ICT Applications for the Smart Grid Opportunities and Policy Implications

OECD. The smart grid is revolutionizing electricity production and consumption. However, strategic use of ICTs and the Internet in energy innovation requires clarifying the roles of partners coming from distinct industries. And it begs for greater coordination of government departments and stakeholder communities that so far had unrelated competencies. This report outlines opportunities, challenges and public policy implications from shifts to ICT-enabled, "smart" electricity grids.

This report discusses “smart” applications of information and communication technologies (ICTs) for more sustainable energy production, management and consumption. The “smart grid” is a particular application area expected to help tackle a number of structural challenges global energy supply and demand are facing. The challenges include:

The direct impact of energy supply industries on climate change and other environmental impact categories.

Explosion of energy demand worldwide over the past decades.

Wider uptake of renewable energy sources in national “energy mixes”, which holds specific challenges.

Accelerating diffusion of electric vehicles, which will impact volumes and patterns of electricity demand.

Provision of reliable and secure national electricity infrastructures.

Electricity provision to unserved parts of the population in developing countries.

This report discusses these challenges in greater detail and links them to innovative applications of ICTs. These linkages provide the basis for what is termed the “smart grid”, i.e. electricity networks with enhanced capacities for information and communication. In concluding, this report outlines policy implications for government ministries dealing with telecommunications regulation, ICT sector and innovation promotion, consumer and competition issues.

The electricity sector is inextricably linked with global energy challenges and climate change since over two-thirds of global electricity is generated from the combustion of fossil fuels.

The smart grid has great potential for driving innovation in the ways electricity is produced, managed and consumed. Applications of information and communication technologies (ICTs) and especially the opportunities provided by the Internet can help sustain electricity supply while limiting environmental impacts. ICTs are seen as promoting a wider integration of renewable energy sources, promoting low-carbon transport options including electric vehicles and inducting structural shifts in electricity consumption.

Innovative applications for final consumers clearly revolve around the smart meter. More than a hardware device, it has the potential to balance traditional information asymmetries between electricity producers and consumers and to stimulate informed energy conservation choices; over 10% of an individual household's electricity consumption can be cut by simply providing better information (or providing information in better ways). Reductions in "peak demand" can directly contribute to lowering greenhouse gas emissions.

There is also significant innovation in the "back-end" of electricity sector operations. Improved monitoring and networked IT systems can help limit losses of electricity along the way and thereby improve capacity utilisation and avoid pollution; such losses represent on average 8% of production worldwide but over 15% in individual countries.

Integrated information and communication systems spur the emergence of new value chain entrants and business models. A prominent example are electricity supply aggregators operating "virtual power plants". Specialised IT services and infrastructure providers develop targeted solutions for the electricity sector. Moreover, "smart" operations in the ICT sector itself can contribute to limiting environmental impacts with cloud computing holding potential for effectively tackling peak electricity demand.

However, overarching policy issues need to be addressed to improve co-ordination and flows of information between smart grid stakeholders, to explore sustainable financing options for smart grids and to ensure acceptance by and engagement of consumers and society at large.

ICT-specific policy implications involve converging energy and telecommunications services, changing connectivity requirements, evolving roles for ICT companies as electricity sector partners and the resulting skills needs for IT professionals. Policy makers can facilitate innovation and co-ordination across IT and energy sectors. But they also have an important role to play in ensuring interoperability and openness of smart grids while at the same time securing critical infrastructures, safeguarding individual privacy and developing sound principles for the commercial use of personal data.

OECD (2012), “ICT Applications for the Smart Grid: Opportunities and Policy Implications”, OECD Digital Economy Papers, No. 190, OECD Publishing.

ICT Applications for the Smart Grid Opportunities and Policy Implications

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Towards an integrated European market for card, internet and mobile payments: online consultation

Brussels, 11.1.2012.COM(2011). The European Commission is looking at ways to spur competition and spark innovation. As a first step, the EU is seeking the public’s views on achieving these goals. A discussion paper  outlines some of the issues, and possible ways of addressing them: competition – improving market access for existing payment providers and making it easier for new companies to enter the market security and data protection – encouraging people to use alternatives to cash by making them more secure clear information on charges – protecting consumers from hidden charges and keeping prices down by helping them compare like with like systems that work throughout Europe – introducing common technical standards for greater compatibility. Currently national differences mean that bank cards often can't be used outside the country of issue, for example. 

Our online consultation is open until 11 April 2012. The comments we receive will inform decisions on the next steps to be taken, expected to be announced before July. 

Any proposals arising out of the consultation would complement common pan-European standards already developed for credit and direct debit transfers. 

Encouraging e-commerce

They would also support EU measures to boost online trade (e commerce), such as the 16 recent proposals  to encourage e commerce. 

