SMART GRIDSAND ENERGY

MARKETS

CONTENTS

4 Smart grid research creates a basis for an energy system of the future

6 Effectiveness of the program

7 Participant’s opinion

8 Smart grid

10 Energy system of the future

12 Direct current brings stability in electricity distribution

14 Electric vehicles helping the smart grid

17 Flexible electricity demand – cost-effective flexibility

19 Full benefits from smart metering

21 Wind power and the electricity network challenge each other

23 Households are gradually becoming microproducers

24 Smart grid requires new technology

27 Smart grid repairs itself

29 Rapid flow of information helps in fault situations

4 SMART GRIDS AND ENERGY MARKETS

SMART GR ID RESEARCH CREATES A BA S IS FOR

AN ENERGY SYSTEM OF THE FUTURE

Finnish companies and research institutes have been developing an energy system of the future in the multidisciplinary research program Smart Grids and Energy Markets.

At its simplest, a smart grid means automation that improves the reliability and profitability of electrici­ty grids.

‘However, in the long term, smart grid research aims for radical changes in the energy market at both the national and international levels,’ says Program Manager Jani Valtari. Changes are necessary due to the targets in sustainable development in energy production and the increasing need for electric ener­gy. It must be ensured that the future electricity sys­tem supports renewable energy production.

The research program aimed to develop smart grid solutions, which can be demonstrated in the Finnish energy system and utilized on the global scale. The solutions are related to the architecture, components, management and maintenance of grids. In addition to technology, business models for future energy markets were also developed in the program.

The ultimate purpose of the study was to boost ex­pertise and competitiveness in the field in Finland. ‘We have an excellent starting point. Finland and the other Nordic countries are leading the field in the uti­lization of automation technology in electricity net­works. It can be said that electricity networks are al­ready smart, but the development continues at an accelerating speed,’ Valtari points out.

The development of smart grids in the technical sense requires, above all, expertise in energy techno­logy and in information and communication techno­logy. Practical solutions also require close coope­ration between electricity sellers and distributors. Various levels of the cooperation were ensured by joining the forces of as many as 26 companies and eight research institutes in the program. The re­searchers also utilized and strengthened their inter­national networks.

‘Thanks to the cooperation, we have been able to study the change in the entire system. We have cre­ated research platforms, which enabled demonstra­tion of the research results in real environments. At the same time, we have built preparedness for new products and methods of operation. The companies will find it easier to continue their own product de­velopment work on this basis,’ says Valtari. Mr Valtari himself works at ABB, which is one of the participants of the program.

The research program was led by CLEEN Ltd (Cluster for Energy and Environment), a strategic centre for science, technology and innovation (SHOK) for en­ergy and environment companies and research communities.

The program is known by the name SGEM, Smart Grids and Energy Markets. Its total value was EUR 52 million, of which the companies paid 34 per cent, public research institutes 10 per cent and Tekes the Finnish Funding Agency for Technology and Innovation 56 per cent. The program started in ear­ly 2010 and it will end in February 2015.

SMART GRIDS AND ENERGY MARKETS 5

EUR 52 M I L L .34 % COMPAN I ES

10 % PUBL IC RESEARCH INST I TUTES

56 % T EKES

ABB OY

A IDON OY

AL STOM GR ID OY

CARUNA OY

OY CYBERSOF T AB

ELEKTROB I T W IRELESS COMMUNICAT IONS OY

ELEN IA OY

EMPOWER IM OY

EMPOWER OY

EMTELE OY

F INGR ID OYJ

FORTUM OYJ

HELEN SÄHKÖVERKKO OY

HEL S INGIN ENERGIA

INNO-W OY

MX E L EC TR IX OY

NOKIA S I EMENS NE T WORKS OY

OULUN SÄHKÖNMY YNT I OY

SUUR-SAVON SÄHKÖ OY

TEKL A OY

TEL IA SONER A F INL AND OYJ

THERE CORPOR AT ION OY

THE SWITCH DR IVE SYSTEMS OY

T I E TO F INL AND OY

VANTA A ENERGY E L EC TR IC I T Y NE T WORKS OY

V IOL A SYSTEMS OY

A ALTO UN IVERS I T Y FOUNDAT ION

UN IVERS I T Y OF EA STERN F INL AND

L APPEENR ANTA UN IVERS I T Y OF T ECHNOLOGY

CENTRE FOR ME TROLOGY AND ACCRED I TAT ION

UN IVERS I T Y OF OULU

TAMPERE UN IVERS I T Y OF T ECHNOLOGY

V T T T ECHN ICAL RESEARCH CENTRE OF F INL AND

UN IVERS I T Y OF VA A SA

5634

10

Effectiveness of the program

SOCIE TAL IMPAC T

108 NEW MA STERS OF SC I ENCE IN T ECHNOLOGY FOR THE CLEANTECH AREA S

41 PHD STUDENTS

20 OVERSEAS RESEARCHERS

INA L EHTO, Adviser, Finnish Energy Industries

The study carried out within the SGEM program significantly supported European-level harmonization of technical requirements in microgeneration plants. On the basis of the study, we issued a nationwide recommendation through the Finnish Energy Industries to approve in Finnish distribution networks microgeneration equipment that meets the German standards. This opened the Finnish market to new microgeneration equip-ment manufacturers, which promoted, e.g. an increase in the use of solar power.

OPER AT IONAL EXCEL LENCE

95 % OF BUDGE TED EXPENSES

840 PL ANNED OUTPUTS

ANT T I MUTANEN , Researcher, Tampere University of Technology

SGEM has not only provided funding, but has also acted as a key cooperation channel with industry. Above all, it has en-abled long-term work on my research topic. This kind of commitment is exceptional in the current climate of fragmented funding sources.

