Keeping the balance: The pivotal new role for energy companies in the new renewables-driven energy economy
Keeping the balance: The pivotal new role for energy companies in the new renewables-driven energy economy

The continuing smart grid evolution means more local smart grids will become connected with each other, forming larger ‘regional smart grids’. As a result, more of the responsibility for balancing the grid will be happening within a regional context, but has national implications if things go wrong.
As renewables continue to take a more prominent role in power generation, the task of network operators is becoming much harder. As we start to see the newly-emerging national smart grid, new challenges to the balancing mechanism must be identified and solved before they are even a problem. In this article, we look at the development of the smart grid from a small-scale local solution into a major contributor to the energy supply network, and explore ways this can be handled on a national and international scale.

As new players enter the market, traditional systems and roles are being put under pressure. This means energy providers need to offer new, valuable services and redefine their role to remain relevant in the new market.

One of the most important roles in the B2B energy supply chain is that of energy brokers and salespeople. These professionals enable variable supply capabilities to be matched to variable demand requirements. They have found a valuable position in the market as a ‘fixer’ who arranges a defined supply at a defined price.

However, even this seemingly-secure position is swiftly becoming obsolete, as we will explore further below. There are intriguing possibilities for these professionals to find new roles, as we will see.

The entire B2B energy service market is changing fast, and many traditional roles are being replaced or redefined. In this article we will look at the many factors involved, and explore ways of redefining these ‘endangered’ roles in a way that capitalises on their value to the market.

The smart grid concept

As discussed in more depth in another article, the smart grid is the developing ‘new reality’ of energy generation and distribution. It enables active ‘prosumers’ (producer-consumers) to leverage their own energy generation from renewables to become participants in the energy market. It works by using smart software and switching mechanisms to store excess renewables-produced energy to be used when renewable generation is not possible, or exported when the energy price is higher.

On a small scale, this can encompass a single enterprise or building. However, the modular nature of the smart grid model means it is easily connected to other small-scale smart grids to form larger local smart grids. As these become more common, the natural progression is for these systems to become interconnected, enhancing stability and increasing storage capabilities through a wide network of distributed energy storage assets. But this brings challenges too, particularly for the balancing mechanism on the larger scales of distribution.

These challenges represent significant business opportunities for energy suppliers who are able to offer technological and service-based solutions for smart grid ‘pro-sumer’ customers.

The Regional Smart Grid (medium voltage grid)

Regional smart grids cover a wider area than small local grids, consisting of multiple entities and medium-scale renewable generation. These grids can cover the area of a city, for example, or may include a cluster of producer-consumers across a region. At the most basic level it consists of clusters of local networks, but also will include significant power generation from larger wind turbines (on farmland, for example), or larger solar arrays.

As they expand, local smart grids will start to cover entire regions within a country. These can be more complex systems, as the grid at this scale will also include industrial consumers who require high voltage 3-phase supplies, in addition to regular medium voltage or domestic-level consumers. This is when the value of software becomes truly apparent, because it is needed to intelligently balance the loads during peak demand or surplus production periods. It is also an opportunity for existing energy companies because they are able to offer their expertise at this scale. These grids include the perfect customers for the kind of flexible energy contracts and other services that will become increasingly widespread as the smart grid concept and technology continues to grow in popularity.

Case Study: Project ERIC, Oxford, UK.

One example of a small local-regional smart grid is Project ERIC, in Oxford, UK. Project ERIC empowered a local community to become energy market participants. This project sits right between the local and regional scale and is part of a long-term effort to integrate all of Oxford into a regional smart grid. In Project ERIC, a Primary School, Community Centre, and 84 homes were connected to a smart grid which included widespread installation of PV arrays, battery storage, and smart management systems (sensors, switching systems, software). This allowed the use of generated power, plus the storage or export of excess energy to the local, regional grid. During the summer months, 51% of the solar power generated was used by the consumers themselves, and the remaining 49% was exported. The use of batteries increased the ‘self-consumption’ rate of solar power by 6%.

