Olle Hansson
Olle Hansson, Project Manager at Fortum, a provider of sustainable energy solutions in Nordic countries, Russia and the Baltic Rim area, is our next guest in the IEEE Smart Grid Expert Spotlight series. In this video interview, Olle addresses climate change – lowering CO2 emissions and the use of renewable energy. In addition, he provides insightful examples of Smart Grid pilot projects underway in Sweden.
VIDEO TRANSCRIPTION
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We are very interested in the smart grid. We know that it is part of the climate change, to conquer the climate change. We are, together with others, trying to find out how to meet these demands of lower CO2 emissions, less use of energy, and more renewables. Even our main generation capacity, it's nuclear and hydropower. We are investigating renewables and how to support this smart grid development. We have several demonstration and test sites in Fortum. Where I'm mostly involved is the one in Stockholm area.
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Sweden has about 150 terawatt hours of electricity, and about 50% is coming from nuclear, 40% hydro, and the rest is biomass, combined heat and power production. Especially in the Stockholm area, there is a lot of district heating, and the district heating is produced in combined heat and power production. Locally, for the Stockholm area, it's nuclear, hydro, and this combined heat and power production. The users are, well, energy intensive industry takes about one-third of the total load – paper and pulp, steel industry – and the rest is more conventional use of electricity.
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How will you make heat and power at the same time to increase efficiency? You heat the water and then you still have some more steam left from the production. They're burning, to some extent, coal but it is going to be phased out. There is waste. There is biomass. Some of the residual from this heat production is used to also make electricity. You reach an efficiency of about 80%, 85% from the fuel, what you use for burning, for getting the hot water, instead of 50%, 60%.
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Mainly, in the beginning, it's a question of smart metering. To have remote metering for all customers, to have billing according to the use of electricity, it's also regulated. To have communication with the meters and to know if there is an outage, to maybe disconnect, if necessary, that should be, maybe, the first step. Then we are exploring other possibilities, but in launching them to all the customers, we are not there. This smart grid will be the next step, and we are trying to find out, together with others, what could be an interesting business case both for Fortum and for the customers.
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While the demonstration is underway in the Stockholm area, there will be a complete new part of the town built in the harbor of Stockholm with, you could say it's about five different aspects.
It's ship to shore. There are a lot of ships in Stockholm. They are staying in the harbor. They are using electricity, but it has been produced locally on the boat, and they produce a lot of CO2. Now, the intention is to provide a shore connection for all of them.
There is this active house. We are trying to find what kind of active house can be used with intelligent appliances that can react to dynamic pricing. That is together with other building companies, Ericsson and also ABB.
We will take a look into a smart grid lab where we will operate and survey the actions inside the smart grid also. There is demand from the city of Stockholm to keep track of how are we doing when it comes to reducing CO2 from the targets of EU to reduce CO2 with 20% energy with 20, and introduce renewables with 20%. This information system, to find out how can you show what you really are getting not only in the terms of electricity, but with the whole perspective prepared for these climate targets.
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One challenge is to define the area that should be part of this target, because now it's a part of the town, but you know that the transmission system is European almost. You don't know where the electron comes from really.
There's also this district heating that is produced not locally, but in another part of the city. Should that also be a part of the information system? To define the area that should be part of the information system is one thing. Then, of course, is measuring. Measuring all the data and communicate them to the customers so they can react not only on prices but also on signal saying that now the emission of CO2 is going up. Can we do anything about it? Because that's one of the targets not to also to communicate the result in reducing CO2, for example.
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In the Royal Seaport Project, it's the city of Stockholm who sets the framework. This Royal Seaport Project has co-financing from the state of Sweden. Of course, that also is governing the targets. In one way, you can say it's a political driven demand. But Fortum, we think it's a needed development to reduce CO2. It's in line with our long-term goals also.
For the seaport area, the main goal setter is the city of Stockholm. It's political demand, but it's also a question of survival for Fortum to respect the need for reduced CO2. You won't be in business if you don't understand that that is very important.
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I hope that we will be the enabler for smart grids development. That's our main target. There will be other actors in the market solutions, but we are in the regulated business but we have to enable the development of smart grids. That means that we maybe have to make investments. We have to help the regulator to understand what are the bottlenecks today, to make changes in regulation. That will probably be the best way we can enable this climate change.
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Fortum is, when it comes to the main interest in smart grids, it's DSO, distribution system operator. As Fortum also has district heating that is part of the services to the city of Stockholm, it must be in this smart grids solution to have a system perspective on it.
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We are regulated, but we can, of course, tell the regulator that if we want smart grids to happen, there are some bottlenecks because of cost, because of operational standards, and then there might be changes and that is one of my main tasks inside the company to look for the bottlenecks that will hinder us to enable the smart grid development.
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No, it's not the government. We have the regulator. The regulator is, of course, when there are changes in the regulation, they discuss that with the DSOs. Fortum is part of that discussion with the regulator on the continuous development of the regulation and how to use the existing regulation of course also.
The regulator sets some legal framework, and within that, as you are a monopoly for distribution of electricity, you can do some things. You are allowed to charge the customer for some things and for some things not. Then the other stakeholders are, for example, the customers and our Fortum shareholders, of course, who want their dividends. They will probably want to have their dividends even if there is a smart grid development. So we have to take that into account when we discuss with the regulator any changes that makes us more comfortable with the development of the smart grids.
