Smart grid technologies provide a range of solutions that can be tailored to the specific needs of each region. The primary global system trends and the role of smart grids are illustrated in the following sections using the Energy Technology Perspectives (ETP) Baseline and BLUE Map Scenarios developed by the IEA to estimate future technology deployment and demand (Box 1).
Future demand and supply
Increased consumption of electricity
Electricity is the fastest-growing component of total global energy demand, with consumption expected to increase by over 150% under the ETP 2010 Baseline Scenario and over 115% between 2007 and 2050 under the BLUE Map Scenario (IEA, 2010).
Growth in demand is expected to vary between regions as OECD member countries experience much more modest increases than emerging economies and developing countries (Figure 3). In OECD countries, where modest growth rates are based on high levels of current demand, smart grid technologies can provide considerable benefits by reducing transmission and distribution losses, and optimising the use of existing infrastructure. In developing regions with high growth, smart grid technologies can be incorporated in new infrastructure, offering better market-function capabilities and more efficient operation. In all regions, smart grid technologies could increase the efficiency of the supply system and help reduce demand by providing consumers with the information they need to use less energy or use it more efficiently.
Deployment of variable generation technology
Efforts to reduce CO2 emissions related to electricity generation, and to reduce fuel imports, have led to a significant increase in the deployment of variable generation technology. This increase is expected to accelerate in the future, with all regions incorporating greater amounts of variable generation into their electricity systems (Figure 4). As penetration rates of variable generation increase over levels of 15% to 20%, and depending on the electricity system in question, it can become increasingly difficult to ensure the reliable and stable management of electricity systems relying solely on conventional grid architectures and limited flexibility. Smart grids will support greater deployment of variable generation technologies by providing operators with real time system information that enables them to manage generation, demand and power quality, thus increasing system flexibility and maintaining stability and balance.
There are some good examples of successful approaches to integrating variable resources. Ireland’s transmission system operator, EirGrid, is deploying smart grid technologies, including high temperature, low-sag conductors and dynamic line rating special protection schemes, to manage the high proportion of wind energy on its system and maximise infrastructure effectiveness. The operation of the system is being improved through state-of-the-art modelling and decision support tools that provide real-time system stability analysis, wind farm dispatch capability and improved wind forecasting, and contingency analysis. System flexibility and smart grid approaches are estimated to facilitate real-time penetrations of wind up to 75% by 2020 (EirGrid, 2010).
In Spain, Red Eléctrica has established a Control Centre of Renewable Energies (CECRE), a worldwide pioneering initiative to monitor and control these variable renewable energy resources. CECRE allows the maximum amount of production from renewable energy sources, especially wind energy, to be integrated into the power system under secure conditions and is an operation unit integrated into the Power Control Centre. With CECRE, Spain has become the first country worldwide to have a control centre for all wind farms over 10 MW.
Electrification of transport
The BLUE Map Scenario estimates that the transport sector will make up 10% of overall electricity consumption by 2050 because of a significant increase in electric vehicles (EV) and plug-in hybrid electric vehicles (PHEV) (Figure 5). If vehicle charging is not managed intelligently, it could increase peak loading on the electricity infrastructure, adding to current peak demands found in the residential and service sectors, and requiring major infrastructure investment to avoid supply failure. Smart grid technology can enable charging to be carried out more strategically, when demand is low, making use of both low-cost generation and extra system capacity, or when the production of electricity from renewable sources is high. Over the long term, smart grid technology could also enable electric vehicles to feed electricity stored in their batteries back into the system when needed.
In the Netherlands, the collaborative Mobile Smart Grid project lead by the distribution utility Enexis is establishing a network of electric car recharging sites and is using smart informartion and communication technology (ICT) applications to enable the existing power network to deal with the additional power demand. Working together with other network operators, energy companies, software and hardware providers, universities and other research institutes, the project should result in simple solutions for charging and paying automatically.
Electricity system considerations
The electrification of developed countries has occurred over the last 100 years; continued investment is needed to maintain reliability and quality of power. As demand grows and changes (e.g. through deployment of electric vehicles), and distributed generation becomes more widespread, ageing distribution and transmission infrastructure will need to be replaced and updated, and new technologies will need to be deployed. Unfortunately, in many regions, the necessary technology investment is hindered by existing market and regulatory structures, which often have long approval processes and do not capture the benefits of new, innovative technologies. Smart grid technologies provide an opportunity to maximise the use of existing infrastructure through better monitoring and management, while new infrastructure can be more strategically deployed.
Rapidly growing economies like China have different smart grid infrastructure needs from those of OECD countries. China’s response to its high growth in demand will give it newer distribution and transmission infrastructure than the other three regions examined in detail in this roadmap (OECD Europe, OECD North America and OECD Pacific). In the Pacific region, recent investments in transmission have resulted in newer infrastructure than that in Europe and North America. OECD Europe has the highest proportion of ageing transmission and distribution lines, but North America has the largest number of lines and the largest number that are ageing – especially at the transmission level. This is an important consideration given the changes in generation and consumption in the IEA scenarios up to 2050, and the need to deploy smart grids strategically. In recent years Japan has invested significantly in its transmission infrastructure, which is operating with very high reliability levels, and is now focusing on its distribution networks. One example is in Yokahama City, where a large scale energy management project is using both new and existing houses in urban areas to assess the effects of energy consumption on distribution infrastructure. In the United States, as part of a broad range of smart grid investments, significant effort is being devoted to deploying phasor measurement units on the transmission system, providing increased information for more reliable operation of ageing infrastructure.
