SHOK-Cleen: Smart power grids will revolutionise electricity markets

More reliable distribution infrastructures, more flexible and service-oriented markets and an opportunity for consumers to produce and sell electricity are some of the development paths that have been opened in CLEEN Oy's SGEM research programme.

There has been a lot of talk about smart power grids for many years but two issues need to be examined in more detail: what is their national and international development potential and what steps should players in the energy sector take in order to ensure that the visions will also become reality.

Answers to these questions have been sought and found in the SGEM (Smart Grids and Energy Markets) research programme, which was launched by CLEEN Oy (SHOK) in 2010 and which is now nearing completion. A broad range of players and research institutes in the sector have been involved in the programme.

The programme focus has been on five themes: management of smart grids, active resources, energy distribution infrastructures of the future, electricity markets of the future and the development paths of the introduction of smart grids.

Smartness is a reliability factor

SGEM's Programme Manager Jani Valtari, who works at ABB, points out that Finland's power grid has gradually become more intelligent in recent years. Smart solutions have helped to make the grid more reliable, made it easier to locate malfunctions and sped up the process of repairing defects.

They have also had an impact on consumer behaviour as energy companies have already invested in remote read meters and in real-time monitoring of electricity consumption. Finland's new electricity market act has also served as a development driver as it has substantially tightened operational reliability requirements for electricity distribution.

However, according to Valtari, the programme has a much longer term target.

'The fact is that the power grid is one of the most critical parts of society. It must be made more reliable by introducing more automation, remote reading and small-scale power generation. A smart grid knows where and how electricity is distributed, where additional capacity is available and where malfunctions are located. Even though the smart grid 1.0 already exists, we are aiming at the next-generation smart grid,' explains Valtari, summing up the vision for the future.

Turning consumers into sellers

The list of investments and improvements that should accompany the programme is a long one. It includes extensive laying of cables, integration of alternative energy sources (such as wind and solar energy) into the distribution networks, use of decentralised energy generation, and IT solutions improving the reliability of the grid and making the management of malfunctions easier. To this we should add electric vehicles, which are set to become increasingly common in the future, and energy storage systems.

Jan Segerstam, Development Director of Empower IM, was in charge of the programme section in which changes and flexibility in the electricity markets were examined. He notes that smart grids will also revolutionise consumers' role in the electricity markets. This is because in the future you can sell the surplus energy coming from your own solar panels or other sources.

By activating the customers' flexible loads so that they can even out fluctuations in the electricity markets and production volumes, it will be possible to avoid expensive investments in power plants and provide customers with new value. At the same time, the new services will make passive customers into active market players.

'The range of services and products available in the electricity markets will also become more customer-friendly and service-oriented. For example, instead of just purchasing electric energy, buildings relying on electric heating could choose and buy the right temperature,' says Sergerstam, laying out his vision for the future.

In fact, he is effusive in his praise of the SGEM programme.

'Cooperation has helped to turn talk and visions into concrete results. The SHOK programme has provided our company with new product development impulses and helped us to establish contacts and partnership networks. It would have been really difficult to achieve all this with our own resources,' Segerstam adds, expressing his satisfaction with the programme.

According to Jussi Mäkelä, Senior Technology Adviser at Tekes, the programme has brought together the most important Finnish players and the cooperation has considerable improved their chances to achieve international success.

'The programme has also taught us that there is a need for such cooperation. Hopefully the results will also generate more product development and turnover,' he adds.

Caption: The SGEM programme has helped energy players to establish networks and has opened up promising development paths.

Further information

Jani Valtari
Programme Manager, SGEM
tel. +358 44 425 2218
jani.valtari (at)

Jan Segerstam
Development Director Empower Oy
tel. +358 50 335 2730
jan.segerstam (at)

Author: Recommended Finland/Timo Sormunen

Sanna Nuutila
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