02 NL
October 2014

Dear Reader,

Thank you for your enthusiastic feedback regarding our first edition from July! As promised we are coming back after the Summer break with our second edition. This time we want to share with you information on one topic that we at R&D Nester are deeply involved in: the Substation of the Future.

Additionally, in a series of two articles to be continued in the next edition, we bring you some views at European level on the topic R&D and its regulatory framework, and on how some countries are addressing the issue.

On our technical information section, we address issues such as "transactive energy", the "global energy internet" and "dynamic tariffs". These are all topics which are under intense debate in the energy field.

Our traditional section on Legislation provides you with the latest updates on key legal and regulatory pieces of information. This time, this section is also enriched with some interesting links and curiosities. Also, for the first time, we present a review of a book that we considered interesting as it is related to Portugal. In case you come across any book that you consider interesting sharing with this community in the cross roads between Energy Transmission Systems and Research, Development and Innovation, please feel free to contact us.

We maintain our section "Quiz" which was very popular in the first edition, with a quite interesting set of answers as you can see in the results presented. Test your knowledge again with an enlarged set of trivia questions!

You will find more on this and other topics in the notes below. We hope that you find the minutes spent with us both relevant and rewarding.


Nuno de Souza e Silva
General Manager


The 'Substation of the Future' project

Until now, the power grids have been firmly separated in transmission and distribution, with the power flow only in one direction, from huge power plants, passing through the transmission, then distribution, and finally reaching the (passive) consumers.

Nowadays, however, this model is rapidly changing, due to some factors:

  • There are new forms of electricity production, as wind farms or even micro-generation at the consumer side;
  • An increasing pressure from the energy markets for efficiency and cost reduction;
  • A conscience for CO2 emission reduction;
  • The consumer will have an active role, when the demand side management (DSM) is implemented.

In the future grid, besides the power flow (in both directions), the flow of information and business will have also to be considered.

A Smart Grid can, then, can be considered a grid that copes with the new paradigm that has been described. The Smart Grid nodes are the Smart Substations.

The 'Substation of the Future' of R&D Nester project has been launched with the aim of producing the new technical specifications of the substation secondary systems (control, automation and protection) that may be adopted by REN, SGCC or other utilities in their Smart Substations.

This project is divided in three main parts:

  • High-level Assessment: The first part of the project will comprise the work towards a clear definition of what will be the technical requirements for the Smart Substation. In this part, the Vision and the Reference Guide are the derivables;
  • Specification and Design: The second part will consist on the definition of all technical specification that will be part of the Smart Substation. The derivable is the Technical Specification;
  • Demonstration of concept: The last part will include the assembly of a typical Smart Substation test system based on different network topologies. The test system will be able to simulate a specific power grid environment dynamically. The derivable is a Final Report.

Developing a Vision

To develop a Vison for the Substation of the Future, stakeholders have been engaged, by means of a survey and a workshop.

These stakeholders represented different departments of TSO's, vendors, system integrators, consultants and academia.

The main characteristics identified as desirable for a Smart Substation include:

  • With real time information flow: to all stakeholders;
  • Highly integrated: instead of having devices specialized in one particular function, a single piece of equipment will perform several functions;
  • With new functions: for instance, functions involving, not only one substation, but an area of the grid;
  • Easy to operate and repair;
  • Safe and secure: for instance, against cyber-attacks;
  • With extended monitoring: the existence of a communication network in the substation will make easier the integration of sensors in high voltage equipment;
  • Self-healing: capability to adapt to new conditions of the grid and also of the secondary system itself.

Examples of Visions put forward are:

The smart substation is part of a decentralized network...

  • With functions of network management,
  • Data acquisition,
  • Semi-autonomous decision-making network operations,
  • Asset management in total cost of ownership logic,

The smart substation will be a platform that enables...

  • Easier integration of protection and automation functions,
  • Together with high voltage equipment to achieve,
  • Easier implementation and maintenance,
  • And lower total life-cycle costs.

Regulatory framework for R&D - a need and a must (Part I)

In the following a general description of the current regulatory framework in what concerns R&D is given, with special focus on the results proposed by the project THOR1.

