31 July, 2012



Singapore’s soaring energy prices and the attendant cost to business competitiveness as well as its high energy intensity (ostensibly overtaking even that of developed countries) have to be carefully managed amid an uncertain global energy future. It is against this backdrop that smart grid technology is now gaining favor as a sustainable alternative to conventional energy generation and grids. Compared to the conventional centralised generation model, smart grids lose less electricity during conversion, transmission and distribution, thereby lowering energy costs and reducing carbon emissions.
Singapore is currently testing out new applications and technologies around a smart grid. The project aims to roll out workable solutions for Singapore’s power system, thereby enhancing its resilience, reducing wastage and shaving peak loads to optimise system efficiency. 
The next step will be the challenge of creating common standards so that the generation, distribution, interfaces, management systems and data exchange can interoperate. For this, all stakeholders – consumers, utilities, inventors, software suppliers, meters manufacturers and regulators – should collaborate to craft a framework that offers certainty without losing the flexibility to plug-in new functionalities. For instance, technical specifications will have to be developed for all smart metering equipment to enable the widespread roll-out of smart meters. The use of intelligent technology and patents which are essential to a common standard will also need to be on fair, reasonable and non-discriminatory terms (FRAND). Rules may also have to be implemented to prevent any monopolistic exploitation of patents which are needed for the common standards. 
In addition, the data handling, data security and data protection aspects will need to be scrutinised. For instance, it may be necessary to identify the ownership of data and access rights, and to check whether specific data protection or privacy laws are needed in respect of smart grids. It may also be useful to consider whether and how consumers are able to consent to the use of their own data.
Ideally, the regulations surrounding smart grids should be adaptive and versatile, to allow freedom of choice for consumers and prevent barriers discriminating against new participants in generation, trade and retail supply of energy. The regulations should respect existing intellectual rights but curtail any monopolistic advantage if common standards are adopted. Data protection and privacy laws should continue to apply but with appropriate modifications suited for smart grids. Finally and most importantly, regulations should be in place to ensure that the reliability and security of the grid is not compromised in the quest to encourage energy efficiency.



For further information, please contact:
Sandra Seah, Partner, ATMD Bird & Bird



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