The smart world is built on grid modernisation

Meghan Calabro and Lucas McIntosh explain why the transformation of the grid to deal with distributed generation is the first step in the energy transition.

The electricity grid is one of the largest, most complex machines ever built, and the world has transformed around it. Now an ongoing revolution in renewable energy sources and distributed generation is changing the structure of that machine. Grid modernisation is the method by which the delivery system is adapting to new realities.

The essential objective for the grid remains unchanged: it must get electricity from the points of generation to the points of consumption, instantaneously balancing supply and demand. But neither the current system nor business model was designed with the idea that customers might one day have alternatives to getting their electricity from the centralised infrastructure.

The grid is evolving from a centralised, unidirectional system pushing power out from large-scale generation facilities to a multidirectional system that can distribute generation from an ever-increasing variety of resources and locations.

The existing grid was not designed to have users put power back into it. When anyone can be a producer of energy — say, by installing photovoltaic panels on their roof or by keeping electric vehicles plugged into the grid when not in use — the grid requires modifications and improvements to maintain the reliability and resilience of the system and services that customers depend upon.

A robust and flexible grid that leverages automation and accommodates localised energy storage is essential for enabling the two-way power flows needed to balance loads in this dynamic marketplace.

In addition to infrastructure and technology, regulation and policy must modernise, too. Better co-ordination and best practice sharing between regulators is imperative to create a regulatory approach that enables markets and business models that reward proactive modernisation of the system.

Indeed, the political and operational issues are going to be much harder than the technical ones. These challenges can be resolved, but only with co-ordinated time and effort.

There are multiple layers to achieving a flexible two-way grid. Automation and sensing will enable the flexibility, but increased strength and capacity of the infrastructure is also needed to maximise the effectiveness of those new technologies.

It starts with the physical pylons and wires that must be upgraded and reconfigured to facilitate dynamic two-way power flows. This will then allow greater utilisation and effectiveness of new intelligent devices, sensors, communications and co-ordination, as well as the back office software that monitors and controls it all.

These new technologies will enable automation in substations and out on the distribution lines to isolate faults quickly, transfer loads to minimise outage impact automatically, and provide better outage awareness to offer speedier restoration.

In addition to grid strength and intelligence, smart meter technology with vastly upgraded communications networks and data management will give grid operators the information about load necessary to enable adaptation to evolving customer needs and increased intermittent and distributed generation and storage.

While these physical and digital transformations of the grid may represent drastic evolution, we must also prepare for accompanying evolution for the employees and their roles in this modern future.

Balancing supply and demand

In a world with increasingly distributed generation, often based on intermittent renewable sources, the challenge of maintaining the balance between supply and demand is complex. And that forces utilities to understand and try to influence customer behaviour to maximise utilisation of grid infrastructure and capabilities.

Modernising the distribution grid is part of the solution. Another aspect depends on developing appropriate incentives to adapt behaviour and maintain balance. The wholesale cost of energy fluctuates from day to day, minute to minute, depending on localised conditions. As the marginal cost of producing energy approaches zero — as new technologies are developed that move toward converting sunlight into electricity in real time, for example — the fixed costs of the infrastructure must still be addressed.

Beyond technology

Further solutions might include a shift from basing rates primarily on usage to selling access to the modern grid network, similar in part to how mobile providers have shifted from selling minutes to selling access. Why charge in kilowatt-hours, for example, when you can charge to the capacity of the network reserved?

The industry today faces challenges similar to those of the industry’s early days of adoption. The rapid development of emerging technologies and expanding services from electricity providers has undoubtedly caused disruption. But nearly everyone is already connected to the grid; the World Bank estimates that over 87 per cent of the world had access to electricity in 2016. Network security and reliability must be maintained even as the market transforms. Like the electric grid itself, regulators, utilities and their partners must all pursue balance.