Realising Smart Grids

Abstract: The smart grid is a popular and well-debated topic in the energy industry right now. The concept itself has a variety of definitions, both followers and opponents have their opinions. The smart grid has been a discussed on both the national and international market. In Sweden, the smart grid has received increased interest and numerous stakeholders. This applies both among politicians with organizations such as The Smart Grid Council, but also at energy producers Vattenfall and giant engineering companies like ABB. What happens in the future is still uncertain but there is reason to believe that the Swedish grid is becoming smarter, at least with respect to all the attention it gets. The purpose of this paper has been to examine the realization of a smart grid in Sweden, by examining possible incentives and barriers. As mentioned, the concept of smart grids is widely debated and relatively undefined. Therefore the work started by utilizing a definition which had to be well established, accepted and correlated with the authors' approach and aim. The chosen definition comes from the European Commission (2010) and reads: “A Smart Grid is an electricity network that can cost efficiently integrate the behaviour and actions of all users connected to it – generators, consumers and those that do both – in order to ensure economically efficient, sustainable power system with low losses and high levels of quality and security of supply and safety” A theoretical framework was developed in order to obtain facts, information, and serve as tools for future analyses. For example, the authors selected The evolution of large technological systems by Thomas Hughes (1987), which describes large technological systems and how they develop in society. Further Marx’s ”Das Kapital” (1867) and several earlier research regarding smart grids were also selected and used for the analyses. Potential stakeholders and key-actors were pointed out and examined to get a picture of the current situation regarding the smart grid in Sweden. Three main areas of key-actors were chosen: academia, business, and political/governmental organizations. Nine qualitative interviews were conducted with actors who were considered to have good insight and influence in the area. The collected material and information was analyzed by the following aspects: financial, technological, sociological, and environmental. The following results were found through the interviews:  Almost all interviewed key-actors pointed out the economic factor as the decisive aspect for a Swedish smart grid realization in Sweden. At present, it was not considered to be sufficient economic incentives.  It was pointed out that the electricity in Sweden is very cheap and therefore customers are not interested in paying more for it, especially not big ones like major industries. The uncertainty about who will pay for the necessary renovations of the existing power grid was also pointed out.  Many of the interviewed actors saw great potential in the political guidelines and regulations. They considered that more stringent requirements and rules that favours a smarter and greener electricity, would lead the development towards a smart grid.  The technical aspect of a smart grid was not considered to be an obstacle. On the contrary, most of the technology was considered already available.  A summative finding was that the majority of actors did not believe in a revolution of the smart grid in the near future. They rather saw it as an evolutionary process that may emerge. Several findings correlate well with the theoretical framework. For instance, Beise & Rennings (2004) confirms the importance of political regulations. Their view on the smart grid as an evolution that will adapt little by little follows the arguments ii that Hughes describes. The value-aspect of the smart grid and the fact that is not considered to be enough today, at least not in an economical way, follows Marx’s theory of value from 1867. The smart grid development fitted well into Leonard- Barton’s (1998) aspect of mutual adaption, which points out that both the users and the technology have to be changed in order to achieve success. The conclusion was drawn that most of the actors are in favour of a smart grid, but they did not see that there will be a "smart revolution" in the next few years given the current financial barriers.