1. Home
  2. Batteries
  3. Unlocking the benefits of a distributed grid
Unlocking the benefits of a distributed grid

Unlocking the benefits of a distributed grid

15
0

India deserves better than the system of 1882, and has both the capabilities and need to pioneer a better answer for the rest of the world to follow.

s India’s economy surges, access to reliable, affordable, and secure energy sources to fuel growth will be critical. The good news is that the increasingly economic choice is to make this fuel clean and electric. A decade-long trend of double-digit percentage annual cost declines in renewable power sources such as wind and solar means that these resources are now at or near price parity with traditional fossil sources on many parts of the grid in India, making the 175 megawatt (MW) renewable goal by 2021 not just a policy to help clean India’s air, but also one that will make energy access more affordable over time.Add on top of this trend similar, but even more impressive cost declines in battery storage for both stationary and electric vehicle applications, along with the ability to coordinate large numbers of distributed digitalised assets, and India has within its grasp the opportunity to build out its energy infrastructure with a capital efficiency, resiliency, and environmental sustainability never before possible.

A capital problem

One of the challenges of legacy electricity grid structures is their capital intensity. In order to operate a system that delivers power reliably to the extremities of the grid during peak demand periods like the hottest hour on the hottest day of the year, extra power plants, transmission wires, transformers, and other contingencies are built that remain partially utilised for much of the year. In fact, most grids globally average under 50 per cent asset utilisation over the annual cycle – a figure which is much lower than other capital-intensive industries such as airlines and telecommunications, which typically operate between 70 per cent to 90 per cent.

Yet, even with this overbuild, there are still areas in India that must regularly shed load to manage peak events or endure one-time disruptions, leading to significant investment in generators by companies, office buildings, and even residential complexes to provide backup power when the grid flickers. The problem of capital efficiency is particularly poignant for India’s discoms, many of which are dependent on a steady stream of financial support and additional debt to maintain standard operations.

If we were to look at India’s grid operations – or indeed those of any country anywhere in the world today – we would notice very few changes relative to the first grid built by Thomas Edison in 1882. All that is now changing, and India can be among the first to do better.

Saving cost with a smarter grid

The advent of digitalisation is transforming the way the grid operates, allowing utilities to deliver more reliable and resilient power at a lower cost. This leap forward is due to the addition of two critical functions to the grid that have not existed previously: The ability to store energy, and the ability to sense what is going on at the grid’s edge.

Electricity is an unusual commodity as historically there have been few economic ways to store it. The grid is run to match supply and demand instantaneously. But with digitalisation and cleantech advances, two new storage options are emerging. The first of these is electrochemical in the batteries used for stationary storage or the e-buses, electric cars, and electric two-wheel and three-wheel vehicles that are already being deployed on India’s streets. The second is virtual storage created when the utility controls very large electricity consuming devices like air conditioners, electric hot water heaters, or refrigerators, adjusting their energy consumption based on agreed parameters with the customer. By coordinating these assets through smart controls that pre-cool buildings or optimise hot water regeneration, the utility can help manage the grid’s performance and ensure the customer’s hardware operates without any sacrifice of comfort or convenience.

Smart thermostats are already over $1 billion annual market and growing at a 50 per cent Compound annual growth rate (CAGR) globally, with supportive utility policies in many developed countries. Large scale implementations of fixed battery storage are becoming more prevalent, with installations like Tesla’s South Australia project showcasing the potential. Vehicle to grid operations are still in the early pilot stages, with dynamic solutions like that taking place on the island of Porto Santo showing great promise. Nonetheless, particularly on electric vehicle integration, further development is required.

In order to harness and manage this new-found flexibility – particularly in the case of distributed and mobile charging/discharging units like EVs – the grid needs to be made smarter. Thankfully, the solution here lies in the very source of the problem. Rather than installing a series of new sensors on the grid by extending expensive Supervisory Control and Data Acquisition (SCADA) systems to lower voltage levels or rolling out “smart” meters for customer billing, utilities can tap into the increasing number of internet-of-things chips that are embedded into devices that consume electricity in the first place. Piggybacking on the investment of consumers, a utility can begin to understand what is happening at the grid edge to a much higher degree of resolution than ever before, and manage the grid from the consumer back in addition to the powerplant forward. This added customer information will ensure that the capital deployed translates more directly into the cool apartments and hot tea that the end user really desires. But, the possibility of speaking with devices that produce, consume, and store power directly from a central vantage need not be the only way to run a smarter grid. We can also allow those devices to talk to each other directly.

