Smart grids: how do we get there? Vincenzo IORDANO European Commission - Joint Research Centre (JRC) IE - Institute for Energy Petten - The Netherlands
Contents Introduction Smart grids and EU Energy Policy Present Scenario Vision Path Smart grid as a system Case study Conclusions
Introduction EU-27 Energy Consumption by fuel/product EU-27 Electricity eneration Others 4% Oil 42% as 23% Solid fuels 5% Electricity 21% Renewables 5% as 23% Solid fuels 29% Other 1% Nuclear 28% Oil 3% Renewables 16% Source:Eurostat
Introduction Security of energy supply is assured when the required resource/service is available At any time With satisfactory quality Within the whole network At reasonable price Price includes economic, environmental and geopolitical costs
Introduction Energy Security Challenges in the EU -Reducing energy dependence - Promoting indigenous clean energy supply, increasing energy efficiency and savings - Promoting an efficient internal energy market
EU-27 Electricity Sector The European Electric Sector is changing, led by EU policy rather than by technology 30-35% Electricity from Renewables by 2020 EC support for decarbonizing the transport sector and for development of clean and electric cars Internal Energy Market/ Cross-Border Cooperation 20% increase in energy efficiency by 2020 Support for Smart Meters (3 rd Energy Package)
Introduction Smart grids Overlaying the electricity grid with digital technologies, to sense and respond to events anywhere along the network Two-way flow of power and information
Value-added services, Hydro power station Wind farm Small HydroPower Solar power plant Control Communication centre Bio-mass Off-shore wind Forecast information Microgrid Wave Energy Photovoltaïc Residential CHP Intelligent automation systems Micro storage of electricity Thermal storage Demand Side Management/ Smart appliances Source: EC
Introduction Strategic importance of smart grids Renewable energy sources and distributed generation Demand management, inclusion of consumers Efficiency, reliability, maintenance of the electric grid Electric Vehicles and Storage Competition in the energy market (New market players, new services, new products)
Introduction Strategic importance of smart grids Economic efficiency (contribution to liberalized electricity markets, reduction of energy imports) Environmental efficiency (Renewables, Electric Vehicles) Technical efficiency (minimization of disruptions, losses, operational costs) Energy efficiency (energy savings, peak load shaving, smart appliances, optimization of assets and resources)
Contents Introduction - Smart grids and EU Energy Policy Present Scenario Vision Path Smart grid as a system Case studies Conclusions
Present scenario rowth of electric consumption in the EU-27: >= 1,5% from 1990 until 2020 rowth of distributed generation Aging infrastructure, not conceived for distributed generation
Present scenario Present grid Limited penetration of Distributed eneration Limited spare transfer capacity Very Limited Participation of consumers Very Limited penetration of EV and PHEV Low level of automation at the distribution level (power flow control, maintenance, self-healing)
Present scenario Foundations of present business models One-way flow of power and information Undifferentiated and passive consumers Easy access to inexpensive carbon fuels Regulatory protections Incentives for operational improvements not for innovations Energy savings not sufficiently rewarded
Contents Introduction - Smart grids and EU Energy Policy Present Situation Vision Path Smart grid as a system Case study Conclusions
Smart rid Vision Mr Rossi owns solar panels to cover his own consumptions and to store or sell back to the grid the surplus. On Wednesday, the weather was sunny and Mr. Rossi s storage device is full. As soon as he comes back from work at 18h, he plugs his EV for charging, turns on his TV and prepares dinner. He consumes the energy stored in his storage device. Energy Energy consumed Energy stocked Picture Source: www.cncie.com 18h 19h Time
Smart rid Vision At 19h, Mr Rossi starts to consume grid energy. The grid is currently unbalanced, as highlighted by the grid operator advanced monitoring system. Energy The operator can use Mr Rossi s EV which is already charged at 30%. Mr Rossi has indicated that he does not need the car until 7.30h the following day. The operator asks Mr Rossi s Energy management system to first consume the energy stored in the battery of the EV. Energy consumed EV battery Picture Source: www.cncie.com 19h 1935h Time
Smart rid Vision At 20.30h, a sudden decrease in wind generation and consequent grid unbalance is detected in Mr Rossi s neighborhood by the monitoring system of the grid operator. The grid operator prefers households in the area to temporarily reduce consumption instead of buying balancing power. Households sell energy savings to the grid operator. Key concepts: Distributed generation Distributed storage EV Home Energy Management System Demand-side management Picture Source: www.cncie.com
Vision Smart rid Vision Penetration of Distributed eneration Penetration of Electric Vehicles and Storage devices Demand side management (peak load shift, demand response) Supply side management (e.g. VPP, micro-grid) New markets, services and business models Increased share of electricity in the energy mix
Vision Picture: World Economic Forum
