The power industry is in the midst of a shake-up, a revolution in how electricity is generated and distributed. Smart grid technology is changing the way utilities and customers interact, and providing support for the integration of renewable resources and energy storage to the grid.

The electric utility industry is undergoing a transformation, and it’s more than a reduced role for fossil fuels and an increased emphasis on renewable resources for power generation. Energy companies are looking at ways to lower the cost of power, and the decentralization of generation is bringing about new business models and processes.

Essential to those goals is modernization of the power grid, and not just the physical infrastructure. Technology to improve communications between utilities and customers, and the grid and its operators, to share information about electricity use and more efficiently balance power supply and demand, is at the forefront of the move toward a smart grid.

Utilities today can monitor the grid in ways not previously possible. They can spot problems before they occur. Automation and remote controls enable faster decision-making. Sensors across the grid help improve power quality and reliability. Outages are identified more quickly, and power can be rerouted more efficiently.

“The smart grid represents an opportunity to move the energy industry into a new era of reliability, availability, and efficiency,” said Lindsay Gorrill, CEO of KORE Power, a Coeur d’Alene, Idaho-based developer of energy storage systems. Gorrill told POWER: “The introduction of smart grid technology is driving more efficient electricity transmission, quicker restoration of electricity after a power outage, reduced peak demands, and increased integration of large-scale renewable energy systems. A smarter grid will continue to enhance resiliency and allow the grid to be better prepared for emergency response.”

Smart grids are a natural evolution of the power grid in developed countries, and could be critical for making power more accessible and improving the economies of developing nations, as the technology enables more stable power quality for factories and other commercial and industrial sites.

Proactive Control

Industry experts who spoke with POWER said the evolution of the smart grid is reshaping the power industry, changing how utilities interact with customers, and enabling customers to proactively control their energy use.

1. The solar array at Delta Electronics Americas’ campus in Fremont, California, helps the building be self-sufficient when it comes to its power use. Delta makes several products that are part of smart grid technology, supporting energy efficiency, renewable energy, and electric vehicles. Courtesy: Delta Electronics

Brian Van Heel, director of PV Inverters and Energy Storage at Delta Electronics Americas (Figure 1), told POWER that the smart grid is enabling more efficient energy production, while also bringing reduced costs and environmental benefits.

“A true smart grid should be able to perform certain functions without direct human control,” said Van Heel. “It can recognize irregularities within the utility grid and automatically adjust to increase energy efficiency and resiliency. Because of this, smart grids create environmental and cost benefits by reducing the amount of energy wasted and improving efficiency of generation, delivery and consumption. Data streams are needed to inform decisions within a smart grid. Advancements in the IoT [Internet of Things] are enabling the smart grid to become more interconnected with the technologies that comprise it.”

As Van Heel noted, energy IoT applications are enabling utilities to move beyond just providing electricity. Power generators today can be comprehensive energy service providers, able to better engage with customers. These applications also help with integration of power from renewable resources, and support efforts to balance power supply and demand on an increasingly complex grid. (Learn more about IoT and smart grids, and their impact on power generation, at POWER’s 4th Annual Connected Plant Conference, to be held Feb. 25–27, 2020, at the Westin Peachtree Plaza in Atlanta, Georgia.)

IoT technology can be used to connect grid infrastructure equipment, and it helps utilities collect data and better manage the grid. Service outages can be detected faster, and service restored more quickly, with some experts saying it brings the concept of a “self-healing” grid.

“The notion of ‘smart grid technology’ is that it uses digitalization to abstract complexity,” Shuli Goodman, executive director at LF Energy, overseen by The Linux Foundation, told POWER. “So, ‘smart’ equals ‘digital,’ or the ability to facilitate hardware to ‘do’ things that we want.

“The benefits are the ability to virtualize hardware and minimize the expense of proprietary solutions,” Goodman said. “When it comes to the grid of the future, smart grids are essential because they are moving us from a principally centralized, one-way system to a multi-directional mesh-like network with devices that can be both loads and resources to the grid. In essence, smart grid technology allows us to transform from a centralized paradigm into a distributed paradigm whereby we manage variable energy demand and generation, including electric mobility or batteries on wheels.”

