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Emerging Technologies That Utilities Can’t Afford to Ignore

Updated: Feb 27, 2019

Electric power grids have changed more over the past few years than in the entire 20thcentury, and technologies that are about to reach the mass market will drive even more drastic changes in the industry. Utility companies who cling to old business models are likely to go out of business, while those that are innovative will rise as the leaders in the industry. This article will provide an overview of the technologies that are transforming power grids, and the role that measurement and monitoring systems play in each case.

Small-Scale Energy Generation and Storage

Solar photovoltaic technology has existed for several decades, but it was held back by low efficiency and an extremely high cost – the investment could not be justified in terms of energy savings, yielding payback periods of several decades. However, photovoltaic systems evolved rapidly after the year 2000 and there are now many places in the world where they are a cheaper alternative to electricity from the power grid. Wind power, although more demanding in terms of site conditions, also experienced a similar evolution.

Small-scale wind and solar power allow energy consumers to become partially independent from utility companies, but they still rely on the power grid when weather conditions are unfavorable for these technologies. When these systems are complemented with energy storage, they can become self-sufficient – price has been the main barrier for widespread adoption of energy storage, but this is already changing:

  • In Germany, a country with high electricity rates, solar PV systems with battery storage are already at grid parity.

  • Throughout the world, there are utility companies who have recognized the need for energy storage to accommodate the increasing solar and wind power installed capacity, and they are offering incentives for their clients to deploy it. Several utilities are following this approach in the southwestern USA, as well as SSE in northern Europe.

  • Electric vehicles, when connected to the power grid, are essentially distributed energy storage as well. Their batteries can be managed by the power grid operator to absorb surplus energy production or to help mitigate peaks in demand.

The key point here is that small-scale generation and storage are distributed, which makes it impossible to manage them with traditional control systems like those found on power plants. In these cases, it is necessary to deploy a measurement and control system at every single site, and then use data aggregation and analytics to optimize generation and storage capacity in real time.

The following graph illustrates how the grid can benefit when distributed generation resources are combined with storage. Consider a city where the average household consumes energy as shown by the line in blue, and where small-scale solar PV systems produce energy as shown by the line in green:

Figure 1. Residential Energy Consumption and PV System Generation

In this scenario, the utility company would have two main issues to deal with:

  • Supplying two peaks in residential consumption, in the morning and afternoon.

  • Absorbing a peak in generation around noon. This energy must be transmitted for consumption somewhere else, and this has a cost for the utility company.

If this system is equipped with energy storage, and the utility company is allowed to manage the charge and discharge cycle, it may be possible to remove all three peaks from operation. From the utility’s point of view, the consumption and generation profiles would appear as shown below:

Figure 2. Residential Energy Consumption and PV System Generation with Optimized Storage

This offers a considerable advantage for the utility company – the variability is reduced significantly, and the utility company can dispatch its generation capacity more efficiently throughout the day. In particular:

  • There is no need to ramp down production at noon.

  • The demand for energy in the early morning and at noon is reduced significantly.

Energy Efficiency, Demand-Side Management and Smart Appliances

At a glance, it might seem that energy efficiency is unfavorable for utility companies: How can a company who is in the business of selling energy benefit when its customers consume less energy? However, there are cases when reduced consumption is actually beneficial for the power grid:

  • Mitigating Peak Demand – Power grids experience a variable demand throughout the day, and the maximum value is normally reached only for a few hours. Utility companies have to keep dedicated power plants on standby during most of the day, just to meet this short peak in demand. Anything that incentives consumers to shift their consumption away from these hours means the utility has to rely less on peaking power plants – reducing operating costs.

  • Reducing the Load on Congested Power Lines – Economic development and population growth increase energy demand, and electric utility companies may face considerable capital expenses when the capacity of transmission lines has to be expanded. Rather than spending their capital on grid expansions, utility companies can develop energy management services that increase customer engagement and provide an extra stream of revenue.

Utilities can step in and gain new streams of revenue by leasing equipment that helps their customers optimize their energy consumption. The leasing model has already proven to be successful with small-scale renewable energy systems, and the same approach could be feasible with smart appliances and demand-side management.

The Internet of Things: Cornerstone of the Smart Grid

The fundamental principle of the smart grid is managing distributed resources and appliances in such a way that the value for all stakeholders is maximized. This is only possible if all these systems are interconnected, and expertise in both software and hardware is required.

Logic Energy has delivered monitoring systems for a wide variety of energy efficiency, DSM and renewable energy applications, and our cloud-based platform offers data visibility in real time. Our technology is built on a decade of experience and the knowledge of industry experts, including applications outside the energy industry such as construction and weather research.

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