Smart grid versus energy efficiency:

Which one first?

Eric Vidalenc
ADEME
27 rue Louis Vicat
75737 Paris Cedex 15
eric.vidalenc@ademe.fr

Laurent Meunier
ADEME
27 rue Louis Vicat
75737 Paris Cedex 15
laurent.meunier@ademe.fr

Keywords
load management, efficiency, electricity use, smart grids

Abstract
Smart grids are designed to match better power supply and
demand. In particular, smoothing the load curve is interesting given the gains it may bring, namely reducing the installed
peak generation capacity and mitigating CO2 emissions. The
purpose of the paper is to determine whether these gains are
effective, and if so, to what extent.
The main contribution of this paper is to show that smoothing the load curve through non-disruptive remote controlling of a given number of appliances is worth under certain
conditions, i.e. in France. However, it cannot be assumed that
peak-shaving will offer gains in terms of load factor, energy efficiency, and GHG emissions reduction. Indeed, we should bear
in mind that smart grids optimise flows in a given system, and
that meeting ambitious targets for both GHG mitigation and
reduced consumption will depend on the systems overall level
of energy efficiency.

Introduction
Theoretically, smart grids are designed, among others, to
reduce peak electricity demand and second to incorporate an
increasingly diverse range of power plants into the grid. Indeed,
smart grids aim at addressing simultaneously a broad range of
issues: improving the management of installed power capacity, resolving congestion problems, incorporating a growing
number of renewable energies and, last but not least, reducing greenhouse gas (GHG) emissions. However, this must still

be verified through an accurate impact assessment. This is the

purpose of the paper.
First, by reviewing existing research, we identify the gains
that can be reasonably expected from the creation of smart
grids, and the conditions under which these gains are effective:
low- versus high-carbon electricity generation mix, peak versus
off-peak hours, energy efficient versus inefficient buildings and
equipment, etc.
Second, based on a quantitative analysis of Frances hourly
load factor combined with the hourly production mix, we assess the potential reductions of non-disruptive remote controlling of three appliances namely washing-machine, dishwasher, and water heater in terms of: power, measured in
gigawatts (GW); GHG emissions, measured in kilo tonnes of
carbon dioxide (ktCO). We focus on France, where the average production mix is low-carbon but where there are significant variations between off-peak and peak hours1. As a
consequence, smoothing the load curve can bring substantial
reductions of power demand and CO emissions. The French
context in which the analysis then is performed is very specific:
the share of nuclear and hydro power is relatively high (about
90% of power production). One could thus object that the issue
should be addressed at the European scale, first because of the
increasing integration of the European grid, and secondly because of increasingly strengthened climate regulations, and in
particular the EU ETS. However, even if the European baseline
production mix is much more dependant on fossil fuels than

1. In 2008, end-of-pipe GHG emissions amounted to 86grams of carbon dioxide

equivalent per kilowatt-hour (henceforth, gCO2/kWh), versus 359gCO2/kWh in the
European Union (EU 27, 20062008 average), (see [8]).

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Table 1 Potential national gains and structural parameters of electricity production.

Lever
Cutting waste

Modality

Increase consumer

Possible gain

Conditions

Energy savings

Reduced installed

All contexts

information
Smoothing the load curve

Via remote control of

equipment

capacity

Reduce CO emissions

Reduction in max peak

hours

Variation in power
production carbon content
between peak and offpeak hours

Incorporating a wide range of

power production plants

Via cheaper

Reduce CO emissions

balancing services

Reinforce Energy security

Greater use of renewable

with flexible power plants

or/and demand side
management

electricity
Additional consumption

Consumption due to

Loss

All contexts but easier

Strong variation in

operating smart

electricity power demand

devices (e.g. meters)

between peak and offpeak hours

Switching from thermal

appliances to electric
appliances

Manage the time of

Reduce CO emissions

High-carbon means of

use of the new

production used in peak

appliance. examples:

hours

from gas water

heater to off-peak

Low-carbon means of
production in base load

electric water heater,

electro mobility

the French one, the ranking of peak hours production costs is

similar.
Finally, we assess actions taken for purposes of energy efficiency considering the same three uses, mainly the development of energy-efficient equipment. We then compare these
results with those obtained previously.

