South Korea: Jeju Island Smart Grid Test-Bed Developing Next Generation Utility Networks

Executive Summary A major challenge faced by cities around the world is how to pursue development and growth, while curbing climate change. Many national and municipal governments have set ambitious goals to reduce CO2 emissions over the next two decades, paving the way for a more sustainable future. To help achieve these goals, utility companies are building smart grids to support the distribution of energy generated from widely-dispersed renewable sources, while enabling more efficient transmission, storage and the consumption of energy. Smart grid test-beds are now being set up around the world, most recently by the Smart Energy Collective in the Netherlands. Their aim is to test the basis of plans to transpose the resulting smart grid services and solutions for advanced technologies required to innovation to a wider commercial base, smart places (homes and buildings) support new elements of the power and internationally. As one of the first and smart transportation. grid, such as electric vehicle charging smart grid test-beds globally, the Jeju n If the government’s plans come to infrastructure, wind and solar power Island programme will help Korean fruition, by 2030, South Korea will and automation of transmission and companies achieve a leading position in generate 11% of all energy from distribution networks. These test-beds the early commercialisation of smart grid renewables from 2.1% in 20121, also research new market and business technology. models. Just as importantly, the test-beds eliminate approximately 230 million Some of the key features of the Jeju test- are exploring ways to change end-user tonnes of greenhouse gas emissions, bed project include: energy consumption habits, which will create 50,000 jobs annually, and generate 74 trillion won (USD 64 be fundamental to achieving major n A close public–private collaboration billion) worth of domestic demand for reductions in CO2 emissions. that involves significant investment new technologies. commitments on both sides; In South Korea, the government has set ambitious goals to reduce CO2 n The test system aims to demonstrate emissions by 30% from the anticipated the management of next generation “business as usual” levels in 2020. To utility networks and how they can be test and evaluate Korea’s future green- supported by modern IT platforms and growth infrastructure and services, communications networks; the government has teamed up with n The test-bed will be a launch pad for private companies to set up the national wider country deployment and to open smart grid project on Jeju Island. up export markets; Approximately 240 billion won (USD 208 million) is set to be invested in the n The project is supported by Korea’s project, of which 64 billion won (USD 56 three major telecommunications million) is committed by the government service providers KT, SKT and LG and the rest by private companies, on the Telecom. Telcos are testing a variety of 1 http://www.smartgrid.or.kr/10eng4-1.php Introduction covers approximately 6,000 homes. Located on the southernmost tip of the The aim is to optimise energy usage by Korean Peninsula, Jeju is the largest utilizing new and renewable energy island in South Korea. sources and energy storage facilities. The smart grid - an intelligent power The island is a popular tourist transmission and distribution system destination, and the location of the - will collect real-time data on energy World Heritage Site Jeju Volcanic Island usage and demand. That data can be and Lava Tubes. The sunny and windy used to limit the unnecessary use of climate makes the island an ideal electricity and increase the efficiency of location to test the concept of distributed energy consumption. energy generation and micro-grids. By The first phase of the project, concluded 2030, the island plans to become carbon- The project is being financed by both in May 2011, involved the construction neutral and fully-sustainable through the the national government and private of smart grid facilities and infrastructure. use of renewable energy. companies. A total investment of The second phase, lasting from summer 240 billion won (US$208 million) is 2011 until May 2013, is testing and The Jeju Test-Bed is being overseen committed to the construction of test-bed demonstrating the infrastructure and by the Korean Ministry of Knowledge facilities, projects and services, of which services, and preparing the technology for Economy, is set to run between May 2009 $56 million comes from public funds and expansion and export to mainland Korea and May 2013. A total of 168 companies the rest from private investment. and overseas. are participating in the project, which

“KT, a leading mobile operator in smart grid, aims to achieve the green growth driven by Korean government. KT consortium is developing low-carbon, energy efficient smart grid technologies in the Smart Population (2010): 531,905 Place sector and creating a new value.“ Area: 1,849km2 Jinsoo Sohn, Head of Smart Grid & Energy Business Unit, KT Gross Domestic Product of the province (2006): USD 8.5bn