Blockchain’s promise

Confronted with the prospect of a grid made of increasingly distributed, digitalised assets that can provide real value and flexibility to the system, the question arises of how best to leverage these new resources. A market is the logical mechanism, given the fundamental issue is about coordinating the exchange of physical and financial value between assets and asset holders. But how would you animate a market among such digitalised assets in a secure and automated way? It is a problem uniquely suited to blockchain.

Blockchain is commonly thought of as distributed ledger technology, or a decentralised, immutable, and public database.But, it is also more than that.In its most sophisticated form, blockchain is a fully decentralised computer that possesses three key attributes: The highest level of encryption and data security available, the ability to execute transactions at extremely low costs, and the ability to automate those transactions so that they happen seamlessly and swiftly in the background using pre-determined rules called smart contracts. Combining these three attributes, blockchain enables us to do on a public WiFi network what was previously restricted to a private one in terms of automated device control, market integration, and settlement.This fact is important when we consider the need to integrate an ever-increasing set of smart devices into the system without creating additional system security vulnerabilities.

While blockchain is still in the early stages of testing, it is already showing signs of real promise as an operating system for a future distributed and transactive grid. In Germany, grid operator TenneT and battery storage company Sonnen have been using blockchain to stabilise the grid and enhance the utilisation of abundant wind resources in the north through decentralised home energy storage solutions. A similar pilot is being run by Belgium’s transmission system operator, Elia, with plans to link millions of small household units using blockchain to enhance grid performance. Specific to EV integration, the Swiss foundation Share&Charge has created a single blockchain-based data and charging management system that harmonizes charging preferences, rates, and payment processes when plugging an EV into charge points hosted by different operators in countries across Europe, and is now piloting in regions in the United States. In each case, blockchain digital solutions are being used to enhance and improve the performance of the grid with minimal capital upgrades.

India in the lead

With wholesale market reforms underway, energy affordability and access challenges, grid operator financial woes, and persistent reliability challenges, the question of whether India can afford to modernise its grid through digital and distributed clean energy technologies is asked by many. The truth is, however, that India cannot afford another path.

Clean energy portfolios that incorporate economic utility scale renewables alongside distributed load control and storage create flexible, virtual power plants that are every bit as real in delivering reliable electricity as the coal or gas plants they replace. However, these virtual power plants are able to deliver that energy at a fraction of the cost because a big part of the resource is paid for by other benefits such as providing hot water, conditioned air, or personal mobility. When the accompanying transmission and distribution investments are reduced because fewer electrons need to be pushed through a revised grid design, even more savings are realised. Through adopting such approaches, India can lead the world in creating a lean and efficient grid that can be dynamically balanced from both ends.

Does this mean that India should immediately migrate to blockchain or decentralised dispatch tools to take full advantage of these emerging possibilities? It is probably too soon to commit to a single technology. But, knowing that these solutions are coming at the speed of software deployment, should prompt planners to pause and policymakers to ponder how best to deliver clean, reliable, and affordable power in a digitalised and decentralised future. Certainly, India deserves better than the system of 1882, and has both the capabilities and need to pioneer a better answer for the rest of the world to follow.

DISCLAIMER: The views expressed are solely of the author and ETEnergyworld.com does not necessarily subscribe to it. ETEnergyworld.com shall not be responsible for any damage caused to any person/organisation directly or indirectly.

About Jon Creyts

Jon Creyts is a managing director at the Rocky Mountain Institute (RMI) and manages RMIs Business Renewables Center. He has 25 years of experience

Source: energy.economictimes.indiatimes
Anand Gupta Editor - EQ Int'l Media Network

LEAVE YOUR COMMENT

Your email address will not be published. Required fields are marked *