Demand for electricity varies throughout the day and across seasons (Figure 6). Electricity system infrastructure is designed to meet the highest level of demand, so during non-peak times the system is typically underutilized. Building the system to satisfy occasional peak demand requires investments in capacity that would not be needed if the demand curve were flatter. Smart grids can reduce peak demand by providing information and incentives to consumers to enable them to shift consumption away from periods of peak demand.
Demand response in the electricity system – the mechanism by which end-users (at the industrial, service or residential sector level) alter consumption in response to price or other signals – can both reduce peak demand, but also provide system flexibility, enabling the deployment of variable generation technologies. Reducing peak demand is likely to be the first priority, because demand at a system level is relatively predictable and ramps up and down slowly compared with variable generation. As demand response technology develops and human interactions are better understood, the availability, volume and response time of the demand-side resource will provide the flexibility necessary to respond to both peak demand and variable generation needs.
The management of peak demand can enable better system planning throughout the entire electricity system, increasing options for new loads such as electric vehicles, for storage deployment and for generation technologies. These benefits are essential for new systems where demand growth is very high, and for existing and ageing systems that need to maintain existing and integrate new technologies.
Growing electricity consumption and recent system failures have focused attention on the role that smart grids can play in increasing electricity reliability – especially by increasing system flexibility. The North American Electric Reliability Corporation (NERC) defines the reliability of the interconnected bulk power system in terms of two basic and functional aspects: adequacy and security.
Adequacy is seen by NERC as the ability of the bulk power system to supply the aggregate electrical demand and energy requirements of its customers at all times, taking into account scheduled and reasonably expected unscheduled outages of system elements. System operators are expected to take “controlled” actions or procedures to maintain a continual balance between supply and demand within a balancing area. Actions include:
• Public appeals to reduce demand.
• Interruptible demand – customer demand that, in accordance with contractual arrangements, can be interrupted by direct control of the system operator or by action of the customer at the direct request of the system operator.
• Voltage reductions – sometimes as much as 5.
• Rotating blackouts.
Security, in NERC’s definition, includes all other system disturbances that result in the unplanned and/or uncontrolled interruption of customer demand, regardless of cause. When these interruptions are contained within a localised area, they are considered unplanned interruptions or disturbances. When they spread over a wide area of the grid, they are referred to as “cascading blackouts” – the uncontrolled successive loss of system elements triggered by an incident at any location. Cascading results in widespread electric service interruption that cannot be prevented from spreading sequentially beyond an area predetermined by studies.
The considerations for meeting the needs of electricity consumers are significantly different from those for other energy commodities. First, large-scale electricity storage is available only in a few regions that have significant reservoir hydro resources. Second, electricity is traded on a regional rather than on a global basis. It is in this context that electricity production and consumption must be continually monitored and controlled. Smart grid technologies can help to improve system adequacy by enabling more efficient system operation and the addition of regional energy resources to the electricity mix.
The increased amounts of data gathered from a smart grid can show where operational efficiency can be improved and increased automation can improve control of various parts of the system, enabling fast response to changes in demand. The introduction of regional energy resources, including variable generation such as solar, wind, small-scale hydro, and combined heat and power, as well as dispatchable generation such as biomass, reservoir-based hydropower and concentrating solar power systems, will increase the amount of generation capability on the system. Smart grids enable improved, lower-cost integration of these and other variable technologies that may require different electricity system operation protocols.
Adequacy concerns introduced by the deployment of variable generation technology can be addressed by a number of flexibility mechanisms, such as direct trading of electricity between regions. One of the best examples of such trading is the Nordic electricity system, where significant interconnection and well functioning markets between regions allow for high levels of wind energy deployment (Figure 7). Smart grid technology can address the complex power flow problems that result from wide-area wholesale trading by allowing them to be managed with increased efficiency and reliability.
Although a number of OECD countries have recently experienced large-scale blackouts, their electricity systems are regarded as generally secure, according to industry-specific indices that measure the number and duration of outages. Smart grid technologies can maintain and improve system security in the face of challenges such as ageing infrastructure, rising demand, variable generation and electric vehicle deployment. By using sensor technology across the electricity system, smart grids can monitor and anticipate system faults before they happen and take corrective action. If outages do occur, smart grids can reduce the spread of the outages and respond more quickly through automated equipment.
Smart grids can improve electricity system reliability and efficiency, but their use of new ICTs can also introduce vulnerabilities that jeopardise reliability, including the potential for cyber attacks. Cyber security is currently being addressed by several international collaborative organisations. One recent US study summarised the following results (GAO, 2011):
• Aspects of the electricity system regulatory environment may make it difficult to ensure the cyber security of smart grid systems.
• Utilities are focusing on regulatory compliance instead of comprehensive security.
• Consumers are not adequately informed about the benefits, costs and risks associated with smart grid systems.
• Insufficient security features are being built into certain smart grid systems.
• The electricity industry does not have an effective mechanism for sharing information on cyber security.
• The electricity industry does not have metrics for evaluating cyber security.
These findings confirm that cyber security must be considered as part of a larger smart grid deployment strategy. Lessons can be learned from other industries that have addressed these challenges, such as banking, mobile phones and retail, but in the context of infrastructure related systems, dedicated focus is needed. For example, the Joint Research Council of the European Commission has initiated the European network for the Security of Control and Real-Time Systems (ESCoRTS). ESCoRTS is a joint project among European Union industries, utilities, equipment manufacturers and research institutes, under the lead of the European Committee for Standardisation (Comité européen de normalisation, or CEN), to foster progress towards cyber security of control and communication equipment in Europe. The adoption of such models that work to develop solutions for cyber security, while allowing data to be used for acceptable purposes, is required for successful deployment of smart grid technologies.
Source: Technology Roadmap- Smart Grids
© OECD/IEA, 2011