Smart grids in the EU with smart regulation: experiences from the UK, Italy and Portugal

The paper describes the integration between what used to be a passive element of the energy value chain - the grid - and both upstream and downstream elements. The evolution of communications among the elements has permitted a more robust and adaptable structure that already is being implemented: the Smart Grid. The paper relates the evolution of EU policy concerning both the development and the rolling-out of solutions to exploit the potential of the Smart Grid concept and describes what has been done by the regulators of three countries that share the same goal but seek to attain it via distinct paths. The article starts with a justification of the need for more integrated networks and a definition of the Smart Grid. A second part covers the risks and difficulties of implementation within an established network, introducing the role of the regulator. The third part describes EU policy response and three different approaches by regulators in the UK, Italy and Portugal, showing how in each case policy is influenced by characteristics of their respective national electricity markets in terms of competition dynamics.