Protecting consumers online 

Enforcing EU rules for online trading is essential to protect shoppers and build consumer trust. The EU has been conducting regular investigations into websites offering consumers products or services. The latest is a sweep of about 500 consumer credit websites. Of these, 70% were found to breach EU consumer protection rules. The companies behind them will be asked to correct their websites – and could face legal action if they do not comply.

Towards an integrated European market for card, internet and mobile payments

Secure, efficient, competitive and innovative electronic payments are crucial if consumers, retailers and companies are to enjoy the full benefits of the Single Market, and increasingly so as the world moves beyond bricks-and-mortar trade towards e-commerce. The way goods and services are purchased in Europe is fundamentally changing. As EU citizens and businesses become increasingly active outside their country of origin, electronic payments that work smoothly across borders significantly facilitate their daily lives. Building on achievements in the field of retail payments, Europe has an opportunity to be at the cutting edge of what ‘making a payment’ could mean in the future, be it with a payment card, on the internet or by using a mobile phone.

A first important milestone on this journey is the Single Euro Payments Area (SEPA), which is based on the premise that there should be no distinction between cross-border and domestic electronic retail payments1 in euro across the EU. The SEPA project covers the key retail payment instruments: credit transfers, direct debits and payment cards. From this basis, SEPA should be a springboard to creating a competitive and innovative European payments market in two ways. The first concerns the ever-growing proportion of on-line or internet payments (e-payments) and mobile payments (m-payments). Above all, the mass take-up of smart phones is changing the payments landscape and is leading to new payment applications, for example electronic purses, replacing wallets and physical cards, or virtual public transport tickets stored in a mobile phone. Here, the pan-European SEPA payment instruments can provide the basis for more integrated and secure payment innovations. Secondly, the existing standards and rules developed under SEPA could be re-applied to payment instruments in non-euro currencies, thereby taking the boundaries of a Single Market for payments beyond euro-denominated transactions.

The benefits of more market integration would mainly stem from four drivers:

1) More competition — in a network industry, such as payments, market access for new entrants or competitors from other Member States is facilitated through integration. Based on common open standards, service providers could offer their existing payment solutions in more than one country. This would expand their business base and hence create an additional incentive for innovation. As a result, the costs and prices of providing payments would converge downwards. Moreover, more competition could mitigate the current domination of the payment cards market by the two existing international card schemes.

2) More choice and transparency for consumers — with a broader range of competitive services, payment users could choose the payment instruments and providers that best serve their needs. Today, the cost implications of the choice they make are often not visible to consumers2. Due to hidden costs, often the most expensive payment method is used and costs are indirectly passed to all consumers through increased prices. By contrast, an integrated and transparent market would steer consumers towards the most efficient payment instruments.

3) More innovation — an integrated market increases scale effects. This means that existing players would have more opportunities to save costs or increase revenue. Furthermore, the incentives for innovation by new market entrants would be higher and the geographical scope of innovation would increase.

4) More payment security and customer trust — in line with the progress achieved in safe and secure payments at the point-of-sale, an integrated market would increase the security of, and consumer’s trust in, remote payments, such as e-payments and m-payments.

An integrated EU market for payment services could also produce, as a by-product, administrative data that could be used for the production of harmonised statistics. This would increase the quality and scope of EU statistics, with no additional costs for companies and limited investment for the statistical community.

This Green Paper assesses the current landscape of card, internet and mobile payments in Europe, identifies the gaps between the current situation and the vision of a fully integrated payments market and the barriers which have created these gaps. The objective of the Green Paper is to launch a broad-scale consultation process with stakeholders to validate or contribute to the Commission’s analysis and to help identify the right way to improve market integration.

Towards an integrated European market for card, internet and mobile payments

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Digital Divide: From Computer Access to Online Activities–A Micro Data Analysis

This study addresses issues of digital divide among households and individuals by using micro-data analysis of ICT usage patterns.  The analysis includes data from  18 European countries (2008), Korea (2008)  and Canada (2007). Inequalities in computer and Internet use are analysed in a two-step approach. First, the paper tries to better quantify and understand the factors that separate the ‘haves’ and the ‘have-nots’. Second, it tries to explain observed differences in the frequency and type of Internet use as a result of the socio-economic characteristics of households and individuals.

The study applies logistic regression and multi-linear regression models to measure the influence of one variable while controlling for the other variables. In particular, age, gender, educational attainment, employment situation, geographical location, household income and composition are used to explain the observed differences in computer and Internet access and use (first part) and Internet frequency of use, selected Internet activities, and Internet scope of use (second part).

The study proves the feasibility of performing micro data analysis of surveys of ICT usage in  households and by individuals. It shows that:

Low income is the single most important factor for non access to a computer and to the Internet. On average, the odds that a high-income household in Europe has access to a computer and to the  Internet are over 4 times higher than for a low-income household.

The presence of children is the second most important factor for the access to a computer and to  the Internet: on average, the odds for a household with one or more children in Europe are up to 3.9 times higher than for a household without children.

Living in a town in Europe increases the odds to have access to a computer and to the Internet by  over 30% as compared to living in the countryside.

