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The smart way to roll out smart grids
By: Klaus Holse Andersen, VP Western Europe
18 August 2011

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Governments around the world are racing to invest in smart electricity grids to reduce energy consumption and battle climate change. The European Union’s Strategic Energy Technology (SET) Plan includes a €2 billion investment in smart grids over the next ten years. By 2020, the EU aims to have smart meters in 80 per cent of homes.

These technology upgrades are vital. Worldwide, many of the transmission and distribution systems linking power generation sources and consumers are inefficient, ageing and increasingly strained. And global demand is rising rapidly. New sources of green energy such as wind and solar cannot be tapped efficiently without a two-way exchange of information on energy supply and demand.

But what is a smart grid? Although there is no universal definition yet, the European Technology Platform SmartGrids, a body created by the European Commission, defines them as “electricity networks that can intelligently integrate the behaviour and actions of all users connected to it”. Energy companies, for example, could send information to consumers about variations in the price of energy throughout the day. The smart grid, using a smart meter, could tell a householder the best time, depending on the energy price, to turn on a home appliance such as a washing machine. This would allow the user to avoid periods of high energy demand and take pressure off the power grid.

A smarter grid can also help change consumer behaviour and attitudes toward energy. When millions of individuals own plug-in hybrid electric vehicles (PHEVs), a smart energy system could allow them to buy electricity from the grid during late night, non-peak hours. Then, if the grid needs power during peaking events, the utility might draw from the stored power in those very same PHEVs. Indeed, utilities are already deploying many devices with the microprocessors and two-way communication facilities that will enable a wide variety of capabilities not possible before, including the collection of more information, local decision-making and coordination.

The European Commission is funding smart grid research and demonstration projects. The Task Force on Smart Grids set up in November 2009 is advising the European Commission on a wide range of issues, from functional requirements and standards to data safety.


Though EU policy on smart grids is not yet decided, security and privacy concerns need to be addressed. In order for the system to work properly, utilities need to install smart meters that can collect, in as close to real time as possible, masses of data on when the consumer is using its electricity. That can create a privacy risk. Also, despite massive spending on smart grid security, smart meters may still be vulnerable to cyber-attacks as the connection to households is made through the Internet. Data on household behaviour is encrypted in commercial or home networks for example but then decrypted at the smart meter; as a result, for a short while the data is available for hackers to access easily.

The smart grid is a major opportunity for society but the underlying technology provokes understandable concerns. Microsoft is committed to addressing those concerns and developing solutions. Microsoft’s Smart Energy Reference Architecture (SERA), is the first comprehensive reference architecture that addresses technology integration throughout the full scope of the smart energy ecosystem.

We advocate three elements to building greater trust in smart grids and the Internet systems on which they will depend:

  • Creation of a trusted stack where security is rooted in hardware and where each element in the stack (hardware, software, data and people) can be authenticated in appropriate circumstances.

  • Managing claims relating to identity attributes, with a system that allows people to pass identity claims (sometimes a full name perhaps, but at other times just an attribute such as proof of age or citizenship). This system must also address the issues of authentication, authorisation, access and audit.

  • Alignment of technological, social, political and economic forces to ensure real progress towards a safer, more trusted Internet. The goal is to put users in control of their computing environments, increasing security and privacy, and preserving other cherished values such as anonymity and freedom of speech.

SERA is the second utility offering to be released from Microsoft following the announcement of Microsoft Hohm, a free online application developed to enhance the experience of utilities, customers and provide further insight into the supply and demand of residential energy use. 

The challenges are important and real but the benefits are as well. Microsoft is working closely with European policymakers, utilities, service providers and customers to provide a safe smart grid experience for all.

“Secure energy supply and good interconnections will be crucial to power future growth. One of the next great European projects is to give Europe a new European super grid for electricity and gas. This will help to meet our growing needs for energy in smarter ways, so that we have secure and stable supplies of energy which meet our climate change goals.”  José Manuel Barroso European Commission President

This article was originally published in Futures Magazine. Click here to view or download the full issue.