How are Smart Grids Revolutionising the Distribution and Supply of Energy

by Matias Almeida Garzon

Smart Grids are at the heart of the energy transition in line with the UN’s Sustainable Development Goals. Achieving net zero by 2050 requires rethinking energy generation, transmission, and distribution. In Europe, only 25% of the energy comes from clean energy, but experts calculate it would be necessary to increase it to 70 or 80% to meet the climate goals.

In many aspects, the energy infrastructure is crucial in the fight against climate change. The modernisation of the power grid is a key factor to prevent climate change, which we will cover across four topics; Supply decentralisation, technology integration, communication and control and the role of DSOs.

Decentralised Supply

Conventional power generation follows the logic of a centralised supply. Broadly speaking, power plants produce electricity in a small number of large-scale power plants far from urban centres. Integrating renewable energy sources like wind or solar requires a significant redesign of this architecture due to the technical characteristics clean energy generation demands.?

First, renewables are located on small-scale sites in strategic areas where turbines or panels can harness larger energy volumes. In other cases, sites can be as close to consumers as the rooftop above their bedrooms. Engineering jargon denominates these sites as?Distributed Energy Resources?or DERs. Their distribution logic completely alters the conceptualisation of power supply by decentralising generation and expanding the geographical area of electrical assets.?

The second implication relates to the new vectors of electric distribution. The integration of DREs implies a lower relevance of centralised power plants; and a higher role for distributed energy, even in user-end power generation. In other words, the energy supply no longer flows unidirectionally from power plants to users but multi-directionally between multiplied generation points.?

The third aspect places the focus on new infrastructure. Returning to the energy supply fundamentals, success lies in preventing disruptions by balancing energy supply and demand.

The conventional centralised infrastructure can’t be easily integrated with DERs because of its intermittent nature since generation depends on weather conditions. However, building energy storage facilities resolves this problem by preserving high energy loads when energy demand is low and releasing them if consumption requires it.

Storage units also emphasise the decentralised nature of modern power grids since they need to be built in the same location as DER sites or significant loads of energy will be lost over the stretch of transferring electricity to distant centralised storage units.

The future will see national distribution networks coexisting with local microgrids. This alternative architecture operates independently or in collaboration with main distribution lines.?

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Integration

Up to this point, the story appears very straightforward. So, why has the integration of renewables already not happened? The answer is simple, the existing power grid is based largely on analogue technology, therefore, the magnitude of the challenge is breath-taking regarding the upgrades required by the grid infrastructure.

Simply put, this involves integrating digital applications at every part of the power grid. Digital substations are the central point where computing technologies are leveraged in the form of?intelligent electronic devices?(IED) to improve grid operational performance, enable remote control, optimise communications, and support the integration of DERs.

Smart Grids are more than just an electricity network, they represent a conceptual revolution. They essentially require the creation of a whole new infrastructure ecosystem, equipped with intelligent devices that allow inter-asset communication and control.

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Communications and Control

Bloomberg has reported that global carbon emissions can be reduced by up to 15% just by unleashing the power of modern Information and Communications Technology (ICT) in the energy sector.

The expansion of IoT devices speaks about the future of the power grid. The director of the Institute for Automation of Complex Power Systems at (university tag), Antonello Monti, explains how decentralisation will translate into the increased importance of small-size devices at the edge of the power grid.

The success of Smart Grids largely depends on communication and control of devices. This is the only way to effectively manage supply and demand within such a widely distributed architecture. Deployment of large-scale data collection processes needs to run from wind turbine generation rates to user consumption readings through devices like smart meters or advanced edge-computing hardware.

Real-time data becomes more relevant as the degree of interconnectivity requires higher accuracy and transmission speed. As explained in a KPMG report, more efficient integration of energy suppliers, distributors and consumers will foster an optimal balance between energy supply and demand while increasing the power grid reliability.

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What does this mean for Energy Operators?

Under a macro-view of the issue, the digitalisation of the power grid requires very high amounts of investment. According to the International Energy Agency, in order to achieve the environmental objective of net zero emissions by 2050, annual investment in smart grids must double from $300 billion to $600 billion.

Amongst those involved in the energy supply chain, Distribution System Operators (DSO) will play a crucial role, despite the increased interaction of consumers with the market.

The Agility Effect, interviewed Radek Lucky and Olivier Monié, the managing directors of E.ON Czech Republic and Omexom. They agreed that the future of energy will require DSOs to perform important roles in fostering value-sharing frameworks as neutral market facilitators and of course, the crucial task of balancing the energy supply.

An extra layer of complexity rises concerning regulatory issues stemming from different legal requirements in countries where utilities operate. Resilience is the key to this aspect. The World Economic Forum forecasts the future of energy requires a systemic and collaborative mindset.

Ironically, decentralisation plays in favour of cooperation. As the power grid extends its operational infrastructure and digital technologies dictate the pace - ensuring interoperability lies at the core of the new paradigm, and companies and governments actively collaborate to facilitate the integration of smart technology. Organisations like E4S, IEC, ENTSO-E, and ISA, are examples of this trend.

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Sources

-???????IEA, Smart Grids, 2022

-???????IEA, Investment spending on electricity grids, 2021

-???????IEA, Renewable integration, 2023

-???????Bloomberg, A smarter power grid can help create a more sustainable world, 2023

-???????KPMG, The role of smart cities in a sustainable future, 2023

-???????The Agility Effect, Are smart grids the perfect solution for energy transition, 2023

-???????World Economic Forums, The future of energy is systemic, open and collaborative – and runs on a smart grid, 2022