DOC TOR AL THESES

PEER-REV I EWED SC I ENT I F IC JOURNAL ART ICLES

CONFERENCE PUBL ICAT IONS

SC I ENT I F IC EXCEL LENCE

13 71

219

TERO K A IP IA , Researcher,Lappeenranta University of Technology

SGEM has produced new information about the electricity market and grid techno-logy. One example of the scientific impact of technological development is the world’s first ±750 V low-voltage direct-current microgrid used in continuous power distribution in a sparsely populated area and the related three doctoral theses, eight journal articles and dozens of conference publications.

I NDUSTR IAL RE LEVANCE

13 RESEARCH P I LOTS

23 23 MIL L . NEW INTERNAL R&D PROJEC TS

240 TECHNICAL REPORTS FOR INDUSTRY ’S NEEDS

MIKAEL LATVALA, Chief Technology Officer,There Corporation Oy

There Corporation has gained sub-stantial benefits from the SGEM program. The program has enabled a joint study of solutions in demand response and it has also helped to create business contacts with important partners. The SGEM program is very well managed and, as a result, territo-riality has not taken hold and the partners have maintained their genuine interest to-wards cooperation throughout the program.

PART IC IPANT ’S OP IN IONSmart grids are one of the most important Cleantech solutions on the glob­al scale. Smart grids play a key role in enabling a significant increase in renewable electricity generation. The demands for security of supply and fault tolerance will also grow along with the increase in renewable produc­tion. Society is becoming more and more dependent on electric energy, and this will highlight the importance of smart grids even further.

Finland has remarkable smart grid expertise in different sectors and branch­es of science. This expertise comes together in the SGEM research program. Together in our extensive and multidisciplinary consortium, we have been able to model future electricity networks already today – and alone this would not be possible. This helps ABB in many different ways in the ever tightening global competition. Together we have built new solutions to en­sure that Finland’s own smart grid keeps abreast with leading­edge tech­nology and that the solutions developed in Finland will become top export products on the global scale. This is the ultimate goal of our research input.

In the future, Finland will need even more high value added Cleantech ex­pertise and innovation that happens across sectoral boundaries. The SGEM program has been a good example of creating innovation clusters. We hope that the broad­based research cooperation will continue after the SGEM program.

TAUNO HE INOL ACEO ABB Oy

8 SMART GRIDS AND ENERGY MARKETS

D ISTR IBUTED GENER AT ION

OPEN DATA SOURCES

SEL F -HEAL ING NE T WORKS

V IRTUAL POWER PL ANTS

SALE OF F L EX IB I L I T Y IN THE E L EC TR IC I T Y

MARKE T

SERV ICES FOR AC T IVE CONSUMERS

CLEANTECH EXPORT

PRODUC TS

RECOMMENDAT IONS FOR REGUL AT ION AND A ID POL ICY

SAV INGS FROM NE T-WORK UPGR AD ING COSTS

PRED IC T IVE COND I T ION MONITOR ING

DEMAND RESPONSE

SMART ME TER ING

MOBI L E DEV ICES

4G

ELEC TR IC VEH ICLES

CABL ING CONTROLL ABLE LOADS

ENERGY STOR AGES

Smart grid

CHALLENGES with security of supply and new grid components

WITH THE AID OF new information technology solutions

RESULTING IN new smart functions

GOALS new products, services and business models

REGUL AT ING POWER

HIGH VOLTAGE 1 1 0– 400 KV

MED IUM VOLTAGE 1 0–60 KV

LOW VOLTAGE 400 V / 230 V

SMART HOME , E L EC TR IC VEH ICLE , AUTOMAT IC

ME TER READ ING, CONTROLLED CONSUMPT ION…

PR IMARY POWER

WIND FARM

D ISTR IBUTED GENER AT ION

SMART PR IMARY SUBSTAT ION

SMART SECONDARY SUBSTAT ION

ENERGY STOR AGES

R AP ID DATA TR ANSMISS ION

D IREC T-CURRENT OFF -GR ID NE T WORK

REAL-T IME E L EC TR IC I T Y

MARKE T

AC T IVE NE T WORK

MANAGEMENT

TR AD I T IONAL E L EC TR IC I T Y NE T WORK

SMART GR ID

10 SMART GRIDS AND ENERGY MARKETS

‘We are approaching the biggest breakthrough in the energy sector since the introduction of elec­tricity,’ says Jarmo Partanen, Professor of Electrical Engineering at the Lappeenranta University of Technology. The chain of reforms has started with energy production.

The popularity of renewable energy sources, such as the sun and wind, is increasing because efforts are made to reduce carbon­dioxide emissions, and con­sequently to mitigate climate change, in energy pro­duction. At the same time, the growing need for elec­tric energy drives the industry towards change.

Distributed production in a controlled waySolar power plants and wind turbines are exceptions in the electricity systems, for example, due to their small size. With the exception of fairly large wind farms, typical producers include one­family homes, office buildings and public facilities. These microproducers usually aim to use the electricity they generate them­selves and to sell any surplus to the grid.

Energy system of the future

Renewable energy sources are revolutionizing electricity networks and markets. Previously,

only electricity generation was flexible, but in the future demand will also

be flexible.