Some background

The 20-20-20 targets, decided by the EC in 2008, have introduced important challenges on grid operators. Those challenges are in nature system challenges (like RES integration, DSM, flexible conventional generation, enable of efficient markets, etc) that depend in general on the maturity of the portfolio of technologies available and range from real time operation to long-term policies and planning (e.g. various scenarios of the EU Energy Roadmap 2050). A strong effort is therefore needed to develop further R&D activities to meet and deal with those challenges.

In the Europe 2020 communication2 it was stated that Europe needs to improve the conditions for private sector R&D in the EU. It also sets a 3% objective for R&D intensity (R&D expenditure as a percentage of GDP). In what concerns TSOs it is recommended 1% of the annual TSO turnover to be spent by TSOs on R&D activities.

On the other hand the third energy package3 explicitly endorses TSOs to trigger and foster R&D necessary for the innovation4 of their activities in order to face the expected challenges which should be incentivized through appropriate remuneration schemes5.

In that regard and pursuant Article 8(3)(a) of Regulation (EC) No 714/2009, ENTSO-E released the R&D Roadmap 2013-2022 (published in December 2012) where a long term vision of the R&D needs of the TSO community is shown for the horizon 2013-2022 and the R&D Implementation Plan 2015-2017 (issued on a yearly basis) in order to specify research priorities for the next three years. While the R&D Roadmap may be seen as the transmission component of the European Electricity Grid Initiative (EEGI), the Implementation Plan serves as a background for developing future EU calls for R&D projects, namely Horizon 2020. More recently on 31 January 2014 ENTSO-E released the 2013 Monitoring Report of the R&D Roadmap (issued on a yearly basis) to assess the research and development work performed and prioritization of specific R&D subject areas in the R&D implementation plans.

Further according to a communication6 and as shown in the figure the investments in R&D activities in electricity networks are limited in comparison with other technologies in the energy sector mainly because of their nature of regulated business.

[Source: EC-JRC Estimate of public and corporate R&D by technology and source (2010)]

Regardless these overall frameworks only few countries carry out R&D expenses for the electricity transmission system are recognized explicitly by the NRAs in the tariff structure. One of the reasons is that current regulatory policies are more focused on the efficiency of TSOs and do not take into account innovation and grid modernization. TSOs' remuneration in most European countries do not include a specific component dedicated to recover the R&D costs nor fixes specific incentives to promote R&D.

In United Kingdom, National Grid has up to 0.7% of regulated transmission turnover. Under the mechanism Network Innovation Competition large scale R&D Demonstration projects are supported with a share up to £27m.

In France, a part of the regulated grid tariff is dedicated to support R&D. It involves a 4 year budget (for the period 2013-2016 about 100 mill €) that RTE has to manage in order to launch and implement R&D and innovation projects.

In Denmark the framework for R&D projects and funding is regulated by a specific act. Each year Energinet.dk has 17.5 mill € for RD&D activities through calls for tenders. This budget is a Public Service Obligation administered by the energy companies and financed by the tariff.

The abovementioned facts moved ENTSO-E7 to issue a position paper "A New Regulatory Framework for TSO R&D in ENTSO-E Countries8" where, amid others, aims to trigger discussion and contribute to developing a common R&D framework for TSOs at European level. Later within the scope of the project THOR a white paper "Regulatory Funding of Transmission System Research and Development in ENTSO-E Countries"9 was issued in order to provide a structured discussion on the type of framework needed to fund TSOs' R&D at European Level and propose a set of principles upon which one or more equivalent funding regimes may be capable to promote and incentivize R&D activities by TSO's.

Why TSOs are different?

In general TSOs are natural monopolies (public, private or mixed ownership) with assets that have long technical life. They are responsible to carry day-to-day operations as well as to plan for future system needs bearing in mind the challenges associated with the decarbonization path that Europe is undertaking all this in a secure and efficient way.

Being fully unbundled and regulated companies TSO get his costs covered through tariffs. When there is no explicit regulation, R&D expenses are mostly considered as justified costs of the transmission activities and therefore treated as operational expenses. The only way to implement energy policies (both for short term and long term) that involves, amid others, the creation of the Internal Market and common European Network Development Plan (e.g. TYNDP10) at least cost is to invest and promote R&D in order to bring the related benefits to the grid users. Full-scale demonstrations involving EHV networks are expensive and therefore R&D projects should be coordinated at European level with pilot implementations.

