1. Smart Grids Mini Hells Kitchen Held at ETSI, 3 rd March 2010 with Board #77 © ETSI 2010. All rights reserved ETSI/B77(10)46

2. 2 Background Smart Grids flagged strategic topic at Board#75 (Nov 2009) The Board smart grids champions team E. Darmois (lead), K. Dickerson, V. Dominguez, B. Dugerdil, S. Hicks, J. Koss, P. Lucas, J. Sundborg, D. Boswarthick (support) Rationale New concept emerged in how electricity is managed. The power grid becomes less of a one-way highway and more of an integrated, interactive network. This new grid gains intelligence and two-way communications.

3. 3 Issues for study include (strategic topic charter) What are the communication requirements for Smart grids entities? What are the communication requirements for entities in the Smart Grid with devices in homes and businesses? What is the relationship with current proposals for Smart Metering? What can ETSI do to help with this? Overall objective: Devise a strategy and a roadmap for Smart Grids standardization From a technology / architecture perspective – What? From an organizational perspective (ETSI works on some relevant bricks, e.g. smart meters, M2M, PLC, etc) – How? From a partnership perspective - Who with? Background

4. How does the Team work? SG Champions Team works by conference calls and has a dedicated Smart Grid email list and shared FTP workspace ETSI participates in the EU Smart Grids Task Force Task force and the three expert groups http://ec.europa.eu/energy/index_en.htm Purpose of the mini Hells kitchen of 3 rd March Get a bigger picture and feedback from the Board Gather elements to elaborate positioning/value proposition enable the kick-off of standardization work Plan an open event in Q2 2010 (Smart Grid Workshop 14 th June) 4

5. Main issues for Hells kitchen 03/03/2010 What is a Smart Grid, how does it function? What are the principle drivers and challenges? Developments in the EU and beyond. Main blockers and barriers: Costs Regulatory challenges Lack of Open Standards The Smart Grid needs consistent standards worldwide. Many of those standards are in development now in various places around the world. Completing them, stabilizing them and normalizing them planet-wide is a process that will take years of additional development, testing and negotiation". Standardization landscape - where will ETSI add value? 5

6. 6 Agenda 14:00 Introduction-objectives of the sessionWalter Weigel, Director General 14:10 Uncovering opportunities in the emerging smart grid Chris Hartshorn, Research Director Lux Research Inc. 15:00 Smart Grids & Electricity Regulation Roman Picard, Commission de Régulation de l'Energie (CRE, France) 15 :30 Policy perspectives towards the implementation of Smart Grids, the EU and US views David Boswarthick, Secretariat support to Board team 16:00 ETSI assets to contribute to the smart grids standardization challenges Emmanuel Darmois, ETSI Board 16:30 Discussion and conclusions/next stepsAll 17:00 Session closes

7. -- Lux and Client Confidential -- Uncovering opportunities in the emerging smart grid Chris Hartshorn, Ph.D., Research Director Lux Research, Inc. March 3, 2010 Doc: ETSI/B77(10)49 Source: Chris Hartshorn, Lux Research Agenda item: 12.13 Document for: Discussion Late submission

8. 8 -- Lux and Client Confidential -- IT segment of the market will total ~$16 billion in 2015 Challenges in reliability, cost, energy efficiency, and environmentalism demand that intelligent communications systems augment the current grid Global Smart-Grid Market, 2009 to 2015

9. 9 -- Lux and Client Confidential -- Companies must position to capitalize on three stages of smart grid Near-term (1-3 years) Mid-term (4-7 years) Long-term (8-10+ years) What is our vision? Grid stability and operational efficiency Renewables integrationFull SG system (including end users) What products will be critical? AMI/legacy integration Generation optimization and prediction T&D automation Distributed generation siting, modeling, integration, and optimization Emerging energy services Holistic E&E management solutions Residential demand response, TOU, HAN Who are the key players? Customers: Vertically integrated utilities, RTO/ISOs Partners: Utility provider incumbents, RTO/ISOs Customers: Disaggregated utilities, renewables developers, trading markets Partners: Renewables/energy storage developers Customers: Buildings, enterprises, consumers Partners: EPCs, consumer equipment suppliers, automotive partners

