The European discussion about data management in the energy sector is driven by the smart meter roll-out and the need to reduce market entry barriers via data access, writes Marius Buchmann, Post-Doc at Jacobs University in Bremen, Germany. Most European countries are discussing or have introduced Retail Hubs to facilitate data collection and distribution. Germany already has mechanisms in place to do this and is instead discussing the introduction of a Grid Hub. Article courtesy of Buchmann’s blog Enerquire.
Information and communication technology (ICT) is currently applied to the electricity networks to reduce the costs of the energy transition. For Germany, the calculations are that the smart grid approach could reduce the costs for the energy transition by 40% (BMWi 2014). To exploit this potential for cost reductions, data needs to be exchanged between the network users (consumers & producers), the network operators and market parties. Most prominently, we need to define a process how to exchange data from smart meters or other advanced metering infrastructure (AMI).
To increase competition, the EU is keen to reduce entry barriers and retail data hubs can be one approach to do this
The EU Commission requires each member state to equip 80% of all network users with smart meters till 2020. That is, if a Cost-Benefit-Analysis (CBA) shows that smart metering can actually save the network users some money. All member states have conducted these CBAs and the results can be clustered into three categories:
- Positive CBA and large-scale roll-out planned/started
- Inconclusive: CBA not clear, some countries plan roll-outs, some don’t
- Negative CBA and no roll-out planned
In total, we can expect that around 200 million smart meters will be installed in Europe till 2020 . Several important issues need to be addressed related to this large scale roll-out, e.g. privacy, security etc. For now, we want to focus on how the different EU states want to make the data of smart meters accessible for all eligible parties.
Smart meter data can be used for three different applications:
- The retail market: Smart meter data can be used to simplify switching processes, to apply time-of-use tariffs and for billing processes as well. Furthermore, smart meter data can help to increase the efficiency of market party communication: the data exchange between retailers and network operators for billing and balancing processes.
- Grid operation: Smart meter data can help to operate the networks. The transmission and distribution grid operators can use the data to develop more accurate projections to balance the networks, contract flexibility etc.
- The Service market: Smart meters allow a much more detailed tracking of energy consumption and production. Developers can use this data to provide new services to the consumers that go beyond the established retail services. For example, the data could be used to provide energy efficiency applications or to develop virtual power plants on a small scale (e.g. a few households with electric cars).
Data management in Europe – Focus on retail data hubs
From a governmental perspective, once a roll-out plan for smart meters has been developed, the logical next step should focus on the definition of a meter data management (MDM) system. If you have 80% of all network users equipped with smart meters, you want to make use of the data gathered by the meters.
Today, we are in the phase where the European countries that plan an 80% smart meter roll-out are developing such data management systems. If we take a closer look at these initiatives it becomes evident that they all focus on the retail market. These data management systems provide a framework to exchange data from smart metering for billing, switching processes and tariffs. Therefore, we label these initiatives Retail Data Hubs. It makes sense to start with these topics as they are at the heart of the current energy business.
Starting in 2018, a centralized data hub will facilitate the data exchange between market parties in Belgium
Retail Data Hubs are introduced to address two primary issues:
- secure equal access to data from smart metering
- increase efficiency in the communication between market parties, especially between network operators and retails for billing and switching purposes
Especially the access to data for switching and billing processes used to be a market entry barrier for new service providers that tried to compete with the incumbent businesses. To increase competition, the EU is therefore keen to reduce these entry barriers and retail data hubs can be one approach to do this.
We can find several examples for such Retail Data Hubs for meter data management in different European states. The most prominent examples are ATRIAS in Belgium and ElHub in Norway. You can find a detailed overview about the status quo of different Retail Hubs here.
Belgium: Central Market System (CMS) aka ATRIAS
Starting in 2018, a centralized data hub CMS will facilitate the data exchange between market parties in Belgium. The CMS is operated and financed by a company called ATRIAS, which is run by the distribution system operators. The CMS connects the databases of the network operators (who collect the data from the smart meters) with the relevant and eligible market parties.
Thus, ATRIAS has a focus on the data exchange between the DSOs and retail businesses. Other parties, like the transmission system operators and third party service providers willl get access to the data as well (CEER 2016).
Norway has a similar plan as Belgium to manage the data exchange from smart metering. This year the ElHub (Electricity Hub) will start operation and facilitate the data exchange between market parties in Norway.
ElHub is operated by the national TSO. Smart metering data is collected via the DSOs and stored in the ElHub together with consumer data from the retailers.
ElHub aims at a standardisation of data access to smart meter data for all eligible parties. In the beginning, ElHub will provide hourly values for smart metering, but might increase this up to 15-minute values. The customers are in full control of their data, which they can access via an online tool and thereby manage third party access to their data sets (CEER 2016).
The German approach
Compared to Belgium and Norway, Germany is heading into a different direction. There is no plan yet to develop a Retail Data Hub in Germany. Rather, each consumer can define which market party gets access to their smart mater data. This results in a very decentralized data management system with a so-called star-shaped structure. This structure is called star-shaped as the smart meter stores data and this data is exchanged with all eligible parties via a standardized interface (smart meter gateway) Thereby, each market party, service provider and network operator establishes an independent connection with the smart meter.
