How to set up the grid for renewable energy

The global electricity industry is undergoing several changes- rising electricity bills, government efforts to slash electricity generation emissions (a task more urgent with the shift to electric cars), climate change concerns, customers leaving the central grid to self-generate their power. In some countries, such as sunny Australia, this is happening on a daunting speed- in 2018, more than two million households have installed renewable generation units, usually in a form of a photo-voltaic solar panel. Energy Networks, Australian think tank, estimates that by the year 2050 customer owned generators will produce 30-50% of Australian electricity.

Energy consumption and its impact on climate and environment are at the centre of attention around the world, regardless of what side of the argument do you find yourself on. Whether it’s in the newspapers (three weeks ago, The Economist dedicated the whole issue to climate change), or on television (Greta Thunberg addressing the leaders at a UN Climate Summit, pleading with them to take climate action); it is obvious that the energy industry is in the middle of an insurrection, and the traditional, centralised and integrated utility companies, could soon find themselves in the potential role of unlikely superheroes leading the transition.

Here is a brief snapshot of the changes impacting the global energy industry (as of 2019):

·      By 2020, installing new renewable energy units will for the first time be cheaper than the marginal operating costs for running a coal-fired capacity at the same time (USD 0.048/kWh- solar PV and 0.045/kWh- onshore winds vs. range of USD 0.049 - USD 0.174/kWh for 700 GW fossil fuel power plant)

·      This gap will continue to widen in the upcoming years by introducing carbon pricing and the decline in the cost of renewable generation technology and advances in storage

·      On average, an Australian electricity customer can save up around $2000 on his annual electricity bill, the pay back period on his investment in a home generation unit being three to five years.

·      If we placed solar panels on only 1.2% of the sand dunes of Sahara Desert, it would be enough to cover all the energy needs of the world in solar energy (this one I included for fun)

·      Almost all developed countries have pledged to become net zero emitters by 2050 (with notable absences of USA and Australia)

This evidence overwhelmingly points towards a reality where renewable energy becomes the competitive backbone of the global energy sector replacing fossil fuel generation. On one hand, this is great news for our climate and the future generations. On the other hand, there is a lot of work that needs to be done to integrate this large amount of new capacity into worldwide energy grids.

The role of distribution network operators today is to transport electricity from the transmission network securely to the end customers. This load is managed centrally and flows only in one direction. However, as more distributed energy resources (DERs) get connected to the low voltage network, all the spare capacity that they generate will either be stored or fed into the grid. In this scenario, the electricity load generated from thousands of residential rooftop solar panels not in one, but multiple directions involving many decentralised participants in the energy exchange. Residential customers will take a more active role in the energy supply chain– from mere consumers of energy they are evolving into prosumers- they are empowered to trade the energy they have conserved or produced.

The result is a new set of complex challenges that network operators must overcome. The role of a network operator itself will have to evolve- to that of a SYSTEM operator, facilitating neutral network access to new players and enabling competitive exchange of electricity, whilst maintaining its safe distribution to each connected customer. In short, the Networks of the Future will need to…

It will no doubt be interesting to see how distribution network operators overcome these challenges. One thing is for certain – enabling the energy transition and securing stability of the network in the context of decentralised generation will make the role of distribution system operators (DSOs) crucial. This transition will warrant a redesign of the value chain and development of new capabilities to manage, optimise and balance the distribution network. Below is a short selection of just few of these (in my opinion fascinating) capabilities, that are already being developed to provide a small glimpse into what will network of the future look like.

Hosting Capacity Analysis

Hosting Capacity is an estimated calculation of the amount of DER that may be accommodated on the grid without adversely impacting power quality or reliability under current configurations and without requiring infrastructure upgrades. This amount depends on several factors – location on the grid, characteristics of the feeder, characteristics of the DER and the number of DERs already connected and supplying generation. While the conversation about the most accurate analysis method is ongoing (HCA is still a relatively new concept), the important point however is for this analysis to be open and accessible to the wider public, which will be the first step in bringing DERs into the competitive market space. Developers could access a digital map of the network and based on the heat map of supplied generation understand, which location would most benefit from additional generation capacity. They could then submit a DER application online – and have it automatically processed by the DSO, based on the available analysis. This application of technology and data models will hugely incentivise DER uptake into the grid and enable more optimum balancing on the network load. Below is a screenshot of a Hosting Capacity Map of New York State, available publicly at: www.pge.com.