While this project is on the smaller end of the scale for regional smart grids, it clearly shows the basic unit structure from which a regional grid is built, as part of a wider strategy toward bringing an entire city within this kind of system.By connecting smaller local smart grids with larger scale renewables, we start to see the formation of the regional smart grid. This modular quality is what helps the smart grid to be so resilient.The smart grid model has a particular application for our modern, information-driven era. The power consumption of data centres is often a subject of concern, especially if the only generation solutions are bad for the environment. Currently data centres consume 1% of the global energy supply, and are expected to reach an annual consumption of 270 terawatt-hours in 2022. However, the power consumption of data centres is pretty stable and predictable and this makes them an ideal consumer. Wind generation is a fantastic source of electricity, but it has the significant drawback of being intermittent.

Within a regional context, it is a rational step to use the energy generated locally by wind power to service the data centre requirement. Using the smart grid concept and technologies this becomes a feasible reality. Excess energy can be stored in batteries and charging EV cars (especially during the night) to maintain a highly reliable, carbon-neutral solution.

Case study: Solar Cities, Australia

One of the longest-running regional smart grid models has been the Solar Cities project in Australia. This project has been funded by the Australian government, which has already contributed AUS$94 million to 7 city-wide projects. This project seeks to utilise the abundant solar energy available, using a variety of systems including solar hot water and PV arrays connected with a smart grid.

These ‘Solar City’ projects helped to develop and refine the technologies needed to roll out regional smart-grids on a larger scale. Solar Cities was essentially a ‘proof-of-concept’, and enabled the harvesting of a great deal of valuable data. In the Perth Solar City, for instance, peak demand was reduced by 25%, and the use of solar hot water and solar panels combined, reduced the average household electricity consumption by 58.9%.

National Smart Grid (High Voltage)

In the traditional power distribution model, centralised power production is transmitted on a national scale across the transmission grid. This is normally done using overhead or underground cables carrying 3-phase AC at very high voltages. The electricity then goes through multiple substations where the voltage is stepped down and supplied to industrial consumers (high voltage) and eventually residential consumers (240v AC or 120v AC).

To supply the transmission grid, power generation needs to be stable and harmonised. It works on a 3-phase AC system, which means the poles need to be perfectly synchronised. This is pretty easy when only a few power stations are supplying the grid, but becomes a technical challenge when hundreds or thousands of renewable sources also want to contribute. While not impossible, the transmission grid is a much more demanding system and there is a significant challenge to bridge this capability gap.

As we know, renewables are a fantastic source of energy, but they are unpredictable too. They are intermittent, and have high seasonal variability. It would clearly be a challenge in a northern European setting to rely exclusively on solar power, year-round for the national power supply. Although in the darker winter months wind power can be plentiful, there is always going to be a shortfall or surplus that needs to be managed, and to accomplish this on the national scale is always going to be difficult.

However, provided smart grids are sufficiently widespread at the local level the challenge is reduced. There should be no need for a local or regional grid to export onto the transmission grid. Indeed, as local smart grids become more capable of self-regulating at the local scale, the national transmission grid becomes less significant, and easier to balance due to the peak load reduction at the local scale.

Jules enables the smart grid using digitisation

A key enabler of the smart grid is the technology. As we have seen, sensors are important for this because they give us an understanding of consumption levels and consumption patterns. Fault Location, Isolation, and Service Restoration (FLISR) technology is already a feature of a modern power grid, so there are already some elements of the smart grid in place.

As digitisation of the industry continues, the challenge then becomes how we manage this data and the communication between different systems. In a similar way to the development of ‘smart home’ technology, the growth of smart grids will require common communication protocols and the development of a secure and reliable software network. While governments play a role in the regulation of these industries, it is the role of energy technology companies like Jules to offer the technical solutions needed to connect the parts of the system into a cohesive ‘whole’.

Jules provides a software platform which enables consumers and producers (and the prosumers) to all take advantage of their positions in the market.

By cutting out the position of the broker, market participants become empowered to maximise their usage or production capabilities with risk management and price-hedging options. This is how democratisation of the energy market happens, and this process is already underway.