Established operators ‘are potential obstacle to smart grids’
Environmental law firm wants to support French solar company in competition case against energy giant EDF
Start-up microgeneration companies hoping to feed power into new, more flexible forms of energy grid could find their path blocked by monopolistic companies sitting astride transmission networks.
Smart grids, which utilise digital communications technologies to detect and react to changes in local utilities usage, could make it easier for small-scale generators of energy to sell surplus power through feed-in tariffs.
Evangelists for such endeavours envisage a brave new world where the line between producers and consumers of energy blurs and new ‘pronsumers’ – customers who also produce some of their own energy, through solar panels for instance – come on stream.
They also hope more peer-to-peer exchanging of renewable energy will be enabled as economies decarbonise.
But in France, where electricity giant EDF supplies the vast majority of homes and businesses and also owns the bulk of the transmission infrastructure, any such move could end up being strangled at birth by vested interests, according to law firm Client Earth.
The firm, which specialises in environmental public interest cases, has offices in London, Brussels and New York and is currently in the midst of a ‘scoping exercise’ that could result in it supporting a French solar energy company in a competition law case against EDF, E&T understands.
James Thornton, founder and chief executive of Client Earth, has stated: “What I would love to do is bring a competition law suit on behalf of such a company, force connections, and get a big anti-monopoly penalty. You would chip away at the monopoly.”
Some industry insiders believe ‘third party’ provisions already allow prospective new entrants into the energy market to obtain fair and non-discriminatory network access.
EDF itself is in the process of researching smart grid technology, but there is a widely acknowledged tension between the business imperatives of big energy firms and the rationale underpinning smart grids, which are intended to make people use less energy.
It is also unclear whether there would be enough of an incentive for monopolistic firms to put money towards hastening such a revolutionary change in the way electricity is produced, distributed and consumed.
Client Earth’s case, if it takes off, could hinge on the question of whether types of grid access required by the energy company in question was possible within an ageing framework often described as having a top-down and centralised approach.
Thornton’s warning to EDF, made to an audience of bankers and pension fund managers in Paris, appears in a new book outlining the scale of the threat of climatic events like heatwaves arising from greenhouse gas emissions.
Population growth and households’ insatiable appetite for electricity, combined with the straitjacket rigours of emissions reduction targets, have fuelled fears that the power supply may be unable to keep pace with demand.
Spooked by this prospect, governments across Europe are pouring tens of millions of pounds into examining whether state-of-the-art data tools and wireless kit can help enable the existing power infrastructure to be used to serve ever greater numbers of people.
On the business side, savings for utilities companies could be reaped through decreased customer service costs arising from use of smart meters and smart grids – and regulators are increasingly forcing big firms to look at new ways of working.
In England a £15m project at Keele University is under way to create what would be the largest smart energy testbed anywhere in Europe, while in Scotland the devolved government has pumped money into smart grid schemes.
Research is also being carried out in Germany and Portugal as part of efforts to prove that the benefits of moving to a new type of grid outweigh the costs this would impose on existing infrastructure – costs that would inevitably be passed on to customers through household energy bills.
Versions of the smart metering and smart grid model could also be forged for the water sector to combat drought.
“We collect data from utilities and customers and have advanced algorithms that gather data – from weather to property data – and combine all of that to provide a dashboard for the utility company so they can observe how everything is working,” explained smart water grid entrepreneur Farshad Samimi at a recent conference in London.
He added: “In the energy sector, when it comes to electricity, one of the drivers has been on the supply side, so there has been more of an incentive there for regulators to push for demand management.”