Decentralization - pivotal redesign of todays energy systems

When I am asked to describe?The Future Digital Energy System?in only two words, I instantly say?decarbonized?and?decentralized.

Decarbonization?perfectly expresses the physical aspects of energy systems of tomorrow, which rely on a selection of technologies that minimize any excess carbon atoms emitted into the atmosphere.

Decentralization, on the other hand, is a great synopsis of all transitions which need to happen at the information technology and communication level. It is implausible to have a factual energy transition without decarbonization and decentralization as a centre of gravity for next-gen energy systems.

In my previous article I have outlined possible decarbonization scenarios, so now, it is time to look at The Future Digital Energy Systems from the perspective of how all different?green?technologies can interconnect and cooperate to provide a robust, secure and optimized low-carbon system.

(De-)centralized Energy Systems

First, let me once again briefly explain the differences between what we have today and what is our target setup. Nowadays, energy systems are concentrated on a stable, centralized energy supply, delivered mainly by power plants. Centralized energy systems are always working the balance between demand and supply side, which is managed by TSOs (Transmission System Operators). Security of energy is provided by proper monitoring and maintenance of the network, overcapacity of the supply side and interconnections with other countries. Such networks have a clear split of responsibility between supply, demand and the grid (TSOs) side.

Once we start decentralizing our energy systems and stem a significant number of prosumers and energy sources, a key factor in the stable growth of the network becomes cooperation and interoperability of millions of assets (renewables, batteries, EVs, etc.).

An additional degree of freedom is different energy sources, which bring an additional dimension to The Future Digital Energy Systems. As explained in my previous article about decarbonization, there are a significant number of options how we can reduce CO2?emissions from stable and flexible fossil fuel plants (or course with the utilization of CCUS) or nuclear and biomass to more intermittent and scattered wind and solar. The robustness of a decentralized energy system to be capable of integrating and utilizing the maximum different energy sources will be another aspect of the next-gen setup.

Nowadays, rebuilding electrical systems, designed almost 120 years ago, to systems which fulfil new expectations is together with decarbonization, the biggest part of the Energy Transition. To summarize, next-gen, decentralized energy systems should fulfil various criteria:

• based on low/no carbon sources
• be resilient
• be efficient
• provide transparency
• be reliable
• be stabile
• be affordable

How to ensure that all required features will be covered appropriately? Low-carbon energy will be based on distinct technologies collected under the decarbonization umbrella, but to cover the rest of the criteria, we need extensive and structured decentralization of our system. This effort needs to be modelled around three components -?smart grid?(network),?energy storage?(capacity) and?services?(i.e. demand side response, blockchain, virtual power plants).

The Smart Grid

Grid is a well-settled part of current energy systems, but it needs pivotal redesign to ensure proper scaling (also downsizing), decentralization (of ownership, responsibility and security) and bi-directionality. The design of the smart grid needs to be based on layered structure (physical assets, energy management and prosumers decisions) to maintain operation and communication with sundry disturbances from both the supply and demand sides.

To uphold a reasonable level of diversification among participants working in one, decentralized smart grid, we require?microgrids. Microgrids are decentralized energy sources and loads which are in normal conditions attached to the grid but are also able to function autonomously, disconnected from the network. In this way, microgrids significantly improve the security of supply within their operations area and can supply emergency power, by switching between autonomous and connected modes.

Each microgrid has its own controller which ensures stability, smooth operations of the network and communication with supervisory systems (which take care of the same task but on a macro level).

A special type of microgrid is?offgrid. This type of electrical system is always working in?island?mode. By utilizing the same technologies which warrant resilient, efficient, secure and reliable microgrids, it is possible to have efficient and stable operations in regions where connection to any type of grid is not possible or financially acceptable. Offgrids can be one of the enablers for i.e., scaling up green hydrogen generation on offshore platforms.

A striking analysis of different microgrid opportunities along with benefit studies of its implementation was performed by Metabolic and sponsored by the Dutch government called?"The New Strategies for Smart Integrated Decentralized Energy Systems". A full copy of the final report can be downloaded?here. The report provides 9 scenarios for 4 different communities, together with holistic evaluation based on payback time, capital investment, self-consumption and production of energy.

Energy Storage

Energy storage is a key technology to ensure appropriate flexibility and security of energy systems. Flexibility mainly reflects the ability to address short-run and unexpected imbalances between demand and supply. Both flexibility and security need to be addressed on different levels: microgrid, grid, national or even international. Distinct gradation means various strategies for choosing the appropriate technology for energy storage. Generally, we can divide energy storage into four categories:

1. Electrochemical?- mainly, different types of batteries (lithium-ion, flow, molten salt, etc.)
2. This type of storage has great potential due to its flexibility and scalability. It is the default choice of energy storage at a consumer level (EVs, households, microgrids).
3. Physical?- energy storage based on kinetic, potential or thermal energy (pumped-storage hydroelectricity, compressed air energy storage (CAES), flywheel, thermal energy storage (TES))
4. Physical batteries are perfect for the storage of vast amounts of energy, but they are constrained by localization or available space. This type of storage is significant capital intensive, so it coheres with macro-scale networks.
5. Electromagnetic?- mainly supercapacitors and superconducting magnetic energy storage (SMES)
6. If I should use one word to describe this storage, it would be superfast. Power density (speed of charge/discharge) is 1000x higher than batteries. Contradictorily, electromagnetic storage can store less energy at the same size as batteries and is prone to self-discharge (even 10-20 per cent per day). Supercapacitors are a perfect fit for network stabilization, but they can really flourish in everyday usage, i.e. EVs (charging a car will be shorter than fuelling it up with petrol) or electronic tools (re-charging the tool will take seconds).
7. Fuel cells?- this is not typical energy storage but a tool utilized to?recover?energy stored in various fuels (i.e. hydrogen, ammonia). Energy retained in molecules can be efficiently transported over longer distances, which can support long-distance transport but also outsource generation of energy to more efficient places (i.e. sunnier or windier). Additionally, green hydrogen can be used as backup energy storage in refineries or chemical sites, where it is also utilized as a feedstock.