Smart Grids: theoretical and practical appraisals

year2, simply as a result of operating the devices. However, in

the event of a positive gain, this would make it possible to reduce the countrys electricity bill, as well as its requisite power
capacity (excluding both imports and exports) and its GHG
emissions.
The purpose of smart grids is to manage flows more efficiently. Basically, the objective is to match at all times supply and
demand, under the following constraints:
economic (using the smallest possible capacity);

Theoretical gains

As mentioned earlier, smart grids are intended to help address a broad range of issues of current concern. They could
have five potential effects: first, they might help locate and cut
waste in energy consumption; second, they are likely to ensure
a smoother load curve; third, they make it easier to incorporate
a wide range of power production plants; fourth, the operations of the smart grid itself will generate some additional consumption of energy; finally, switching from thermal appliances
(fossil-fuelled) to electric appliances (e.g. from gas to electric
water heater) will enhance gains or losses.
Thus, it should be noted that there will be a gain in total
electricity savings if and only if the possible decrease in consumption as a result of the first effect exceeds the increase in
consumption resulting from the fourth effect. For instance,
an ADEME study (cf [2]) shows that Linky smart-meters, if
adopted on a broad scale, might initially lead to an estimated increase in consumption of 0.4terawatt-hours (TWh) per

technical (including reserve capacity);

environmental (incorporating an increasing amount of re-

newable electricity).

This paper deals only with a limited functional (peak load shaving) and technical (smart appliances) aspect of smart grid
Table1 summarises these potential gains and the conditional
structural parameters.
We focus on the French case, given the characteristics of its
electricity mix:
a significant share of nuclear production (76%) and hydro

production (12%),

a low average carbon emission factor (86g/kWh);

competitive base production costs;

2. Refer to [2] for further details. This quantity amounts to slightly less than 0.1%
of Frances total electricity consumption. In 2008, Frances annual electricity consumption was 485TWh

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a thermal production, mainly used in seasonal (winter)

peaks of consumption, as far as it is competitive;

Data

Load curve

important current interconnections with foreign countries;

investments in combined-cycle gas turbines (about 1GW

per year between 2010 and 2012).

Therefore, smoothing the load curve, which we focus on in

this section, could conceivably help manage better the installed power capacity and lower GHG emissions. But France
is specific in its high nuclear share, leading to a strong base load
component and maybe limiting the possibilities of integrating
fluctuating sources via smart grids. The findings cannot necessarily been generalized in other countries with a very different
electricity mix.
Electricity demand management

As mentioned previously, smoothing the load curve might

reduce the needed installed power capacity. The main ways
to smooth the load curve are through: heat storage (domestic hot water, heating, air conditioning); electricity storage
for low-power uses (computer, television, audio equipment,
battery-powered electrical appliances, etc.); and load shifting
(washer, dryer, dishwasher), including possibly peak-shaving
and valley-filling. This can be achieved either by technical
means (remote control of equipment) or economic incentives
(such as differentiated pricing), or a combination of both of
them. We focus here on technical means of smoothing the
load curve.
This section is broadly inspired by the comprehensive EIE
report (see [10]) on the potential of smart appliances. In that
study, the potential gain from smart appliances is analysed, based on a bottom-up approach.

Smoothing the load curve: electric equipment in

France

We use the CHARTER database (see [5]). It provides a reconstruction of hourly power demand for the entire year of 2008
in France, per appliance (e.g. washer, heat, hot water, etc.), per
sector of electrical demand (e.g. households in detached homes,
households in multi-family buildings, shops, industries, etc.),
per type of day (i.e., weekday, Saturday, and Sunday or holiday) and finally per month. There are 12months, 3types of
day, 42appliances and 57demand sectors. The data is compiled
from surveys of representative households and companies, the
aggregation of which yields the estimated national load curve,
which is really close to the empirical one. Notice that we focus
in this paper on the residential and services sectors, leaving
aside industry and agriculture mainly because lack of data.
Furthermore, demand management actions (pricing, agreements, etc.) have already been implemented in the industry
and agriculture does not appear to be an important focus for
smart grid development, given its relatively low consumption
(approximately 10TWh per year).
Among the appliances used in the database, only the following have been considered with regard to demand management:
washing machine;
dishwasher;
electric water heater.

