of its security to make sure it is up to scratch. Its SASensor product, a substation automation solution based on an open software and system platform enables Locamation to offer a customisable and secure service to clients.

Bleeker says: “Besides reliability and performance, the highest level of security has always been our continuous goal in our product development, and has been proven in several hacker tests over the last few years. This approach has actually helped us be flexible in meeting customer requirements, and this flexibility is helping our customers to mitigate investment risks and achieve business goals.”

Proving that flexibility
While flexibility is obviously a strength, added costs if things are continually changed is challenging too. Locamation says its flexibility is appreciated by utility companies and that it enables its customers to actually cut costs. By using a software approach, the company is able to seamlessly deliver necessary upgrades, new functions and fixes when required. In the past, utility firms would be tied into expensive equipment that would either need to be replaced or discarded.

Schoenfeldt says: “Everybody is aware of some uncertainty in the future, but the preparatory steps network companies can take by using SASensor will result in a better preparation to face future demands and prevent stranded costs. Like utilities may have meters that are not future-proof, with no security provided, as hardware encryption is not in place. With SASensor, they will have the flexibility.”

In the past few years… distribution companies have started to prepare for future challenges, rather than waiting for regulatory decisions

Changing regulations can also impact on utility firms, and so increased flexibility allows companies to adjust accordingly, says Schoenfeldt: “Utility firms have changed their viewpoints in the past few years significantly, from a government-owned monopoly to a customer and profit-oriented service provider. This is an ongoing trend. Specifically, distribution companies have started to prepare for future challenges, rather than waiting for regulatory decisions. ”

“Within this transformation, the distribution companies realise that moving forward in small technical micro-steps will not help them to manage the cliff of their future market model. So they need to change their business model.”

SASensor will also help in the smart buildings sector, creating greater efficiencies. Bleeker says: “In the near future, buildings will not only become zero emission houses, they will become an active grid component with available capacity for other consumers. The impact to the grid will be significant and does require control in load and frequency management. With SASensor, we can activate and utilise these building capabilities much more efficiently than with conventional technology.”

The importance of collaboration
Working together with other companies, as well as local authorities, is crucial to implementing smarter power solutions that benefit communities. Regulations are not currently designed to help the industry, but local authorities are lobbying central government on its behalf.

Bleeker says: “The regulation is not well planned for supporting smart grid initiatives. We also need to get financial benefits from this. It’s not only about reliability and sustainability; people are also looking at the financial effects. Local government is lobbying central government to change the tax laws to help make these projects financially viable.” The tide is turning, however, and many countries are piloting new smart-grid schemes in the hope that they will prove a success.

Schoenfeldt adds: “A lot of European countries have understood the need to change the regulatory funding model. We have seen this start in the UK. In Germany, Poland, Belgium, and Austria they are preparing the next regulatory period, and every country is coming to an agreement about how the grid costs are covered. Every government is interested in results, and so that is why there are so many pilot projects around to provide them with real experience.”

Last year, Locamation announced it had begun a number of pilot schemes with companies in the UK. In October, it was conducting a pilot with Scottish and Southern Energy Power Distribution. The pilot will run for a year and see a substation with Locamationís SASensor HMV product. Earlier in the year, the company revealed it had struck a pilot deal with Western Power Distribution and UK Power Networks, two of the largest power distribution networks in the UK.

Working together with other companies, as well as local authorities, is crucial to implementing smarter power solutions that benefit communities

Keeping an eye on progress
In the past, utility firms would only be able to monitor how their grids were running at specific times, creating mere snapshots of how they were operating. Locamation’s approach is to continuously monitor grids, building intelligence into the substations.

Bleeker says: “As we continuously monitor the standard key performance indicators of power quality, load, phase angle, we decided to filter the continuous information stream, and log and record the data specials in order to get early signals of potential outages or failures already on substation level.”

“The network companies have the requirement to understand better and start to manage the grid differently. For this grid insight, we change from a yearly-to-daily picture and will end with a live movie of the critical locations and stress points in the network topology. The benefit of this new grid intelligence, including documentation and the possibility to remotely control, is keeping the network healthy, cost-efficient, secure and reliable.”

Smart grids are going to become more important as communities attempt to use their electricity in a more efficient manner. Creating a sustainable network of energy provision is a goal that will ultimately benefit communities everywhere.

Bleeker says: “Just imagine: the electricity grid will become the most powerful network of societies and industrial life, being their blood and nerve system at the same time. Automation and self-healing mechanisms have been put in place to enable society to use electricity at any point, at any time and to meet any demand it has.”

For this network to be achieved, there will need to be support from regulators, as well as the industry, ensuring that a standardised set of systems is in use so that collaboration is possible. As Bleeker says: “Locamation understands its responsibility to provide standardised, intelligent, designed system architecture, and devices and software in combination with basic and customer-specific software functionalities in a collaborative community of customers and partners.”

Schoenfeldt agrees: “Our ambition should be to create a standardised platform for the industry. There are standards for metering, for substation communication, for in-home platforms. The interoperability will make them all work together.”