fredag 6. september 2013

Contributions from Smart Grids to a Sustainable Energy System

By Livingstone Senyonga NorRen Summer School 2013 

“In the coming decades, electricity’s share of total energy is expected to continue growing, and more intelligent processes will be introduced into this network […]. It is envisioned that the electric power grid will move from an electromechanically controlled system to an electronically controlled network in the next two decades.” Amin et al. (2005).

Challenges in the power grid and power market

Physical electricity is traded between the producers and the distributors through markets. The grid and the rest of the infrastructure that facilitates the transmission of power from the point generation to the final end-users is a mandate of transmission and systems operator (TSO) in the respective country. On top of ensuring that power is delivered to where it is needed, the TSO is also responsible for maintaining the safety of the grid and the security of supply. To provide the security of supply, the TSO is responsible and operates a balancing market on which up-regulating and down regulating-power is traded.

With increasing electric power demands, the market and the grid are facing several challenges:

  1.   How to efficiently involve the consumers and consumer trust in the market.
  2.   How to efficiently integrate large scale renewable energy like wind.
  3.  How to efficiently manage congestion, especially during peak load hours.
If these challenges are not addressed, several problems are likely to occur:
  1.  Prices are likely to increase.
  2.  Congestion problems will increase with e-vehicles and increasing electricity demand.
  3.  Environmental targets will fail with increased use of polluting energy resources.
  4.  Increased need for balancing services as outages may increase.
  5.   Increased production, demand and waste of power.
  6.   Loss of reliability of the system and loss of security of supply.

Two possible courses of action are available while confronting the above three challenges. One is to wait for the above problems and meet the related costs, the other is to provide a complete, sustainable package of innovative solutions to the market that will lead to improved flexibility of the grid infrastructure, enhanced demand responsiveness, decentralized production, and higher use of renewable energy.
Such sustainable power systems require a solution that provides a three dimensional approach to the current challenges: Economic efficiency, environmental concerns, and the social political dimension.

Smart Grid – The Remedy

A smarter grid applies technologies, tools, and techniques available to make the power distribution more efficient. The realization of smart grids demands a change in relationships between utilities, regulators, energy producers, services and technique providers, automation vendors.

Sketch of smart grid, 3M (2013)

  • Areas of impact:
  • Power generation that integrates more renewables
  • Distribution / Transmission
  •  e-Mobility
  •  Smart Building / Factory
  •  Integration of ICT in the grid
  • Demand-side management
  •  Demand for storage management

In the following, three different contributions to the smart grid will be discussed.

Smart Meter (AMS)

A smart meter is an electronic measurement device used by utilities to communicate information for billing customers and operating their electric systems, EEI-AEIC-UTC (2011). It enables the power companies to measure the client’s power consumption more frequently, without being dependent on the manual reading from their customers. In Norway it has been agreed that such smart meters should be installed in all households within 1. January 2019. Initially they are meant to provide automatic measurements of the household consumption and also the ability to interrupt the electric supply for the specific household, but installing them will also open up for other opportunities within stability, control and coordination on a larger scale, SINTEF (2012).

From the customer's side, the largest incentive at the time is to receive hourly power prices, this can in time help lower the peak hour consumption. However, this is at the cost of invasion of privacy. The AMS allows the power companies to both access and to some extent control the power consumption of their customers. In order to be able to use the information provided by the AMS, there is a huge need for communication services within all parts of the grid. Such services are not present in today’s grid, and installing this as well as the AMS itself is linked to large expenses. The inevitable question of “Who should pay?” arises. In Norway today, many fear that the customers will end up paying through increased prices, which makes the AMS less popular.

If the use of the AMS over time is extended to include communication and control on a larger scale, its entrance in the grid could be very useful. If this is not achieved, the investments could be useless, and a negative attitude towards such investments could grow. This would not be good for other solutions with high investment costs, as they might be more difficult to realize.

Energy storage and load management

In a power system, the frequency is vital and must be kept within certain limits. Therefore, there must be a balance of power between generation and load. Otherwise, it can lead to a cascading collapse of the whole power system. In reality loads vary largely depending on customers’ demand. Producers must then adjust power generation to keep the power balance and also a sufficient reserve is needed.

In smart grids large amounts of renewable energy sources like wind and solar can be integrated into the grid. The availability of these sources is fluctuating and uncontrolled, meaning that more disturbances are introduced into the grid. That makes the power balance more and more challenging, or even impossible to maintain when the share of renewable sources is dominant.
In traditional systems when generation cannot meet demand (load) usually electricity needs to be imported. On the other hand, when demand is lower than production, electricity usually needs to be exported. In smart grids using energy storage can avoid import or export at disadvantageous conditions.

Also the demand side often exhibits a time-varying profile. There are times when demand hits peaks while in other periods demand is very low. That can lead to insufficient use of resources in order to maintain the power balance since large loads mainly occur just for a few hours a day. Here storage systems, especially batteries, are essential to reduce peak demand of customers (when the consumers use stored energy from the batteries instead of power from the grid) or increase production in times of high demand (when batteries are used to feed power to the grid).