Age and economic inactivity are by far the most important factors for having never used a  computer or the Internet. The odds are over 4 times higher for European inhabitants aged 65-74 years and up to 2.6 times for those out of the labour force. (Low) income, gender (female) and (lack of) children do play a role but their effect is smaller.

Becoming unemployed is the most important factor for stopping using the Internet. The odds that a European inhabitant has not used the Internet over the last 3 months are about 2 times higher if he is unemployed or out of the labour force.

Education is the most important  determinant of the intensity of Internet use. The odds that an individual uses the Internet everyday increases by 2.4 times in Europe and by 3.6 times in Korea if he has a university degree and above.

Being a student is the second most important determinant of the intensity of Internet use – the odds that a student uses the Internet every day are 2 times higher both in Europe and in Korea.

The third factor explaining the intensity of Internet use is income in Europe (the  odds are  over 70% higher for the high-income households) and broadband access in Korea (the odds are  2 times higher for households with a broadband connection).

Young age and higher education are the main determinants for the scope of Internet use in Canada, Europe and Korea.

Montagnier, P. and A. Wirthmann (2011), “Digital Divide: From Computer Access to Online Activities – A Micro Data Analysis”, OECD Digital Economy Papers, No. 189, OECD Publishing.OECD Digital Economy Papers.No. 189

Digital Divide: From Computer Access to Online Activities – A Micro Data Analysis

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Estudio sobre el conocimiento y uso de las Redes Sociales en España

El primer estudio sobre las Redes Sociales en España del Observatorio Nacional de las Telecomunicaciones y de la Sociedad de la Información (ONTSI) se ha estructurado en tres partes claramente diferenciadas.

En la Parte I del estudio “Las Redes Sociales en Internet Conceptos e Investigación de las Fuentes de Datos Existentes” se definen, conceptualizan y clasifican las diferentes tipologías de redes sociales analizando sus diferentes impactos. Para ello se presentan los principales datos disponibles de otros informes sobre penetración y hábitos de uso.

La Parte II del estudio es una encuesta sobre el conocimiento y uso de las redes sociales en España y entrevistas a expertos para conocer su opinión sobre este fenómeno. El objetivo de la investigación ha sido determinar el perfil de los usuarios, estableciendo una primera base de segmentación en función de sus usos y actitudes frente a las redes sociales y a los cambios que éstas han producido en sus formas de relacionarse e interaccionar.

En la Parte III del estudio, de manera totalmente novedosa, se exponen los resultados del análisis de las redes sociales Tuenti y Menéame aplicando la teoría de grafos, lo que permite el análisis de todo el universo de usuarios de cada red. Los objetivos principales son dos:

Conocer en profundidad el comportamiento de los usuarios en las redes sociales.

Esclarecer aspectos de la estructura y funcionamiento de las redes de los usuarios.

Por tanto, los resultados obtenidos permiten conocer, entre otros aspectos, el grado de actividad de los usuarios con perfil, la frecuencia de acceso, el tiempo de conexión y el número de contactos, así como la distancia a la que se encuentran los usuarios. Los resultados obtenidos son de interés para, por ejemplo, el desarrollo del comercio electrónico y la e-Administración.

Estudio sobre las Redes Sociales en España ( Descargar PDF 6330KB )        

Presentación Estudio sobre las Redes Sociales en España ( Descargar PDF 1557KB )

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Informe Anual de los Contenidos Digitales en España 2011

El Informe Anual de los Contenidos Digitales en España 2011 presenta los principales datos de la Industria de los Contenidos Digitales de nuestro país, datos relevantes de los hábitos de consumo de los contenidos por parte de los ciudadanos así como tendencias de cada uno de los sectores estudiados. Algunos de los principales datos del informe son:

 La industria de los contenidos digitales facturó 9.125 millones de euros en 2010, un 14,1% más que el año anterior
• La cifra de negocio de la venta de software para videojuegos en España ascendió a 631 millones de euros y se mantuvo en los niveles de 2009 (ADESE, 2011).
• La música digital experimentó un incremento del 10% en su cifra de facturación, alcanzando los 192 millones de euros.
• El mercado digital de las actividades cinematográficas, de vídeo y de programas de televisión supuso 2.571 millones de euros, un 5,1% más que en 2009.
• El sector audiovisual se consolida como el motor de la industria digital en España con un 44% de la facturación total de 2010.
• La edición digital de la prensa y los libros alcanzó los 780 millones de euros, un 6,3% más que en 2009.
• La inversión publicitaria en medios digitales fue de 799 millones de euros en el año 2010 (IAB, 2011).
• El 91,5% de la población española consume contenidos digitales a través de Internet o mediante un dispositivo electrónico no conectado a la Red.

Presentación Informe 2011 Contenidos Digitales ( Descargar PDF 967KB )

Informe 2011 Contenidos Digitales ( Descargar PDF 1700KB )