What the U.S. could learn from Europe's latest smart grid ploy

1 Quick Take: After a lackluster response to its 2009 smart grid plan, the EC has finally gotten serious. It is demanding European-wide interoperability standards no later than 18 months from now, threatening intervention if progress stalls. It is also asking all 27 member countries to have a smart grid plan in place by the same time. The EC warns of "stricter regulation" if countries are still making "insufficient progress."

So much for the stick. As for the carrots, the Commission hinted at regulatory incentives. It will also launch its own smart grid demonstration projects in 2011. And a study last fall claimed a smart grid could save Europe 52 billion euros per year.

Likely fallout? More attention paid by international firms to Europe, less to the U.S. What's more, Europe may have the chance to avoid some of the pioneering mistakes made in the U.S. For instance, it appears that it may avoid building the smart grid @$$ backwards, as many utilities in the U.S. are doing. During my last visit, I came away convinced that Europe has a higher smart grid IQ than America. Use the QuickPoll to record your own opinion. – Jesse Berst, founder and chief analyst of Smart Grid News  

The European Commission, disappointed with what it sees as a less than stunning response to its 2009 smart grid plan, has warned member states that more strict smart grid regulations are coming if they don't get moving on their smart meter rollouts. And to sweeten the pot, the EC also slipped into its strategy paper the possibility of regulatory incentives.

Smart meter rollouts are getting heat and a big push from the Commission, which is the European Union's executive branch, because of the EU's mandated goal of having smart meters in 80% of homes by 2020. Overall, the European smart grid initiative is intended to cut network losses, integrate the considerable number of renewable energy sources and improve grid reliability.

John Harris, VP of smart metering and energy management solutions company Landis+Gyr, was quoted in EU policy journal EurActiv as saying smart meters are the critical foundation for building the smart grid and achieving the EU's ambitious energy-related targets. He said of the EC warning, "I don't think this is the panacea that will get everything going but at least there is a recognition of the problem: that there was no real requirement for member states to do anything about smart grids in the third energy package (the 2009 plan)."

Harris, whose company has been very busy with projects throughout Europe, also criticized that EC plan for smart metering as allowing too much time for implementation. "The Commission now has to translate its words into investments in infrastructure, and action on the ground."

The EC paper also says a significant investment gap needs to be filled for the smart grid to happen because grid operators and suppliers are expected to shoulder most of the investment burden, and they won't do it without a "fair cost-sharing model."

But Jessica Stromback, executive director of Europe's Smart Energy Demand Coalition, told EurActiv that the investment is there and the biggest problem for the smart grid right now is regulatory and legislative guidance.

Yes, it's complicated. But the stakeholders interviewed seemed to agree that the EC's strategy paper had set the right tone and was a good start toward more substantial, comprehensive regulations for smart grid deployment.

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