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Smart grids: The dark horse of European energy transition?

Published at 21. 07. 2021 | Written by Radoslav Stompf

This article has been originally published in April's issue of Energy World magazine.

If Covid-19 hit ten years earlier, seamless operations and smooth energy delivery would have been much more difficult to achieve than it is today. Why have our systems fared well? It’s mostly because of smart grids. According to Christian Buchel, the Chairman of the European Distribution System Operators (EDSO), the technology has proven incredibly valuable securing resilience, enabling remote operations, and providing insights into consumer data...

This article has been originally published in April's issue of Energy World magazine.

If Covid-19 hit ten years earlier, seamless operations and smooth energy delivery would have been much more difficult to achieve than it is today. Why have our systems fared well? It’s mostly because of smart grids. According to Christian Buchel, the Chairman of the European Distribution System Operators (EDSO), the technology has proven incredibly valuable securing resilience, enabling remote operations, and providing insights into consumer data.

Beyond immediate crisis management, smart grids are also poised to become a key element of Europe’s green and digital recovery. First, they are well equipped to accommodate renewable energy, which has been increasingly finding its way into the continent’s energy mix. Second, they respond to the need for a secure energy system transformation and integration in order to build a springboard for optimal usage and optimisation of innovations such as electric vehicles.

In line with the European Green Deal, the European Commission (EC) has recently proposed revised rules for cross-border energy infrastructure to advance the transition in the most effective way. Interestingly, smart grids are a critical part of the proposal, with the institution highlighting the considerable development of these technologies in line with the growing digital transformation of the electricity sector.

The EU’s aim for recovery is clear: digitisation, decarbonisation, deregulation, and decentralisation of the energy system. But why exactly do smart grids play such a key role in this endeavor?

Smart grids need smart planning

Smart grids, consisting of complex cyber-physical networks of communications, sensors, and computers, work to modernize the electricity system from A to Z. By enabling a two-way flow of both electricity and data, they give operators the power to detect and react to changes in usage and other issues. With their self-healing capabilities and consumer empowerment, the EU is relying on smart grids to enter a new energy era.

In simple terms, we could say the EU is moving from pipes to platforms, and there are a few reasons for that. These include the rising number of active customers engaged in demand-response, the constantly growing share of distributed energy resources that needs to be accommodated, and factors such as the need for greater efficiency and reliability to advance larger projects like the mass adoption of electric vehicles or smart homes.

The EC aims to double the number of key smart electricity grid initiatives for interconnecting the continent’s energy system (also known as projects of common interest) by 2026. It goes without saying, though, that there are stark differences in progress across member countries. Italy, Sweden, and Finland, for example, are already planning or executing the rollout of second-generation smart metering devices, while other nations have only begun conducting pilot tests. The process will take both substantial effort and resources: €41bn is needed to achieve a smart meter penetration rate of 92% across Europe by 2030.

Learning from lessons on past inefficiencies and artificial policy obstacles, the revised proposal for trans-European energy infrastructure is specifically focused on providing tangible guidelines. It calls for union-wide integrated networks and smart grid deployment in order to ensure a competitive and functioning integrated market. In regards to smart grids, it requests:

  • upgraded rules to promote the uptake of smart electricity grids to facilitate rapid electrification and scale up renewable electricity generation;
  • new provisions on smart grid investments for integrating clean gases (like biogas and renewable hydrogen) into the existing networks; and
  • continued attention to the modernisation of electricity grids and storage and carbon transportation networks.

Interestingly, the EU highlights that projects like smart grids may not require as complex permitting processes as transmission infrastructure does. Reinforcing the entire energy infrastructure is inherently resource-intensive; with these smart, cyber-physical setups, it’s possible to still achieve great results while laying the foundation for a successful energy transition in Europe. Striving for efficiency and applying innovations throughout will be key.

It’s worth noting that artificial intelligence (AI) can also work to make the smart grid way more efficient. The technology may not be new, but its potential in making the life of transmission system operators (TSOs) and distribution system operators (DSOs) is substantial. At FUERGY, we deploy AI to analyze historical data and generate behavior patterns on any variable that evolves over time, such as total energy consumption, consumption of specific delivery points, or the production of renewable energy sources. Subsequently, the AI generates predictions about energy production and consumption, compares these variables with online data, and suggests the best option for energy management. It then gives insights into what part of locally produced green energy will be consumed locally and what part will be shared with the grid; what part of the excess energy will be stored; or how much of the available energy from batteries or storage will be used during peak energy consumption.

FUERGY software

Sustainability – more than a catchword

The EU has been looking to increase its use of renewable energy and tackle global warming for years. However, with fluctuations in supply and limited storage, integrating sources like wind and solar hasn’t been easy. These challenges have driven research efforts, with initiatives like ERIGrid working to develop methods, concepts, and procedures to make the technology more applicable in different settings across the continent.

Yet, shining examples already exist. Among others, the EU has been highlighting the island of Bornholm in Denmark. Over the last two decades, it has erected dozens of large wind turbines and set up plants to burn waste. With smart meters to orchestrate the island’s heating systems, even fridges have been programmed to balance the electrical supply. Research across 2,800 households which applied smart controllers to fluctuations in the electricity price, time of day, and weather, found a 30% drop in winter energy demand.

Having an optimal mixture of renewables is fundamental. We have to combine both solar and wind energy to have a relatively stable green energy production – if there’s no sun, the wind probably blows. There is no risk of having too many green sources, as the smart grid assures that excess green energy is either stored or used for the production of green hydrogen – a process that has a particularly bright future, especially in electromobility. Smart grid technology simply allows us to find the right synergies between energy sources and consumption, where all sources are used to the fullest.

How Europe envisions smart cities

Cities will be the main actors of energy transformation, by shifting the way they use energy. By 2050, the world’s urban population is projected to reach 7.7bn. The EU specifically states that cities play a major role in helping the continent meet its decarbonisation objectives for 2030 and 2050. Perhaps apart from Copenhagen and its smart urban bicycle projects, how might European smart cities look in the future?

Storage and flexibilities, electric mobility, equipment components, service and capability sourcing, data, and cybersecurity – all these will form key concepts ruling smart grids, making them applicable in cities around Europe. For example, the city of Vienna already collects data from the Aspern district's smart grid, buildings, tech, and citizens to analyze over 1.5mn daily datasets, cut greenhouse gases, and optimize the energy framework.

In addition to Lyon, Florence, and Malmö, Amsterdam is also advancing smart grid projects. With tens of thousands of dwellings connected to a smart grid, slumbering power outages will be visible and easy to prevent. By combining the demand and supply-side measures, the city plans to cut the overall electricity demand by 3%.

The EU’s reliance on smart grids for its recovery is an obvious sign of pragmatism. Rather than setting decade-long goals for an ambitious energy transition, the institution has realized that the existing structures might as well just be enough – that is, if we apply smart grids to make them work the way we need them to.

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