The deployment of new smart grid technologies must be a means to an end and not an end in itself, with investment providing better value and direct benefits for all grid users, as well as indirect benefits such as greater diversity both for the electricity supply system and society as a whole, according to the European Regulators’ Group for Electricity and Gas (ERGEG) in a new position paper on smart grids.

With a growing consensus that smarter networks will be required to meet the 2020 targets, it is vital that regulatory mechanisms stimulate such developments directly, e.g. by market and technical rules, and by efficient regulatory incentives, the paper continues; adding that regulators therefore act as key facilitators in this process, by identifying and removing possible barriers and by finding solutions that provide an appropriate balance between all the stakeholders’ positions.

The paper suggests that a good regulatory model that could be used as the basis for a regulatory approach to smart grids is the incentive regulation mechanisms adopted to promote other aspects of network business, such as quality of supply in electricity distribution.

Finally, regulators have a legal obligation to identify and address any barriers that could prevent cost effective solutions from being adopted which would benefit network users, taking particular account of environmental issues.