Electric vehicles altering Electricity regulation track

Manila Bulletin 
By Myrna M. Velasco 
Published: August 11, 2013 
Brussels, Belgium – Electric vehicles as well as other distributed energy resources (DERs) being part of the bigger smart grid revolution will be changing the regulatory track for power utilities, according to European energy regulators.
In  the “Think Report” of the Council of European Energy Regulators (CEER) which was aligned with the mandates of the European Commission, it was opined that “regulatory and policy uncertainty has been regarded as one of the major challenges facing the  power sector and a major barrier to innovation.”
In the case of charging infrastructure for electric vehicles (EVs), the CEER’s prescription will be a policy wherein “a market approach should be favored over a regulated approach.”
For countries or power markets taking plunge into this innovation, the recommendation is to examine the “expertise and interest in certain countries in the provision of charging infrastructure and ancillary services.”
The regulators qualified that a market-based approach is more suited for emerging technologies such as EVs, as subjecting them to the rigors of regulation may encumber further innovations.
 “We believe more regulation – or the wrong sort of regulation – in this market (EV charging infrastructure) may stifle innovation and hamper the development of viable commercial propositions,” the CEER has noted.
Europe is among the jurisdictions intending to ‘vastly electrify’ its transport sector as part of its sustainability goal – a key component of it would be to pare its carbon footprints. EVs are considerably “green” at end-use point.
Part of the innovations being pushed across European markets would be the “standardization of charging infrastructures” so they can thrive sustainably well into the future.
Dr. Stephen Littlechild, the well-regarded proponent of the performance-based rate setting (PBR) scheme generally adopted in electricity markets worldwide, acknowledged that such model of utility regulation “was developed without these (integration of innovative services) in mind.”
He concurred on prognosis that the regulatory landscape will likely change because of the incursion of DERs and smart grids, with him recommending that the role of the regulator must now focus on “facilitating market processes, instead of taking all the decisions.”
Apart from EVs, the CEER report similarly tackled other DERs, to include storage facilities and distributed generation, wherein it recommended that the scheme of regulation “should enable welfare enhancing business models under any future market development.”
Distribution utilities embracing wider array of services within the smart grid era, it was said, will be seeing some changes in their capital expenditures (capex) and operating expenses (OPEX) structures.
Ultimately, it was recommended that policy-setting must deal with incentivizing these power utilities for their innovative solutions relating to information and communications technology (ICT), data handling and other services.  
 But while embracing technology shifts, it was emphasized that regulators must first ensure that these distribution service companies are keeping pace with their core role of maintaining grid stability and extending quality service to customers.
With the deployment of DER-anchored innovations, the European regulators similarly set focus on the emergence of new industry players called the “prosumers” – or consumers who are also involved in the production of their own electricity, made possible by integration of distributed generation systems into the grid.   source