Indeed, we consider only those appliances that can be modified

without significant impacts on households lifestyle, behaviours
and comfort, the aim not being to determine the maximum
gain possibly made by smart grids but an evaluation without
impact on lifestyle and behaviour.
Power generation mix

In this section, we first give a brief description of the data used

to perform the quantitative analysis. We then present the methodology, and finally the results.

We use the public database of the French grid manager, Rseau

de Transport dElectricit (RTE), which provides information
on hourly levels of production, consumption, possible imports
and exports, and the power generation mix. As a result, for

Table 2 Rates of equipment use of French households.

Washer

Potential for non-disruptive

load shifting
Yes

Penetration rate or number

95% (stable)

Dryer

Yes

33.2%

Dishwasher

Yes

50%

Oven and
stove
Refrigerator

No
Yes

50% (oven) 95% of new

sales
>100% (stable)

Freezer

No

52% (stable)

Room air
conditioner
Electric water
heater
Electric heat

No

9% (2008)

Yes

12 M

Yes

22.2% (1998-2002)

Heat pump

No

~15M

Start-time delay
function
42%
100%

Usage frequency of starttime delay function

32% almost all the time
After 60% of wash cycles

90% with overnight

storage
20% are storageheating (in Germany,
more than 98%)
Note: pumps are overpowered

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without demand management

85
80

---with demand management

75
70

Power, GW

65
60
55
50
45
40
35
30
1000

2000

3000

4000

5000

6000

7000

8000

Hours

Figure 1. An example of daily load duration curve and the annual load duration curve. Source: ADEME (from RTE and Charter Database).

Table 3 Structural drivers and subsequent situations.

Appliances

Current
100% remote control

any hour of a given year (2008 in this case) we can identify the
power generation mix, made up of:
nuclear power;
hydro power;
coal- and gas-fuelled thermal power;
oil thermal power and output power from daily peak means

of production (storage-and-pump plants) ;

remaining types of power generation (mainly combined

heat power generation, CHP).

Methodology

Management
Decentralised

Aggregated

Actual situation 2008

Not optimal situation

Smart grid potential 2008

Greatest potential gains situation

1. Reconstructing the hourly load curve for each of the hours

of the year 2008, by matching each type of day with calendar

days;

2. Estimating the potential for managing hourly demand, us-

ing Stamminger ([10], Figure1), for the six hours during

which demand is highest to be shifted to the six hours during which demand is lowest;

3. Estimating the marginal change in the electrical power sys-

tem;

4. Estimating the potential gains in terms of installed capacity

(reserve) and GHG emissions.

The potential peak-shaving, for a given hour was determined

according to the following equation:

Assumptions and general method

First of all, notice that the current analysis is performed on

the year 2008 and we consider the French national grid (see
[9]).
The level of smart grid development is mainly driven by the
level at which management decisions are made (decentralised
or aggregated), and also by the penetration rate of appliances
equipped with a start-time delay function and remote-controlled equipment. Table3 summarises the structural elements that
drive the development of smart grids:
The evaluation performed lies within the top-right situation.
In other words, we look at the current equipment rates and the
demand management potential (Table2) of the already mentioned three appliances, through information on forthcoming
peak hours. This may sound optimistic, yet people are not necessarily reluctant to energy management actions as showed by
the Ecowatt program for example.
The steps are as follows:

psph=0.2856*wmh+1*dwh+1*ewhh

(1)

Where:
Index h represents the hour considered;
psph is the peak-shaving potential, in GW (i.e. the amount by
which demand can be decreased at time h);
wmh represents the power demand of washing-machines,
in GW; the coefficient0.2856 is equal to 0.42*0.68 (refer to
Table2); (22% of annual peak-shaving potential)
dwh represents the power demand of dish-washers, in GW;
the coefficient1 means that we assume that the time of use
of all dish-washers at time h can be shifted (43% of annual
peak-shaving potential)
ewhh represents the power demand of electric water heaters,
in GW; the coefficient1 means that we assume that the time

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250
200

Variable cost
Fixed cost

150
100
50
0
Nuclear

Gas

Coal

Figure 2. Base production costs in France.

of use of all electric water heaters at time h can be shifted

(35% of annual peak-shaving potential)
Notice finally that no net energy saving is considered in this
section, but only shifts in time of usage.
Assessing the power generation mix: what to change, what not
to change?

