Daniela Velte & Angel Diaz - Tecnalia Research & Innovation Brussels, 12 April 2012 TECHNO-ECONOMIC ANALYSIS OF SMART GRIDS
Mar 27, 2015
Daniela Velte & Angel Diaz - Tecnalia Research & InnovationBrussels, 12 April 2012
TECHNO-ECONOMIC ANALYSIS OF SMART GRIDS
SMART GRIDS IN THE WIDER CONTEXT OF A CHANGING ENERGY MARKET
The deployment of smart grids is expected to last several years, foreseeably up to 2030.
Within this period, further important changes are likely to occur in the energy sector,
affecting functions that the smart grid is supposed to deliver, for example, peak load
shaving.
The paradigm change in the energy sector can accelerate the demand for smart grids, or deter investment if certain functions, for
example electricity storage, can be covered more efficiently or more economically by
alternative technology innovations.
Which long-term trends in the energy sector are relevant for smart grid
deployment?
1. Which part of future energy consumption will actually be electrical?2. Which part of the new, decentralized
electricity production from renewables will actually
be fed into the grid and how much will be used for own consumption?
3. Which are the most cost-effective solutions for integrating intermittent
production fromrenewable sources and enhancing security
of supply?
Power demand in Seville
There are strong arguments for making a greater use of (renewable-assisted) district heating and cooling networks (“Blueprint on Energy Infrastructure Priorities 2020 and beyond”), which would curb peak demand and overall electricity consumption substantially, especially in Southern locations.
There is also a strong R&D drive to bring lower-cost storage technologies for all grid levels to the market. Advanced batteries can be a competing technology to smart grids or part of a system solution, for example, for microgrids, fostering distributed generation.
Which part of future energy consumption will actually be electrical?
Which long-term trends in the energy sector are relevant for smart grid
deployment?
Special attention must be paid to the following
trends:
Substitution of electricity uses for
heating and cooling by thermal processes
Advances in electricity storage
technologies
“Dynamic grid parity could occur as early as 2013 in the commercial
segmentin Italy and then spread
out in Europe to reach all types of installations
considered in all the selected countries by
2020.” (EPIA)
30 – 75% of the electricity produced in PV installations will be consumed directly (EPIA).Increased costs of electricity sourced from the grid will make off-grid solutions more attractive, but no estimate is available of the possible impacts of this trend on the European electricity system.Smart grid deployment could raise customer bills by 8.4% to 12.8% (EPRI) in times of rising energy prices for fossil fuel power generation. How long will customers remain “captive”?
PV’s generation cost PV Revenue Source: EPIA
Smart Grid function:
integration of renewables - or self-consumption?
“If supply quality in Germany sank to
Spanish levels, losses to the general
economy would amount to 1.500 to 3.200 million € per
year”
Smart grid benefits are expected to be greatest in feeble or island networks with a high risk of power outages. The “value of lost load” for society and different customer groups has been estimated at 10 € / kWh on average, and these losses justify public investments in grid improvement.The French system operator RTE foresees a serious capacity shortfall and risks of supply interruptions as early as 2016. Smart microgrids could fulfill a back-up function for essential and strategic services.
Overview of international studies on the valueof non-delivered energy
Average value Households Industry
Smart Grid function:
Improving security and quality of supply
Smart Grid function:the enabling technology for e-mobility
The present grids will not be able to support the additional demand for electromobility if cars are charged during the day. For this reason, plug-ins need to be installed at the place of residence.But: the large-scale deployment of electric vehicles faces serious hurdles related to costs and material scarcity.Tailored solutions based on varied energy sources for different types of fleets (scooters, agricultural vehicles, urban buses, …) need to be considered.
Integrating wind power:
“Up to 30% of renewables can be
incorporated in today’s electricity
grids. Smart solutions are already being
adopted on the transmission level”
Smart Grid function: Integrating Renewables
Smoothing the outputs from renewable energy sources such as wind, wave and photovoltaic allows the proportion of energy supplied by these technologies to increase from around 20% to 50% without creating instabilities in the network. This smoothing can be achieved with storage, improved prediction and smart management of the grid, such as automated control centres.The main challenge for the European electricity system is presently the integration of production from large off-shore wind farms, which will foreseeably be aided by HVDC (High Voltage Direct Current) lines on the transmission level.
Siemens Permanent Magnet Generator
“35% of customers would not allow the
utility to control thermostats in their
homes atany price” (Joint
Research Center)
NON-TECHNOLOGICAL CHALLENGES:Privacy and empowerment
Who owns the customer’s data and how its access and use will be regulated?Who guarantees privacy and security of customer data?Will sale or transfer of customer data be allowed and under what terms?Do competing electricity providers have access to customer data on the same terms as the incumbent utility?Will there be an opt-out option for customers not willing to participate?How to encourage customer participation once smart meters are deployed?