Jeju

Jeju-do Exhibit 1: Five Areas of the Jeju Test-Bed ICT infrastructure for smart grid will be digital, capable of two-way low- latency communication, and designed to be highly reliable, even self-healing. For telco network providers involved in smart grids projects, the main challenge is therefore to optimise and Smart Power Grid monitor the communication network performance, and to deal with exploding Build Smart Power Grid Infrastructure amounts of data, while ensuring that ICT infrastructure does not compromise Smart Smart Smart stability and security of the grid. Place Transportation Renewable However, their role in supporting a smart grid will go further than networks and Lay the foundation for Lay the foundation for Manage clean energy infrastructure. efficient energy use expanded distribution of reliably electric vehicles At Jeju Island, KT, for example, is testing a range of solutions for smart home and building energy management, as well as SmartS ElElectricityii ServiceSi electric vehicle mobility solutions through the KT Consortium, which consists of 14 Provide new electricity services corporations, such as Samsung, Hyosung, Omni system, ABB, and four research institutes for advanced technologies, such as Korea Institute of Energy Research and Korea Electronics Technology Institute. At the heart of KT’s operations is a smart grid NOC (network operating centre), Source: Korea Smart Grid Institute built on its Open Service Platform. The platform inter-works with a variety of connected devices and the legacy Testing the useCustomer of IT Platforms to Manage giveSmart consumers Phone/Pad choice ofPC electricity rates, IHD grid network,SoIP and providesIPTV third(Smart TV)party Next Generation Energy Networks allow them to sell renewable energy back to support services through an open API Moving from closed utility systems to open the grid, and implement a real-time pricing portal (see Exhibit 2). service platforms3rd Party systemService Interfacenationwide. Web Service Interface Application Interface Successful operation of the smart grid Traditional, closed single-utility ICT will requireIndividual secure Operators and interoperable3rd ICT Party KT Open Service Platform Support systemsEnergy Management aren’t capable of delivering infrastructure and platforms to support HEMS BEMS TEMS Services thePlatfrorm required range of technological and new services,Partners such (CP/SP) as demand response operationalIntegrated capabilities. The new smart (DR), building energy management andOneAPI Usage Data Meta Data Subscribers Info Contents Shop in Shop Portal gridDatabase will involve multiple companies power retail. Demand response will Dev andNOC require real-time monitoring and enableAlliance utilities Partners companies (Shop & Shop to )curtail the DRMS REMS MDMS BSS Support managementplatform of millions of widely consumption of energy by home and distributed managed objects and devices, business users during times of peak Legacy/Device including meters, feeder automationLegacy Interface Device Interface demand, by controlling the use of electricity Interface devices, and distributed generation assets. and appliances at customer premises and Smart grid market participants will need to rewarding them through price discounts apply sophisticatedTOC analyticalSCAD toolsAO to deal ther Devices including AMI, Panel Board, etc. and other incentives. Building energy with large amounts of data in real-time, and management services will provide real-time be able to bill and invoice customers for energy monitoring and control tools to end- large volumes of transactions. users themselves. Lastly, power retail will Smart Power Grid

Build Smart Power Grid Infrastructure

Smart Smart Smart Place Transportation Renewable

Lay the foundation for Lay the foundation for Manage clean energy efficient energy use expanded distribution of reliably electric vehicles

SmartS ElElectricityii ServiceSi

Provide new electricity services

Exhibit 2 KT Open Service Platform to support smart grid services

Customer Smart Phone/Pad PC IHD SoIP IPTV (Smart TV)

3rd Party Service Interface Web Service Interface Application Interface

Individual Operators 3rd Party KT Open Service Platform Support Energy Management HEMS BEMS TEMS Partners (CP/SP) Services Platfrorm Integrated OneAPI Usage Data Meta Data Subscribers Info Contents Shop in Shop Portal Database Dev NOC Alliance Partners (Shop & Shop) Support platform DRMS REMS MDMS BSS

Legacy/Device Interface Legacy Interface Device Interface

TOC SCADAOther Devices including AMI, Panel Board, etc.

