The world is undergoing an energy transformation. Government leaders, businesses and civil society agree that a sustainable future means shifting to low-carbon electricity. Or more simply, if we want to stop warming the planet we have to stop burning non-renewable things. But what does that mean for the energy business?
We need a greener grid
It means shifting away from fossil fuel to a greener grid. However, it’s not as simple as it sounds. The inherent characteristic of all electricity systems is the need to balance production and consumption in real time. Greening the grid changes the way our energy is produced in the network, and this shift away from fossil fuels to lower carbon substitutes, poses a challenge to this power balance.
A big part of the problem is that the renewable energy sources with the most potential – wind and solar – are not constant nor easily controllable. You could say they’re changing like the weather. So unlike fossil fuel burning, which performs consistently and provides balancing power, renewables are much more likely to upset the delicate power balance.
On top of that, renewable generation is often located in distribution grids that were originally built to deal with only demand; no one thought that distribution networks would ever need to cope with production as well. That’s why distributed generation can lead to serious technical problems and even damage to the system.
A greener grid must still be reliable and resilient
The society is becoming more and more dependent on electricity and the social and economic threat from even brief power outages is potentially severe. So how are we going to integrate renewables into the future grid while ensuring reliability and resilience?
The first challenge to tackle is power balance. When the amount of controllable centralized production decreases, flexibility needs to be provided also by small, currently passive, distributed resources. The easiest targets are for instance heating or cooling loads or electric cars plugged in for overnight charging. Things that don’t disturb people while helping balance the grid. If the system turns off your HVAC or electric car charger for five minutes this doesn’t affect people, whereas, if your televisions are suddenly powered down, you’re far more likely to be upset.
But the system must still take into account people’s needs. For example, if you drive to work at 8am daily, there had better at least be a partially charged battery in your electric car. And if your car batteries have been supplying the grid all night, you’ll need to be compensated. The future challenge will be to find flexible resources that can be adapted rapidly and easily, either by shifting consumption, curtailing renewable production or storing energy depending on the need.
The second challenge to tackle is connecting distributed generation and improving distribution network reliability without excessive costs. Depending on the selected approach, small-scale generation can lead to either substantial additional costs or can decrease the investment need caused by the requirement to lower the number and duration of power outages in all parts of Finland. Active network management lowers the total costs of distribution networks that accommodate distributed generation substantially and should, therefore, be used and incentivised. After all, it is the customer who is paying the bill.
Meet the microgrid
The future smart energy system needs to have high levels of automation to enable efficient utilization of all flexible resources. Microgrids provide one technical solution for grid smartening, including also the possibility of island operation which can be used to improve network reliability.
Microgrids can be of any size ranging from very small, as in a home with a solar panel on the roof and an electric car in the garage, to larger areas including a collection of buildings, like a neighbourhood or a shopping mall, having the capacity to produce and store clean energy. The first microgrids have already emerged. As an example, right now in Greater Helsinki, a large shopping mall called Sello is being developed into a clean energy microgrid, including solar panels on the roofs, which can manage its own renewable energy production, optimise use fluctuations and participate to frequency regulation markets. Another microgrid example utilizing LVDC technology is located in rural area in Eastern Finland and aims at enhanced reliability through island operation during network outages and optimization of energy use.
Scaling up next
In the future, microgrids and active resources will be aggregated to participate in system level markets as virtual power plants to flexibly help address power unbalances, as well as enable wind and solar energy to be used on a bigger scale in Finland. At the same time, the resources will participate locally to distribution network management and also local energy exchange between neighbours can emerge inside energy communities. Integrating different energy vectors, especially electricity and heat, will be crucial for optimized operation of the whole energy system.
But can we make it affordable?
Optimisation of the system must also mean optimising the cost. Utilizing small resources in grid operation decreases the amount of needed investments in physical network infrastructure but lowers the total costs only if implemented in a cost-efficient manner. We are not talking about someone coming to your house and putting in new wires and gadgets. The cost of connecting different small devices for control purposes must not be too high. This is where IoT comes in. As systems and appliances get better at communicating over the Internet, electricity will become more adaptable and controllable.
Climate change does not wait
The first steps towards smart and clean energy future have already been taken and many enabling technologies exist. However, the transition pace is not adequate for climate change mitigation. We need determined actions to accelerate the transition towards a low-carbon society. Further development of smart energy solutions, widespread real-life utilization of them, system level studies and changes in regulatory framework are among the key challenges to be solved.
New types of piloting platforms and innovation ecosystems are needed to accelerate the energy transition. Smart Otaniemi innovation ecosystem and SENECC provide a new type of environment for companies, research organisations and financiers for efficient and impactful collaboration. Join us to build a sustainable energy future!