Smart Grid Market Segments

Published Date: 02 Nov 2017

Key words: Smart grid, Networking, Green House Gas, Communications, ICT, WSN, AMI, utility communications, power grid.

Abstract—the transition towards a low-carbon economy will change both the way power is produced and the way it is consumed. Smart grids are an essential element to facilitate this transformation and for achieving energy security, affordable energy and climate change mitigation—the three elements of the "energy trilemma". In this paper we will introduce the smart grid concepts and domains, and we will de give a brief description of smart grid systems and best practices.

Introduction

In the past decade our society has been increasingly digitalized, we are dependent on electricity more than ever before and this need will be doubled over the twenty coming years. Our need for a new electricity cleaner resources, monitoring systems, and network architectures is growing.

An integrated high performance, highly reliable, scalable, and secure communications network is critical for the effective deployment and operation of the next-generation electricity systems starting from the generation of electric power, to its transmission, and its distribution systems—known as "smart grids"[1].

In this context, Smart grid can be considered as a combination of the electric power infrastructure and communications infrastructure. New information communication and networking technologies will enable a better management of the available resources and future smart grid deployment.

In this paper, we will

Scope and objectives

Smart grid is the term generally used to describe the integration of power grid with an information infrastructure in order to deliver power to the end-users in a reliable, self-healing, secure, convenient, and efficient manner.

The smart grid is a complex system of systems which include bulk generation, transmission, distribution, markets, operations, service provider, and customer [3].

The smart grid cannot exist without an effective integrated communications infrastructure.

This paper establishes the smart grid state of the art and concepts, smart grid reference architecture, functionalities and supported applications.

Smart GRID: An Overview

The way electricity is supplied and consumed today is in the way to be revolutionized by the development of smart grids. Smart grids are supported by the latest control and monitoring systems, communication and information technologies emergence. They provide the flexibility, efficiency and resilience needed to cope with diversified power generation, rising demand, changing use patterns and increasingly stretched transmission and distribution networks.

They also give a high level of control over energy networks and that’s fundamental to curbing wasteful energy use and integrating small, diversified generators into the grid. Smart grids will play an important role in reducing greenhouse gas emissions.

Smart grid key features

Adaptive

Centralized generation is diversifying to include large-scale offshore wind and, in future, possibly tidal stream energy. A significant proportion of power will come from small generators – biomass, solar photovoltaic, onshore wind, combined heat and power, and emerging technologies like wave energy. 

Power output from many is intermittent and of medium to low voltage. At the same time, energy-hungry use patterns are emerging with the introduction of electric vehicles and heat pumps, for instance. Challenges include ‘harmonizing’ energy from various sources to iron out surges and dips and provide power of a consistent quality. Smart grids can adapt to all types of generation.

Integrated and predictive

Integration of communication, protection and control technologies allows data to be communicated and processed in real time. This gives transmission and distribution control rooms a hitherto impossibly precise picture of how networks are behaving. There can be large variations in supply and demand, with surplus in one part of the network and a shortage in another. Smart grid communication and control technologies enable electricity to be redistributed to achieve better power balance across the grid.

Interactive

Customers will have unprecedented control over how they use energy, with environmental and financial benefits. Smart meters will apply variable tariffs: at agreed thresholds or when demand is high, the unit cost of energy will go up, encouraging customers to reduce consumption. 

Optimized and self-healing

Operators will be able to route electricity from supply source to point of demand via the most economical route, preventing local overload in the transmission and distribution system. If a line is severed the smart grid will find alternative paths. Existing grids are manually restored following disruption. Smart grids will be automated, making restoration of supply faster and safer.

Smart Grid Market Segments

The Smart Grid is comprised of three high-level layers, from an architectural perspective: the physical power layer (transmission and distribution), the data transport and control layer (communications and control), and the applications layer (applications and services). Each of these high-level layers breaks down further into sub layers and more detailed market segments, all of which are detailed in this paper.

The predominant Smart Grid market segments and applications include advanced metering infrastructure (AMI), demand response, grid optimization, distributed generation, energy storage, PHEVs (including smart charging and V2G), advanced utility control systems, and smart homes/networks.

