ICT4SMARTDG ICT Solutions to enable Smart Distributed Generation WP3 - Executive Summary

1. ICT4SMARTDGICT Solutions to enable Smart Distributed Generation WP3 - Executive Summary 20th May 2011

2. WP3 Objectives Task of this WP is to get the understanding of potential (non technical) blocking factors that could hamper large scale deployment of Smart Distribution Generation, given that suitable technology exist and to develop proposals about how to overcome those blocking factors.

3. T3.1: Identification and analysis of the potential adopters (end users) Public Sector: can act as an example for massive adoption Agriculture: high potential for biomass, cogeneration and PV Local Communities Adopters Airports Finance Stadiums Residential (PROSUMERS) Multifunctional buildings Adopters are aware of RES benefit but the adoption is complex and “Green World” is not the Cheaper World Smart Micro Grid may reduce costs and enable rural areas to local produce Energy for local use and consequently evolve in the value chain. Hospitals Shopping Mall Agriculture

4. T3.2: Identification and analysis of the potential suppliers/enablers (manufacturers) In Current Scenario enablers are: Energy Companies, Electronic and electric equipment Suppliers, Metering suppliers, Storage Suppliers, ICT and Telecom Companies, DNO, TNO, System Integrators, Finance Institutions and ESCO Two different business models • One shot: single Energy improvement (i.e. LED lights, PV roof) • Energy management: temporary energy outsource of Energy management to Utilities or to ESCOs with special Energy performance contracts New figures may appear: • ESCO: Energy Service Companies producing managing and reselling Energy • Aggregators: manager of multiple DER to bring more added value to the Market

5. T 3.3 Major barriers and associated blocking factors for scenarios indentified in WP1 = low barrier = medium barrier = high barrier

6. T 3.3 Major barriers and associated blocking factors for scenarios indentified in WP1 • SCENARIO 1: NON-RESIDENTIAL BUILDINGS / ENTERPRISES Main barriers in this scenario, are principally the uncertain of feed in tariff. In fact the go decision is taken by a single investor who is the owner of the building infrastructure and can be incentivized by special laws like asbestos removal. • SCENARIO 2: MICRO-GRIDS Main barriers are cultural and environmental (visual impact and the unpredictability of the sun and wind) RES perception is a key barrier that has to be removed with specific environmental campaign or for earth sustainability and energy saving. As a Microgrid scenario it is clear the importance of interconnection agreement and the problem of lack of standardization. • SCENARIO 3: ISOLATED HOUSES This is the most critical scenario, where barriers are more higher in all areas. Economical barriers are all related to the fact that people consider only the energy saving investment instead of the earth sustainability.

7. T 3.4 ANALISYS OF QUESTIONNAIRE MAJOR OUTPUT From Questionnaire The major concept of Distributed Generation (DG) is Solar • Solar 92% • Micro wind 62% • CHP (combined heat and power) 7% • Biomass 12% • Cell fuel 3% • Thermal 1% • Micro hydro 1% From Market Analysis • EU has the largest installed base for small PV plants and is acting as a driver for SMART GRID Adoption

8. T 3.4 ANALISYS OF QUESTIONNAIRE MAJOR OUTPUT • From Questionnaire the biggest non technical barrier for mass deployment of DG technologies  • Entry Price too high 10% • Uncertainty of economical payback period 15% • Complexity 30% • Costs implied (purchase, maintenance) 22% • Unclear perception of the potential benefits 12% • Lack of public support: financial help 1% • Lack of space within the building 1% • Don’t know 9% From Questionnaire Adopters will install Smart distributed equipment solutions at home only if I get some economic gain: • short-medium term 62% • Long term 31% • Anyway 7%

9. T 3.4 Generate new proposal: Action Plan with ten major actions to reduce Barriers To reduce Business Practice Barriers: • Adopt standard and light commercial practices for interconnection • Establish standard business terms for interconnection agreements • Develop tools for Utilities to assess the value and impact of distributed power at any point on the grid To reduce Regulatory Barriers: • Develop new regulatory principles compatible with distributed power choices in both competitive and utility Market. • Adopt stable regulatory tariffs and utility incentives to fit the new distributed power model • Establish expedited dispute resolution processes for distributed generation project proposals • Define the conditions necessary for a right to interconnect To reduce Cultural Barriers: 8) Create a “green benchmark” of energy efficiency to increase the awareness of people en push for Smart Grid adoption. 9) Promote Micro Grid as the solution to permit the adoption of different technology in different networks. 10) Promote specific information campaigns to push people to consider energy saving investment linked with earth sustainability

10. Conclusions Develop Micro Grids in isolated Countries can support Energetic Evolution of the Country itself, drastically reducing the distribution grid and satisfacting the own on site energy consumption. Agriculture could feel the effects of PV-Wind plant diffusion The land owner considers the use of the land for energy production as an alternative of agriculture use. In some countries as Italy only 5-10% of the overall agricultural soil could be used for PV installations; this will obviously represent a problem in solar and wind farms.