(The author is a Reuters market analyst. The views expressed
are his own.)
By Gerard Wynn
LONDON Oct 12 Smart grid and meter applications
in Europe are having to compete with other services for radio
frequencies, raising questions over grid stability and value for
All wireless technologies transmit and receive information
across airwaves known as the radio spectrum, an increasingly
crowded resource essential for services from mobile phones to
wireless internet and TV and radio broadcasting.
Utilities are installing smart meters to help to manage peak
power demand, while smart grid services are being expanded to
enable real-time monitoring and automated remote control. Some
of that communication will be across fixed wires, including
power lines; the rest will be wireless.
To do this, utilities argue that they should be allocated
free dedicated spectrum. As things stand, frequencies can be
reserved for particular applications through competitive
auctions of exclusive licences, or there is the option of
regulated, unlicensed use.
So far, smart energy operators have chosen between
purchasing licences or using unlicensed wavelengths in an ad hoc
The European Commission estimates the spectrum's annual
value at 200 billion euros ($259 billion) or more in Europe,
leading some grid operators and utilities to argue that they
cannot compete with mobile phone companies to acquire licences.
They say that doing so would involve passing on heavy costs to
To justify free dedicated spectrum, however, they will have
to do a better job of explaining the threats to grid stability,
such as how the rise in local solar and wind power generation,
plus increasing cross-border transmission capacity, are putting
new strains on the network.
The European Commission recently cancelled a planned impact
assessment on dedicated spectrum for smart energy systems after
an inconclusive consultation, it said.
Instead, it is including that initiative in work on other
sectors and a more generic programme to promote the "shared use
of radio spectrum resources in the internal market".
Supporting policies for the smart grid include the EU's 2009
renewable energy law, which viewed such technology as an enabler
for the integration of an increasing amount of renewable energy.
The Energy Efficiency Directive identified smart meters as
an important measure contributing to energy efficiency, while
the 2009 "third package" for the internal energy market imposes
an obligation to roll out smart metering in member states by
Smart meters allow two-way, real-time communication between
utilities and residential and commercial energy customers and
their appliances, enabling consumers to offer to cut peak energy
use in exchange for cheaper tariffs.
The meters are expected to communicate with operators' back
offices through wireless or fixed-line connections, and with
appliances across the home by wireless.
Smart grid services, meanwhile, are intended to make grids
more secure, especially the final distribution to consumers. One
way this would be done is with sensors and switches to direct
power in multiple directions.
That can help to incorporate more local renewable power
generation and avoid replacing cables and sub-stations to
While grid monitoring and management is usually conducted
through fixed-line connections, wireless applications are
increasingly important to control the lower voltage and more
extensive distribution end of the grid, and as back-up.
Whether smart energy systems need dedicated radio spectrum
partly boils down to whether the service is needed urgently.
The EU utility trade body Eurelectric argues that grid
management is critical, in contrast with the "loose timing/
response requirements of demand response services" such as smart
It concluded in its response to the European Commission
consultation on spectrum allocation that grid operators should
have some dedicated bandwidth, while both grids and meters would
benefit from a harmonised, EU-wide approach.
"The existence of a specific band for smart grid and smart
metering applications at the European level would bring more
competition in the metering and control equipment industry,
leading to lower costs," it said.
"A dedicated band reserved for DSOs (distribution system
operators) and smart grid applications ensures secure and
reliable communication, which should reduce the risk of attacks
and the breach of integrity."
It argues that during critical events of grid instability,
such as voltage spikes or blackouts, it needs to have exclusive
control of uncluttered airwaves to direct electricity flows.
Smart grid service providers point out the more prosaic
rationale for requesting free dedicated spectrum: the expense of
having to compete with mobile phone companies to purchase
Phone companies are expected to bid several billion pounds
in a forthcoming UK auction of 4G spectrum.
As regulated entities, European grid operators are limited
in the tariffs they can charge energy consumers and would have
to justify to regulators why they need to be able to charge more
so that they can compete for radio frequency licences.
Any allocation of free dedicated bandwidth would be a big
step for issuing authorities because it would be seen as
preferential treatment over other services that have huge value
to the economy and pay for licensed airwaves.
Furthermore, standardising which airwaves smart energy use
may make sense for grid operators operating across European
borders, but it is unclear how it will cut costs.
U.S. smart meter specialist Echelon was unconvinced by
either in its response to the EU consultation, especially given
the availability of power lines for communication.
"We advocate the use of existing RF (radio frequency)
networks and spectrum, rather than allocating additional
spectrum specifically for these applications. It would not make
sense to dedicate specific spectrum across Europe, since in many
situations it will not be used."
($1 = 0.7726 euros)
(Editing by David Goodman)