SMART GRIDS AND ENERGY MARKETS 11

‘The challenge is how to connect distributed gener­ation to the grid in an efficient and reliable way,’ says Partanen. According to him, the connection itself has already been solved quite well, but the network load still needs more attention in order to keep electri city production and consumption in balance. In a tradi­tional energy system, power plants forecast consump­tion and regulate production according to the forecast. However, the sun and the wind produce electricity whenever they will and at a minimal cost, too. This will result in unforeseen fluctuation in production, which puts a strain not only on the management of power balance in the system, but also on the economy of electricity producers. On a sunny and windy day, the income of a traditional power plant plummets when the market price of electricity falls. In worst cases, the producer pays the customer for receiving electricity.

‘If electricity generation is not profitable, power plants will be removed from the market. But how can you then safeguard electricity supply on a cloudy day?’ According to Partanen, a second wave is starting in the reform of the electricity system.

‘Until now, we have achieved a lot of good, but also problems. We will now solve the problems and create a new model for the electricity market.’

Flexibility in demand and supplyIn a future electricity system, demand for electricity will be flexible. According to Partanen, it is essential to invite households to be flexible by offering them easy, money saving demand response solutions.

‘For example, in Finland there are a lot of homes heat­ed by electricity. In these, the boiler could be set to heat up water at the best time in view of the system. The heating capacity of the boiler is also excellent as reserve in case of disturbances,’ Partanen explains. He expects that storage of electric energy will also be cost­effective in the next decade. At that time, flexibility could be offered by, e.g. electric vehicle batteries.

Partanen emphasizes that, despite demand response, supply must also be flexible in order to maintain the reliability of electricity distribution. Nimble, con­trolled regulating power could be used for supple­menting inflexible primary power and uncontrollably fluctuating wind and solar power.

‘Controlled production can mean, for example, a combustion engine power plant that can be started up and stopped in an instant, rapidly controlled hy­dro power, or combustion­based condensing and co­generation plants that can be controlled better than at present. Increasing demand for flexible prod­ucts will also promote development in existing sys­tems according to market economy,’ Partanen points out. The load of the electricity grid would also be ba­lanced by an opportunity to transmit electricity even longer distances.

‘For example, in Central Europe, wind and solar en­ergy could be transmitted over long distances de­pending on where the sun shines at any given time. However, permit issues will then pose a challenge.’

More intelligence in the electricity gridFlexible solutions require development of the elec­tricity grid. The current shared electricity grid con­nects together the equipment of electricity users, producers and distributors. In the future, more and more information will travel between the equipment through data communication links – on the industri­al internet. That is when you can really talk about a smart grid.

According to Partanen, the Finnish electricity grid can already be called smart. For example, the major­ity of Finnish homes have a remotely read smart me­ter, which offers excellent preconditions for further development of the smart grid.

‘The electricity grid is constantly developing, now more than ever before,’ Partanen says.

12 SMART GRIDS AND ENERGY MARKETS

The main current used in Finland is alternating cur­rent (a.c.). One of the reasons for choosing alterna­ting current at the time was the fact that it was easy to transform its voltage with transformers. High vol­tages were suitable for high transmission power and distances, and lower ones for distribution.

As power electronics have developed, direct current (d.c.) power has been raised as a worthy alternative in a low­voltage distribution network, and it was also studied within the SGEM program.

‘According to our studies, d.c. power is a reasonable alternative especially in the distribution networks of sparsely populated areas,’ explains researcher Tero Kaipia of the Lappeenranta University of Technology. He justifies this claim with the costs of the network renovation, especially when replacing the weather sensitive overhead lines in the medium­voltage net­works, with underground cables. A process is gene­rally on going in Nordic countries. According to him, the total cost of cabling will fall considerably if sec­tions of the medium­voltage network are replaced with a low­voltage network. ‘This will be possible, because by using d.c. power, a higher power trans­mission capacity is achieved in low­voltage electric­ity distribution. It is also cheaper and easier to con­nect distributed gene ration and batteries to a d.c. network,’ Kaipia explains.

According to him, d.c. power is also better than a.c. power for a microgrid of a village community, which is a part of the electricity grid that can be separated from the wider utility network into an off­grid net­work. A microgrid has its own generation and bat­tery energy storages, which can provide electricity for several hours, for example, when a storm has crippled the wider electricity network.

‘As a result, supply interruptions to electricity users will be reduced and there is less need to carry out un­derground cabling of the medium­voltage network.’

Direct current brings stability in

electricity distribution

According to Kaipia, the LVDC system developed in the research program can also be used in a versatile way in the distribution networks of population cen­tres and in special areas, e.g. in street lighting, electric vehicle charging systems and even inside properties.

As LVDC network usually reaches all the way to the customer’s home, it is necessary to have a customer­end inverter that changes the d.c. back to a.c., so that domestic appliances and wall sockets will work. At the same time, the inverter will filter away disturbances, such as voltage fluctuations and flicker­ing. Therefore, Kaipia expects that the LVDC network will improve the quality of electricity in addition to reducing costs.

‘Modern converter technology will enable local man­agement of power quality in a way that has not been possible before,’ says Kaipia. He emphasizes that the inverter installed in a customer’s property is not an ex­tra device, because it can replace the existing electrici­ty meter when the meter is replaced anyway in future.

Equipment technology optimized for the LVDC net­work, as well as tools for the designers and construct­ors of the networks were developed in the SGEM pro­gram. The functioning of the technology was studied in distribution networks in areas of a few customers. The test networks were built by Suur­Savon Sähkö Oy together with the Lappeenranta University of Technology and by Elenia Oy together with ABB Oy. Elenia’s planning engineer Tomi Hakala expects the test network to provide long­term user experienc­es, which in his opinion are of primary importance when planning an extensive introduction of new technology.

