The Road to Smarter Grids and Smarter People

Dr. Elie Azar
Assistant Professor at Masdar Institute
Abu Dhabi, United Arab Emirates

The electricity grid of most countries currently runs on technology and systems developed and built more than 50 years ago. Its aging infrastructure is highly inefficient, unreliable, and unable to cope with the rising need for more renewable technologies in the energy mix such as solar, wind, biomass, and other energy sources. Furthermore, the energy needs of various sectors are growing and evolving in complexity, mandating new ways to produce, store, and transmit electricity to end-users.

Growing and Dynamic Challenges

The first challenge facing utilities is to optimize the balance between energy supply and demand with minimal reliance on non-renewable energy sources. With electricity traveling at the speed of light, utilities have the difficult task of instantaneously matching every Kilowatt-hour generated with users’ demand. During peak hours, such as in the afternoon of hot summer days, utilities rely on spinning-reserve power plants that generate the additional supply needed to match demand. These back-up power plants are extremely expensive to operate and constitute a significant portion of the electricity bill. Furthermore, these plants typically run on carbon-intensive sources such as oil or gas. Consequently,

there is an urgent need to better understand, and in real-time, energy demand, in order to devise strategies that “level” or “shave” the peak load to avoid inefficient energy generation.

Another challenge facing utilities emerges from the increasing renewable energy generation and the transformation of energy consumers to “prosumers”, or consumers that also produce energy. In recent years, most developed countries have begun providing their citizens with the right incentives and infrastructure to connect renewables such as solar photovoltaic or wind turbines to the grid, selling back any excess of energy they generate. Despite great advantages of renewables, the decentralization of energy generation makes balancing energy supply and demand a highly difficult task for utilities. More specifically, variations in the energy generated by customers affect both how much electricity they need from the grid, and consequently, how much utilities need to produce. In addition, the intermittency of renewable energy sources further complicates the energy management process. For instance, the operation and efficiency of solar panels and wind turbines are mostly weather dependent, unlike traditional processes such as electricity generation from coal, which are more predictable and easier to control.

Smart Grids and Consumer Engagement

A smart grid introduces a two-way flow of electricity and information between utility companies and their customers. It is a digitalized energy network where supply sources, the grid, and customers interact all in real-time as part of an integrated electricity system. This is achieved through a network of communications, control, automation, and power technologies.

The transition towards smart grids provides a multitude of benefits, which include:

  • Dynamic sensing and control of fluctuations in energy generation, demand, and prices;
  • More efficient transmission of electricity;
  • Higher network resilience to power disturbances and outages;
  • Reduced grid operation and management costs; and
  • Improved integration of small-scale and large-scale renewable energy generation systems.

The premise of smart grids does not stop at innovative technologies but also reaches consumers’ daily choices of how and when to use energy. A “Smart Meter”, for example, can provide building occupants with real-time information of how much energy they are using and how much it is costing them. This increased level of awareness can help consumers understand the impact of their actions and motivate them to adopt conservative energy consumption patterns.

Furthermore, the capability to communicate with customers in real-time opens the door for additional strategies to control demand and align it with particular energy supply profiles. For instance, utilities can implement time-of-use tariffs where the cost of electricity is raised during peak-demand hours. Customers exposed to these tariffs can then shift a portion of their energy demand to off-peak periods, helping level overall energy demand levels and avoid excessive and costly energy production capacities.

Energy Storage

Despite the communication and control capabilities of smart grids, harmonizing energy production and consumption remains extremely challenging. In general, the energy demand of various sectors is increasing in complexity, as is the energy supply, given the growing trend towards renewable energy. The intermittency of renewables is in particular creating gaps between when energy is produced on the one hand, and when it needs to be consumed on the other. A typical example is the energy produced by wind turbines at night, when energy demand is typically at its lowest.

Energy storage facilities can accumulate surpluses of energy produced from various traditional or renewable sources. Stored energy can take many forms and can be subject to various processes. For instance, electric energy can be used to pump water into elevated reservoirs, hence creating a potential hydroelectric source of energy that can be dispatched upon need. Another method consists of converting electricity to compressed air or gases such as Hydrogen or Methane. These gases can then be used at a later stage to run turbines and generate electricity. Finally, batteries can also be used as storage devices, oftentimes coupled to renewable technologies such as solar photovoltaic panels or wind turbines. In recent years, battery storage applications are expanding to novel technologies such as electric cars. These cars can for instance be used to store the energy produced at night by sources such as wind turbine, when the energy demand of other sectors is at its lowest.

Smart People

In conclusion, the energy sector has witnessed significant advancements in technology all the way from energy harvesting and generation to consumption by the end-user. Nonetheless, several challenges still exist such as the lack of compatibility of old infrastructure systems with new technology, as well as the high capital costs of renovating or replacing current systems. While these techno-economic challenges are widely covered in literature, human-related challenges are as important and need further consideration. Human decision-making, in fact, plays a major role in the transition towards more sustainable infrastructure and cities.

At a macro level, policy makers need to set the right policies, regulations, and incentives to create a synergy for a greener economy and more sustainable growth. At a micro level, smart consumer choices are crucial to translate policies and incentives to actions. Examples are many and include the adoption of renewable energy technologies, smart-home technologies, or electric cars. Furthermore, the best way to use energy efficiently is not to use it at all. Daily actions such as carpooling or taking the bus, turning lights off, or adjusting thermostat temperatures by a couple of degrees can lead to significant energy and carbon emissions savings.

As the ex-mayor of Bogota Enrique Peñalosa once said: “A developed country is not a place where the poor have cars. It's where the rich use public transportation.”

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