TSOs are the only stakeholder capable to bring a systemic view to address the ever-increasing requirements on system integration and interoperability at European level through applied research since the use of the system is new and the manufacturers cannot replicate system effects.

In the next article we will address the following main questions:

  • What is the R&D experiences in some European countries?
  • What are European Network Transmission System Operators considerations regarding a needed new regulatory framework?
  • Project THOR: Five principles for a solution


1 Project THOR "Regulatory Funding of Transmission System Research and Development in ENTSO-E Countries" - White Paper
2 COM(2010) 2020 of 3.3.2010
3 Adopted by the European Parliament in April 2009
4 Article 8.3a of Regulation 714/2009: "ENTSO-E shall adopt common network operation tools to ensure co-ordination of network operation in normal and emergency conditions, including a common incidents classification scale, and research plans"
5 Directive 2009/72/EC, art 37.8 : "… regulatory authorities shall ensure that transmission and distribution system operators are granted appropriate incentive over both the short and long term, to increase efficiencies, foster market integration and security of supply and support the related research activities …"
6 COM(2013) 253 final - 2.5.2013
7 European Network of Transmission System Operators for Electricity - https://www.entsoe.eu/
8 https://www.entsoe.eu/fileadmin/user_upload/_library/position_papers/110701_ENTSO-E_PP_on_Regulatory_Framework_for_RD_vFINAL.pdf
9 http://www.sumicsid.com/reg/papers/thor_white_paper_final.pdf
10 Ten Year Network Development Plan - https://www.entsoe.eu/major-projects/ten-year-network-development-plan/



Decreto-Lei nº 90/2014, de 11 de Junho
Third amendment to Decreto-Lei nº 39/2010, of April 26, which establishes the legal regime of electric mobility, applicable to the organization, and pursuit of activities relating to electric mobility, as well as rules for the creation a pilot network of electric mobility.

Read Document


Decreto-Lei nº 94/2014, de 24 de Junho
Establishes the rules applicable to the additional power and energy, and additional equipment of wind power plants whose electricity is remunerated by a system of feed-in tariffs.

Read Document

Determines a set of supplementary conditions of the 2nd phase of the process of privatization of REN - Redes Nacionais, SGPS, SA

Read Document

Decreto-Lei n.º 129/2014, de 29 de agosto
Approves the new Laboratório Nacional de Energia e Geologia, I. P. by laws.

Read Document

Decreto-Lei n.º 130/2014, de 29 de Agosto
Approves the new Direção-Geral de Energia e Geologia by laws.

Read Document

Despacho nº 6/2014
Quarterly update of the reference tariff for cogeneration (3rd quarter 2014)

Read More

Decreto-Lei nº 119/2014, de 6 de Agosto
Establish the rules related to the use of certain material in electrical and electronic equipment.

Read Document

ERSE's decision regarding REN's certification process
Decisão da Entidade Reguladora dos Serviços Energéticos (ERSE)

Read Document


The 2020 climate and energy package and an interesting EC institutucional movie about it:

Read more

You may find a very interesting article by nobel prize Paul Krugman regarding clima and energy policy:

Read more

An article in Telegraph about the banning of hair dryers and energy efficiency:

Read more

New renewable energy inventives in Colombia:

Read more

Portuguese government has just approved the new legal framework for micro generation and auto consumption:

Read more

Some updated information about Portuguese wave energy pilot zone managed by REN:

Read more


Engineering IT-Enabled Electricity Services: The Tale of Two Low-Cost Green Azores Islands

By Ilic, Marija, Xie, Le, Liu, Qixing (Eds.)

The book looks at the energy sustainability in the Azores, Portugal. It covers sustainable energy services to customers - a balanced choice and coordination of energy generated by traditional and alternative sources. The key is the proper use of Information Technology (IT). Sited on two islands in the Azores, a model of careful forecasting of demand and supply was developed, down to the minute, coordinating the output of conventional power plants, wind energy, fly wheels, hydroelectricity, demand reduction, and even plug-in electric vehicles to take full advantage of the clean resources available.