Based on a cost and technical analysis (see [4]), we determine

which primary energy is saved, if any.
Besides, although the national grid is increasingly interconnected (15GW in winter and 14GW in summer according to
RTE), we do not consider the European electricity mix but only
the French national mix. Indeed, the French marginal power
plant is often the same type of the European marginal power
plant. One should notice however that the data for 2008 published by RTE does not draw a distinction:
first, between gas- and coal-fuelled plants production;
second, between oil-fuelled plant production and the one

from daily peak means of production.

The considered generation mix is summarised in Table4.

In sum, with regard to peak shaving, the power generation

mix is considered according to the following order of priority:
first oil-fuelled power plants, and then coal- and gas-fuelled
power plants. Accordingly, to increase off-peak production,
we consider the reverse order: first coal and gas, and then
oil. Notice that the peak-shaving can not, for any hour, be
greater than the aggregated production of, on the one hand
coal- and gas-fuelled power plant, and on the other hand oilfuelled power plants. Therefore, some potential gain is lost
because we do not consider the modulation of the other types
of plants. The reason why nuclear and renewable energies (i.e.
hydraulic, wind, solar and biomass) are not considered in this
modulation is because these means of production are either
intermittent and must take generators (e.g., wind and solar), or
cost-competitive (e.g., nuclear and hydro). Thus, all these productions are considered operated at full potential. Nevertheless, this last assertion must be specified concerning nuclear. In
past year, early in the morning, some marginal nuclear availability existed for some days. But this situation will probably
change in next years considering interconnections and growth
of consumption.
Results

The results are the following:

Demand management and power. These values compare
with Frances overall consumption (485TWh in 2008), and
the highest annual peak load, i.e. 90 GW in 2008 on the
coldest day of the year (and 96.3 GW in 2010). In terms
of power, the gains are significant, since for 50 % of the
879hours (10% of hours of the year in 2008) during which
demand is highest, the peak-shaving potential is greater
than 1.61GW. In addition, the gain for the top-three peak
hours amounts to1.75 which is significant from the grid
manager perspective.
Modulation of thermal production plants. Beyond these results, demand management has an impact on the production mix as summarized in Table6.

Table 4 French generation mix.

Installed power, GW
Type of plant
Wind and Solar
Nuclear
Hydro
Gas & Coal
Oil & pumped-hydro

3.6
63.3
25.3
7.9
5.8

Production (TWh)
5.7
439.5
68.4
44.5
6.1

Type of production
Intermittent
Base
Base and daily peak
Seasonal and daily peak
Daily peak

Table 5 Peak-shaving potential.

Capacity
Power, GW
Difference in demand between annual peaks (with and without demand management)

Energy
consumption,
GWh

1.75

Potential Management

5,845

Effective Management (only if thermal power plants are available to be modulated)

3,965

Median peak-shaving of the 879 hours with highest demand

1.61

Power capacity modulation of the three hours during which withdrawing is highest

1.75

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Table 6 Modulation of power plants.

Coal- and gas-fuelled power plants

Oil-fuelled power plants
Total

Production without demand management, GWh

25,707
1,888
27,595

Production with demand management, GWh

26,480
1,115
27,595

Table 7 Potential of CO emissions abatement.

Plant

CO content, g/KWh

CO emissions variation, kt

Oil

800

-618

Coal & gaz

658

+508

Total

110

Table 8 Evaluation of energy efficiency gains.

Current Annual
Consumption
(kWh)

Washing machine
Dishwasher
Water heater
Total

169

Annual consumption
with best efficient
equipment, kWh/year
(see [7])

120

2008 Calculated
Consumption
(GWh)

1789

2008 Calculated
Potential
Consumption with energy saved
best technologies (GWh)
(GWh)

1270

Pontential
CO saved
(kt)

519

31

273

272

3621

3607

13

1920

730

20995

7978

13017

521

Thus, in 2008, more than 773GWh could have been saved

from oil-fuelled power production and shifted to coal- and
gas-fuelled power production through smart management
of the considered appliances. This represents a major decrease in electricity production from oil-fuelled power
plants in France (from 1,888GWh to 1,115GWh).
CO emissions. To assess the overall gain from these modu-

lations, an average CO content (658g/kWh) has been calculated based on the annual productions of gas- and coalfuelled power plants in 2008. The estimated CO emissions
reduction amounts to 110,000tonnes in 2008, which is relatively low in comparison with the annual emissions of the
electricity sector (slightly greater than 30Mt of CO).