FLISR (Fault Location Isolation Service Restoration)

FLISR is referred to as a “self-healing” grid capability. The basic idea of FLISR is to quickly identify the location of a fault, isolate the faulted area and reconfigure the grid to switch some customers to adjacent feeders. Of course, this is the goal of distribution operators everywhere. But FLISR utilises remote control devices, communications networks and system intelligence to achieve this goal in a very optimal and fast way. When a fault on the network occurs, the remote fault Indicators detect that the voltage and current levels are outside their normal boundaries. They then call on the automated feeder switches (another cool technology kit) to isolate the faulty feeder by opening / closing. The network then automatically reconfigures the adjacent (non-faulty) feeders to supply customers that were cut off by the fault. All of this happens automatically (within minutes) and what’s more exciting, using decentralised intelligence, rather than sending commands from an operator’s control room. Operators that implemented FLISR technology have benefited from drastic reductions in the number of interrupted customers and interruption times.

Automated Demand Response

During peak-load hours, the increased electricity demand can put significant pressure on the grid resulting in the need for expensive network expansion investment. The alternative to the above is for the DSO to enable automatic consumption reductions of end customers (households and businesses) demand in exchange for a (monetary) benefit. The way it would work is that during peak times, the DSO sends a pricing signal or reduction alert to the customer where the ‘behind the meter’ technology translates these commands into pre-programmed DR actions and allowing the customer to decide which devices can be modified in this way and in what patterns. For example, I can decide that I am willing to switch off my air conditioner in exchange to save money, but not my fridge. I could also select at which price signals am I interested to engage in demand response. I can then grant the DSO the remote access to my smart meter & home appliances and voila, I can sit at home and watch my smart home earning money. (Picture credit: energycentral.com)

Renewable energy forecasting

The energy produced from a household rooftop solar panel is primarily used to supply the energy needs of that household. At this stage, it has minimal impact on the grid other than the demand reduction of that individual customer. If, however, household can't consume all the generated power, the excess is fed back into the low voltage network. At high DER penetration levels (remember, two million Australian households have rooftop PV panels), it can create sudden influxes of capacity, especially at low consumption & peak generation times (middle of the day). It will become essential for DSOs to accurately predict how much DER load will likely enter the grid at any time. If implemented right, this capability will allow the DSO to optimise network planning and avoid expensive network upgrades. The challenge with the current technology used for customer rooftop PV systems is that (the meters) it only measures renewable energy received by the grid, not the total output generated by the system. This is of limited use to the DSO, as it doesn’t give them visibility of how much energy are DERs likely to generate in the future. In the future, a DSO will need to be able to calculate total probabilistic output of DERs at any given time and then determine, how much of that power will likely be fed into the grid.

Local Flexibility Market

End user integration will to the network will constitute an opportunity to develop a local marketplace for procuring flexibility services, that will enable safe and the most cost-efficient system operation. Prosumers, aggregators and flexibility providers could actively participate in this marketplace and take advantage of the flexibility services and generation that they can provide for the benefit of the whole community. These flexibility services can include storage, voltage control, ramping products and others. By focusing on the desired network outcomes, rather than specific technologies, the market forces could ensure the selection of the most efficient solutions for the network and avert costly network upgrades. DSO could step up to the role of a neutral facilitator of the Local Flexibility Market, developing commercial protocols and platforms to procure flexibility services, irrespective of technology.

The scale of this transition will define DSOs’ investment and capability priorities in the coming years, but preparation work should commence now. It won’t be a one size fits all approach- transformation road maps will be shaped by local circumstances, market structure and maturity and available technology and will require a collaboration between many different stakeholders- network operators, regulators, government, local communities. Most importantly, developing successful DSO model will not be a final destination, but rather a stopover point on the journey of constant energy landscape laying ahead.