‘So far, the test runs have gone well. As the next step, the manufacturers are expected to develop and launch productized equipment, which is required in extensive utilization of the LVDC distribution,’ Kaipia says.

Low-voltage direct current (LVDC) power distribution is an economically viable alternative when distribution networks are being

renewed. It also facilitates distributed generation and separation of regional networks into self-sufficient off-grid networks.

T ERO K A IP IAResearcher, Lappeenranta University of Technology

According to our studies, direct current is a reasonable alternative especially in the distribution networks of sparsely populated areas. M ICRO-GR ID CAN BE DE TACHED

FROM THE REST OF THE GR ID INTO AN OFF -GR ID NE T WORK

M ICRO-GR ID (D IREC T CURRENT )± 750 V

MED IUM-VOLTAGE NE T WORK(ALTERNAT ING CURRENT ) 20 KV

ELEC TRONIC REC T I F I ER

THE VOLTAGE OF A LOW-VOLTAGE D IREC T CURRENT D ISTR IBUT ION NE T WORK I S ± 750 V ( c f . t h e vo l tage o f a l ow - vo l tage a l te r na t i ng cu r ren t ne t wo r k i s 400 V )

14 SMART GRIDS AND ENERGY MARKETS

When electric vehicles become more widely used, the impact is felt in the electricity networks. In addition to needing energy, the charging of electric vehicles places an uneven load on the electricity grid. Jarmo Partanen, Professor of Electrical Engineering at the Lappeenranta University of Technology, is sure that the energy demand can be managed, but the un even load must be tackled before electric vehicles become more common. The subject was also studied in the SGEM research program.

If a large number of electric vehicle users charged their car after returning home in late afternoon, the charging would put a considerable burden on the electricity network and, according to Partanen, it would require significant investment in the net­work. When the research team at the Lappeenranta University of Technology simulated network load, it turned out that by carrying out controlled charging the extra costs would be almost negligible.

‘If it is enough for a car owner that the battery is full in the morning, charging can be carried out at any time of the day or night before the morning, and the costs would be quite marginal.’

At their best, electric vehicle batteries can even ba­lance out the network load by functioning as an en­ergy storage for distributed generation.

‘A solar panel on the roof produces electricity during the day. This electricity is used by the vehicle or, if the vehicle is not there, the electricity is stored in a bat­tery located in the basement, to be used by the ve­hicle – or even by the grid – in the evening,’ Partanen outlines. The network companies would make cost savings in investments, and that way also consum­ers would save money in distribution prices. VTT also showed through simulation that the flexibility offered by electric vehicles would make it easier and more profitable to utilize distributed production than at present. This, in turn, could reduce carbon dioxide emissions in the entire electricity system.

Currently, the electric vehicle charging systems do not support smart charging, but the stand­ard on charging already provides that opportuni­ty. Elektrobit has been among the first companies to utilize this opportunity: it has developed a charg­ing protocol program, which takes into account the status of the grid and the user’s needs, which are re­lated, e.g. to the time of charging and the price of electricity.

‘When the number of electric vehicles rises, connect­ing them to the grid in a smart way is a precondi­tion for managing grid loads,’ says Director Hannu Hakalahti of Elektrobit.

When there is a high number of electricity vehicles in use, their uncontrolled charging may interfere with the balance of the electricity grid. However, at their best, electric vehicles can balance out the network load.

Electric vehicles helping the smart grid

JARMO PARTANENProfessor, Lappeenranta University of Technology

At their best, electric vehicle batteries can even balance out the network load by functioning as an energy storage for distributed generation.

2

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2

6

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8

4

10

5

1 2

6

7

8

9

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1 4 1 6 1 8 20 220

D IREC T N IGHT-T IME CHARGING

STAGGERED N IGHT-T IME CHARGING

COMBINED WORKPL ACE AND HOME CHARGING

OPT IM IZED CHARGING

CURRENT POWER NEED WI THOUT E L EC TR IC VEH ICLES

POWER MW

T IME OF DAY

JAN SEGERSTAMDevelopment Director, Empower IM Oy

With the SGEM program, we are able to model a future environment together in a comprehensive way. Nobody can do it alone.

E L EC TR IC I T Y CONSUMPT ION IN F INL AND OVER ONE WINTER WEEK

MW

h/h 16,000

14,000

12,000

10,000

8,000MON TUE WED THU FRI SAT SUN

FOR EX AMPLE , W I TH CONTROLLED HEAT ING, HOUSEHOLDS COULD BAL ANCE CONSUMPT ION PEAKS .

I F THE CONSUMER PR ICE OF E L EC TR IC I T Y WA S BA SED ON THE E L EC TR IC I T Y PROCUREMENT PR ICE AT THE T IME OF CONSUMPT ION , I T WOULD MOT IVATE CONSUMERS TO BE F L EX IB LE IN CONSUMPT ION ACCORD ING TO PRODUC T ION F LUC TUAT IONS .

SMART GRIDS AND ENERGY MARKETS 17

The foundation of the electricity system has remained unchanged from the beginning of electricity distribu­tion. Production and consumption must be balanced to ensure that the quality of electricity is high and the network is in good condition. Traditionally, production has been regulated according to consumption, but so­lar and wind energy is stirring up these practices. Its production is not flexible, and it is hard to forecast.

