Smarter energy markets - We have the technology

Global energy markets are evolving as countries strive to address the ongoing trilemma – to ensure security, affordability and sustainability of our energy supplies.
ABB is ready to respond to these challenges with a broad portfolio of smart technologies, including distribution automation and demand side response, as Colin Green, ABB’s Head of Regulatory Affairs and Technology, explains.

Within the UK, the im­plementation of Electricity Market Reform (EMR) is a major step in facilitating the tens of billions of pounds investment in new low carbon power generation. Nevertheless, the key question at the heart of our energy policy is how can we best deploy smart technology to ensure that we develop and use our national energy resources efficiently?
By 2020, 30 million UK homes and small businesses will have smart meters installed enabling consumers to be more engaged. This is though just one example of how technology is supporting the development of a smarter energy system – one that gives greater control over how we produce, transport and use energy.
There is perhaps a tendency to think that the technology we need is not fully ready. But in fact, ABB has already developed and made commercially available many of the vital building blocks such as:
- Power technologies to increase the efficiency of existing assets;
- Advanced network automation;
- Demand response management systems;
- Building control infrastructure;
- Consumer control interfaces.
Smart grids
Smart grids have an important role to play in a smart energy system. Many smart grid technologies are already applied across the global energy sector – e.g. FACTS (Flexible Alternating Current Transmission Systems), WAMS (Wide Area Monitoring Systems), IEC 61850 intelligent electronic devices (IEDs), and intelligent control systems.
Information is crucial to the success of a smarter energy system, as we need to understand and control – in real-time – the relationship between energy production and consumption; and the interaction with network operation and performance.
Distribution Grid Automation
Distribution Grid Automation solutions have been developed to enable network operators to manage day-to-day local grid operations efficiently and reliably through a combination of operational technology (OT) and information technology (IT) that delivers advanced applications such as:
- Outage management to identify system faults and manage work crew response
- Automated switching to reconnect customers during storms
- Automated controls to optimize the grid in real time to improve reliability, reduce losses, and improve grid efficiency.
Customer engagement – DRM
Customer engagement (industrial, commercial, residential) is also crucial to the development of the smarter energy market. This includes consumer interaction with the market through demand side participation and more efficient energy use through intelligent building controls.
Demand response management (DRM) offers substantial opportunities for future energy markets. In general, DRM provides a way for end customers to make short-term changes in their energy consumption in response to specific criteria. These can be changes in pricing or incentive payments designed to induce lower electricity use at times of high wholesale market prices, or when system reliability is jeopardized.
DRM is not actually a new concept, but we are now seeing a new generation of DRM that creates a more direct and interactive relationship between the consumer and energy management systems to help optimize the consumption of energy. Moreover, energy management systems are now starting to integrate DRM with the management of local renewables, energy storage, electric vehicles and major new loads such as data centres.
In addition to the environmental impact of reducing electricity consumption, implementing DRM:
- Helps utilities save money by deferring upgrades of the distribution system
- Provides financial benefits to customers
- Makes the overall electricity market less volatile in spot prices (ie, prices for immediate payment and delivery)
DRM is often initiated at the utility where data, based on a demand forecast is used to estimate the capacity margin for future time intervals. A decrease in this capacity margin or a negative margin would cause the utility to trigger a DRM event. However, demand response can also be used to support grid stability in response to a network constraint or fault.
Clearly, DRM relies heavily on IT and communications infrastructure. Ventyx, the software business inside ABB, has developed a total distribution response management concept based on this principle. It combines real-time and near-real-time data, system modelling, visualization, simulation and integration of all major systems used in distribution operations, to provide a new way of managing and operating distribution networks.
Intelligent buildings
ABB is also particularly active in the smart home and intelligent building sector through our state of the art i-bus® KNX systems. By providing automated control of key services such as heating, lighting and ventilation they are proven to deliver double-digit improvements in energy efficiency by:
- Only using energy when it is really needed
- Only using the exact amount of energy actually needed
- Applying the energy that is used with the highest possible efficiency
A time of profound change
The world of energy networks already looks very different to how it was just 18 months ago. Looking ahead by 2 or 3 years we can anticipate the start of profound changes. The good news is that much of the foundations are already in place. What is needed is the shared vision to bring them all together.

i-bus® KNX systems provide control for smart homes and buildings