The supporting IT technologies based on predictive models become critical to optimize the system and avoid the need for fast-responding storage. Data provided with the book represents a repository of real-world electric energy systems and its IT-enabled smarts.


Transactive Energy Management Systems

The term "transactive energy" is used to refer to techniques for managing the generation, consumption or flow of electric power within an electric power system through the use of economic or market based constructs, while considering grid reliability constraints.

To understand the concept of transactive energy it is important to realize the role of dynamic pricing in the energy industry. Wholesale power markets use dynamic pricing to value energy based on demand at the time of use. This means price of electricity can fluctuate throughout the day.

A transactive energy system can actually make energy use decisions based on price signals. This could include a building energy management system programmed to respond to a high price signal by curtailing energy use via automated demand response, using microgrid generation, or even shifting load to onsite energy storage.

An example of commercially available software to manage transactive energy is VOLTTRON. This is a platform for distributed control and sensing - allows sensing and control actions to take place as close to the source of the data as possible. VOLTTRON is designed to support modern control strategies, including use of agent-based and transaction-based controls. It enables mobile and stationary software agents to perform both information gathering, processing, and control actions.

VOLTTRON is presented as a secure, extensible, and modular technology that supports a wide range of applications, such as managing end-use loads, increasing building efficiency, integrating renewable energy, accessing storage, or improving electric vehicle charging. It is equipped to communicate with building systems (e.g. MODBUS or BACnet devices) and external services.

Read more

Global Energy Internet Map
Source: IEEE PES General Meeting plenary session, 23rd July,2014, Washington DC, USA. 2014 GM: Global Energy
Internet - Roadmap for Sustainable Development of Human Beings (Plenary Session Presentation) - Video

China National Grid Liu Zhenya: Building a Global Energy Internet

In IEEE PES conference held in Washington DC in 27 to 31 July 2014, Liu Zhenya, the chairman of the State Grid Corporation China, issued the signed article entitled "Building a Global Energy Internet services for sustainable development of human society".

This paper analyses challenges confronted by human society, points out the way ahead of clean energy, the trend of "Two replacements" (clean replacement and electricity replacement), and necessity of realizing clean energy-dominant energy mix. Furthermore, it also takes a global energy outlook and elaborates on the strategic significance, target, layout, method and way forward of developing global energy internet based on Ultra High Voltage AC/ DC and smart grid technology, which provides a theoretical and practical basis for promoting secure, clean, efficient and sustainable global energy development.

"By global energy internet, we refer to a globally interconnected strong and smart grid with ultra-high voltage (UHV) grid as the backbone (channel) and clean energy transmission as the priority." Mr. Liu Zhenya also gives vision for building a global energy internet, includes interconnection within a continent, across continents, and worldwide. According to the blueprint in this paper, by 2050, a wind power base will be built at the North Pole to supply power to Asia, North America and Europe through UHV DC lines; solar power bases will be built at North Africa and Middle East to supply power northward to Europe, eastward to Asia through UHV AC/DC lines, therefore realizing interconnection of Africa, Europe and Asia; solar power bases will be built at the north of South America and Oceania, connecting North and South America, Asia and Oceania, forming up a global energy internet that enables efficient development, allocation and utilization of clean energy worldwide (see attached map for reference).

Energy Internet and the third Industry Revolution

In a context where legislation on consumer-producer mechanisms (auto-consumption, mini- and micro-generation) is being reviewed and published, it is worthy revisiting the concept of "Energy Internet".

"Energy internet " is a emerging concept proposed by Jeremy Rifkin in his book "The Third Industrial Revolution; How Lateral Power is Transforming Energy, the Economy, and the World". Jeremy Rifkin explores how internet technology and renewable energy are merging together to create a powerful "Third Industrial Revolution (TIR)." He describes a future when millions of existing and new businesses and homeowners become energy players, producing their own green energy in their homes, offices and factories, and the share it with each other in an "Energy Internet," just like we now create and share information online.