Who pays for what, who gets the benefits?
“In-home displays are necessary to realice
energy savings by real-time feedback on energy consumption”
In-home displays typically cost 80 – 200 € and help to achieve average savings of 3.8%. Customers often expect erroneously that these appliances will be deployed along with smart meters. Potential benefits for industry seem to be much clearer.
Potential smart grid
beneficiaries
NON-TECHNOLOGICAL CHALLENGES:Energy savings and equity
Technology trends affecting the deployment
of smart grids
“If Alexander Graham Bell were somehow transported to the 21st century, he would not begin to recognize the components of modern telephony – cell phones, texting, cell towers, PDAs, etc. – while Thomas Edison, one of the grid’s key early architects, would be totally familiar with the grid.”
Source:“The Smart Grid: An Introduction”, US Department
of Energy
Massive introduction of Distributed Energy Resources
• Distributed generation, storage, microgrids.• Renewable energy. • Electric vehicle.
Active consumer participation.
Changes in business models.• Evolution to a more volatile and competitive
market.• Offers and tariffs according to the customer
needs..Challenge: Balance
optimization between generation and consumption in a more complex power system
Tech trends affecting the deployment of smart grids:
Future scenario for smart grids
Tech trends affecting the deployment of smart grids:
Integration of renewables Central controlCentral controlBusiness as usual Central control
2012
Cap
acit
y
CentralGeneration
Transmissionnetworks
DER
Distributionnetworks
CentralGeneration
Transmissionnetworks
DG
Distributionnetworks
CentralGeneration
Transmissionnetworks
DER
Distributionnetworks
CentralGeneration
Transmissionnetworks
Renewables
Distributionnetworks P
assiv
e
Con
trol
Cen
tralised
C
on
trol
2020
CentralGeneration
Transmissionnetworks
DER
Distributionnetworks
CentralGeneration
Transmissionnetworks
DG
Distributionnetworks
CentralGeneration
Transmissionnetworks
DER
Distributionnetworks
Central
Generation
Transmissionnetworks
Distributionnetworks
Passiv
e
Con
trol
Cen
tralised
C
on
trol
Renewables
Fit & Forget
Generation
Central
Distribution and
Transmission networks
Dis
trib
ute
d C
on
trol Renewables
Integration
fenix‘… a step towards the future of
electricity networks’
fenix‘… a step towards the future of
electricity networks’Source
:
Tech trends affecting the deployment of smart grids:
System innovation
Distributed generationand storage
HomeBuilding
LAN(Local Area Network)
WAN(Wide Area Network)
FAN/AMI(Field Area Network)
HAN(Home Area Network)
Network Gateway
AMI, MDM
DR control systems
EMS, DMS, GIS
Application 1(e.g. AMI)
Application 2(e.g. DemandResponse)
Application 3(e.g. Distributed Generation)
Data metering
In home applications : Control and data
Distributed Generation and data storage
Control andmanagement
(application n)Application n End user data
...
Advanced systems for network control and business management
H
T
Control systems for the
end user
Com
mu
nic
ati
on
s
la
yer
En
erg
y la
yer
Sm
art
gri
ds
ap
pli
cati
on
s
laye
r
Smart meter
DistributionSubstationTransmissionGeneration
Source: Honeywell, 2009
Smart customer
Tech trends affecting the deployment of smart grids:
Customer centric approach
Source: Google
Tech trends affecting the deployment of smart grids:
The way forward
GENERATION
Centralised generation Distributed generation, microgrids,
virtual power plants, …
Analogic technology Digital technology
Manual response to network contingencies
Network automation
Few network sensors
Fully sensorised and monitored network
Low capacity unidireccional communications
High capacity bidirectional communications
TRANSMISSION AND DISTRIBUTION
Limited power flow control
Use of power electronics for power flow control and increase of
network capacity
Basic tariff systems Real time dynamic tariffs
Limited supplier choice by the consumer and simple billing
systems
Wide offer for the customer
complex customer management CONSUMPTION
Passive and unaware
consumer
“Smart customer”: “smart meter”; load management, consumption
awareness NEW SCENARIOS:
GENERATION & CONSUMPTION
Non plug-in vehicles
Plug-in electric vehicles: smart charging and V2G
BUSINESS MANAGEMENT
Limited business information
volume for utilities
Huge business information volume supported by IT management
processes
GENERATION
Centralised generation Distributed generation, microgrids,
virtual power plants, …
Analogic technology Digital technology
Manual response to network contingencies
Network automation
Few network sensors
Fully sensorised and monitored network
Low capacity unidireccional communications
High capacity bidirectional communications
TRANSMISSION AND DISTRIBUTION
Limited power flow control