‘Restriction on production is one alternative, but it goes against the principles of renewable energy use. Therefore, it is increasingly important that the demand for electricity is flexible,’ says Development Director Jan Segerstam of Empower IM Ltd. According to Segerstam, the structures of the market and electrici­ty networks do not support flexibility particularly well in small distributed sites, such as in households. One of the research subjects in the SGEM program was the question of what could be done about the structures.

In the unregulated electricity market, a structural re­form requires cooperation between a number of dif­ferent participants and harmonization of conflicting targets. For energy producers and users, demand re­sponse can provide financial benefits. However, for electricity distribution system operators flexibili­ty means, above all, costs in the current situation. Flexibility requires a smart network, and smartness costs money. However, at its best, flexibility helps net­work companies to avoid or at least to postpone in­vestments related to the strengthening of network infrastructure.

‘With the SGEM program, we were able to model a future environment together in a comprehensive way. No one could do that alone,’ Segerstam says. In his opinion, Finland’s advanced electricity market is an exceptionally good development environment. Remotely readable smart meters installed in almost

every Finnish home are an excellent starting point. The meters have the technical readiness to control, for example, electric heating in 600,000 homes.

The SGEM program paved way for demand response control through various methods and created the necessary function chains to flexibility­related data exchange. Information exchange was studied in four different towns from slightly different aspects, and consumers took part in the definition of control in one of the studies. Control systems installed in customer properties were also used as an alternative to remote­ly read smart meters. These systems can be fully con­trolled and updated from the control room.

Segerstam expects the studies to result in a business model for electricity sales and distribution where demand response has been taken into account. According to him, the model may also be of benefit in the other Nordic countries and in Central Europe. He points out that changes to legislation in Finland would promote the utilization of pricing that encour­ages flexibility. At the moment, consumers can choose time­based pricing and control, which usually divides the price of electricity between hourly prices or day and night prices. Segerstam trusts that a consumer market that promotes flexibility could become a rea­lity if electricity meters with the control option could be widely utilized in the unregulated market.

‘More incentive pricing would be based on the actu­al procurement price of electricity at the time of con­sumption. It is important that those who are truly flex­ible would also gain the benefits. However, pricing alone is not enough. It is also important that all par­ties to the customer’s supply chain take part in flexi­bility control in order to avoid hidden costs of flexibi­lity in different parts of the supply chain.’

Flexible electricity demand – cost-effective

flexibilityThe production of solar and wind energy is not

flexible, and therefore electricity consumption must be flexible. The structures of the electricity grids

and markets must be upgraded to make flexibility worthwhile for consumers.

PERT T I JÄRVENTAUSTAProfessor, Tampere University of Technology

When demand response cuts consumption peaks, it balances the network load, which is also beneficial to system operators.

NE T WORK COMPANY

ELEC TR IC I T Y MARKE T

€

Detailed information about consumption and the opportunity for demand response and forecasting » costs are down

Detailed information about consumption » reduction of costs » quality of electricity improves

Detailed information about consumption and the quality of electricity, as well as automatic reports on network faults » more effective fault management » more accurate load modelling and estimation of network status » more effective loss compensation and allocation of investments

SMART GRIDS AND ENERGY MARKETS 19

By law, 80 per cent of distribution network customers in Finland have to have a remotely read electricity me­ter, a smart meter. In practice, almost all Finnish house­holds have the meter. This solution is exceptional on the global scale, and Finland is a forerunner. Meter readers no longer go around knocking on doors, but what else can be achieved with the meters? This ques­tion was dealt with in a number of different contexts in the SGEM program.

‘In the SGEM program, we were able to examine the utilization of meters in a comprehensive way, taking all parties into account,’ says Pertti Järventausta, Professor of Power Engineering at the Tampere University of Technology.

The benefits are obvious from the consumer’s and the electricity retailer’s points of view. With the me­ter, an electricity retailer can monitor and bill the cus­tomer’s electricity consumption based on real hourly consumption, and the consumer can save money by using electricity at the most favourably priced times of the day.

‘An electricity company can also develop services that help customers to monitor and control their con­sumption.’ When demand response cuts consump­tion peaks, it balances the network load, which is also bene ficial for system operators.

Järventausta points out that there are also other possi­bilities to utilize smart meters in the energy system of

the future. When the meters collect detailed informa­tion about each customer’s consumption, the loads of different customer types can be modelled even more accurately than before, which will help in network de­sign and loss assessment.

Network companies also use smart meters in fault management in addition to other network automa­tion. The data systems of control rooms collect and analyze data from different parts of the network, for example, to prevent and identify faults.

‘Smart meters can offer extremely precise information, e.g. on the quality of electricity, especially in terms of voltage,’ Järventausta explains. The meters also send automatic notifications of a network fault and that way direct a maintenance team straight to the fault location, which reduces the duration of power cuts.

While the utilization of electricity meters increases, the meters themselves are also developed. Home en­ergy management systems, offering more versatile possibilities, e.g. in demand response, are also deve­loped. Järventausta is not worried about the question whether these systems will surpass the current meters in terms of functionality.

‘In any case, the maximum life cycle of a meter is 15 years. The forerunners will start replacing meters al­ready in the next few years.’

Full benefits from smart metering

Almost all customers in Finland have a smart meter. When used in a versatile way, it provides an

opportunity for smart management of the power grid and development of the electricity market.

SEPPO HÄNN INENTechnology Manager, VTT Technical Research Centre of Finland

In the simulation environment, wind power developers can test wind power protection systems by simulating different types and lengths of faults.

