the key to developing a smarter grid lies in a new more distributed and interoperable architecture
The technology is here to transform the power system but implementing a smart grid to manage resources requires collaboration across the ecosystem and an open, interoperable and distributed architecture.
AT THE BRINK: THE CALL FOR A TRANSFORMED POWER SYSTEM
The call for adapting our energy systems to be more sustainable has been growing for at least half a century. Last month the world was once again given a stark warning in the form of the latest Intergovernmental Panel on Climate Change (IPCC) assessment report: manage energy resources better or suffer the worst effects of climate change. The report is clear that the world needs a true transformation of energy systems to reduce the risks of irreversible climate change, not just incremental change.
As large as the issue of climate change is, it is not just sustainability that is driving transformation in the energy sector. Global energy demands are expected to grow 37% by 2040. Today’s aging power generation and distribution infrastructure cannot meet this level of demand nor provide the level of services required to support the digital infrastructure we have all become so addicted to.
FROM CLIMATE RISK TO CLIMATE RESILIENT DEVELOPMENT
Combating such large, interconnected infrastructure and resource projects is no easy task. Transforming the power system will require looking at both the physical infrastructure and the digital infrastructure. And yet, there is reason to be hopeful. The required technology to improve power generation, distribution, and usage through the enabling of a smarter and more interoperable power grid is available today.
This new power infrastructure will be a truly Smart System – an intersection of multiple parallel technologies that are increasingly reinforcing and accelerating one another. The new, intelligent infrastructure will bring together the worlds of sensors, automation, machine learning, computing, cloud infrastructure and communications.
ORCHESTRATING A SMARTER SMART GRID
The power industry has been faced with adopting new technologies for some time and as such is well equipped to embrace innovation and transformation. New sources of renewable energy, such as wind and solar, are increasingly being adopted by power suppliers and customers alike. Without upgrades to the grid, integrating these new sources of renewable energy to a wider population will be complex. But the market is rising to meet the demand for renewable resources. In fact, hundreds of global companies have announced plans to shift to 100% renewable energy with the next 5 years.
As these new renewable technologies are adopted, electrical power will shift from linear flows of power generated by large, centralized suppliers and consumed passively by customers—to decentralized, distributed, smart grid energy systems.
Smart grids are essentially subsets of larger electrical utility grids, designed to give organizations greater control over their energy resources and to make better use of utility-provided energy in conjunction with locally produced power. Most importantly, smart grids can connect and disconnect from the larger grid, thus operating as a “micro-grid,” both connected to a grid or as an island.
The smart grid and the utility grid are linked by a “point of common coupling” that maintains voltage at a constant level until there is a problem on the utility’s grid. If the utility’s power starts to fluctuate, the smart grid taps its on-site energy production to even out the flow. If the larger grid goes down completely, the smart grid disconnects and uses its own local generating and/or storage capacity to provide power.
Because smart grids are a connected and highly-instrumented phenomenon, they are by definition a huge Smart Systems and Internet of Things (IoT) opportunity. They incorporate a wide array of sensors that can sample electrical current at up to 60,000 times per second. This huge volume of data feeds sophisticated AI algorithms both at the edge and at the core, allowing smart grids to operate autonomously. And the energy flow from smart grids is two-way, which requires specialized software to manage scenarios that involve selling as well as buying electrical energy.
Fortunately, we are at a point of increasingly mature technologies, increased computing capabilities, higher performance networks and lowered costs of key elements such as batteries. These mature and well-aligned technologies will enable more rapid adoption and a truly transformative, sophisticated smart grid.
INNOVATIVE POWER TECHNOLOGIES ARE CHANGING THE ELECTRICITY INDUSTRY
source: Harbor Research
UNLOCKING DATA FOR A COLLABORATIVE ECOSYSTEM
Today, many equipment, software and smart services players are embracing the concept smart energy systems. But in reality, for grids to become truly smart and freely interoperable, new systems, relationships and data interactions will need to be enabled to ensure we don’t create anything more than a huge collection of disparate systems, data and information-islands.