Thus, energy storage plays an important role in keeping the balance since energy is stored when there is surplus production and used when there is a shortage in supply. As a result, it paves the way for more integration of renewable power.
The most widely used storage technologies are pumped storage (hydropower), batteries and flywheels.

Pumped storage technology uses excess energy to pump water from a reservoir at a lower level to a reservoir at a higher level. When prices are high or when there are shortages in electricity supply the water is sent through a turbine and fed into the lower reservoir. This technology exhibits an efficiency of around 80% (largely depending on who you ask and on the boundary conditions). Batteries represent an electro-chemical storage and are used e.g. in electric vehicles and photovoltaic power plants.

Demand side management (DSM) includes different measures to influence the electricity demand side. Important measures are e.g. load management, energy conservation, fuel substitution and load building, Bhattacharyya (2011).
Load management includes e.g. peak clipping, load shifting and valley filling, see Bhattacharyya (2011) for more detailed explanations.

Through effective energy storage and load management costly investments in grid extension as well as import or export at disadvantageous conditions can possibly be avoided. Both technologies can only be used efficiently in smart grids where e.g. advanced metering, control and communication systems are available.


The Aggregator as introduced in ADDRESS FP7-PROJECT (2013) is the new actor coming to play in the smart grid field, standing between the Distributed System Operator (DSO) and the end prosumers. The Aggregator main tasks are customer clustering, storage management and demand side management. The Aggregator uses smart meters and an ICT infrastructure to communicate with the end users and controls and manages the electricity loads. The aggregator unites all the small distributed generator sources and distributes and stores the production for the demand side management.  

The Aggregator facilitates the Renewable Energy Sources (RES) integration by easing the process of small actors coming to the market. It can compromise between DSO needs and the elasticity of the RES and demand from customers. It can introduce new services to the electricity market like smart charging and use of EV’s and storage devices  which eases the DSM process while providing the prosumers with flexible prices and energy saving policies. Another major benefit from Aggregators is the possibility of local management based on local consumption forecast and local energy production from DES. The possibility to cluster a limited number of customers into a group gives the customers more lobbying power to negotiate prices and gives them the opportunity to get more benefits from the DSO. Using Aggregators provides also a good way to access to electricity market for new and smaller investors. New schemas of investment could emerge which include leasing/renting of PV panels, shares in stocks, etc. All in all the Aggregator plays a major role in speeding up the smart grid integration process, as presented in several surveys like, Gkatzikis et al. (2013).

Several risks have been identified related to aggregators. Security issues will appear as long as the Smart Meter is accessible within an external network. The perception for the user could be that some external agent can access the SM and extract some private information (readings, consumption profile, etc.) or connect/disconnect loads (appliances, lights, etc). Then, security should be granted to the user to avoid adoption barriers. Moreover, in order to integrate the SM into the aggregator network, the ICT infrastructure should be used or built from the scratch. In any case, some cost arises. Since the aggregators are new actors in the market, customer need to trust in these new small emerging companies, which will be very different from the already existing big utilities. Also the quality of supplying should be guaranteed to the users by these new companies, with no expertise in energy demand, energy balance, etc.

To realize these aggregators, the first step should be the substitution of the old meters for smart meters, and connect these meters the aggregator data network. Smart appliances represent a high cost for customers, so an intermediate solution should appear, like the smart plugs (which offer the possibility to control any appliance remotely). Electro-vehicles are already in the market, but the number of them should increase. Then, customers would start thinking in installing small generators (PV, mini-winds, etc.) as well as some storage system as a backup for using or selling the energy when prices are interesting.


From the growing demand for electrical energy and the increasing share of intermittent and distributed energy resources, a need for a smarter and more efficient grid is emerging. For this, the Smart Grid is launched as a solution, which includes many ideas for possible solutions, some mentioned here. However, the ideas for smart grid are many, and it is important to consider the pitfalls that they include. It is also of vital importance to build up communication and control that makes all of the elements work together in an optimal manner.

Amin et al. (2005), S.Massoud Amin and Bruce F. Wollenberg. ”Towards a Smart Grid,” IEEE power & energy magazine, September/October 2005, 34-41.
3M (2013),, accessed: 15.08.2013
EEI-AEIC-UTC(2011), “Smart Meters and Smart Meter Systems: A Metering Industry Perspective”
SINTEF (2012), “Risikovurdering av AMS, kartlegging av informasjonssikkerhetsmessige sårbarheter i AMS”
S. C. Bhattacharyya (2011), "Energy Economics - Concepts, Issues, Markets and Governance", Springer
Gkatzikis  et al. (2013), Gkatzikis, L.; Koutsopoulos, I.; Salonidis, T. , "The Role of Aggregators in Smart Grid Demand Response Markets," Selected Areas in Communications, IEEE Journal on , vol.31, no.7, pp.1247,1257

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