Importantly, Germany does not plan a full roll-out of smart meters. Rather, it plans to equip about 10-20% of all network users (consumers with high demand and generators above 7kW) with so-called intelligent metering systems (imsys). These imsys can exchange data with external parties via the smart meter gateway.
All other network users will only be equipped with modern metering systems, which do not have the smart meter gateway interface. They can only be used to visualize electricity consumption, not to exchange data with external parties.
This system combined with the smart meter gateway and the star-shaped structure is intended to secure that every eligible party has the same access to metering data and that the consumers keep the power over their data. Thus, as it is, Germany already has a system in place to secure equal access to data from smart metering.
We can expect that Retail Hubs will evolve towards facilitators of value-added services, at least allowing the market parties beyond existing retailers to access the data on smart metering
Additionally, Germany already has a standardized interface (EDIFACT) for the data exchange between market parties to secure efficient processes for supplier switching, billing and balancing.
This shows that Germany already addresses the two issues of smart meter data access and efficient market processes that are central to the Retail Data Hubs in Europe. Consequently, Germany is not explicitly discussing the introduction of a Retail Data Hub at the moment but is focusing on another important aspect related to meter data management systems: the development of a data management platform for network operation, a Grid Hub.
A Grid Hub can be defined as a data hub that collects all data from smart meters, generators and the network infrastructure and makes this data available to the network operators for system operation. In the past, it was sufficient to have data about generation on the transmission level, but this is changing with the energy transition and the increasing importance of renewables. In Germany, 95% of the renewables are connected to the distribution girds; similar developments take place in Spain and in other European countries. Therefore, the system operators require data on generation on the distribution grid as well.
The shift in data requirements from transmission to the distribution level has important implications. Besides load balancing, the provision of ancillary services (voltage and frequency control, reactive power management etc.) now can and needs to be provided on the distribution grid level. Additionally, prospects are that we can use existing and new electricity consumers like heat pumps, electric vehicles and battery storages to provide flexibility to the networks to reduce congestion in the grid. For all these services and applications the network operators need access to data to secure stable operation and to develop accurate projections of load and demand.
In Germany, it is currently discussed what such a Grid Hub should look like. Which data should be stored? How should data be validated? Who should get access to the data and which entity should operate and own the Grid Hub?
The German discussion is already evolving towards a more general discussion about the roles and responsibilities of the network operators
These discussions are currently summarized under the headline of the energy information network (Energieinformationsnetz). So far, the energy information network consists of standardized data packages and communication protocols that secure the data exchange between large generators (>10MW) that are connected to the medium or high voltage grids. At the end of 2016 the transmission system operators (TSO) proposed in a study to develop a central data hub that collects all data needed for network operation from all networks and the connected users.
For example, it is discussed that the Grid Hub collects data from all larger consumers (above 6000 kWh) and small-scale electricity generators (e.g. Photovoltaic power plants >7kW) as well as from the network infrastructure (e.g. intelligent transformer stations). The proposal by the TSOs suggests that this data is collected without aggregation and that the energy information network data hub is operated by the TSOs.
Takeaways: Europe focuses on Retail Hubs, Germany on a Grid Hub
Summing up, we can see that the European discussion about data management in the energy sector is driven by the smart meter roll-out and the need to reduce market entry barriers via data access. Therefore, most European states are at least discussing or already introducing Retail Hubs that should facilitate the data collection and distribution from smart metering for billing, switching and balancing purposes.
This is an important and relevant discussion in Germany as well, but Germany has already different systems in place to secure a level playing field in the retail sector that are currently not under revision. It might happen that Germany establishes a Retail Hub in the future as well, but this is not likely to happen before the smart meter roll-out is finished (anticipated for 2032).
However, due to the increasing share of renewables and the increasing number of new electricity devices (e.g. electric vehicles and battery storage) on the distribution grid level, Germany needs to establish a process to secure data availability for network operation and discusses what a Grid Hub could look like in its function to collect, validate and distribute data for network operation to the network operators. This is a very different discussion than the one currently taking place in other European states.
The current debate on Retail Hubs and the Grid Hub are the foundation for the next steps in the digitization process of the energy sector. We can expect that Retail Hubs will evolve towards facilitators of value-added services, at least allowing the market parties beyond existing retailers to access the data on smart metering (given the permission of the data owners).
Furthermore, the German discussion is already evolving towards a more general discussion about the roles and responsibilities of the network operators. How do we facilitate the coordination between TSO and DSO in the future? Who is responsible for system stability? Who can access regional electricity markets or flexibility markets?
What do you think? Will we see a national Grid Hub in Germany and who is going to operate it?
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Marius Buchmann (Twitter: @enerquire_) is a Post-Doc at Jacobs University in Bremen, Germany. He currently focuses on the digitalization of the energy sector and energy transition. He conducted several projects in Europe and Asia related to smart grids, electric mobility and regulation. His clients are energy utilities and public agencies. Currently he coordinates the project group enera (www.projectenera.com) at Jacobs University. This article was first published on Marius’ blog Enerquire and is republished here with permission.