Smart grids, which combine conventional electrical grids with information and communications technologies, gather, distribute and supply electricity on two-way information about the behavior of participants in order to improve the efficiency, reliability and sustainability of electricity services being connected with renewable energy sources and electric cars. Korea has seen its own smart grid act and test bed implemented for years, but there is no industrial spearhead nor clear-cut picture for the future even though no one is doubtful of a brilliant prospect for smart grid projects. One of the biggest huddle is the privacy issue protected by law. The Smart Grid Act provides for data protection because smart meters gather and transmit electricity usage information of consumers periodically to the meter data management system for both grid control and billing purposes. So do the electricity charging stands located across the country for electric vehicles. However, this kind of personal information may expose customer’s habits, behaviors, home appliances’ category, and even the life pattern information. That’s why the United Kingdom has revised its ambitious plan to install smart meters at all households, to selective households at their choice.
In this connection, reliable solutions should be provided lest privacy issues should outweigh the importance of smart grids. First of all, such data protection provisions on notice and consent should be observed by smart grid participants. And the customers’ information on the electricity usage is required to be processed to be anonymous or even encrypted. It is advisable to put the installation of smart meters at ordinary households to the lowest priority until any privacy protection technology is fully developed.
Further, a smart grid governance, very similar to IT governance, should be implemented in a proper manner. At first, smart grid governance is to enhance the effectiveness and transparency of electric power supply, distribution and consumption. Then who is accountable for the operation of smart grid including the afore-mentioned privacy protection?
The co-authors think the electric power exchange, KPX, is the most appropriate candidate for smart grid governance. The reason why KPX is accountable for smart grids in Korea is as follows:
- Smart grid governance could be well managed by a legal entity in a neutral position.
- Smart grid governance is usually linked to price-dependent supply, distribution and consumption (collectively trading) of electric power.
- Any violator of smart grid governance should be expelled from the on-line marketplace for trading of electric power.
- When any smart grid participant without a license (e.g., a wind generation operator) wishes to sell electricity, it may do so via the smart governance operator. For instance, KPX may nominate the applicant so that it may trade electricity to the extent that the relevant act allows to do so. It may save the red-tapes and lots of paper works at the initial stage of smart grid projects.