Electricity gets Smarter

The electricity system is being transformed by some of the strongest forces it has experienced since the invention of the electromagnet. These forces are converging to completely disrupt how we generate, manage and use electricity in today’s modern world.

22 September 2017

Lightbulb with cash

The electricity system is being transformed by some of the strongest forces it has experienced since the invention of the electromagnet. These forces are converging to completely disrupt how we generate, manage and use electricity in today’s modern world.

By Mitchell Duncan, Technical Analyst 

Two trends which underpin these forces are: decentralisation and digitalisation acting together in a way that reinforces their influence beyond their individual means and are all happening at the edge of the electricity grid – beyond the meter. These trends will blur the traditional distinctions between electricity producer, distributor and customer

Decentralisation encompasses several changes with dissimilar repercussions on the electricity grid. These include distributed generation and storage, energy efficiency practices and demand response capabilities.

Distributed generation is perhaps the most visible of influences and represents the most significant physical change to the future of electricity. Traditional generation of electricity dictated that the source of power was a centralised generating power station, fuelled by coal/coke, nuclear, hydro or geothermal sources. In more recent years the technology developments in solar energy (solar thermal and photovoltaic) and wind turbines has skewed the design of power distribution systems. For example, in some non-UK cities, more than 30% of peak power (during daylight) is generated by rooftop-based photovoltaic panels. In the UK, at the end of 2016, coal generation contributed 9.2% of electricity, compared to 11.5% from wind sources.

Distributed storage is driven by its companion force of renewable energy. During ‘off-peak’ supply times (i.e. night and still days for solar and wind respectively) the need to draw power from ‘other’ sources will become increasingly acute. Storage systems, i.e., batteries will store excess power generated on windy and/or sunny days and allow utilities and customers alike to flatten out the peaks and valleys of availability. On current trends the decline in battery costs should see the cost of storage reach parity with grid power in the late 2020s.

Digitalisation is the process of applying digital technologies to devices across the whole electricity grid. These devices include smart meters, IoT sensors, supervisory control and data acquisition (SCADA) systems that collect grid data and allow real-time operation and control of the network.

At a management level, the digitalisation of the grid provides opportunity for improvement in quality of service and costs. Data from smart devices will provide more information to the utility in the form of demand data allowing for better supply management, and preparation for (and possibly predict) peak demand loading, to avoid blackouts.

From a customer viewpoint, smart devices will help them better manage their electricity demand and therefore costs. They should see an improvement in the reliable supply of power and greater responsiveness on the part of the utility. They should also see a growth in the availability of smart appliances that allow them to tailor usage and meet their budgets.

All of these changes herald an accelerated need for the development of digital enabling technologies for the smart grid.