Said Gorrill: “Beyond just powering EVs [electric vehicles], the smart grid possesses the ability to allow EVs to become electricity resources, taking additional strain off of smart grid operations. When plugged in, the EV batteries could provide many of the grid services that stationary energy storage systems can provide. A grid backed by energy storage will provide the monitoring, communications, control, and computational capabilities to accommodate fast EV charging during peak demand periods.”

2. Industrial-grade battery technology, like KORE Power’s Mark 1 Energy Storage System, is a necessary component of the changing smart grid. These systems enable the incorporation of renewable energy and help prevent widespread power disruptions. Courtesy: KORE Power

Not all smart grid technology is new. Things such as supervisory control and data acquisition, known as SCADA, and advanced meter infrastructure have been in use for years, providing near real-time information on energy supply, consumption, and transmission. The advent of distributed energy resources (DERs), such as solar, wind, and energy storage (Figure 2) at residential and commercial sites, has brought a new urgency to grid upgrades. These DERs require technology to generate and store power, and are part of demand response, adjusting to peaks and valleys in power demand.

“There are a few levers that we have with regards to ‘smart grid technology,’ ” said Goodman. “They include things such as demand response, flexibility services, distributed generation, real-time to near-time planning and simulation, congestion management at the transmission and distribution level, automation, virtualization, and the ability to onboard billions of devices, most of which are not owned by a utility. All of this requires the ability to communicate digitally.”

Communication Is Key

“The technology in general, the internet and communications technology, is improving in many industries, and the power industry as well,” said Raj Iyer, Grid Integration Solutions leader at GE Grid Solutions, in an interview with POWER. Iyer is among those who agree that communication is key to the smart grid. “It supports smart energy management systems, battery energy management systems, and these are all very well integrated for the grid. The evolution of the smart grid brings the possibility of trimming energy production based on demand profiles, much better than we can today.”

Stewart Kantor, president and CFO of Sunnyvale, California-based Ondas Networks, concurred, telling POWER, “A lot of the initial focus on the smart grid was metering infrastructure, for the automation of reading smart meters. Our focus, and where a lot of potential future gain [exists], is in substation automation, as [utilities] move into a neighborhood, and where there can be substantial gains in terms of efficiency.”

Kantor referenced his home state, where wildfires and earthquakes have wreaked havoc with the grid. “There’s fire risk, and earthquake risk, and many of the new advanced smart grid technologies can help with these specific issues,” he said. “It’s a big opportunity for California grid operators to automate and protect the grid. And there’s also the potential to be working on rapid response to crises, including fire and earthquake response. The way we’ve designed our equipment is to cover a lot of infrastructure at a very low cost. It allows for the early warning and isolation of problems.”

Goodman said smart grid technology supports both the sustainability and the reliability of power distribution. “Digitalization abstracts the complexity of hardware and the communication between things. It is both essential and critical to the grid of the future,” she said. “Demand and load management will be increasingly more important than simply the production of energy. Radical energy efficiency will be what catapults us from 50–60% decarbonization to 100%.”

The smart grid also could help utilities and customers before and after natural disasters. Said Kantor: “Think about what we’re experiencing in California, with large areas of power being turned off,” as part of proactive measures to reduce grid impacts from wildfires in particular. “The ability to isolate sections of the grid, this would be an example of smart grid technology, to do power isolation, to get closer to the impacted area, without impacting other neighborhoods. It allows for isolation deeper in the grid.”

Kantor said this is important not just for power companies. “It’s not just the electric grid that’s impacted here,” he said, referring to the proactive outages. “During the recent outages in Northern California, I kept my power, but lost my internet connectivity and cell coverage. My cable provider turned off [its] power. So, I had power at my home, but I didn’t have [internet] connectivity. That resulted in the cell phone system getting overloaded. The impacts of these outages go beyond just the residential or consumer level of power, impacting other critical services.”