Vision Traditional grid Smart grid L Distribution grid L Distribution grid Transmission grid Transmission grid L L Distribution grid Distribution grid Distribution grid Distribution grid L L L L L TRADITIONAL DISTRIBUTION RIDS SCHEME (Typical Europe-wide architecture) ACTIVE DISTRIBUTION RIDS SCHEME (Many portions in most European countries) ENERATIN CUSTOMER ACTIVE CUSTOMER L LOAD CUSTOMER PHYSICAL LINK (AND FLOWS DIRECTION) STRON WEAK COMMUNICATION AND CONTROL CHANNELS
Vision Micro-grid Virtual power plant L Distribution grid L Distribution grid Transmission grid Transmission grid Distribution grid Distribution grid Distribution grid Distribution grid L L MICRORIDS SCHEME (e.g. Denmark, Spain, reece) VIRTUAL POWER PLANT SCHEME (e.g. ermany, The Netherlands) ENERATIN CUSTOMER ACTIVE CUSTOMER L LOAD CUSTOMER PHYSICAL LINK (AND FLOWS DIRECTION) STRON WEAK COMMUNICATION AND CONTROL CHANNELS
Contents Introduction - Smart grids and EU Energy Policy Situation Vision Path Smart grid as a system Case study Conclusions
Path Smart grid as a system In a major infrastructural shift, technologies do not replace technologies, rather systems replace systems
Path Smart rid System Components Smart Meters Distributed generation Storage devices/electric vehicles Inclusion of consumers Automation of distribution grid Cross-border connections, interface transmission/distribution New markets and business models
Target Climate Change Energy dependence Electricity demand Promotion of internal energy market Smart grid as a system + + Smart grid RES Distributed eneration/supply side management Electric vehicles Smart Meters/Demand Side Management Storage devices Disruptions, maintenance, operational costs Aging infrastructure New markets and services Operational efficiency, reduced maintenance costs Cross-border transmissions
Path Complex Interdependencies among the components of the smart grid system (EV, RES, Smart Meters, Storage Devices etc.) Smart grid as a system Technical and economic synergies may improve the business cases of different technologies Leverages at disposal of policy makers and industries to steer the smart grid deployment process at various levels
Path Smart grid - One size does not fit all Deployment will be step-wise and region dependent Several smart grids will develop locally according to specific legacy characteristics of the power grid and primary drivers Transition driven by a number of factors and needs, varying from country to country
Path Business paradigm shift Enabling technology Innovative business model A favorable governmental policy
Path Business paradigm shift Barriers to Smart rid deployment are largely of regulatory nature, but also to a lack of suitable demonstration pilot projects The main reasons are the current uncertainties regarding the new market models, the global investments needed and the technology needed
Path New business models The new market might more and more consider electricity as a service rather than just a commodity Digital communication technology in the electricity sector might lead to a participatory network of the various players New business platforms typical of the new economy may emerge (e.g. multi-sided platforms)
Path Business paradigm shift-multisided platform Picture Source: IBM Institute for Business Value Business values at several levels Need for all parties to get some of the benefits Platform owner not necessarily reaping the greatest benefits
Path Role of policy-makers Support market-ready technologies if it s clear that they can be delivered profitably Support not just nascent technologies but also nascent business models Amend regulations that inhibit new models and find effective incentive regulation for investments Support system-wide demonstration pilot projects to assess new business cases and regulatory frameworks
Path Role of policy-makers Find effective ways to reverse present attitude in the DSOs: Risk averse behaviour. Concentration on short term savings. Reduced spending on innovation.
Path Role of policy-makers Promote social acceptance of the WHOLE smart grid value proposition despite that impacts to consumers will likely include: Potentially higher prices of electricity Change consumption patterns/reduce energy consumption Agreeing on having electricity supply interrupted during high peak demands Drive electric cars with limited range Privacy issues on consumption data New more expensive smart appliances
Path Smart grid as a system - A case study Problem: Diffusion of Electric Vehicles Side 1: Customers waiting for cheap EVs Side 2: Auto-makers waiting for a market for EVs Side 3: Power retailers looking for extra-revenues Side 4:Utilities interested in Vehicle to grid services Side 5: RES producers interested in synergies with EVs Side 6: Battery suppliers
Path Better Place project Smart grid as a system A case study Build a network of charging spots and battery switching stations Subsidize the hardware (battery & car) Sell electric miles from RES Intelligent charging schemes/demand-side management Use only clean electricity
Path Some challenges Smart grid as a system A case study Business case for DSOs to invest and take an active stance Business models (applicable to different scenarios?) and affordable capitals Standardization (hardware and communication protocols) Demand-side/supply side management Synergies among smart grid components (RES, EVs, Smart Meters etc.) Cybersecurity and data privacy
Conclusions Smart grid instrumental for a low carbony economy in the EU Smart grid deployment is led by policy rather than technology Smart grid deployment is a matter of assembling the pieces: view through systemic lens for successful planning overnmental support for system-wide demonstration pilots and for new technologies coupled with new business models