Source: KT Smart Grid Brochure

Mobile technology is being used on Jeju real-time analysis of consumption data, By 2030, the South Korean government Island to support the delivery of a wide and a major effort to teach smart grid plans to engage 30% of all citizens in a range of smart grid solutions. In addition customers how to use the new systems. real-time power trading market, giving to connectivity for smart devices, mobile them choice of electricity rates and At the Jeju test-bed, the KT consortium is infrastructure is used for various support allowing them to sell renewable energy testing a wide range of connected devices, services, such as billing, authentication back to the grid. To achieve this, the sensors and web-based cloud services to and security. participating consortiums will need to analyse and present energy consumption invest in a significant amount of research data. These include: Creating a new customer experience into end-user energy consumption n Connected home devices include smart habits and education of household users The Jeju Island project is also testing new meters, smart tags (smart switches about the benefits and use of new smart market and business models by involving which monitor the power usage of grid services. On Jeju Island, the Smart the entire ecosystem of utilities, ICT each electrical device) and smart Grid Information Centre (SGIC) has companies and public administration boxes (gateways connected to a wide been educating householders through companies. Korea’s three major area network (WAN) via WCDMA, meetings, presentations, conferences and telecommunications service providers KT, WiBRO or FTTH and used to control all forums. Even so, progress has been slow SKT and LG Telecom are testing a variety household appliances). In combination in some areas, where large proportions of smart grid services and solutions for with temperature and humidity sensors, of the population are elderly. According smart places (homes and buildings) and these devices are used for real–time to the 2010 Jeju Statistical Yearbook, for smart transportation. The telcos are also monitoring and control of energy example, 44 per cent of the Gujwa-eup piloting end-user services and tools, consumption. The data is transmitted test area’s 3,282 residents were over the including web-based cloud platforms for to KT’s network operating centre over a age of 652, and most would struggle to energy management. wide area network. understand what to do with new smart Smart grids will only realise their full meters and information home displays n Energy consumption info portal: potential if households and businesses Householders can view their energy Such educational programmes will need change from passive consumers of consumption data on four different to be replicated when smart grid services electricity to well-informed and proactive screens, such as in-home displays, TVs, are transposed to a wider commercial users of energy management systems. tablet PCs, smartphones. Moreover, base, both in Korea and abroad. On Jeju Island, such a change is being every household can compare its usage enabled by the introduction of new with comparable houses and neighbours. 2 http://www.jejuweekly.com/news/articleView.html?idxno=1835 connected devices at customer premises, Jeju Island Smart Grid Test-Bed is a Launch- then, KT has been involved in 44 u-City pad for pan-South Korean Deployments projects in South Korea, taking part in Building a nationwide smart grid will strategic planning, design implementation be a lengthy process. The roadmap for or operation of u-Cities. South Korea’s national smart grid plan KT is participating in the Jeju Test-Bed cites the construction of a smart grid project through the KT Consortium, across metropolitan areas, together which consists of 14 corporations, such as with fitting all households with smart Samsung, Hyosung, Omni system, ABB, meters, by 2020. The goal is to complete and four research institutes for advanced a nationwide smart grid by 2030. A technologies, such as Korea Institute of significant effort will be needed to Energy Research and Korea Electronics integrate new smart grid services with Technology Institute. Additional the existing infrastructure and services information about KT can be found at of South Korea’s u-Cities, which are www.KT.com. deploying ubiquitous connectivity and sensors to provide advanced city services. The development of the link between the SK Telecom two will start in May 2013. SKT is a leading telecommunication operator in South Korea, providing If the government’s plans come to wireless services to 26.5 million fruition, by 2030, South Korea will subscribers. It holds 49% of the local generate 11% of all energy from wireless market. On Jeju Island, SK renewables from 2.1% in 20123, eliminate service for 50 homes in Bahrain in 2011. Telecom leads a consortium of 28 approximately 230 million tonnes of SKT, another leading Korean telco, is also companies from various industries, greenhouse gas emissions, create 50,000 planning to expand into the overseas including Korea Cable TV and Jeju jobs annually, generate 74 trillion won markets for smart grids, such as the U.S. Broadcast, among others. The consortium (USD 64 billion) worth of domestic and China. provides facilities and devices for 1,000 demand for new technologies, eliminate households in five different areas of 47 trillion won (USD 40 billion) worth AMI, solar power, energy storage, smart of energy imports, remove the need to Challenges appliances and electric vehicles. It tests construct 3.2 trillion won (USD 2.8 billion) As well as secure and interoperable various business models and smart grid worth of new power plants and generate technology, the success of smart grids services, and conducts analysis of customer 49 trillion won (USD 42 billion) worth of depends on the education of consumers needs and consumption patterns.5 exports of technology know how.4 and businesses about the new capabilities of smart grid technologies and power Further Information Conclusion market models. This can be a lengthy and Korea Smart Grid Institute: Achievements resource-intensive process. http://www.smartgrid.or.kr/10eng3-1.php South Korea was among the first countries to set up a test-bed for smart Jeju Test-Bed: Background on Participating grids, preparing South Korean companies Companies to be at the forefront of the early KT commercialisation of the technology. KT Corporation is a telecommunication South Korean telcos will be among the operator in Korea providing wireless, fixed main beneficiaries of this pioneering line, broadband and IP TV. It holds 86% of approach, as they are preparing to export the national fixed-line market, 32% of the their expertise and technology outside of wireless market and 45% of the broadband Korea. In 2012, for example, KT started market (19 million, 16.6 million, and 7.9 deploying its Smart Grid Network million subscribers respectively). KT Operating Centre (NOC) technology in proposed the U-City concept to the Korean Finland and Uzbekistan. The operator government as a new model of city also conducted analysis and design for development through government-private four buildings in Chicago in May 2012; collaboration, and applied it in the first 3 http://www.smartgrid.or.kr/10eng4-1.php 4 http://www.smartgrid.or.kr/Ebook/Roadmap2/Roadmap2.html and it developed a pre-commercial u-City project in Dongtan in 2006. Since 5 http://www.keei.re.kr/keei/download/seminar/101117/II101117_b03.pdf GSMA Connected Living Programme sectors. The Connected Living The GSMA’s Connected Living programme is also working with the city programme is a three-year market of Barcelona, the Mobile World Capital, to development initiative whose mission develop and showcase smart city services. is to help mobile operators accelerate Our work focuses on the adoption of the delivery of new connected devices mobile-based solutions and services to and services. Our target is to assist in ensure that the cities of the future are safe the creation of 700 million new mobile and healthy places to live and work. connections, whilst stimulating a number of service trials and launches in the Email: [email protected] Automotive, Education and Healthcare www.gsma.com/connectedliving/smart-cities