10–28 22:0010–28 18:00 10–29 02:00

WHOLE COUNTRY

Out

put [

MW

] 200

150

100

50

010–28 14:00 10–29 06:00 10–29 10:00 10–29 14:00 10–29 18:00 10–29 22:00

CURR

ENT

MO

MEN

T

MODEL DEVELOPED IN THE SGEM PROGR AM FORECA STS WIND POWER PRODUC T ION IN F INGR ID ’S CONTROL ROOM.

95% confidence interval

The need for provision before the model developed in the SGEM program.

AC TUAL FORECA ST

ACTUAL / 120 MW

2-H FORECAST

12-H FORECAST

FORECAST – ONLINE

FORECAST – ALL / 230 MW

SMART GRIDS AND ENERGY MARKETS 21

Finland’s national electricity transmission grid oper­ator Fingrid ensures that the balance of electricity generation and consumption is maintained at every moment. This task is made easier by the fact that the major producers are obliged to estimate and regu­late their production. However, there are an increas­ing number of producers who do not find it sensible to regulate production. For example, it is typical of dis­tributed generation that electricity is produced when it is windy or when the sun shines.

In order to prepare for wind power production, too, Fingrid itself also carries out forecasting. In the SGEM program, VTT studied different methods of forecast­ing and developed a model that forecasts production over the next 24 hours and shows actual production for the past 12 hours.

‘The model is based, e.g. on wind forecasts and prob­ability calculations. It also takes into account the vol­umes of electricity that different power plants have produced under different wind conditions,’ explains VTT’s senior scientist Seppo Hänninen.

Fingrid’s control room operators have monitored VTT’s forecast for about a year. ‘The program has been a good addition to existing tools and it has a clear user interface, and therefore we are considering using the forecast also in the future,’ says Adviser Markku Piironen of Fingrid.

In view of wind power, dimensioning of power lines was also studied. Safe electricity transmission requires that the conductor does not heat up too much. The heating is affected by the volume of electricity transmitted with respect to the cross­sectional area of the conductor and by the conditions in which this takes place. Cooling of lines improves, for example, in high winds.

The electricity market, temperature and transmission capacity information in situations where the line load turns into a bottleneck in electricity transmission was studied in the SGEM program. According to Hänninen,

it is possible to achieve considerable savings by in­creasing the permitted load capacity of lines within the limits of environmental conditions.

Wind turbines can be problematic to the electrici­ty networks, but problems can also stream into the wind turbine through the network. For that reason, it is important that wind turbines are automatically detached from the network when a serious network fault takes place in order to protect them. According to Hänninen, a wind turbine can, however, be unnec­essarily detached from the network due to a harmless or momentary network fault.

In order to study these kinds of situations, a simula­tion environment was created in the SGEM program to model wind power production and the electricity network with the aid of physical equipment and sim­ulation programs.

‘In the environment, wind power developers can test wind power protection systems by simulating differ­ent types and lengths of faults.’

As distributed generation increases, the preconditions for off­grid use of electricity networks improve. Off­grid use means separating a network in a certain area, a micro­grid, from the rest of the network, for exam­ple, as a result of network fault when the area’s own electricity generation is sufficient for the consumption in the area in question. In the SGEM program, control of the microgrid and its internal electricity generation, as well as automatic identification of off­grid use and network protection, were selected as a research area in the SGEM program.

‘After identification, network protection must be changed to correspond with the situation. This has to take place rapidly and automatically because the off­grid mode can be turned on and off again seve­ral times in a single day, depending on the precondi­tions of the off­grid electricity generation in the area,’ says Hänninen.

Wind power and the electricity network challenge each other

Forecasting of wind power facilitates its utilization in the electricity network. The use of wind power is also promoted by the development of protection in the

network and in the turbine.

MERJA PAKK ANENSenior Researcher,University of Vaasa

The experiences have been positive, and almost all were happy to recommend the panels to others.

SMART GRIDS AND ENERGY MARKETS 23

The visions of increasing renewable energy sourc­es are largely based on distributed microgeneration. Companies and households are expected to gener­ate electricity, for example, with a small wind turbine or solar panels.

The interest of Finnish households towards microgen­eration of solar power was investigated in the SGEM program. In the first part of the study, 20 energy ex­perts and 17 owners of solar panels gave their opin­ions on the subject.

According to the study, the greatest reason for the low popularity of microgeneration is the long repay­ment period of the equipment investment, which can be as long as 25 years. ‘Experts believe that the repayment period for the investment should be less than 10 years before the consumers would be inte­rested in microgeneration of their own,’ says Senior Researcher Merja Pakkanen of the University of Vaasa. According to her, the majority of those who had already installed solar panels also regarded the repayment period as too long.

‘However, the same people may have justified their purchase with the fact that the panels will generate free electricity,’ Pakkanen points out. Many explained their investment also with environment values, and some were interested in the technical side of electri­city generation although the product package did not require technical expertise.

Before acquiring solar panels, single­family house owners were interested in safety in relation to the roof of the building. ‘The experiences have been positive, and almost all were happy to recommend panels to others.’

All microproducers who were interviewed had an op­portunity to use the electricity they produced them­

Households are gradually becoming

microproducers

selves or to feed it to the grid. It would be most fa­vorable to use the electricity yourself, but the sunny hours and the electricity consumption of the house­hold do not necessarily go hand in hand. According to Pakkanen, many microproducers had systemati­cally started using electricity during sunnier hours, but not everyone was interested or had the time to do that.

The average age of the interviewed microgenerators, 59 years, corresponded with the estimates of the in­terviewed experts, according to which the most po­tential microgenerators were over 50 years old.