It should be noticed that there are two potential biases concerning CO emissions gains. First, the CO content of the annual
composite average coal- and gas-fuelled power production
(i.e. 658g/kWh) is the mean of coal- and gas-fuelled power
production CO content, weighted by their respective annual
production. Yet, considering current modulation in France,
coal-fuelled power plants and then gas-fuelled power plants
would be turned off when shaving peak hours demand (recall
that the CO content of French coal-fuelled power amounts to
960gCO/kWh). On the contrary, gas-fuelled production and
then coal-fuelled production would be increased during offpeaks hours (the content of gas-fuelled power is equal to 360g/
kWh). In so doing, we underestimate the average CO content of jointed coal-and gas-fuelled power production which
is shaved during peak hours, and overestimate the average
content of the additional production during off-peaks hours.
Therefore, we underestimate the gain (i.e. -508ktCO). On the
other hand, the average CO content of extreme peak produc-

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tion (i.e. 800g/kWh) is overestimated since the extreme peak

production means is made up of oil-fuelled power plants and
storage-and-pump power plants. As the content of the former
is equal to 800g/kWh, whereas the content of the latter is close
to zero, we overestimate the related gain (i.e. 618kt). However,
as no distinction is drawn in RTE data, on the one hand, between gas- and coal-fuelled power productions, and on the
other hand between oil-fuelled and storage-and-pump plants,
we cannot go further.
To conclude, these results show that the overall gain can be
quite significant in terms of power demand, but remain relatively weak with regard to CO emissions.

Smart Grids versus Energy Efficiency: which is

more effective?
The previous section showed that smart grids can help match
supply and demand. In this section, we first assess the technical performance of a large-scale energy efficiency policy,
and second, we compare these results to those obtained in the
previous section. In other words, we calculate the consumption with constant uses for the same appliances assuming that
same French households have the currently most efficient appliances.
Potential gains are considered on the basis of current average
consumption of these appliances and the best available equipments. It is worth noting that the CO gains are evaluated on
the basis of historic uses emission factors: 40g CO2/kWh for
water heater and 60 g/kWh for washing machine and dishwasher (see [1]).
Hence, even with unfavourable CO emission factor considered, the evaluated energy savings actions enhance a much

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greater absolute reduction in CO emissions than in the previous section.

Conclusion
We performed separate analyses of smart grids and energy
efficiency potential gains in order to compare them, even if
they are more complementary than contradictory in reality. It
turned out that, in the short run, energy efficiency is likely to
bring greater gains than smart grids, at least as far as CO emissions are concerned (more than 550ktCO2 versus 170ktC02).
However, smart grids are likely to develop alongside energy
efficiency actions. Indeed, they are complementary: smart grids
help optimise energy flows within a given system, yet that systems energy efficiency will be critical to achieving ambitious
reductions in GHG emissions.
Moreover, we saw that smart grids could bring considerable
reductions in power demand a determinant of electric power
system sizing but the gains in CO emissions will be all the
more so high as the difference in carbon content between peak
and off-peak hours generation mix is higher. The emissions
could even be increased by peak-shaving actions, for example in
the case of lignite-fuelled power in base periods and gas-fuelled
power during semi-base and peak periods.
To conclude, energy efficiency lays the foundations of the energy system, and smart grids are likely to help address current
and forthcoming challenges, such as incorporating an increasing quantity of renewable energy and demand variations. Thus,
each of them addresses different issues. Therefore, in a longterm perspective, they both should be encouraged. And smart

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grid can be a condition for changing the system from a system

relying heavily on base load plants coal or nuclear to a combination of renewable energies, demand side measures, micro
generation, storage capacities, and smaller flexible plants.

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