Upgrading Transmission and Distribution

Digitization is key for the smart grid, but improving physical grid infrastructure (Figure 3) is a starting point for any upgrades. Chinese officials talk about their “Strong Grid” concept, which involves improving infrastructure as the first step, followed by the addition of a digital layer, and then “business process transformation”—the ability to capitalize on the investment in those upgrades.

3. Contractors work on renovations to a substation at Beale Air Force Base in California. The base in 2017 upgraded five substations, and built a new substation, to support the area’s growing demand for energy. Such upgrades are occurring worldwide, in part to install smart grid technology and improve the efficiency of power transmission. Source: U.S. Air Force / Airman 1st Class Tristan D. Viglianco

The Chinese government’s ownership of the transmission and distribution sector in that country has enabled a more rapid advancement of smart grid technologies, important for China’s integration of renewable energy resources. China at year-end 2018 had 728 GW of renewable energy generation capacity, according to the International Energy Agency, leading the world—and by a large margin—in wind, solar, and hydropower.

A Morgan Stanley report released in December said growth in the Chinese economy, which has slowed over the past several months for many reasons, including a trade war with the U.S., could be improved with the application of more smart grid technologies, which also would support adoption of more renewable energy resources.

“A second wave of urbanization driven by smart tech ‘supercities’—regional clusters of giant hub cities surrounded by large satellite cities—could hold the key to giving China a new gear for growth, with significant implications for investors and the global economy,” the investment bank said in its report.

Kantor noted the importance of smart grid technology to renewable energy. “Where we focus is the communications infrastructure, automated re-closers, voltage regulators, there’s a whole host of pieces critical to distribution automation,” he said. “The impact of solar, energy flowing back into the grid, utilities need to be able to absorb that in real time, with smart inverters for solar [to] allow the input of electricity back into the grid when it’s required. There are a number of technologies leading to what you would call the true smart grid. These alternative forms of energy are having a large impact on the grid, and without the smart grid they won’t be absorbed properly.”

The Morgan Stanley report touched on those aspects, including 5G connectivity, saying that future life in a potentially smart supercity could see not only automated homes utilizing IoT, but also daily commuting via high-speed rail and automated vehicles on smart grids. That could spawn more business opportunities for utilities and telecommunications companies.

“Over the longer run, more advanced smart city features, such as driverless cars, auto-delivery drones, and fully interconnected and automated home appliances should take productivity to the next level,” said Shawn Kim, head of Morgan Stanley’s Asia Technology research team, in a statement about the report.

“Data streams are needed to inform decisions within a smart grid. Advancements in the IoT are enabling the smart grid to become more interconnected with the technologies that comprise it,” said Van Heel. “5G’s low latency is going to be a major step forward for the industry, especially since we could [theoretically] have more than 100 billion interconnected devices that make up the smart grid within the next 20 years. When 5G advancements are eventually combined with edge computing, the grid will become exponentially more responsive and autonomous.”

Said GE’s Iyer: “My vision, what I see, is the revolution that will happen in the power sector. You have to see [the] power sector evolving the same way as the telecom sector. The telecom sector has undergone a lot of change in the last four or five decades, it’s unprecedented.

“I see the power sector evolving in that direction, with the infrastructure being built today recognizing power as an essential part of life,” Iyer said. “I think this is the way it has to be seen. The technology to realize the renewable energy potential, in terms of bulk resources, and with HVDC [high-voltage direct current] enabling connection points from remote generation sources to wherever the [power] loads are, even if they’re far away.

“If you have technologies like HVDC, it enables all these integrations to happen easily. If one has the will to retire conventional energy sources in the next couple of decades, one can make that decision and go for it. It’s more political will than a technology constraint. The market is there. The infrastructure for power is a huge market going forward, to come out of traditional energy sources, to have electricity be one of the main drivers of things. The next two to three decades are going to be revolutionary for the energy sector.” ■

—Darrell Proctor is a POWER associate editor.