‘Young people may wish to acquire distributed gene­ration of renewable energy, but they may also have to move properties in the near future. Therefore, it is important to see solar panels as an investment that raises the value of the property with immediate effect and pays in the longer term,’ says Product Manager Olli Raatikainen of Fortum. According to him, the study illustrated well the popularity of distributed generation and the preconditions for its increasing popularity.

In the second part of the study, the researchers con­ducted an online questionnaire among those con­sumers who had not acquired solar panels. A total of 198 respondents living in a detached home took part in the study. 74% of them found that the electricity bill has a great significance, and those with electric heating regarded it even higher.

The consumers had both positive and negative views of wind and solar power, but the majority supported their increase. Most of the respondents knew only lit­tle or nothing about electricity generation carried out by households. The respondents regarded about EUR 4,000 as a suitable investment cost of solar panels and eight years as a fair repayment period.

Households have a place in future electricity systems as electricity consumers, but also as microproducers.

Are the Finnish people ready for this?

24 SMART GRIDS AND ENERGY MARKETS

Remote control of electricity networks has increased strongly in Finland in the past few years. Network faults can be localized even faster and fault areas can be limited so that fewer and fewer customers suffer from power cuts and network equipment is much less likely to be damaged due to fault current. ‘Advanced remote control is also a necessity in reliable manage­ment of distributed electricity generation. For exam­ple, a wind turbine has to be rapidly detached from a faulty network in order to avoid a dangerous si­tuation,’ says Research Manager Jani Valtari of ABB.

Technologies enabling increasingly smart network management were studied in the SGEM program. For example, a fault detector developed by VTT can be connected directly to a line in the medium­voltage network to send a wireless message, e.g. to a wind turbine or substation. At the substation, the central­ized automation system studied by ABB collects and analyzes all messages related to network protection.‘It is easier and cheaper to update a centralized au­tomation system than every single protective re­lay in the substation,’ Valtari points out. According to him, centralized data processing also helps to no­tice faults hidden in the network even before they turn serious. Forecasting is also supported by an ana­lyzer developed by Mikes, which offers increasingly precise metering results.

Valtari regards it as important that it was possible to study the technologies and develop them in electric­ity networks in use. He believes that technologies de­veloped by Finnish experts can grow into commer­cially significant products and also be successful in the export market.

In addition to equipment, network intelligence re­quires rapid data transmission. ‘In the wireless 3G and 4G networks, we have achieved latencies of up to 40 milliseconds. In that time, the message is trans­mitted, for example, from the substation to the pro­duction facility, and the level of reliability meets the network companies’ requirements,’ says Valtari.

VTT also studied the reliability and cost­efficien­cy of commercial mobile data communication net­

Smart grid requires new technology

works. The power and mobile data communication networks and their functioning were modelled in a selected rural area with measurements and vegeta­tion data.

‘In the model, we created fault situations in the elec­tricity networks in order to see how they affect the data communication network and the wireless re­mote control of the electricity network,’ explains VTT’s Principal Scientist Seppo Horsmanheimo. As the base stations of data communication networks need electricity, a long power cut affects the data communication links and thereby the remotely con­trolled equipment in the power grid, as well as the mobile phones of maintenance workers repairing the network in the field. This was clearly highlight­ed when the data from the Patrick storms were be­ing analyzed.

‘With the data, we were able to accurately mod­el how the storms affected the electricity and data communication networks and how the networks re­covered from them,’ Horsmanheimo explains.

Some of the research focused on the urban environ­ment where buildings pose new challenges in the reception and delays in the wireless network. ‘We carried out the measurements in the field and simu­lated network operation on the basis of the measure­ments,’ says Horsmanheimo. Research carried out in defined areas offer a good basis for analysis in dif­ferent areas in Finland and overseas. Horsmanheimo believes that modelling is of interest primarily to electricity distribution system operators who have to choose where and how it pays to use the wireless networks. On the other hand, the results will proba­bly also be of interest to mobile operators who want to develop their operations.

Studies have long shown that commercial data communication networks are suitable for smart grid communications in Finland as long as the network companies and mobile operators know the possibil­ities and limitations of wireless networks and take into account the mutual dependencies of networks.

Remote control of an electricity network requires advanced equipment and reliable data communication links. The existing technology has

capabilities to this.

MED

IUM

VO

LTA

GE

20 K

VH IGH VOLTAGE 1 1 0 KV

FAULT DE TEC TOR

SMART SUBSTAT ION

R AP ID DATA TR ANSMISS ION

JAN I VALTAR IResearch Manager, ABB

Technologies developed by Finnish experts can grow into commercially significant products and also be successful in the export market.

AREA IN WH ICH FAULT MUST BE SOUGHT WI THOUT FAULT DE TEC TOR (ABOUT 50 KM)

AREA IN WH ICH FAULT MUST BE SOUGHT WI TH FAULT DE TEC TOR ( 1 -2 KM)

FAULT DE TEC TOR

NE T WORK RECLOSER

OSMO S I IRTOUnit Manager, Helen Sähköverkko

The objective is an extensive and smart fault management system. In an urban area, automatic localization and separation of network faults essentially speeds up fault management.

!

SMART GRIDS AND ENERGY MARKETS 27

At the beginning of the SGEM program, network fail­ures in Helsinki resulted in power outages lasting for an average of almost one hour. Helen Sähköverkko Oy calculated that the faults in electricity distribution cost the customers about two million euros per year. The network company also estimated that the costs would be diminished to a fraction of this if the pow­er cuts were shortened to one minute.