Services

Available services' suite strongly depends on infrastructure, two previous paragraphs of this article: network and capacity. The portfolio of services will change over time and certainly will become the torch-bearer of new developments and ideas. Today, we can proffer certain tools which have already established a quite rigid position on the market and have the potential to swell even further:

• Blockchain?is a default choice for ensuring cooperation, transparency and security between different participants of the market. Thanks to its huge expandability and well-established position in other sectors (i.e. financial) it is also certain that this service is our new way of exchanging information.
• Virtual Power Plants?allow us to apply known control strategies to scattered assets (virtually centralize control of decentralized sources). With the exponential increase of prosumers, this will be a life-saving service to keep The Future Digital Energy Systems running efficiently, especially in the transition period.
• Demand Side Response?seems to be my personal hand-picked service in the midterm horizon. By, enabling both, an increase in collaboration and incentivization of all participants in the energy system, it allows us to scale smaller success to common benefits. Demand Side Response is a very special kind of service with different use cases for different participants of the system. It has already been available on the market for some time, but it is not utilized to its full potential as grid and energy storage have not matured enough.

Demand Side Response

Demand Side Response (DSR) is one of the services which has the biggest potential to increase the adaptability of electricity demand to a volatile electricity supply. Incentivising flexibility on the demand side can help to stabilize all intermittent sources of energy. Hitherto, the main focus was on the management of the supply side, but with the expansion of smart grid and smart metering (thus, real-time monitoring and instant communication between market participants) urgency is shifting towards management of the demand side. Prosumers with a dilution of a split between supply and demand, provide an additional degree of freedom, which can be utilized for optimization and security of The Future Digital Energy Systems.

Each household, with a relatively small demand on energy, can participate in the DSR market through aggregators which combine?small-volume?users to offer appropriate flexibility. The situation is different with large energy consumers (mainly industry). If we look at Demand Side Response from a production process perspective, we can derive different scenarios with different sectors.1 2

• Refining & Chemicals?- as a large energy consumer has quite a big potential for DSR service but due to continuous process, activation of service needs to be incremental by shedding production or, if possible, shifting batch production
• Steel & Metal?- another energy-intensive segment, where activation of the service is binary (on/off) but due to the thermal inertia of the process it has to last for at least a week
• Paper?- this industry is very keen on DSR as it can provide two types of flexibilities: short term (1-24 hours) by shifting the whole production batch or long term (for weeks) by incremental shedding production
• Food?- an industry with a huge volume of sites, that in most cases, are flexible in shedding production or lowering the load on continuous process
• Automotive & Machinery?- best example of district industry where Demand Side Response can be provided with load shifting by using variation in the cycle time of production line machines

It is also worth mentioning the different types of Demand Side Response services, divided into?internal?and?external?categories. Internal DSR is governed by the asset owners, mainly by apt price stimulus. These are Real-time Pricing (RTP), Time of User (ToU) or Critical Peak Pricing (CPP).

External DSR is superintended by?the grid, which can appeal to decrease energy demand to i.e., maintain grid parameters or fulfil market requirements. Typical applications are Direct Load Control, Demand Bidding, Emergency Demand Response or Ancillary Services.

Conclusion

Yet, some boundaries are impossible to cross - no matter how we decentralize and decarbonize our system, we always have to fit with certain principles. Let's take vital parameters of the electrical network - voltage and frequency. With electrification and the decreasing relevance of rotating equipment (which is nowadays a major source to manipulate voltage and frequency parameters), we need to appoint new countermeasures (i.e., energy storage or demand side response) to maintain the security and stability of the grid. With the progressing transition towards net-zero, we will see a proportional growth in the complexity of the energy systems which need to serve the constantly increasing number of prosumers and the diversity of the patterns of energy supply and demand.

The positive thing is that this will not happen within a day. We can gradually adapt to upcoming disruptions with new technologies and services. Nevertheless, such a situation sets a new paradigm for our times - stability has become a luxury. We need to learn to adapt quickly, become open to changes and be ardent to upcoming possibilities. Only with such an attitude, we can withstand the upcoming energy revolution.

With The Future Digital Energy Systems articles series, I'd like to address the main drivers and enablers of our future energy landscape. Analysing available technology, required changes in organizations, legislation, and society, I want to disenchant and simplify all actions needed to fulfil net-zero commitments and limit global warming.

Other articles in the series:

Previous:?Decarbonization - The titanic challenge of our times

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About the author:

Mateusz Kasprzak?is an enthusiast of sustainability with the aim of understanding and describing?how the industry is changing our planet and how our planet is changing the industry.

Professionally, for more than 10 years, he has been helping the industry to translate management goals into real actions and projects with respect to energy efficiency, digitalization, and operational efficiency. One of the first?Official SIRI (Smart Industry Readiness Index) Assessor?in Poland.

References:

1. Shoreh, M. H., Siano, P., Shafie-khah, M., Loia, V., & Catal?o, J. P. S. (2016).?A survey of industrial applications of Demand Response. Electric Power Systems Research, 141, 31–49.?doi:10.1016/j.epsr.2016.07.008
2. Alcazar-Ortega, Manuel. (2011). Evaluation and Assessment of New Demand Response Products based on the use of Flexibility in Industrial Processes: Application to the Food Industry.
3. DNV GL. 2020. A state of the art review of demand side flexibility
4. International Energy Agency. 2021. World Energy Outlook 2021.