daniela velte & angel diaz - tecnalia research & innovation brussels, 12 april 2012...

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


Integration of renewables Central controlCentral controlBusiness as usual Central control

2012

Cap

acit

y

CentralGeneration

Transmissionnetworks

DER

Distributionnetworks

CentralGeneration


DG


CentralGeneration


DER


CentralGeneration


Renewables

Distributionnetworks P

assiv

e

Con

trol

Cen

tralised

C

on

trol

2020

CentralGeneration


DER


CentralGeneration


DG


CentralGeneration


DER


Central

Generation



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

:


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


Customer centric approach

Source: Google


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





Network automation

Few network sensors







network capacity



systems



Passive and unaware

consumer






BUSINESS MANAGEMENT




processes

GENERATION





Network automation

Few network sensors







network capacity



systems



Passive and unaware

consumer






BUSINESS MANAGEMENT




processes

GENERATION





Network automation

Few network sensors







network capacity



systems



Passive and unaware

consumer






BUSINESS MANAGEMENT




processes

GENERATION





Network automation

Few network sensors







network capacity



systems



Passive and unaware

consumer






BUSINESS 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.


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.


Smart grid benefits

daniela velte & angel diaz - tecnalia research & innovation brussels, 12 april 2012...

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