10. Smart Grids & Electricity Regulation ETSI Board Sophia Antipolis, March 2010 Doc: ETSI/B77(10)41 Source: Roman Picard, CRE Agenda item: 12.13 Document for: Discussion

11. 11 Summary Electricity market and market players Electricity regulation Regulation impact on smart grids Example of smart metering systems

12. 12 Smart Grids & Electricity Regulation I. – Electricity market and market players

13. 13 Electricity market players Regulator (CRE) European Union State System Operators Producers Electricity Suppliers Industrials Local Authorities Electricity Stock exchange Consumers Services Providers

14. 14 Smart Grids & Electricity Regulation II. – Electricity regulation

15. 15 Historic evolution of regulation Directive #96/92/EC Directive #2003/54/EC Directive #2009/72/EC Law #2000-108 Law #2003-8 Law #2004-803 Law #2005-781 Law #2006-1537 1999 2000 2003 2004 2007 20 % 30 % 37 % 68 % 100 % > 100 GWh/y > 16 GWh/y > 7 GWh/y Pro Private 200 sites 1,400 sites 3,200 sites 4 M sites 35 M sites

16. Policy perspectives towards the implementation of Smart Grids, EU and US views Hells kitchen at ETSI, 3 March 2010 © ETSI 2010. All rights reserved Doc: ETSI/B77(10)46 Source: ETSI Director-General Agenda item: 12.13 Document for: Discussion Late submission

17. 17 The American View The smart grid plan offers the hope that it will save us money, protect our power sources from blackout or attack, and deliver clean, alternative forms of energy to every corner of our nation. The growth of clean energy can lead to the growth of our economy - President Barack Obama

18. 18 US – Economic Stimulus American Recovery and Reinvestment Plan – 2009 $787 Billion stimulus The bill provides $4.5 billion to modernize the nation's electricity grid with smart grid technology. The bill increases federal matching grants for the Smart Grid Investment Program from 20% to 50%. $10M for NIST to coordinate smart grid standards Department of Energy (DOE) lead agency for U.S. Government - $3.4 billion of Stimulus-funded Smart Grid Investment Grants The bill provides $2.5 billion for renewable energy and energy efficiency R&D, demonstration and deployment activities. The bill provides a three-year extension of the Production Tax Credit (PTC) for electricity derived from wind facilities through December 31, 2012, as well as or geothermal, biomass, hydropower, landfill gas, waste-to-energy and marine facilities through December 31 2013.

19. 19 The European View Recital 27 Member States should encourage the modernisation of distribution networks, such as through the introduction of smart grids, which should be built in a way that encourages decentralised generation and energy efficiency. Article 3, 11 In order to promote energy efficiency, Member States, or where a Member State has so provided, the regulatory authority shall strongly recommend that electricity undertakings optimise the use of electricity, for example by providing energy management services, developing innovative pricing formulas or introducing intelligent metering systems or smart grids, where appropriate. - Statements on Smart Grids Directive 2009/72/EC of 13 July 2009

20. 20 EU - Drivers and actions towards Smart Grids Present EU targets require changes to the grids. Smart Grids solutions embrace the changing structure of generation, market and use of electricity. This evolution is a complex subject and a true industrial take-up has not been happening to date. It requires a coordinated approach addressing various issues and all the actors. Key challenges are of regulatory nature. The Third Energy Package provides the appropriate environment for the implementation of Smart Grids across Europe and its obligations support it to a large extent by 2020. A Task Force has been launched to set up the policy, further regulation recommendations and coordinate the first steps towards the implementation of Smart Grids.

21. 21 Conclusions and Recommendations US clearly lead EU on the issue of Smart Grids Started earlier Inject more money Heavy push from Government EU is clearly committed to Smart Grids Started slightly later Less money injected Less political push on the issue Can use lessons learned in US, and in EU on Smart Metering Recommendations Rec01: ETSI participates pro-actively in the EC Smart Grid Steering Committee meetings Rec02: ETSI nominates participants for the three EC Task Force Expert Groups Rec03: ETSI cooperates with Cenelec on Standards roles and Strategy being developed Rec04: ETSI monitors to the technical work done in US (and other regions) on Smart Grids (China, Japan, others…) Rec05: ETSI participates in the NIST SGIP meeting (open invite obtained)

22. World Class Standards Smart Grids An opportunity for ICT and ETSI Champions Team © ETSI 2010. All rights reserved