By making the electricity grid ‘intelligent’ and
adding telecoms to it, the power will eventually move away from the electricity
companies and be directed towards the customers, who will be able to control
their energy consumption through sensors, M2M devices, and the internet of
things (IoT). Europe and North America are rated as the most advanced adopters
of smart grid and smart metering technology, but the market is expected to
shift increasingly towards Asia and the developing world.
‘Smart’ means communication, and since many countries
are currently addressing their broadband networks it would be a clever move to
roll out fast broadband infrastructure in combination with smart grids and,
wherever applicable, other smart infrastructure. In that way, energy efficiency
measures can be implemented throughout society and throughout the economy
(buildings, transport, cities) with a minimum of extra infrastructure, as a
trans-sector approach is based on sharing the infrastructure.
Unfortunately, one of the major obstacles to smart
grid uptake continues to be the lack of good government policies. With all the
knowledge we now have, it would almost amount to a criminal offence if this
generation were to allow vested interests to prevent us from developing
trans-sector policies and holistic initiatives to address energy and
environmental concerns. We need to break down those silos and force cooperation
between the sectors wherever possible.
Significant progress has been made within the
industry in Australia in relation to the deployment of smart technologies that,
over time, will create a smart national grid.
The past five years have seen confusion, resistance
and the lack of a strategic approach towards a holistic policy aimed at
creating a smarter energy structure that could reduce energy usage by 30%-40%
without having a major impact on people’s lifestyle, just by being smarter. But
all of the electricity companies in Australia are now involved in the
implementation of smart grids – a process that will take a decade, or perhaps
several decades, to complete.
In the future some $200 billion will be invested
overall in the national energy structure (not just smart grids). The first
results from projects such as Smart Grid, Smart City indicate that the results
greatly exceed expectations; the same applies to companies involved in the
smart meter rollout in Victoria. However a holistic government policy continues
to be the key to success, rather than the current hodgepodge of policies.
Energy is heavily influenced by government regulations and unless these are
sorted out it will be difficult for the industry to develop cohesive strategies
that will see a more comprehensive approach towards a smarter energy system for
the country.
With a better understanding of the complexity
involved in the transformation of the electricity industry the words ‘smart’ or
‘future’ energy are becoming more prominent. BuddeComm believes that the term
‘smart grids’ is too narrow and that eventually ‘smart energy’ will become the
accepted terminology – especially once the communications developments in
national mobile and fixed broadband networks start to converge with smart grid
developments. As well as this, smart grids have unfortunately become synonymous
with smart meters, again leading to too narrow a view of this market.
Smart energy signifies a system that is more
integrated and scalable, and which extends throughout the distribution system –
from businesses and homes and back to the sources of energy. Developments at
the edge of the network will increasingly determine its future direction. A
smarter energy system has sensors and controls embedded into its fabric.
Because it is interconnected there is a two-way flow of information and energy
across the network, including information on pricing. In addition to this it is
intelligent, making use of proactive analytics and automation to transform data
into knowledge and interpretation, and to efficiently manage resources.
This links with the telecoms development known as M2M
or IoT. For this to happen various functional areas within the energy ecosystem
must be engaged: consumers; business customers; energy providers; regulators;
the utility’s own operations; smart meters; grid operations; work and asset
management; communications; and the integration of distributed resources.
With energy consumption expected to grow worldwide by
more than 40% over the next 25 years demand in some parts of the world could
exceed 100% in that time. This will produce an increase in competition for
resources, resulting in higher costs. In an environment like this energy
efficiency will become even more important.
Quite apart from any increased demand for energy in
specific markets, the move to more sustainable technologies – for example,
electric vehicles and distributed and renewable generation – will add even more
complexity to operations within the energy sector. And, as was mentioned at the
COP20 in Lima, technological innovations will have to play a larger role in climate
change adaptation.
Concerns about issues such as energy security,
environmental sustainability, and economic competitiveness are triggering a
shift in energy policy, technology and consumer focus. This, in turn, is making
it necessary to move on from the traditional energy business model. Renewable
energy, linked to distributed energy systems and battery storage, is going to
be the game-changer here.
As a consequence, electricity utilities could end up
in a ‘spiral of death’ situation similar to that of the companies that invested
in the building of the internet infrastructure. They may own the means of
delivering electricity and associated services, but may not be able to take
advantage of the new business opportunities that will arise. This will limit
their opportunities for future growth. To avoid this companies should develop a
‘vortex of opportunities’.
Another problem will surface when, due to users
reducing consumption and producing energy themselves through energy efficiency
strategies, the traditional pricing models become inadequate in terms of
maintaining the energy infrastructure.
The potential for transformation of the energy
industry to smart energy is still at a very early stage. Valuable advances have
already been made in some areas but consensus needs to be reached regarding a
collective approach to interoperability and technical standards.
Smart Grid,
Smart City – Key findings, recommendations and comments
The Smart Grid, Smart City (SGSC) project, which ran
from 2010 to 2013 in Newcastle and Sydney CBD areas, was funded by a $100
million injection from the federal government and around $390 million ‘in kind’
or otherwise from the project’s other contributors, which included entities
such as Ausgrid, Energy Australia, IBM Australia, the CSIRO and several local
councils.
Part of the recommendations were that the broader
industry should be involved and that the outcomes would be shared.
The project was launched in 2010 and is perhaps the
most comprehensive smart grid demonstration project undertaken anywhere in the
world. The report, published in mid-2014, presents three very detailed smart
grid scenarios towards the year 2034. It trialled a range of in-grid and
consumer-based smart technologies with electricity suppliers for 17,000 households
in order to determine whether there was an economic benefit attached to
deploying the technologies across Australia.
The overarching outcome of the project is that under
a medium scenario smart grids can deliver a national net benefit of $27 billion
by 2034 through the development and deployment of smart grid technologies,
changing consumer behaviour, energy market reform, and ‘cost reflective’
electricity pricing such as dynamic tariffs.
For more
information see – http://mrr.cm/4xJ
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