In the era of Third Industrial Revolution, how will the Energy Internet change things? Well, the following things might happen:

(1) Buildings will become micro-power plants to collect renewable energies. People could produce their own green energy and integrate it with the power grid.
(2) Sensor-driven, Wi-Fi-enabled, self-learning smart indoor environment controls like Google Nest Thermostat will be installed, which can program themselves to save energy cost while improve comfort. Moreover, "energy rush hour" in the grid will be greatly alleviated after such smart devices have been installed widely.
(3) TIR will also enable users to store extra energy to local storages or sell it. National policy about energy is expected to be more market driven.
(4) Electrical energy will be cheaper than any fossil energy, so tomorrow's electric cars will be as easy to recharge from a socket as today's are with petrol from a pump.
(5) Wireless power transfer will enable many applications, including wireless energy collection from distributed generation and wireless charging.

Dynamic tariffs

In recent years, we have been witnessing regulators intentions to investigate the creation of a regulatory framework that creates the conditions for introducing innovation in networks access tariffs, enabling the adoption of dynamic tariffs such as Critical Peak Pricing (CPP) under customers optional decision, as an alternative to established Time-of-Use tariffs (TOU) or others.

Tariffs differentiated by time period are aiming to use price signals to transfer consumption from higher load periods to lower load periods.

In fact, in many networks the current peak period lasts for about 1000 hours, being that the networks are paid primarily by the consumption made in this period of increased demand, which justifies the new investment requirements. Being that the time period is very wide (about 1000 hours) it originates a price per unit of energy relatively attenuated, in order to reflect the cost of investment in networks demand during critical peak periods achieved within a few hours of the year. The figures below depict the peak demand concentration in the top 100 hours in Germany and US power systems.

Dynamic pricing is a class of rates that can be changed (raised and lowered) more frequently than traditional, more static forms of rate structures. This form of dynamic pricing is frequently used in many other economic activities, being found in other utilities such as telecommunications and water operators, or air transportation.

The most commonly-stated objectives for dynamic pricing are to promote increased overall economic efficiency and reliability in the provision and consumption of electricity. In fact, the rationale for dynamic pricing is that providing electricity at peak times is very expensive.

Economic efficiency in this context means that electricity prices reflect the marginal costs of supplying electricity (e.g., production and transportation). Since consumers will only buy a product when its value to them exceeds the price, pricing at marginal cost will ensure that electricity is only consumed when its value to the consumer is greater than its cost of supply. Economic efficiency ensures that scarce capital and fuel resources are used in such a way to meet consumer wants that the gains to society are maximized.

There are several types of dynamic pricing and time-varying pricing. One of the best known is called Critical Peak Pricing (CPP). Other examples are Time-of-Use Rates, Inclining Block Rates, Peak Time Rebates, Real-Time Pricing and Seasonal Rates.

The application of CPP type tariffs can take many forms and usually requires the definition of the following variables: price per time period, the number of critical periods and the duration of critical periods. The days that are considered critical are not defined previously. The application of CPP type tariffs allows consumers participants to have the option to reduce their consumption. Additionally, by allowing that the critical days are defined closer to its occurrence, enables the adoption of shorter peak hours periods, enabling a greater price differentiation between periods and consequently the transmission of stronger price signals.

Although, the results of such tariff are uncertain, as it depends on the consumers elasticity to price signals, the introduction of this option provides a potential reduction of costs for the whole system.

The consideration of dynamic pricing involves a number of regulatory policy issues including, among other:

  • Fairness and equity issues, including allocation of costs and benefits among customers with different electricity consumption profiles,
  • Avoidance of negative impacts on low income, elderly and other customers who have limited abilities or are unable to shift or reduce consumption of electricity in response to dynamic pricing,
  • The risk-reward tradeoff of time-varying rates,
  • Ensuring revenue stability,
  • Introduction of Locational Constraint on the Transmission and Distribution system considerations.

We will elaborate more on this topic in the next edition of our newsletter, addressing examples of application in the US, Spain, France, among others.

Further, we will highlight as in the majority of cases, weather conditions (e.g., temperature or humidity) are used as the key driver for triggering critical events, and the key paramenters for implementing such a system. Finally we will address the gains obtained in the different contexts (residential vs. commercial-industrial) and the trade-off and criticisms associated.