Use of power electronics for power flow control and increase of
network capacity
Basic tariff systems Real time dynamic tariffs
Limited supplier choice by the consumer and simple billing
systems
Wide offer for the customer
complex customer management CONSUMPTION
Passive and unaware
consumer
“Smart customer”: “smart meter”; load management, consumption
awareness NEW SCENARIOS:
GENERATION & CONSUMPTION
Non plug-in vehicles
Plug-in electric vehicles: smart charging and V2G
BUSINESS MANAGEMENT
Limited business information
volume for utilities
Huge business information volume supported by IT management
processes
GENERATION
Centralised generation Distributed generation, microgrids,
virtual power plants, …
Analogic technology Digital technology
Manual response to network contingencies
Network automation
Few network sensors
Fully sensorised and monitored network
Low capacity unidireccional communications
High capacity bidirectional communications
TRANSMISSION AND DISTRIBUTION
Limited power flow control
Use of power electronics for power flow control and increase of
network capacity
Basic tariff systems Real time dynamic tariffs
Limited supplier choice by the consumer and simple billing
systems
Wide offer for the customer
complex customer management CONSUMPTION
Passive and unaware
consumer
“Smart customer”: “smart meter”; load management, consumption
awareness NEW SCENARIOS:
GENERATION & CONSUMPTION
Non plug-in vehicles
Plug-in electric vehicles: smart charging and V2G
BUSINESS MANAGEMENT
Limited business information
volume for utilities
Huge business information volume supported by IT management
processes
GENERATION
Centralised generation Distributed generation, microgrids,
virtual power plants, …
Analogic technology Digital technology
Manual response to network contingencies
Network automation
Few network sensors
Fully sensorised and monitored network
Low capacity unidireccional communications
High capacity bidirectional communications
TRANSMISSION AND DISTRIBUTION
Limited power flow control
Use of power electronics for power flow control and increase of
network capacity
Basic tariff systems Real time dynamic tariffs
Limited supplier choice by the consumer and simple billing
systems
Wide offer for the customer
complex customer management CONSUMPTION
Passive and unaware
consumer
“Smart customer”: “smart meter”; load management, consumption
awareness NEW SCENARIOS:
GENERATION & CONSUMPTION
Non plug-in vehicles
Plug-in electric vehicles: smart charging and V2G
BUSINESS MANAGEMENT
Limited business information
volume for utilities
Huge business information volume supported by IT management
processes
GENERATION
Centralised generation Distributed generation, microgrids,
virtual power plants, …
Analogic technology Digital technology
Manual response to network contingencies
Network automation
Few network sensors
Fully sensorised and monitored network
Low capacity unidireccional communications
High capacity bidirectional communications
TRANSMISSION AND DISTRIBUTION
Limited power flow control
Use of power electronics for power flow control and increase of
network capacity
Basic tariff systems Real time dynamic tariffs
Limited supplier choice by the consumer and simple billing
systems
Wide offer for the customer
complex customer management CONSUMPTION
Passive and unaware
consumer
“Smart customer”: “smart meter”; load management, consumption
awareness NEW SCENARIOS:
GENERATION & CONSUMPTION
Non plug-in vehicles
Plug-in electric vehicles: smart charging and V2G
BUSINESS MANAGEMENT
Limited business information
volume for utilities
Huge business information volume supported by IT management
processes
current situation future model
Integration of distributed generation and storage. Management of intermittent generation from renewables
sources. Active demand management Electrical Vehicle integration. V2G services. Energy efficiency optimisation. Improvement of network efficiency (automation, topology
optimization, voltage control, reduction of losses, ...) Power quality and network reliability. New network arquitectures (microgrids, virtual power
plants, ...) “Two-way grid” (bidirectional power flow and
communications). Added value services for end users.
Tech trends affecting the deployment of smart grids:
To do list
ongoing ..
.
Economic advantages:
More efficient grid operation.
Better power quality and faster outage management.
More accurate information for decision making.
Facilitation of power supply competition.
Access to new market to small stakeholders.
Environmental / social :
Increase of renewable energy.
Reduction of GHG emissions.
Reduction of electrical losses.
Less waste of energy.
Less dependency of external fuel supply.
Tech trends affecting the deployment of smart grids:
Smart grid benefits