‘In five or ten years, we can talk about a few minutes at best. We have already achieved about 40 minutes on average. We have introduced new technologies, learned about practices in other countries and drawn up our own optimization models,’ says Unit Manager Osmo Siirto of Helen Sähköverkko. He emphasizes that the optimization models can also be utilized in other electricity networks in Finland and abroad.

The technical improvements by Helen Sähköverkko are largely related to the utilization of remote use and control in fault localization and the isolation of the fault area. The logic of fault management, as well as affordable fault detectors suitable for an urban net­work, which can be installed close to each other in the entire network, have been defined in the SGEM program.

‘The objective is an extensive and smart fault man­agement system. In an urban area, automatic localiza­tion and isolation of network faults essentially speed up fault management. That way, it is possible to avoid problems related to field work, such as move­ment in slow traffic and difficulties to gain access to

Smart grid repairs itself

properties and transformers in order to carry out con­nections,’ Siirto says. He describes future networks as self­healing, and this term is also used by Smart Grid Project Manager Oleg Gulich of Caruna. In practice, this does not mean repairing, but it mainly means that, in case of a fault, a new route is automatically found for electricity distribution.

In the SGEM program, Caruna developed fault man­agement in rural medium­voltage networks, and to­gether with ABB it studied automation solutions in Masala in Kirkkonummi, where overhead lines are susceptible to strong winds and, due to the rocks, the environment is not favourable to installing under­ground cables. The research program also launched wider test use in Pusula. Data management was cen­tralized in substations with new equipment, and fault detectors were added to the network.

Challenges faced by the overhead line network in­clude trees and branches that fall over the lines. Branches can conduct electricity from one line to an­other or to the ground, resulting in a short circuit or earth fault. In a traditional electricity network, the fault location has to be searched within a radius of up to 50 kilometres, whereas in Masala and Pusula the fault can be found with an accuracy of 1–2 kilometres.‘Power cuts have been reduced to a half,’ Gulich tells. He emphasizes that, at its best, a smart grid is able to even prevent short power cuts, flickers, which can be caused by tree branches that fleetingly touch the electricity lines.

Faults in the electricity grid cannot be completely prevented. However, it is easy to cut down the number and length of power outages in the countryside and in urban areas by increasing intelligence in the network.

New solutions are already in test use.

USER GROUPS

AUTOMAT IC INFORMAT ION

FROM OPER ATORS’ SYSTEMS

PEKK A VERHOProfessor, Tampere University of Technology

We developed a situation awareness system, in which the authorities and the electricity users to whom the availability of electricity is crucial can also feed information.

MAP-BA SED USER INTERFACE

MANUALLY UPDATED STAT IC DATA

DSO D ISTR IBUT ION SYSTEM OPER ATOR

DSO D ISTR IBUT ION SYSTEM OPER ATOR

RESCUE SERV ICES

WEATHER FORECA STS

TR AFF IC REPORTS

DEF IN I T ION OF CR I T ICAL S I T ES

RESCUE SERV ICES CUSTOMERSMUN IC IPAL I T Y

SMART GRIDS AND ENERGY MARKETS 29

There are still plenty of overhead lines in the medium­voltage network in Finland, and they are susceptible to disturbances. A typical fault is an earth fault, which usually happens when a branch or a fall­en tree touches the line. If the tree conducts electri­city neatly to the ground, the protective relay in the substation immediately detects the fault from the changes in the current and voltage. However, when the tree and the ground are frozen or the ground is rocky, they do not conduct electricity so well, and the protective relay does not necessarily react to the situation.

‘This kind of a high­impedance fault also usually turns more dangerous and harmful,’ says Postdoctoral Researcher Ari Nikander of the Tampere University of Technology. An earth fault may cause an elec­tric shock to people moving in the area, and in the network it can result in an extensive power cut. Therefore, it is important to detect even a tiny fault before it turns into a major one.

A centralized protection method was developed for this purpose in the SGEM program. When a tradition­al protective relay takes care of the situation in the feeder where it is installed, the new method utilizes the information of all feeders and their protective re­lays in the centralized computer in the substation.

Rapid flow of information helps

in fault situations

For the development of the method, the electricity network and the substation with its physical equip­ment were modelled, and high­impedance faults were successfully identified in this environment.

However, it is not possible to completely eliminate fault situations especially in the overhead line net­work. Therefore, the flow of information between the electricity network companies, the authorities and customers was also researched in the SGEM program.

‘We developed a situation awareness system in which you can gather essential information, for example, on the extent of the power cut. The authorities and the electricity users to whom the availability of electric­ity is crucial, such as hospitals, can feed information into the system,’ explains Pekka Verho, Professor of Electrical Energy Engineering at the Tampere University of Technology. Say, during a destructive storm, the system can help the network companies in the prioritization of repair work and the authori­ties, such as the fire and rescue services, in the plan­ning of their own operations. It can also send auto­matic warnings between the parties.

The system was developed in cooperation with the authorities, and a demonstration on the basic prin­ciples of the system, used in the web browser, is cur­rently at hand.

When a tree falls onto an overhead line, a smart grid notices the fault even before it causes a hazard or

an extensive power outage. In fault situations, fluent flow of information between the system operator, the

authorities and customers also helps.

JAN I VALTAR I

SGEM Program Manager, CLEEN Oyjani.valtari@cleen.fi / +358 50 335 2730

JAT TA JUSS I L A-SUOK A S

CTO, CLEEN Oyjatta.jussila@cleen.fi / +358 40 825 6500

TOMMY JACOBSON

CEO, CLEEN Oytommy.jacobson@cleen.fi / +358 40 828 2711