Expert interview: EPO coordinator Gerard Owens and patent examiner Giulio Ceccarini on the future of smart electrical grids

Smart electrical grids hold the key to a cleaner and more energy-efficient future. Once considered cutting-edge technology, smart grids are already on their way to becoming the status quo. This development is not only driven by specific international policies and industry standards but also by patents – and a new, dedicated classification scheme provides easy access to this technology.

In this expert interview, Gerard Owens, Coordinator for Public Policy Issues at the EPO, and Giulio Ceccarini, patent examiner and technical expert in this field, point out the importance of international cooperation for the future of smart grids.

Interview chapters:

A "smart" paradigm shift

Smart grids are driven by patented technologies from a vast variety of segments, from fundamental electrical engineering to telecommunications and IT. What are the main sectors involved?

Power cables (JPG)Giulio Ceccarini (GC): The new elements are mainly in computing, information and communication technologies (ICT). For example: Ideally, every household will soon be equipped with a "smart" electricity meter that allows remote reading instead of a mechanical meter someone has to read once a year to write the electricity bill.

Smart meters send information about current energy usage on a continuous basis, every five minutes or so. Collecting this kind of data from several million households allows for precise measurements of actual energy usage and predictions of future energy requirements. This not only results in much more effective automation of power systems and significantly shorter reaction times following changes in demand, it also helps integrate unpredictable power generation by solar panels and wind turbines, whose output may vary quickly and frequently.  

That sounds like a paradigm shift from conventional grids.

GC: Indeed - just consider the changes in power generation. Traditionally, we had central sources of electricity generation, such as a big power station that feeds an entire area with electricity. In the modern world, we rely more and more on distributed power generation, especially on renewable energy. But renewable sources are decentralised, with solar panels on top of houses and wind farms in the countryside.

While we can control the output of a central power station, we cannot control the sun that feeds the solar panels and the wind that drives the turbines. The basic idea of smart grids is to efficiently integrate these elements, which are not controllable.

How is that achieved in practice?

GC: The generated power must always meet demand. The trend is to maximize the share of renewable energy but, contrary to a conventional power station, it won't always be clear in advance when these resources will be available. Still, we can predict weather patterns several days in advance, so it's possible to anticipate when the sun and wind will generate plenty of electricity. And we can generate predictive models of how much energy will be used and predict what demand will be like.

Eventually, it must be possible that the end users invoice the power company for the energy generated by their solar panels or integrate electric and hybrid vehicles into the power system operation, for example. Data could also be fed back to consumers, indicating at what times energy use is most economic. So, for instance, washing machines and tumble dryers could be used at night, when demand is otherwise low. 

The rise of "smart" patents

How does the patent system support innovation in the field of smart grids?

Smart grid (JPG) Gerard Owens (GO): Without patents, people would not be willing to invest in Research & Development. Companies need to be able to protect their inventions against their competitors to secure a return on their investment, and the patent system is there to offer this protection. Plus, the technical description in a patent application is available as from its publication 18 months after filing, and this accessibility of knowledge helps others build on top of existing inventions.

How will the new Y04S classification scheme for smart-grid-related patents help inventors and stakeholders?

GO: Anybody who wants to work or develop in this field needs to know whether they have the freedom to operate and to ensure they don’t infringe someone else's patent rights. The dedicated Y04S classification scheme makes it easier to find relevant patents: All it takes is a quick database search to see if someone is already offering a similar solution.

In addition, the Y04S scheme brings together all the different elements that constitute a smart grid – such as electricity distribution, telecommunications and cyber security – which would otherwise be scattered widely over traditional technology fields.  

Looking at statistics for Y04S patents, what are some notable trends?

GC: Most remarkably, this entire category has seen an increase of more than 10-fold in patent applications since 2002. And looking at related technologies, the role of vehicles within smart grids – the remote charging of hybrid cars, for example – was practically non-existent in 2003. In 2011, there were more than 300 applications, and in 2016 over 7000, which shows a growing demand in this area.

Is the situation similar to, for instance, telecommunications where select companies account for major shares of patent applications?

GC: Actually, no. Looking at the main companies filing smart grid applications, even the biggest firms - such as Siemens in Europe - only account for 8%. This indicates that a lot of smaller companies are very active in this area. And this fact - many players involved in a growing field - signals the need for standardisation and interoperability in this segment.