Conference APREN 2014



IEC 61850 Europe 2014



UMBRELLA Workshop on System State Modelling and Toolbox Design



Local Renewables Conference


Cape Town


European Utility Week

4-6 November 2014, Amsterdam

see +

13th Wind Integration Workshop

11-13 November, 2014, Berlin

see +

ENTSO-E Conference: Securing Europe's Competitive Energy Future

19 November 2014, Brussels

see +

RENEW2014 Conference on Renewable Energies Offshore

24-26 November 2014, Lisbon

see +

Technology Workshop: Analysis of Operating Wind Farm 2014

9-10 December 2014, Malmo, Sweden

see +

FUNDING Opportunities

1. ERANETMED Transnational Cooperation CALL PRE-ANNOUNCEMENT


Read more

ERANETMED is an ERA-NET dedicated to the coordination of research and innovation in the area of societal challenges in the Euro-Mediterranean region. It was established in October 2013 and shall end by September 2017. It is coordinated by the Centro Internazionale di Alti Studi Agronomici Mediterranei - Instituto Agronomico Mediterraneo di Bari, in Italy. The main aim of the project is to enhance Euro-Mediterranean co-ownership through innovation and competitive research in the societal challenges of the region. The project aims at reducing fragmentation of programming in the Mediterranean region by increasing coordination among national research programs of European Member States, Associated Countries and Mediterranean Partner Countries.

2. Horizon 2020

>Societal Challenges > Secure, Clean and Efficient Energy

The Energy Challenge is designed to support the transition to a reliable, sustainable and competitive energy system.

Work Programme(Last review)

As for the underlying principles, there are considerable changes between the previous research framework programs FP7 and Horizon 2020. First of all, work programs are biannual under Horizon 2020, to allow better preparation of applicants. Secondly, Horizon 2020 takes a challenge-based approach giving the researchers more freedom to come up with innovative technology solutions. Cross-cutting actions have also been introduced under Horizon 2020. Last but not least, Technology Readiness Level (TRL) should be applied under this Program in order to better specify the scope of activities.


Energy Efficiency - PPP EeB and SPIRE topics

Deadline: 09/12/2014

Call for competitive low-carbon energy

Deadline: 03/03/2015

Call - Smart Cities and Communities

Deadline: 03/03/2015

The consideration of dynamic pricing involves a number of regulatory policy issues including, among other:

We will elaborate more on this topic in the next edition of our newsletter, addressing examples of application in the US, Spain, France, among others.

Further, we will highlight as in the majority of cases, weather conditions (e.g., temperature or humidity) are used as the key driver for triggering critical events, and the key paramenters for implementing such a system. Finally we will address the gains obtained in the different contexts (residential vs. commercial-industrial) and the trade-off and criticisms associated.

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APE, Julho 2014

APREN assina acordo para projectos na área da Energia, Junho 2014

Portugal Global, Julho 2014

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FSR Energy Encyclopedia

A) 60 per cent
B) 2 per cent
C) 43 per cent
D) 25 per cent

A) Solar
B) Wind
C) Geothermal
D) All of the above

A) Washing the coal to remove impurities
B) Converting the coal into a fuel gas before it is combusted
C) Capturing and storing the carbon dioxide emissions produced by burning coal
D) All of the above

A) Wind energy is an indirect for of solar energy
B) Wind turbines generate more than 1 per cent of global electricity
C) Many countries are building offshore wind farms to capitalize on the stronger winds found at sea
D) Wind turbines reach maximum power output at wind speeds of 25 metres per second
A) 200 MW per kilometer of coastline
B) 500 MW per kilometer of coastline
C) 1000 MW per kilometer of coastline
D) 2000 MW per kilometer of coastline

A) It is too hard to produce
B) We do not have the necessary infrastructure to deliver hydrogen
C) It is difficult to store
D) It cannot be used in private cars

A) Cockroaches
B) Termites
C) Flies
D) Spiders

A) Dogtrot
B) Geodesic dome
C) Passive house
D) Trullo

Correct answers will be provided to you soon.
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