The time for grids is now

First and foremost, welcome back to our #FridayFeatures. We hope you were able to enjoy some of the summer and are ready to dive back into an already busy autumn.

Grid awareness was everywhere this week. In a first report on the Power System of the Future , Eurelectric made a big call for ramping up the capacity of our distribution grids. Meanwhile, our President and E.ON CEO, Leo Birnbaum , took part in the European Commission and ENTSO-E 's high-level forum on the future of our grids. Even Energy Commissioner Kadri Simson had an Op-Ed in the Financial Times on upgrading our grids for a greener future.

What Commission President Ursula von der Leyen put quite well last month, as she named Frans Timmermans’ replacement as Green Deal Chief, is that “Following a successful legislation phase, the focus of Executive Vice-President ?ef?ovi? will be the successful roll-out of the European Green Deal as Europe's growth strategy”. Indeed, it is time for roll-out, but to make that happen, it is time to focus on the elements that will deliver that roll-out. The time for grids is now.

What’s the hold-up?

The Commission’s ambitious electrification targets laid out in REPowerEU call for an additional 605 GW of renewable energy by 2030, of which, as we point out in our capacity report, 70% will connect at the distribution level. However, our distribution grids are ageing. 40% of Europe’s distribution grids are over 40 years old, and with age comes obsolescence. That is because over 40 years ago when those grids were being planned, the nature of our energy system was fundamentally different.

In the 1980s, renewable energy penetration was practically nonexistent. What the system relied on was massive, centralised power plants that would deliver hundreds of megawatts of electricity to the system. This electricity would then be funnelled down the transmission, then the distribution system until it reached the end user. That was it.

Today, renewable generation scatters the countryside with a megawatt or so here and another few over there. Furthermore, people have solar panels on their houses, shopping centres have them on their roofs. People also now drive electric cars that, not only consume energy but can send it back to the grid if they do not need the stored electricity in the car’s battery. Heating is increasingly electrified. Consumers also have smart meters that enable them to adjust their electricity usage to when demand is lower, and prices are more favourable.

Today, we are in an age where interactions with the grid are bi- or even multidirectional, and this complicates the traditional system – the so-called transmission-centric model. That is already beyond the fact that there are simply so many electric solutions connecting to the distribution grid. The hold-up is the fact that we live in a 21st-century world with 20th-century infrastructure. To deliver the power system of the future – a so-called decentralised model – we need to expand, modernise and digitalise our grids to increase their capacity all while making efficient use of the capacity that already exists.

Expand, modernise and digitalise

These words have become a mantra for utilities and this is reflected by the fact that they are enshrined in our Presidency’s Priorities . They are the key to delivering capacity on the distribution grid as we add hundreds of gigawatts of renewable energy and distributed energy resources (DERs) to the system. The good news is that right now we are at an optimal point to give these verbs their action. It just needs a bit of spark.

Expand

First and foremost, we need to get to work on expanding the grid. Countries across the EU are already facing congestion due to a lack of physical infrastructure to connect. As more and more DERs are slated to be connected to the grid, delays in connection arise because the current grid simply cannot accommodate them. An egregious example of this is waiting nearly seven years for a grid connection in the Netherlands. Seven years from now is 2030, so if we want to meet 2030 targets, we need to get started on our grid expansion now.

Right now, there is a great opportunity to incentivise this needed expansion in the form of the electricity market design (EMD) reform which is nearing the trilogue phase. Throughout the process, we have been calling for mechanisms to incentivise the needed flexibility for the power system of the future. So far, this has taken hold. It will be vital that these mechanisms remain embedded in the reform and become a tangible outcome that incentivises the investment in this expansion.

Unfortunately, however, there is also the hurdle of permitting. Getting the permit to expand a grid line also takes several years. If we are to see the expansion needed then, we must see a streamlining of this permitting process. Meanwhile, it is clear that the capacity we need right now cannot wait for expansion.

Modernise

While we wait on this grid expansion, we need to use the capacity we already have more efficiently. This can be done in a number of ways, as we outline in our grid capacity report. The key example is flexible connection agreements. In a simplified language, these agreements allow system operators (SOs) to regulate electricity flows based on the usage level of the grid, allowing them to optimise the usage of the capacity available to them.

However, this form of agreement would require that the consumer be flexible as well. It would mean that the SO could divert electricity flow away from a consumer's area when deemed necessary and this would impact the way the consumer uses their electricity. For those consumers highly reliant on DERs, this sounds like it could be too much to deal with and may disincentivise such an agreement. But in fact, there are ways for this to be mutually beneficial for the SO and the consumer.

Digitalise

The modern day can be near synonymously referred to as the digital age. Everything we do can be translated into data sets and analysed, and this includes interactions with the grid. DERs especially have the added advantage that they can act as smart devices, whether smart charging for electric vehicles, smart meters for energy consumption, or smart heat pumps for heating. However, 40-year-old grids have a tough time using this data for the betterment of the system. This is where some quick wins could be earned in delivering capacity to the grid.

Enabling the grid to analyse the data that it produces would bring myriad benefits and aid in the efficient use of the grid. Smart meters would provide real-time data to consumers on their consumption, but also to SOs on where demand is highest. Smart solutions like smart chargers and heat pumps connected to such a digital system could be aggregated and managed by SOs to heat people’s homes and charge their cars while shaving the peak loads that occur without this data oversight most efficiently. Meanwhile, consumers also benefit as this demand reduction leads to lower energy prices that save the consumers. The feasibility is there, what is needed now is the right regulatory framework to protect consumers’ data privacy while enabling such demand response.

An electrifying future for grids

Quite literally, the future of our grids is electrifying. In the Decarbonisation Speedways report, we identified that the total final energy demand for electricity will reach 4,200 TWh in 2030 and 4,800 TWh by 2040. This is all while total energy demand is expected to decrease. It is therefore vital that our grids are up to the challenge of delivering a greater share of our society’s energy needs, and fast. That is why we are dialling it up on grids.

Already this week, our President intervened at the Commission and ENTSO-E forum on grids, calling for a bold new political project, the European power infrastructure deal. Next month, too, we will be hosting an event alongside SolarPower Europe on connecting huge amounts of solar photovoltaics to our grids in the coming years. And this is just the start of a sustained call for policymakers to give our grids the attention they deserve. The Commission’s new Green Deal Chief, Maro? ?ef?ovi? , already has the right idea with his proposed energy sector-energy intensive sector roundtable. As next year’s EU elections approach, it is vital that grids remain a central thought in policymakers' minds for reaching all the targets set over the past years. The time for grids is now.

This week's edition written by:

Nicholas A. Steinwand , Strategic Communications Officer -?Eurelectric

With technical input by:

Mélis ISIKLI , Grid Integration Lead -?Eurelectric

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