Why standards are key

Speaking of standardisation: Electrical grids are enormous pieces of infrastructure. How important are international technical standards when it comes to networks on this scale?

Electricity pilon (JPG)GO: Standards are agreed upon to create interoperability between components produced by different manufacturers. For example, there are standards for the sizes of doors used in houses or the DIN paper standard. Mobile phones are a good example because this field involves different manufacturers, operators network types who need agreed, standardised protocols for exchanging information.

These are all interoperability elements that need to work together across different countries, which is achieved through standards.

This sounds very similar to smart grids in terms of integrating technologies from different fields.

GO: Yes, smart grids are the same. We need interoperability from every meter in every house to the way information is produced and transmitted by wind turbines and solar panels across the grid.

Mobile phones have been a great success with more than 7 billion mobile phone registrations worldwide, and the industry is driving interoperability with new patented inventions and accessible standards at the same time. Effective standards will be paramount to the future success of smart grids, too.

Where do standards intersect with patents?

GO: If someone wants turn a patented technology into a standard, they have to agree to give licences to everyone who wants to use it on fair terms. Either they give the licence royalty-free or on Fair, Reasonable And Non-Discriminatory licensing terms (FRAND). This is where we need to have very well established intellectual property rights (IPR) policies in the standards organisations.

How does the renewed cooperation between the EPO and the IEEE Standards Association (IEEE-SA) play into this segment?

GO: The cooperation with the IEEE aims to make sure that all players are aware of the rules of the game. It's a very complex area - standards are for everyone, and nobody owns a standard. Patents, on the other hand, are owned by individuals or commercial and other enterprises.

But with the right policies and agreements, you can make it work for everyone. The most basic rule for negotiating standards is that you need to apply for a patent for a certain technology before it is brought up before the standards association and discussed with competitors.

Patent right holders must also declare any patents in their possession required to implement a standard, so-called Standard Essential Patents (SEPs). The EPO will then ensure that patents are only granted for genuine inventions. It will refuse applications filed after technologies have been disclosed at standards organisation discussions to prevent others from patenting this technology.

EPO and IEEE have also cooperated to define the Y04S smart grids classification scheme, ensuring that the scope and structure of the scheme is realistic, and that it meets the needs of industry.

The cooperation between the EPO and the IEEE was recently highlighted as best practice at a United States Senate judiciary subcommittee hearing on standard essential patents and antitrust law.

The future of smart grids

Smart grids are a key topic right now in light of the European Union's 20-20-20 goals and the debate about climate change. What role will policies play for the proliferation of smart grids?

Electricity meter (JPG)GO: In order for smart grids to work efficiently, you need to reach a critical mass of participating households. A central policy, for example offering people tax incentives for installing a smart meter in their home or offering better prices for electricity, will help reach that point. Without policies, people may not have a reason to participate.

With all the data collected by smart meters, are there privacy concerns among consumers?

GO: There are major concerns right now on what happens with the data on electricity usage. For example, if someone would call in sick from work and their energy usage shows they have been on the Internet all night. But with all the data available from mobile phones, including location data, electricity use should be the least concern. Ultimately, protecting people's privacy is important in a democracy, and one potential way would be to anonymise the data.

Another concern to be addressed is cybersecurity. Third parties must be prevented from hacking into and taking control of power grid networks for terrorist or other criminal activities.

Are we already seeing mass-scale adoption of smart grids in Europe?

GO: I was very impressed by a workshop and various presentations during the 100 Year Starship conference in Brussels. The event revealed that many European countries already have concrete plans to implement smart grids over the next decade, which is amazingly fast. So there are European consortiums to make smart grids work - and make them work fast.

Can the European Commission and other transnational entities support this process?

GO: The cost of re-engineering traditional grids could be very high and probably not within the reach of any single enterprise. In addition, existing enterprises must move together to maintain interoperability. A critical mass of smart meters and participation is required for such a smart grid to work. Therefore, the move to smart grids can be greatly aided by central policy.

There are already European Commission mandates for developing standards for various smart grid components in the European Union. The European standardisation organisations play a very important part in promoting the fact that smart grids can work. They do so by incorporating the most effective and latest patented technology in smart grids standards and thus reproducing the success of areas such as mobile phones. So that in the future, we can have achievements like smart grids, smart energy and smart transportation and maintain our standard of living in a low-emissions world.

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