Advanced Metering Infrastructure (AMI)

Advanced Metering Infrastructure, as its name suggests, is focused on the meter – that is, at the point of consumption.  AMI deployment is replacing mechanical meters with digital meters that allow for two-way communication.  By providing information as well as energy, the consumer is empowered to shift consumption patterns away from peak-demand periods when prices are high and system reliability is low.  Utilities are also able to collect usage data that can be used to provide more efficiency and less waste.

Demand Response (DR)

Because electricity must be used when generated, providing sufficient power for "peak" demand periods is an ongoing problem for utilities.  The problem has been traditionally addressed with so-called "peaker plants" that are brought on-line only when needed – when demand is expected to spike, such as during a hot summer afternoon when air conditioners are sucking energy to keep things cool.  Peaker plants are generally old, inefficient, expensive and dirty to operate.  Demand Response is an alternative solution that is enabled by the Smart Grid.

DR allows a customer to reduce its use of energy during these peak periods, lowering cost for the consumer and allowing the utility to re-route the electricity where it is needed – without having to rely on starting up its peakers.  DR is cheaper, faster, cleaner and more reliable.

To date, most DR solutions have been deployed by large commercial energy users.  But with the widespread integration of Smart Meters, the practice can now begin to be rolled out for residential consumers as well.

DR is implemented by third party aggregators who enter into contracts with consumers that allow the aggregator to reduce the consumers’ energy usage during peak hours (using thermostats and intelligent grid-aware devices).  The aggregated "virtual peak power" is then sold to the utility.

Grid Optimization

Grid Optimization is all about making the distribution network more efficient through the use of information management and system controls.  Rather than focusing on changing consumer behavior, which is essentially the goal of AMI, Grid Optimization enables utilities to clean up their side of the street – distribution from the substation to the point of use.

There are wealth of devices and technologies that are contributing to Grid Optimization, and more will be developed as the Smart Grid is built out.  Some of the many benefits include monitoring grid assets, decreasing faults and outages, rerouting power to maximize efficiency, minimizing congestion, determining when to bring renewables online and generally allowing proactive management of generation and distribution assets.  (Leeds p. 60-61).  Leeds anticipates that Grid Optimization and its cousin, Distribution Automation, will be the fastest growing market segment over the next five years.

Energy Storage

Anyone working in the renewables field (solar, wind, etc.) can immediately see that a breakthrough in energy storage would revolutionize the industry.  Renewables are referred to as "intermittent" resources because they only generate some of the time – when the sun shines or the wind blows.  If only we had an economical way to store electrons, renewable energy could begin to supply base load, and that would change the game forever. But this is going to require a true technological breakthrough.  The available options at present are woefully inadequate.  Energy storage, such as pumped storage (hydro and air), thermal storage and flywheels, provide the best solutions, but even they have severe limitations (cost, scalability, geography, etc.)  Electricity storage –batteries (Lead Acid, sodium-sulfur, Lithium ion, etc.) and super capacitors are worse:  expensive and inefficient.

What is needed is a distributed storage solution allowing energy to be stored at the point of use and relayed through Smart Grid management when and where it is needed.  Energy storage is getting the attention of investors and major players, but obviously further work can and should be done.

The Role of Smart Grid Infrastructure in Reducing Greenhouse Gas Emissions

Smart Grid Potential Impact

A wide area optimized network infrastructure for smart grid systems, combined with the appropriate power sensors in the distribution network, will allow power utilities to collect and transport increased volumes of real-time usage data.

With this visibility, power utilities can more accurately respond to rising or falling consumption. They can also dynamically adjust electricity supply to meet demand and better predict when and where there could be a weakness or a failure in the grid.

In case of an outage, a proper network infrastructure enables smart grid applications to take immediate and automatic actions to limit the spread of the outage and to dispatch the right workers with the right tools and the right information to restore power as soon as possible.

Essentially, the Smart Grid will allow utilities to proactively manage demand, re-route power around disturbances, integrate distributed renewables and electric transportation and continue to offer reliable and affordable electricity into the foreseeable future.

Conclusion

The Age of the Smart Grid is upon us.  Huge amounts of capital are being and will be deployed over the next decade and beyond in upgrading the world’s power grid.  Both the political and financial will appears to be behind Smart Grid deployment.  Fortunes will be made in this arena, and our lives will all be changed for the better through the intelligent delivery of more efficient and cleaner energy. Furthermore, smart grid must be supported by a smart and secure communications network, power utilities will have the infrastructure, applications and services required to deliver non-stop, high-quality power safely and efficiently.