To be a truly smart system, data must be able to travel and interact freely across systems, allowing information from disparate infrastructure and grid systems to feed one another, increasing their overall value to users. Open data architectures are like bridges built at private expense for public benefit. Everybody wants to collect the tolls, but few are prepared for the major challenges and costs they will face to build and maintain the bridge.
New more open and collaborative ecosystems have the potential to drive many values, including:
- Uniqueness. The central “tension” in technology markets is revenue growth requires collaboration, but sustained profits require uniqueness. Collaboration requires that knowledge be shared. Participation speeds the flow of information and knowledge (driving growth) without foreclosing all opportunities to achieve unique advantage (driving profit).
- Scale and Scope. Collaboration communities “fast-track” the development of new markets when the network of players acts as the “market” before such a market exists, keeping all interested parties effectively linked as the whole opportunity takes shape.
- Coordination in Under-Developed Markets. The heart of any not-yet-existent market is a changed view of how people might use that technology to achieve desired goals. Ecosystems bring together diverse expertise and provide coordination so that each “strand” of the community can work on a distinct piece of the solution.
- See the Future. Plotting an effective course in emergent markets like renewable energy and smart grids requires acute peripheral vision. A collaborative community connects many participants and knowledge, some of which may have no direct impact on their business today, but any of which may be keys to success tomorrow. Efficient management of these informational links and relationships is critical to success.
INNOVATORS ARE MANEUVERING TO ENABLE FUTURE ENERGY SYSTEMS
source: Harbor Research
NEW BUSINESS MODELS FOR A NEW SMART GRID
Years of engineering developments are resulting in affordable technology solutions that, connected by the Internet, will lower power costs and increase its efficient use. Some utilities are beginning to adopt new technologies, but business models will need to fundamentally shift to remain relevant in the distributed energy future.
The adoption of distributed energy technologies and energy efficiency applications opens up new potential revenue streams for utilities. New services are emerging that can quickly change how electric service providers increase revenues, and how consumers of power can better manage costs. These new services will rely on distributed, networked power devices that can be automatically monitored, controlled and managed to adjust to power cost, availability, and usage requirements.
The motivation for developing a smart grid lies in added efficiency of distribution and increased reliability of energy services, both from the point of view of the utility firm and the customer. Power customers are increasingly demanding higher quality, cleaner power with no disruption or downtime, and lower prices. Utility firms are looking for ways to reduce expenditures, maintain system stability, and offer customized services.
Recent studies have identified as many as 2,000 smart grid projects, both grid-tied and remote, that are in the proposed, planning or deployment stages worldwide. Together, they represent almost 21 gigawatts (GW) of capacity. (By way of comparison, the total energy generating capacity of Great Britain is roughly 75 GW.)
Grid-enhancing technologies that can track power-line capacity in real time can cost about 5% of the total relative unit cost of building new transmission, and can boost power transfer capacities by up to 40%.
Smart City applications represent an enormous opportunity for key transformation projects. By 2026, electrical power will represent over half of the revenue opportunity—however, one third of the smart city’s opportunity represents adjacent opportunities that energy OEMs and utilities can serve, including the deployment of an infrastructure for electric vehicles, traffic management, smart street lighting and smart parking.
A SMART GRID IS CRITICAL FOR FUTURE SMART CITY APPLICATIONS
source: Harbor Research
By applying complex IoT solutions, which facilitate automation on an industrial scale, smart grids can improve energy efficiency at the source. By integrating IoT and digital twins technologies across vast infrastructures like power plants, suppliers can shave time and labor from their presently manual processes. This translates to vast savings. And simplifying processes through the use of a connected IoT system can provide predictive maintenance and improve outage management, offering a significant degree of stability and optimization in an ever-evolving and unpredictable market. The climate data may be daunting, but the technologies, business models and players are all in place to transform our power systems to a sustainable, interoperable smart grid. ◆